There are many documents released by the Department of Defense that strain the attention span, but perhaps one of the hardest to get through is the Strategic and Critical Materials Report. It is a topic vital to national security, but the 2013 report runs to 189 pages and includes 17 appendixes. The report examines materials essential to the civilian and military economy, the projected supplies, and the problems that may occur in a crisis if the United States does not have adequate access to them.
There is one part of the economy that is not examined in the Defense Department’s calculations; the state of the American debt. Those in favor of increasing the defense budget, which will necessarily increase the country’s debt burden, need to understand how debt will affect the military’s ability to respond to future security crises. High levels of debt prevent nations from quickly ramping up their response to threats. The United States has run a deficit for much of the last century, but the current level of debt has become particularly burdensome.
This is not to say that the Defense Department is unaware of the problem. In 2011, the Chairman of the Joint Chiefs of Staff ranked the US debt as the biggest threat to American national security. The Joint Chiefs, Washington think tanks, and the Administration discussed how reducing the defense budget was hard, but imperative, and part of the wider necessity of reducing American deficits and debt. The rise of ISIS and Russian aggression, however, has shifted the conversation back towards traditional threats. The new nominee to head the U.S. Joint Chiefs has placed Russia squarely as the chief threat to the United States. Other threats mentioned included China, North Korea, and ISIS.
These are certainly major problems within the geopolitical world of today, but the issue of debt has not gone away. In 2014, the debt grew from $16.7 trillion to $17.8 trillion. The gross government debt, which includes publically held debt and debt held by other countries, ticked over one hundred percent this year. While the US government has debated the best response to the current strategic problems, it has failed to address how it would fund its response if the situation gets even worse.
The Congressional Research Service put together a report in 2010 on the cost of every major American war since independence. The report measures the war cost as a percentage of GDP in the conflict’s peak year, the total defense spending as a percentage of GDP in the conflict’s peak year, and the cost of the war in 2011 constant dollars. During the peak years of all the American conflicts, the United States spent on average 9.62 percent of its GDP on defense spending, and 6.7 percent on the war specifically. Of course, the world wars skew the data somewhat, but if only post-World War II conflicts are including in the averages, the numbers are 7.3 percent and 1.7 percent respectively.
If the US were to follow these averages with today’s GDP, the next conflict would cost us $283.36 billion in its peak year alone, with general defense spending at $1.292 trillion in the same year (in 2015 dollars). The requested defense budget for 2016 was $585 billion for the base budget and war funding. Problematically, the post-WWII conflicts all involved technologically inferior enemies. These estimates could balloon in a conflict against a peer or near-peer power. During the peak of World War I, American defense spending reached 14.1 percent of GDP. During the peak of World War II, it reached 37.5 percent. Today, the equivalent spending would cost $2.497 trillion and $6.641 trillion respectively – and that is only for the most expensive year of the conflict.
The median length of an American war has been four years, with the median defense expenditure at 5 percent of GDP. With those dimensions, a new war would cost $3.5 trillion dollars – all else being held equal. These numbers hide the fact that personnel costs have vastly increased in the most recent wars. There do exist technological advances that could drive costs down, but not without significant increases in research, development, and investment expenditures. The Department of Defense has highlighted this within its third offset strategy, but there are doubts that the Pentagon can invest in the required innovation and maintain current necessary spending at current budget levels.
Should the United States become engaged in such an extreme conflict, the costs would be prohibitive. As it stands, the United States must either find a much more efficient way of managing its defense, or work harder to reduce its overall expenditure. Given the other burdens on the federal government, it is likely that the Defense Department will have to become significantly more efficient than it has been in previous conflicts. The economy is not in a state that could handle the stress of another large conflict outlay, and the United States cannot afford to ramp up defense spending in similar manner to its previous increases. The Congressional Budget Office predicts that the debt will grow by $7.2 trillion between 2016-2025 without such an exogenous shock.
Since the end of World War II, the United States has involved itself in a major conflict every ten years or so (averaging the length of time between each conflict). The security world has changed as well, with low-intensity, long-term conflicts becoming the norm. It is a very optimistic forecast that sees a ten-year gap between the end of the Iraq/Afghanistan Wars and the next U.S. conflict. For those concerned about national security, the national debt is still very much an issue. Conversations on how to handle the problem need to begin again.