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Ten Years of Elevated Military Spending, Still Near WW II Levels

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With recent revisions to the Consumer Price Index data for 2011, we can now analyze long term U.S. defense spending based on Bureau of Labor Statistics and U.S. Government Printing data, 1940-2011. We have now seen ten full years of elevated military spending, much of it during a time of national economic hardship. When comparing to an average of the highest spending war years, 1942 through 1945, we see that last year's spending level was 86.3% of average World War II spending. It was the third consecutive year of real spending at 85% of WW II levels.

The long term chart below shows the peak of World War II spending, peaks for the Korean and Vietnam wars, the Reagan era buildup, and the post 9/11 hardware buildup. Spending following the Iraq invasion, when shown in constant dollars, makes clear that the cost of the wars plus the 9/11 hardware buildup is roughly equivalent to adding double the "peak" that the previous wars and buildups exhibited.

US Defense Spending 1940-2011 ($M Adjusted for Inflation) by

The tables below show the World War II years' annual spending in 2011 dollars, and below it, spending for the last ten years, and the percentage for that year vs. the World War II average. The peak was reached in 2010, when U.S. spending amounted to 87.6% of 1942-1945 average spending. ( sorry... the spending breakouts table formatting could not be transferred to this website; please see the original post if interested in the numbers).

In a February presentation to Congress, Defense Secretary Leon Panetta displayed a remarkably similar chart, cut off just before it could show World War II historical spending. The chart was featured for a time at the Whitehouse website, to illustrate that the administration is not "soft on defense."

The projected reductions in defense spending by the Obama administration projects continued spending at post 9/11 levels, in effect, cutting the "second" peak, but not the first. This is made clear by the level of the dotted line at the right of Secretary Panetta's chart, shown below.

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Post WW II Defense Spending - From Leon Panetta Presentation to Senate
Slide from Leon Panetta presentation to Senate, Feb. 2012 by
Public Domain - U.S. Defense Dept.

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I am a professional in the computer field whose specialty is databases. I grew up, went to school in, and lived in New York for many years. I have lived in Florida for twenty years now, and it is a wonderful place to see and experience nature. I am (more...)

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