NCPA - National Center for Policy Analysis


May 12, 2005

The national defense budget could be cut by nearly a quarter and still leave the United States military in shape to take on all likely threats and fulfill its role in the war on terrorism, says Charles Pena, director of defense policy studies at the Cato Institute.

Furthermore, the United States is outspending the rest of the world at an astounding rate. According to the International Institute for Strategic Studies (IISS), in 2003:

  • Total U.S. defense expenditures were $404.9 billion, an amount exceeding the combined defense expenditures of the next 13 countries and more than double the combined defense spending of the remaining 158 countries in the world.
  • The countries closest in defense spending to the United States were Russia at $65.2 billion and China at $55.9 billion.
  • The United States outspent its NATO allies nearly two to one ($404.9 billion vs. $221.1 billion).
  • The combined defense spending of the remaining "axis of evil" nations (North Korea and Iran) was about $8.5 billion, or 2 percent of U.S. defense expenditures.

Although it is impossible to accurately predict future defense expenditures, Pena says the United States is on track to outspend the rest of the world combined sometime during the next 10 to 20 years.

Pena says there are no threats from nation-states that warrant the United States maintaining a large, forward-deployed military presence around the world. A better approach to maintaining U.S. security would be to eschew unnecessary interventions abroad and to reduce overseas Cold War-era military commitments.

Source: Charles Pena, "The War on Terrorism Does Not Require a Burgeoning Defense Budget," Cato Institute, Policy Analysis No. 539, March 28, 2005.

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