In 1961, at the end of his tenure, President Eisenhower eloquently warned the nation about its military industrial complex:
"Our military organization today bears little relation to that known by any of my predecessors in peace time ... This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence – economic, political, even spiritual – is felt in every city, every state house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. ... In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist" (National Archives 2024).
The defense industry remains a powerful force in the US economy six decades after Eisenhower issued his warning, and US military spending continues unabated. In 2025, the US allocated $2.32 trillion in budgetary resources to the Department of Defense, an increase from $1.99 trillion in 2024, which amounts to 14.7% of the entire federal budget (USAspending.gov 2025). The funding bill, which is authorized annually, provided $824.3 billion in funding to the Department of Defense in 2024, an increase of $26.8 billion from the prior year, and the Office of Management and Budget (2025) reports that the US spent $874 billion on national defense that year.
These funding patterns are part of a larger phenomenon referred to as militarism. Militarism can be broadly defined as "a set of social practices that highlight the utility of organised violence, plays a central role in global security and military affairs" (Mabee & Vucetic 2025). Shaw (1991:9-15) explained that the term denoted "the penetration of social relations in general by military relations; in militarisation, militarism is extended, in demilitarisation, it contracts." On this page, we further explore militarism via the enormous US defense budget.
The US Military Budget
As large as it is, the billions of funding dollars just cited as the official figure for the US military budget is misleading in at least two ways. For instance, the official figure has excluded several military-related costs such as veterans’ benefits and interest on the national debt from past military spending. When these costs are taken into account, the total military budget is far higher (Friends Committee on National Legislation 2012; War Resisters League 2012).
Critics say that US military spending is too high and takes needed dollars from domestic essentials like housing, schooling, food aid, and healthcare.
© Thinkstock
Additionally, the calculation for the proportion of federal spending devoted to defense excludes additional military expenses just discussed, and it uses a misleading measure of federal spending. This latter fact needs some explanation. Federal spending includes both mandatory and discretionary spending. As its name implies, mandatory spending is required by various laws and includes such things as Social Security, Medicare and Medicaid, and interest payments on the national debt. Much of these mandatory expenses are funded by trust funds, such as Social Security taxes, which are raised and spent separately from income taxes. Discretionary spending involves the money the president and Congress must decide how to spend each year and includes federal income tax dollars only. Critics of the military budget argue that it is more accurate to cite its share of discretionary spending rather than its share of all federal spending. Of the $1.81 trillion in discretionary spending in 2024, defense outlays accounted for 47%, at $850 trillion (Congressional Budget Office 2025). To put that another way, near half of all federal income tax dollars were used for military expenditures that year.
Another dimension of militarism involves arms exports by both the US government and US military contractors. Combining data on both types of exports, the US sent $12.2 billion in arms deliveries to other nations in 2010. This figure ranked the highest in the world and constituted almost 35% of all world arms exports that year. Russia ranked second with $5.3 billion in arms deliveries, while Germany ranked third with $2.6 billion (Grimmett 2011). Most arms exports from the US and other exporters go to developing nations. Critics say that these exports help fuel the worldwide arms race and international discord. They add that the exports at times go to nations ruled by dictators, who then use them to threaten their own people (Feinstein 2011; Shah 2011).
As mentioned above, according to the Office of Management and Budget, the US spent $874 billion on national defense in fiscal year 2024. $826 billion was spent on military activities and the remaining $47 billion was spent by other agencies including the Federal Bureau of Investigation on Department of Energy on defense related activities. Defense spending for 2024 on this wide range of activities is visualized in the table below. Moreover, the composition of defense spending has changed over time.
This pie chart displays the proportion of defense spending for various types of activities. Operations and maintenance is the largest category, followed by military personnel, procurement, and research and development.
Source: Peter G. Peterson Foundation 2025
The US Military Budget in an International Perspective
However it is calculated, the US military budget is by far the highest in the world and has accounted for 43% of the world’s military spending. According to the Office of Management and Budget, the US is still known to spend more on defense, relative to the size of its economy and more than any member of the G7 (Peter G. Peterson Foundation 2025). Compared to the US, China's estimated military expenditure was $314 billion, Russia's estimated spending was $149 billion, while Germany and the UK's spending was $88.5 and $81.8, respectively (Liang et al. 2025). The charts below display US spending compared to other nations.
These charts compares US defense spending with that of other nations, including other G7 countries. (Note that the chart on the left side uses 2023 figures.) Explore these interactive charts on the Peter G. Peterson Foundation's Defense Spending page.
Source: Peter G. Peterson Foundation 2025
The US Military Budget in a Moral Perspective
Oscar Arias, a former president of Costa Rica and a winner of the Nobel Peace Prize, echoed famous words from President Eisenhower quoted at the top of this page when he wrote that US military spending took money away from important domestic needs. “Americans are hurt,” he warned, “when the defense budget squanders money that could be used to repair schools or to guarantee universal health care” (Arias 1999).
In the decade since Arias wrote these words, the US spent more than $5.5 trillion on defense outlays in constant dollars, including $1.3 trillion on the wars in Iraq and Afghanistan. Cost equivalencies illustrate what is lost when so much money is spent on the military, especially on weapons systems that do not work and are not needed. For example, the F-35 fighter aircraft has been plagued with “management problems, huge cost-overruns, [and] substantial performance shortfalls,” according to a news report (Kaplan 2012). Each F-35 costs about $300 million (in 2012 dollars). This same sum could have been used to pay the salaries of 10,000 new teachers earning $30,000 per year or to build twenty elementary schools at a cost of $15 million each. In another example using 2012 dollars, the Navy was designing a new series of nuclear submarines. Each submarine was projected to cost more than $8 billion to build and another $21 billion in constant dollars in operation and maintenance costs over its lifetime (Castelli 2012). This $29 billion sum for each of 12 submarines during its lifetime could provide 5.8 million scholarships worth $5,000 each to low- and middle-income high school students to help them pay for college.
The wars in Iraq and Afghanistan provide additional examples. These wars cost the US about $1.3 trillion through 2012 (not accounting for costs after that year), for an average of more than $100 billion annually (Harrison 2012). This same yearly amount could have paid for one year’s worth (in California cost figures) of all of the following:
- 146,000 police officers
- 9.5 million children receiving low-income health care (Medicaid)
- 1.7 million students receiving full-tuition scholarships at state universities
- 1.6 million Head Start slots for children
- 179,000 elementary school teachers
- 162,000 firefighters
- 2.5 million Pell Grants of $5,550 each (National Priorities Project 2012).
All these figures demonstrate that war and preparation for war indeed have a heavy human cost, not only in the numbers of dead and wounded, but also in the diversion of funds from important social functions and needs.
Lessons from Other Societies
Guns or Butter?
“Guns versus butter” is a macroeconomics phrase that illustrates the dilemma that nations face in deciding their spending priorities. The more they spend on their military (guns), the less they can spend on food for their poor and other domestic needs (butter).
In making this very important decision, Europe has chosen butter over guns. The wealthy European countries that compose the bulk of the Organization for Economic Cooperation and Development (OECD), an international consortium, spent 2.5% of their total economy (gross domestic product, or GDP) on their militaries. In contrast, the US spent 5.1% of its economy on its base military budget, which does not include costs for veterans’ benefits, for the Iraq and Afghanistan wars, and military spending that falls outside the Pentagon’s budget.
The European nations’ decisions to limit their military spending allows more spending for social needs. As a result, observes one economics writer, most Europeans have “universal health care, deeply subsidized education (including free university tuition in many countries), modern infrastructure, good mass transit, and far less poverty” than the US has. Perhaps worse, the US ranks last among the world’s 20 wealthiest democracies in life expectancy and infant mortality and also ranks worst in the risk of dying before age 60. In addition, half of American children need food stamps at some time before becoming adults, while this problem is far rarer in Europe.
Compared to Europe, then, the US has chosen guns over butter, leaving far less money for its social needs. As an economics writer wryly noted, “So remember to take pride in American power, and remember that it comes at a very high price.” In making this classic macroeconomics decision, the US has much to learn from the wealthy nations of Europe.
Source: Holland 2011
The Debate over the US Military Budget
This diversion of funds is unfortunate, but some argue that it is necessary if the high level of US military spending is needed to ensure the nation’s security. Experts disagree over this issue. Some think that the US needs to maintain and in fact increase its level of military spending to replace aging weapons systems, to meet the threat posed by terrorists, and to respond to various other challenges around the world. Military spending is good for workers, they add, because it creates jobs and it contributes to technological development (Boot 2012; England 2012; McKeon 2012).
Other experts echo President Eisenhower’s concern over the size of the military budget (Bacevich 2011; Korb, Rothman, & Hoffman 2012; Lochhead 2012; Wheeler 2009). Noting that the military budget today exceeds the average budget during the Cold War, they think that military spending is far higher than it needs to be to ensure the nation’s defense with the Soviet Union no longer a threat. They say that the US could safely decrease its nuclear and conventional weapons arsenals without at all endangering national security. They also say that the stationing of some 300,000 American troops on 865 military bases abroad in 2011, including 81,000 troops in Europe and 220,000 in other nations, is hardly needed to ensure the nation’s defense. As one scholar said of the military bases, “It makes as much sense for the Pentagon to hold onto 227 military bases in Germany as it would for the post office to maintain a fleet of horses and buggies” (vanden Heuvel 2011).
These experts argue that the military budget is bloated for at least four reasons. First, the defense industry is very effective at lobbying Congress for increased military spending, with the cozy relationship among members of the power elite helping to ensure the effectiveness of this lobbying. Second, members of Congress fear being labeled 'weak on defense' if they try to reduce the military budget or do not agree to new weapons systems requested by the Pentagon. Regarding this fear, former US senator and presidential candidate George McGovern (2011: 47), a decorated World War II hero, writes, “We need to end the false choice between a bloated budget and a weak spine.”
Third, and helping to explain the success of this lobbying, military spending provides jobs and income to the home districts of members of Congress. Fourth, military waste in the form of cost overruns from poor accounting and other management failures is rampant. As just one example of such waste, a 2011 federal audit found that cost overruns over the prior two years had added at least $70 billion to projected costs of various weapons systems (Drew 2011). A major reason for this problem was that the Pentagon had begun building these systems before their designs had been completely tested.
Critics also argue that military spending actually produces fewer jobs than spending in other sectors (Ledbetter 2011). According to a 2011 estimate, $1 billion spent by the Pentagon creates 11,200 jobs, but the same $1 billion spent in other sectors would create 16,800 clean energy jobs, 17,200 health-care jobs, and 26,700 education jobs (Pollin & Garrett-Peltier 2011). To quote the title of one report, military spending is “a poor job creator” (Hartung 2012). This report concluded that “the more money we spend on unneeded weapons programs, the more layoffs there will be of police officers, firefighters, teachers, and other workers whose jobs are funded directly or indirectly by federal spending.”
As this overview of the debate over military spending indicates, the military remains a hot topic more than two decades after the Cold War ended following the demise of the Soviet Union. As we move further into the twenty-first century, the issue of military spending will present a major challenge for US political and economic institutions to address in a way that meets America’s international and domestic interests.
