I want to bring a different tack to our usually fun forays into Data Analysis:  Instead of me railing about some statistical aberation, smoke coming out of my ears as I type, I want you, dear readers, to exercise those muscles. 

For this, we go to a reliable source of bad data: The WSJ’s OpEd page. 

Is_ther_e_a_waron_19200209_1While editorials are by nature supposed to be opinion pieces, over time I have noted that this page has a tendency to disconnect from reality when it comes to mathematics, data, statistics. At times, the word dissembling comes to mind. 

Feel free to agree or disagree with the premise of the commentary. But this is not a political exercise. Instead, I am looking for ways you find that the data has been spun or misinterpreted or
otherwise omitted in support of this argument.

You may also feel free to argue the data is correct, or that the Op-Ed understates the facts. Either way, focus on the data.

Professors of Economics, Statistics, and Mathematics can feel free to make this a regular part of their curriculum.  And don’t limit yourself to the WSJ: The NYT, WP,  LAT are all fair game. But I keep coming back to the WSJ OpEd for their long standing tendency to use economic or budgetary data, and then to distort it. 

No matter: Lets see how strong your powers of observations are: Identify the errors in this Op Ed:

Our Small Defense Budget
October 20, 2006; Page A12 http://www.opinionjournal.com/editorial/feature.html?id=110009124

The full text is at the free Opinion Journal site.

>

NOTE:  I do not want to make this about politics, but, rather, about how data is tortured for political ends. The most political this could get is perhaps how the WSJ Op-Ed page advocated for tax cuts during the war or things along that line which impact the budget — but not the political arguments.

Make the focus on numbers, not partisanship.

>

Call this crowdsourcing:  If anyone wants to reference charts, tables, etc, feel free to do so, and I will gather them all in a follow up post next week.

Category: Data Analysis, War/Defense

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

76 Responses to “Our piddlingly tiny Defense Budget”

  1. OkieLawyer says:

    In the chart you have shown, I think that even it is literally true, it could be very misleading due to federal government debt levels limiting how much can be allocated for every area of government — not just defense. We have run deficits almost every year since WWII. Therefore our debts have continuously grown. There has never, to my memory, been any serious attempt to pay down the national debt.

    A chart showing the percentage applied to all federal government spending (including interest payments on the national debt) would give you a fuller picture. Another is what GDP was in today’s dollars, vs then. Another is what the tax rate was then compared to now.

    And even all that does not tell you the whole story, but it would be a good start.

    Find the Truth. Do Justice.

  2. JoshK says:

    WSJ does a lot better than NYT. I’m not sure on BBerg where you can find defese / budget data. Under ECOR, they don’t really have anything about military spending. I’ll assume the #’s themselves are correct and that he uses real #’s everywhere.

    To be fair to the writer, I don’t think he is necessarily trying to ignore things like the NPV of future US gov obligations. Ignoring those is par for the course. I mean, if we counted those, we might acutally have to do something about that, and that would involve touching a lot of “third rails”.

  3. marty says:

    Did you just realize that the wsj opinion page is the worst offender of the” assault on facts”?

  4. The Hube says:

    By focusing on the share of GDP or federal outlays, he is ignoring the obvious fact that both GDP and federal spending have increased tremendoudly over the years. A smaller share of a bigger pie can still result in an enormous increase.
    This argument is roughly akin to arguing that because I owned 10% of Google in its first (pre ipo and pre VC financing) year and I now only own 3% that I have somehow become impoverished.

  5. 4merRepublican says:

    Marty touched on the crux of the problem. GDP has become so manupulated and overstated that these type of statistics are skewed. Defense spending as a percentage of REAL GDP is probably rather high.

  6. JoshK says:

    I’m not sure GDP as a % of outlays is necessarily the best way to do it, but it is reasonable. I wouldn’t use it as the only criteria for judging the right spending level, but it is fair. Especially so if you consider military spend to be like insurance, which you would expect to scale with earnings to some degree. eg, you up your life insurance as you make more money.

  7. sneakypie says:

    Damn right it’s a small defense budget.. still barely 47%of the whole world’s military expenditures, and only about 8.6 times bigger than the UK’s military spending. Oh wait, that’s 2002 figures.. the situation may have improved since then.

    And damnit, Saudi Arabia spends about 10% of its GDP on the military..there’s a lot of catching up to do. Hell, in 2004, worldwide military spending was still an unacceptable 6% below its 1988 cold war all-time high. If we have a new all-time high for the Dow, how come military spending has gone nowhere in the last 8 years?

    For those of you who know math, please immediately forget that 4% is more than a 33% uptick from the earlier 3% level. Heck, even if it had doubled, it would only be 6%, right?

  8. Gary says:

    I think this chart from the Brookings Institution (http://www.brook.edu/comm/policybriefs/pb95.htm) pretty much refutes the premise of a small defense budget. (can’t paste an image here unfortunately)

    Also, this article from Jane’s provides some insight (it’s from 2005, but relevant): US defence budget will equal ROW combined “within 12 months” — http://www.janes.com/defence/news/jdi/jdi050504_1_n.shtml
    And those are just starting points.

  9. JoshK says:

    I don’t think this thread is about how large US military spending should be compared to the rest of the world, or the EU, or whoever else. The claim Barry made is that they are misinterpreting the data.

    The author is trying to make the point that military spending is lower in terms of national income than it has been in the past. The accusation is that this fact is somehow a distortion or a manipulation.

    We can all sit here and talk about how the US spends more, or what the recent increase is. But, that’s not the accusation above. You can discuss if this is well spent military money, but again, that’s not to the point.

  10. bob says:

    I think “OpEd” stands for “opposite to editorial”, the same way as “Tribeca” stands for “triangle below canal”.

    So it has nothing to do with “opinion”. It is just another page.

  11. mrmanny says:

    >Josh:
    >You can discuss if this is well spent military money, but again, that’s not to the point.

    I think it is the point. Bottom line the journal is justifying an increase in defense spending. One has to ask weather the money spent is achieving our goals. Its like the education debate we always hear we have to spend more more more but few are looking to see what we are accomplishing with that spending. The US kids seemingly are falling behind the rest of the world in test scores. Same with health care spending, we spend almost 10x per cpaita as Costa Rica but have the same life expectancy.

    Bottom line we can increase defense spending but will we achieve what we want to achieve?

  12. Q-Ball says:

    I would be very interested to hear how this is a distortion of data.

    As JoshK states the article was making the point that we spend a smaller portion of our income now on the military than we did in the past. Perhaps we should, perhaps we shouldn’t. But I sense that the suggestion is that military spending should not be measured in this way. If military spending should not be measure as a percentage of the pie perhaps nothing should.

    Perhaps we should keep federal spending at 1945 dollars adjusted for inflation and population growth. Does that sound like a good idea. That would leave out any increase due to productivity which would mean the federal budget would eventually tend towards zero percent of the GDP over the centuries. Sound reasonable? I don’t think many would think so.

    Perhaps the world is such today with technological advances and threats that we should be spending an even higher percentage of our pie on the military than we did in the past.

    If the suggestion is not that military spending should be measured on a more straightline cost adjustment basis then I stand corrected, (however then I would like to know what the suggestion in fact is).

    It doesn’t seem to make much sense to me to not measure it as a percentage of GDP. So perhaps you could clarify Barry exactly how you think it should be measured.

  13. paul says:

    The obvious problem is that the Dept of Homeland Security is an obvious part of the nation’s defense, but not included in the Dept of Defense budget. Likewise with the FBI, CIA, NSA, etc.

    The WSJ writer wants cuts in ‘non-essential’ programs to spend more on security. But this point would be undercut by showing the % of the federal budget devoted to the military, especially if combined by Homeland Security, etc. (I’m assuming ‘non-essentail’ means welfare, education, arts, etc – which have not grown as fast as the military part.)

    The writer is also trying to argue that we do not have “imperial overstretch,” but neither of the measures really speak to that. That’s a political discussion that needs support from different measures.

  14. Q-Ball says:

    “Bottom line we can increase defense spending but will we achieve what we want to achieve?”

    Thats a very fair point. But it doesn’t alter the fact that we spend a smaller portion of our income on military now than we used to. Again perhaps that is warranted. But I don’t see how its a distortion of data. The whole point here as Barry spelled it out was not to argue with the opinion of the editorial (increase the military budget), but to show how they are distorting data to make their point.

    I don’t see it. Where is the data distortion.

  15. JoshK says:

    mrmanny,

    >>One has to ask weather the money spent is achieving our goals.

    I agree with what you are saying and that’s a great discussion that can go on for days.

    But, what I am pointing out is that Barry above is saying is that there is distortion in the presentation or aggregation of the data itself. That doesn’t seem right to me.

  16. Greg says:

    the first things to pop out are the same points that everyone above has already mentioned… ie. only listing percentages; no nominal measurements; no reference to gdp growth or changes in tax revenue, etc.

    just quickly glancing at the article… i noticed one other thing that hasn’t been mentioned.

    “Nearly half (46%) of all tax dollars went to national security during Vietnam, and 28.1% as recently as 1987. But spending for the war on terror, including Iraq and Afghanistan, has only lifted defense to 19.8% of all federal spending today”

    Now, without digging into the calculation (which might be another issue, i don’t know), a the author is trying to prove that we are underfunding these recent military campaigns. However, this comparison implies that the only spending relevant to today’s conflict is this years budget. what about defense spending in 1993? 1998? 2000? 3/4′s of 2001? Just by looking at his chart, it appears to me that defense spending hovered around 16-20% in any one of these given years… All of which were relatively peaceful, yet we spent on defense: upgrading technology, training soldiers, building weapons (planes, ships, missiles, etc). Much of this investment is now being used.

    In a corporate environment, a company may spend 1 billion dollars over 1-2 years to build a new plant. But this capital expenditure is spread across the next 15+ years of production. I see gov’t military expendures in a similar way.

    Without acknowleging spending in prior years, that is being leveraged in current conflicts, the author is neglected to give a true picture of what has been spent to fund the current war.

  17. thx1138 says:

    >>I think it is the point.

    I think he means it’s not the point of Barry’s post.

    My gut reaction to all data is not, ‘has it be manipulated to some end’ but rather ‘is this data even correct.’ I can usually draw my own conclusions from information but I can verify if it is valid information without understand the data collection methods. Generally if you understand the methods used your belief in the veracity of the data drops significantly. Good data is rare.

  18. Q-Ball says:

    “Without acknowleging spending in prior years, that is being leveraged in current conflicts, the author is neglected to give a true picture of what has been spent to fund the current war.”

    This argument is non-sense.

    Every war campaign has bee preceded by years or decades of peaceful military spending. Prior to WWII we had 20 years of military spending with no war. Yet spending spiked to 40% of GDP. I guess that 20 years of spending prior to WWII must have all been wasted since such a large buildup was needed.

  19. BDG123 says:

    Think I’m nuts normally? I could ramble for hours on the US defense budget. I think Eisenhower had it right: Beware the military industrial complex.

    Can someone tell me why our defense spending has to be more than the other 100+ countries on earth combined? This is choking investment in the private sector, giving Orwellian freakishness to our society, crowding out diplomacy in international disagreements, a joke when our children don’t have health insurance, etc.

    I’d like to see a non-Hawk win the next Prez elections, slash the military spending by 30% and get us the hell out of Iraq. So, on a very touchy subject, it’s rather absurd that we feel we need to stay to teach the Iraqis how to set up a government.

    So, let’s say after the REVOLUTIONARY War, that’s right, revolution, that the French, our co-liberators, had stayed and dictated to us the rules under which we could set up a government. How much would we have put up with that? Remember, we were a very fundamentalist country as well. For Christ’s sake, we burned people at the stake. We did ok. Let the Iraqis figure out their own mess. When they come to their senses, we would be a great ally because we liberated them. And, if it’s now three countries instead of one, who cares?

  20. sneakypie says:

    I believe the point the OpEd piece tries to make is that the US defense spending is low, especially given the threats the US is facing, and that it should be higher.

    To support this view, it views the US in isolation (i.e., ignores other countries’ defense budget size) and uses two arbitrarily chosen ratios.

    BR said that (among other things) he was looking for ways in which data was omitted to support this argument.

    One could say that these are appropriate metrics to choose, but e.g. the GDP doesn’t really measure the GDP because of various distortions.

    One could say these aren’t the right metrics and we should use different ones e.g., median per capita income or net worth or whatever.

    One could say that given the threats facing the US, UK, G8, NATO, etc., the US spends a disproportionate amount on defense relative to other countries.

  21. john john says:

    Re: distortions….some random missives

    During the Cold War, the USSR + et al was spending around 20%+ GDP on military spending (someone have exact figure?). So US military spending could be considered appropriate/symmetrical.

    Consider that the insurgents in Iraq and Afghanistan are armed with AK-47s and IEDs (cost a few $1,000 per insurgent?), while the US spends $100 billion per year for the 150,000 soldiers in the Mid. East (not to mention the “routine” $300+ billion in military spending).

    So in Iraq and Afghanistan, the US is literally outspending/outkilling the insurgents and a magnitude of 100+ to 1, yet the Iraq is still a mess. This is the definition of asymmetrical warfare.

    Finally, re: North Korea + Iran/other conventional enemies, just like in the corporate sector, the US military has grown more productive due to technology, etc. So the US doesn’t need to spending as much $$$$ to field the ability to kill each enemy.

    The general downtrend of the WSJ graphs re: military spending v. GDP would look just like a graph of labor costs v. revenue for any Fortune 500 company like GE, GM.

    So yes, WSJ’s OpEd page loves to harp about increased productivity in the cubicles and factories, but neglects to consider the increased productivity of GI Joe.

  22. spencer says:

    the data is correct. But let me put another spin on the analysis.

    We are losing the war on terror in Iraq because this administration has been trying to fight it on the cheap as this data demonstrates. Moreover, the data overstates military spending because of the budget games the administration is playing — for example not allowing the professionals in the pentagon to put the $40 billion in the budget to repalce and/or recondition all the equipment being worn out and/or destroyed in Iraq. this is the first war in US history that the army is weaker after 3 years of fighting then it was at the start of the war.

    So why is this administration fight the war on the cheap?

    Because if they were honest about what it would cost to win the war they would be forced to give up their tax cuts.

    So we are losing the war because their tax cuts for the wealthy or more important to this administration then winning the war.

    So someone show me one fact to demonstrate that i am wrong.

  23. JoshK says:

    Again, everyone above has an opinion on:

    1. is this enough spending
    2. is it being spent the right way
    3. are our foriegn policies the best
    4. who’s going to win the world series

    But, the % of GDP argument presented by the author seems pretty tight, and that’s all he’s saying.

    Someone above mentioned that the #’s above omit other agency spending, which is a valid point. But, that is also probably constant. I don’t think that the FBI was ever in the military budget. And with the mess that congressional budgeting is, who the hell really knows what we spend on anything. But that’s a different discussion, more like the ADP vs BLS argument. IMHO, go with ADP.

    Compare that to a typical NYT op ed that assumes a horizontal demand curve for everything they want to tax. The integrity of the above article seems pretty good to me.

  24. Paul says:

    One item that we should consider is that the last graph is of total federal outlay. On item that should be looked at is the military budget as a function of discretionary spending. The federal budget has grown tremendously in the area of mandated programs. See: http://www.thebudgetgraph.com/view.html

    2007 Discretionary budget: $983B
    2007 Military: $633B (64%)
    2007 Non-Mil: $350B (36%)

    Personally, I don’t have a problem with it. I’d like to see reductions in the non-discretionary spending – but thats another topic.

  25. M.Z. Forrest says:

    If you like at the left tail of both graphs you will not that it is lower than present day percentage of expenditures. 1945 was when the Cold War began, at the Yalta conference. A relative low point, 1949, was the year the Soviets expoded their first nuclear bomb. (For a complete timeline, see here. The Cold war ended in 1991 with the collapse of the Soviet Union. Of the 66 years portrayed, 46 of them comprise the Cold War period. This means 70% of the graph represents an anomaly.

  26. M.Z. Forrest says:

    Doh!
    If you like at the left tail of both graphs you will not that…
    s/b
    If you look at the left tail of both graphs you will note that…

  27. S says:

    As a libretarian, knowing that 80% of federal government outlays goes to something other than defense spending makes me want to hurl.

  28. Gary says:

    The premise is defense spending is too small because it is a small portion of total outlays or gdp.

    The article says “We have less to spend on guns because we are spending so much more than we once did on the rest of government, especially health care.”

    Well, yea. The population in 1940 was a 132M versus 300M today. Social Security was only 3 years old. The pie has gotten bigger.

    It also seems strange to me that we have to spend more in constant dollars, and more than the rest of the world combined to protect the same amount of territory.

  29. wcw says:

    Thanks, Paul, for being the first commenter to use the adjective “discretionary”. That neatly eviscerates the second of the two charts. Anyone who plots defense spending against total federal spending either doesn’t understand government or is trying actively to mislead, or in the case of the Journal’s editorial pages, both.

    Now perhaps someone will use the noun “productivity” in an analysis and we can understand the first chart.

    Ugh, the WSJ editorial page.

  30. Rick says:

    Barry used the word “errors,” but I spot only one, huge as it is. And, no, it’s not the use of nominal vs. real numbers. To convert from nominal to real, the same number appears as a factor in both the numerator and the denominator. Hence, the percentages will remain the same.

    I suppose one could make an issue over the omission of the government deficit in the numbers, because GDP rather glosses over things like the crowing out effect.

    But that’s not the most glaring problem with the article. The author’s reasoning carries an implicit assumption that defense spending is, or ought to be thought of as, a function of GDP. Why? Why would we expect defense spending to parallel growth in GDP? Does a country somehow need more defense merely because it produced more hamburgers?

    Yes, changes in technology, coupled with the way government budgeting tends to work, might well produce fluctuations in defense spending, but one would expect real defense spending to be sinusoidal, and that the overall trend for defense as a percentage of GDP ought to be downward-sloping modulo any changes we would expect as the country transitions betwen wartime and peacetime.

    Even the effect of wartime vs peacetime doesn’t really change this conclusion. If anything, wartime vs peacetime might increase the amplitude of the sine wave, but that ought not change the long-term relationship to GDP.

    Having said all that, it’s been more than 20 years since I took an Econ course, so you’re asking me to exercise some muscles that have atrophied just a tad.

  31. Bob A says:

    I’m all for raising taxes on defense contractors and spending all of the new money on defense.

  32. Ian says:

    I think everyone is missing the point. Sorry if someone said this already. I did not read every word of all the comments. The very first comment alludes to this, but the real point is, how much is defense spending as a percentage of tax revenue?! We have a much lower marginal tax rate now than in the past, so simply comparing spending to GDP does no good. Trying to compare it to total outlays does no good, because we are running a ridiculous deficit! That’s like justifying to your wife that you cut down your allocation for hookers and alcohol to 19.8% of expenses this year, but fail to tell her you racked up a huge credit card bill to do it.

  33. Smokefoot says:

    The biggest error in the chart is that the appropriations for the Iraq war are off-budget, and so are not declared as part of the “defense budget”. That huge bump for WW2 would disappear if they used the same kind of accounting back then.

  34. Smokefoot says:

    The off-budget cost of Iraq and Afganistan has been about $60 billion/year, while the Homeland Security budget has been $36 billion. This adds 0.8% of GDP to defense spending, making the number much bigger than the 90′s, but still smaller than the cold war spending. (Any errors I blame on Google!)

  35. ilsm says:

    I apologize for reiterating what may have been said.

    I did not read all the comments.

    I have workind in the Military Industrial Complex for some time, both sides.

    The attempt to say we are scrimping on defense becasue we are spending 4% of GDP when we spent 13% during the Korean Police action misses two points.

    One, we are spending nearly as much in real terms on “defense” as during most of the cold war. That is inflation adjusted dollars. Indeed, defense has not consumed the same percent of a much larger economy.

    The second critical point is what it is spent on.

    Investment in things to fight cave dwelling terrorists is paltry.

    We are spending a lot on platinum hammers to crush these ants.

    It is all about needs.

    The threat in 1980 was 500 times the threat today.

    There is no industrial age enemy to tilt with so we tilt with windmills.

    The WSJ is attempting to show the country is mizerly or neglecting national (income) security (for the contractors) for not devoting as much of GDP as when we had real enemies.

  36. fuistemon says:

    Politics aside, what’s wrong with placing data on the op ed page? The NYT routinely places op eds on the news pages. Which is worse?

  37. ilsm says:

    It is misleading to show % of GDP and not include a comparison of real dollars over time.

    Asif % of wealth is a measure of what should be spent on anything.

  38. john diehl says:

    Isn’t a high defense spend just one of the quid-pro-quo’s for the right to mint the world’s reserve currency?

    I would be interested in seeing defense spending (plus homeland security, etc) relative to M2.

  39. j d ess says:

    As a libretarian, knowing that 80% of federal government outlays goes to something other than defense spending makes me want to hurl.

    you oughta be nauseous about the other 20%, too, seeing as how we can all defend our damn selves from evil doers. lousy, big gov’t always has his heel on the little guy’s neck…

  40. Aaron says:

    Does a higher GDP mean an increase in the nation threat? Didn’t 9/11 happened during a recession? Justification of spending based as a percentage of GDP is like spending money if only because it is there. We spend on military to protect Americans. Therefore I would measure the cost per American. The next step is looking at the causes of American deaths to figure out where money would be best spent.

  41. Lawyer says:

    Typical WSJ. % of GDP is meaningless. For defense, for health care, for any other category. You should look at constant dollar spending in current year dollars or 1950 (or other year) dollars if you prefer. Similarly, the distortion of a % of tax revenues vs. percentage of overall spending — comparing apples to oranges. You should look at rate of growth in spending in constant dollars.

    And, too, we don’t adjust for the number of personnel. Salaries are a major component of the budget (2nd largest piece I believe), and size of the armed forces is smaller now than it was in WW2 or Vietnam or the cold war (1/3 fewer troops than 25 years ago).

    The news pages of WSJ do a generally excellent job. The editorial and op-ed is propaganda pure and simple. Never ever ever trust anything they say or any argument they make. It’s all intended for a political purpose.

  42. John F. says:

    The second chart is meaningless. It doesn’t strip out entitlement spending, which is basically simple redistribution and has been growing rapidly. This in no way let’s the NYT off the hook: they’re perfectly capable of dissembling with or without charts.

  43. cButler says:

    A couple of interesting comments, especially the one about the actual relevance of the statistic, seeing as growth in GDP doesn’t require a proportional growth in defence spending to protect it. For me, a more interesting take would be defence spending divided by per capita GDP. And even more – defence spending per enlisted serviceman. That one would cut to the core of the political issue without leaving the world of stats…

  44. JT says:

    I disagree about the chart being distorted – I think the WSJ is not that dumb and assumes that smart readers like us understand that our GDP and Federal Outlays are not the same as WWII figures.

    I think the point you are all missing is the graphs prove that we have plenty of financial capacity to fund our war machine because the dollars are not coming out of other programs vs. WWII where there was sacrifice in other areas to produce those expenditures. The graphs are not misleading – what is misleading is if you don’t use your brain to see the implications – our war financing is more efficient. I agree that it is misleading only to the extent you would interpret the graphs to say we are not spending enough for WWIII as we spent for WWII. The point is really a political one to say it is no longer guns vs. butter. It is now guns and butter.

  45. JoshK says:

    Well, it seems that the majority of people posting don’t agree with Barry’s claim above, but this has branched out into some other interesting ideas, so here’s mine:

    What about a chart showing real $ spent / perceived threat compared to realized threat?

    Not that I know where to get the data from, but it would be cool to see.

  46. T says:

    The first chart overlooks the fact that in 1940, increases in defense spending would squeeze out non-defense production (because they were both dependent on the same manufacturing base.) That effect has basically disappeared, since almost all defense capacity is now dedicated to that task. Also, on both graphs, it ignores the issue of defense productivity — during WWII and other past wars, there was a huge ramp up in the size of the defense “labor force” … unlike spending on equipment, that’s a current-year expense rather than a capital investment. Plus, it would take away from non-defense productivity and GDP.

    The top graph needs a line showing real GDP (my bet is that it would be flat during the first half at least, showing a substitution effect at play.) The second graph really needs to split spending on manpower vs. spending on equipment.

  47. john diehl says:

    How does real GDP change the top graph? Wouldn’t a given year’s GDP and defense spending be measured in that year’s dollars?

    And what does “federal outlays” mean in the second graph? Assuming it includes social security payments, that is a distortion that allows the denominator to grow at a fast rate over the time period. ANY non-SS federal spending would decline as a % of federal outlays.

  48. goldbug says:

    Shouldn’t we be measuring the defense budget in gold instead of USD ? I am only half kidding. :)

  49. Estragon says:

    What would a chart of changes in real defense spending versus real gdp growth lagged ten years look like? There is almost certainly a lagged boost to gdp as technology is transferred to civilian use.

  50. brion says:

    i have a one word review of that WSJ piece….”Shnorfle”

    i don’t see how you can separate the politics out of it.. It’s like the Bank pres. saying “i dont understand how the money could have gotten out. There is only one key and it’s the one in my possession!”

    Military spending in this country is the “pork du jour” -tout jour- when it comes to the unholy “axis of evil” of politics/power/profits.

    Fact is we don’t need this giant military/industrial tick sucking on Columbia’s teat.
    We don’t need to play the “team America” world police ever.
    All we need are up-to-date nukes, adequate intelligence services, solid ALLIANCES,
    and a militray force called upon ONLY in true times of National emergency (not cockamamie attempts to re-engineer “Islamic” clusterfuks like iraq into Iowa! AKA Nation building)
    But don’t ask me…..Ask Mikhail Gorbachov (ex Premiere of ex Soviet Union)

  51. Kevin_r says:

    The biggest questionable assumption he makes is that higher defense spending = more security.
    He says that Clinton let the defense budget fall too far in “one of the ways in which the Clinton era was a holiday from global history.” But the initial US invasion of Afghanistan in 2001 was carried out by the Clinton-funded military using Clinton-era planning.
    The current Iraq situation is the product of the higher level of spending since then. Do you know anyone who believes that the current military situation in Iraq is a greater success than the US-led overthrow of the Taliban?
    Second, he uses as his baseline an era during which we were constantly either at full-scale war with advanced industrial economies (Germany/Japan) or at cold war with a large industrial economy spending all it could on armaments (Soviet Union) and at times also fighting a hardware-intensive war with countries supplied by the Soviets (South Korea + China, Vietnam).
    His biggest failure is his failure to consider what kind of world we actually live in.
    To quote Bradford Cornell as quoted in Michael J. Mauboussin’s “More Than You Know”: “When data are nonstationary, projecting past averages typically produces nonsensical results.”

  52. ilsm says:

    Here is the chart on constant inflation adjusted dollars spent on “national security”:

    http://www.d-n-i.net/fcs/pdf/dod_toa.pdf

    This site has graph similar to those on the WSJ editorial, with this one for clarity.

    Note we are now about where the spending was in 1984 a few years after the Soviet wake up calls in Central Europe and SW Asia.

    Norm Augustine used to tell a joke I heard it at one of his presentations:

    ‘One day the rate we are going (late 80′s) we will have one airplane for the Navy, Marines and Air Force to share. They will fly it by drawing lots once a week.’

    Sort of like the military running the space shuttle, it is getting there.

    Got quite a chuckle among the audience of up and coming defense acquisition managers.

    The underlying truth: There is no one asking the obvious question: Does the thing merit spending the taxpayers’ dough.

    NO ONE IN THE MILITARY INDUSTRIAL COMPLEX, EITHER SIDE, ASKS THAT VERY LOGICAL QUESTION!!!

    There is huge waste, the stuff we buy supposedly to replace old broke stuff is hugely expendsive and highly unreliable.

    The F-22 to replace the F-15, which has never seen air combat with an equal, is only 288 each at the cost of the 1500 or so F-15′s built in the 70′s.

    Missile defense cannot even pass the most scripted tests much less an enemy who will not sympathize with an aborted launch.

    Ike said it he knew better than most:

    “Every [weapon] signifies, in the final sense, a theft from those who hunger and are not fed.” – Dwight D. Eisenhower

    The effect is it is good we are taking care of the hungry rather than make Augustine a comic in his multi millionairre crowd.

    Further:

    “Overgrown military establishments are under any form of government inauspicious to liberty.” George Washington, 1796.

    brion is rght

  53. Robert ben Kline says:

    In 1942, every man between the age of 18 and 45 was in some sort of military unit or in a job important to the military. Food, fuel, tires and much more was rationed. Major consumer goods were not available to the public.
    It hurt everyone to be at war.
    the data shows that we have never made such a commitment since.
    Does anyone think we should NOW?

  54. Kevin_r says:

    My god, once I start digging into this…
    “The larger point is that America remains a long way from a state of “imperial overstretch,”
    Defense spending as % of GDP is useless as a measure of “imperial overstretch”. A better measure is how much Ahmadinejad{sp} and Kim Jong-Il think they need to take the possibility of US action against them into account as the consider acquiring nuclear weapons.

    “More than half of the fiscal 2006 budget deficit of 1.9% of GDP can thus be attributed solely to this rebuilding of American defenses after the Clinton drawdown.”
    Now if we had launched an elective war in Iraq, that might be the responsibility of the current administration. Oops.
    I’m sorry, Barry. I don’t usually read this tendentious nonsense, so I’m having one of those moments you have when CNBC announces the end of the housing downturn.

  55. apav says:

    There are lots of places to hide the money: How much of VA benefits and educational benifits do they include in Defense spending? How much of food stamp type assistance that goes to army personel? How much outsourced stuff, e.g. maintenance, logistics? How much of local education for military dependants is covered by DOD? How much to foriegn governments for basing rights? How much in military aid and training to foriegn governments? How much is spent CIA, NSA and black programs? And how much is defered – e.g. psychiatric and rehab care for wounded, replacement of spent arms, equipment depreciation….?

  56. An essay or an article using statistics. Only arguing the validity of the statistics serves what purpose?

    The writer had an agenda. Defense spending is not out of line with other things we choose to spend our tax dollars on. The writer might even be advocating for more spending.

    ———————————————

    Smokefoot’s post addresses the validity of the stats well at a general level.

    “There is no industrial age enemy to tilt with so we tilt with windmills.”

    It’s not as expensive to fight terrorism as it is to confront a Cold War threat globally like the Soviet Union was.

    —————————————-

    That said, there is an agenda that has to be addressed too. The military industrial complex is more entrenched in our country than ever.

    Those defense stats cited in the article won’t show that, but looking at how many communities in America are dependent on defense contractors and to what extent would show it. So would a look at the dollars given to Congressmen, Senators and various State and Local politicians.

    These stats and this article is being used to hide a big problem that is turning us into a miltaristic, fascist society leaning towards a theocracy – another 9/11 would probably do it.

    I have a big problem with that and so should everybody here who has posted (unless you are a “conservative without a conscience” Authoritarian Bush Cultist).

    Regards,

    Patrick

  57. Robert Cote says:

    This is always an easy question to answer for me. Anyone who thinks the defense budget is too high is welcome to adopt and previous defense budget of the last 60 years. The only catch is you have to adopt the ENTIRE budget. When offered that choice the true agenda is revealed it isn’t that the defense budget is too big but rather the complainers want to spend more on other things.

  58. whipsaw says:

    I don’t think that the underlying issue is whether the defense budget is high or low, it’s how much of it is either being wasted or stolen?

    From where I work, I see the F-22 being test flown about once a week with a chase plane. This thing is too big to be a fighter, too small to carry a useful conventional payload as a bomber, and too loud to actually be stealthy once it gets below one click in altitude. So it is a $200 million per copy boondoggle.

    While the DoD is spending money on that, I hear from my retired military friends (several Lt. Cols and a Brig Gen) that the army’s equipment and artillery is all shot to hell from multiple tours in the Land of Roses for the Liberators. Full depot teardown maintenance has been skipped and it is anybody’s guess when a tank, etc., will fail in combat. It isn’t right to send kids into a combat zone when they can’t count on anything but themselves.

    So I’d just say that if you are going to have a real war, you need to get the vast majority of the US behind it (Afghanistan), you need to tell them the truth about how bad it could be (never with Junior- “Go shop or fly somewhere”), you need to put 10 million men under arms via a draft (never, Junior doesn’t like the concept), and you need to put the entire US economy on a war footing via production controls and wage & price controls (never, not good for the markets).

    Otherwise, you are just killing people on both sides aimlessly, regardless of the budgets. Either have a war or don’t, never in between.

  59. ilsm says:

    The most obvious support for military spending includes the jobs in districts.

    Build the thing, keep the base in my district.

    Forget that it was built to fight the Soviets.

    Most support is for jobs.

    After WW II there was a conscious decision to use the military industrial complex rather than arsenals.

    Civil servants do not fund PAC’s.

    The US military in raw numbers outside the Navy is 40% less. Yet it costs about as much to run it as in 1984.

    It has become a capital intense structure delivering jobs to congressional districts.

    Look to Lieberman and Connecticutt.

    How much defense money goes there?

  60. Robert Schneier says:

    Obviously the % GDP argument they make is bogus analysis. However, the real error of their argument lies in what is acutally contained in the OMB definition of “defense spending.” It excludes, for example, all the spending on the Iraqi and Afghanastani wars; it excludes a big chunck of military spending that gets slotted under the DHS and other budgets; it excludes accruals; it excludes certain discretionary and non-discretionary spending; it excludes all ‘black’ programs; and so on. It’s the same data-definition subterfuge used when OMB talks about the ‘budget deficit’. Like this phony ‘analysis’ of defense spending, the reported deficit numbers exclude a whole bunch of pesky outlays and accruals, and addback phony inflows. All these data are readily available on USG websites for anyone who cares to read them.

  61. ken says:

    I don’t care who writes it I have learned never to trust anything on the WSJ editorial page.

    It is like trusting the public relations department instead of reading the audited financials.

  62. D. says:

    US Pop:
    1970: 205M
    2007: 298M

    Defense Spending:
    1970: 81.9B
    2007: 528B

    Spending per person:
    1970: 400$
    2007: 1770$

    For an increase of 4.2% per year.

    It’s flat over the years since it more or less followed inflation.

  63. donna says:

    Well, the first mistake is, we don’t have a “defense” budget, we have an “agression” budget.

    A “defense” department would have protected us against things like 9/11.

  64. ilsm says:

    Donna,

    Correct.

    The DoD was established by the national security act.

    Aggression is a form of security. Hit the bogeyman before he hits you.

    The security part goes more to profit security for the privatized arsenal system.

    The argument that we spend so and so in GDP terms on the military industrail complex is from the PAC’s and military industry associations.

    It is business development, marketing death.

    The false accusation that we are being cheap on defense is rooted in the 1880′s drive for a worldwide Navy so we could grab Cuba and the Phillipines in 1898.

  65. D. says:

    IMO, the train is gaining momentum.

    Public opinion is being shaped into beliieving more money is needed to protect America.

    The US economy is slowing. Consumers are retreating and government will take over. Protectionism will increase and defense spending too.

    It’s not all that bad. Many of the luxuries we enjoy today were developed with war R&D.

    Hedonism does not make a nation very strong.

  66. Gary says:

    Ok, this is off-topic but Donna and ilsm mention one of the most brilliant examples of propaganda ever — the renaming of the War Department to the Department of Defense. Pure genius. Eisenhower saw where it was going and he was right. Now it’s joined by the War on Terror, the perpetual war hyped every two years. As someone evil once said: “Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”

  67. Coruscation says:

    Answering the question, ‘ Identify the error’:
    These charts do show wars in the mid 1940s or 1950s.
    They miss WWII or Korea.

    Technical analysis of the charts:
    1. Wars are getting shorter and wider.
    Not happening in speeded up internet time.

    2. If you used GNP rather than GDP, you could include
    the value of overseas Americans. Monetize that democracy
    they are creating. Economists need to learn addition.

    Investment analysis:

    1. America has become more efficient at selecting
    which wars to wage.

    2. No booty.
    If America was stronger, her enemies could
    pay tribute, and net defence spending could shrink
    during wartime.

  68. anon says:

    The US Military won the WAR in Iraq in 3 weeks and 2 days. Period.

    What we currently call the War On Terror or GWOT or War-in-Iraq or whatever is more properly called a Failed Occupation.

  69. anon says:

    From my post over at Mankiw – revised.
    This WSJ thing sounds like Bill Kristol and the Neocons.

    National Defense spending in these days of the GWOT must include some portion of the Homeland Security budget plus DOE protecting power grids and nuclear plants etc.

    And since much of this war is covert where exactly does the CIA budget show?

    Why has the annual DOD budget voting not included the ad hoc appropriations for the Afghan and Iraq wars? Is THAT in the WSJ chart?

    And now that we have a Space Command and the new NASA launch vehicle and moon base work will be doing double duty… should not a portion of the NASA budget be classified as Defense?

    Finally the graph does not show pre-WW2 data very well. Eisenhower in his 1961 farewell brought forward the risks of a standing army and the Military-Industrial Complex. There was none pre-WW2. We needed one to counter the commies. Now do we love Russia and China?

    So when the Soviet Union collapsed in 1989 and the Red Menace disappeared Bush-1 slashed the standing army from 18 to 14 Divisions with a plan to go to 12 in his 2nd term. Clinton took it to 10. Is Peace a valid reason to reduce an army?

    NET:
    1. What are we really spending?
    2. What is appropriate?

    WSJ rationale of Percentage of Budget or of GDP is weak.

  70. ilsm says:

    “It’s not all that bad. Many of the luxuries we enjoy today were developed with war R&D.”

    I am not sure what was developed.

    But I do want know, if you concern yourself with human condition, what better would be done with $140B a year in technical investment in alternative fuels, medical science, agriculture or anything other than miniscule improvements on weapons developed to fight the Nazis?

    All I can think of is Tang, the Brits developed radar and jet engines in the pre WWII times. The Nazis did the basic tech for landing on the moon.

  71. JuanBobsDad says:

    The charts and numerology appear to be fine, but I don’t care at all for the conclusion of the article:

    “And all of these priorities must compete with the ever-larger share of the defense budget consumed by health care and salaries for the volunteer force.”

  72. D. says:

    Examples of war research? There are tons of examples. But I’ll only give one because I think it speaks for itself:

    1. PACKETIZED DATA COMMUNICATION

    It would be nice if we could direct money to research without being at war. But with democracy we never seem to be able to decide which group gets the funding. It seems that we humans need to be scared of something to get our act together!

  73. ilsm says:

    “And all of these priorities must compete with the ever-larger share of the defense budget consumed by health care and salaries for the volunteer force.”

    The military pay raise is 2.2%. Takes effect 1 Jan 2007.

    The SS COL is 3.3%, takes effect 1 Dec 2006.

    Do you think there are no trades?

    It is highly profitable gunboats and planes before the troops.

  74. ilsm says:

    Look at defense this way:

    If I was spending $20K on a porsche in 1975 when there were great autobahns where I could really drive the thing, does it make sense to keeping buying the $20K porsche when the roads are all dirt, after the autobahns decayed?

    The autobahn is the Red threat which might ( I was not and am not sure) have justified a porsche (although the Red Army proved super weapons are no good against poor weapons, in large numbers and good tactics).

    The dirt road is the Terrorist and North Korea “feardsome” threats (I do not believe them). Again super weapons are not working.

  75. anon says:

    WHERE is the follow-up post?

  76. Wes says:

    One new point, one concurrence:
    1. The WSJ wants defense spending to be the something like the percentage of GDP that it was in past. But the WSJ does not acknowledge that tax levels were generally higher in the past than now. It is not realistic to make vague references to cutting other spending to pay for the large increase in defense spending the WSJ seems to favor.

    2. Then there is the question, raised by others, whether the threat the US faces at any particular time should be assumed to grow in lockstep with US GDP. Isn’t it true (and isn’t it relevant) that the US spends about as much on defense as the whole rest of the world?