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WaPo’s Misleading Defense Spending Numbers

In the January 16th Washington Post, the day before the 50th anniversary of President Dwight Eisenhower’s “military-industrial complex” speech to Congress, his granddaughter, and chairman emeritus of the Eisenhower Institute, Susan Eisenhower wrote:

Looking back, it is easy to see the parallels to our era, especially how the complex has expanded since Sept. 11, 2001. In less than 10 years, our military and security expenditures have increased by 119 percent. Even after subtracting the costs of the wars in Iraq and Afghanistan, the budget has grown by 68 percent since 2001. In 2010, the United States is projected to spend at least $700 billion on its defense and security, the most, in real terms, that we’ve spent in any year since World War II.

These numbers are all correct, but they are a highly misleading comparison to President Eisenhower’s era. Here are the facts:  When President Eisenhower spoke, the U.S. government spent 10 percent of or gross domestic product (GDP) on national defense, while Medicare and Medicaid did not even exist. Today, we spend only 4.9 percent of our GDP on defense and 9.9 percent on our entitlement programs (which include Medicare, Medicaid, and Social Security). So while total speeding on defense has risen since WWII, so has our nation’s GDP. The fact is we spend far far less on defense today, as a percentage of GDP, then we did during President Eisenhower’s time. This fact is completely missing from Mrs. Eisenhower’s report.

Looking forward, the imbalance only gets worse: Defense spending is set to fall to 3.5 percent of GDP by 2015 while spending on entitlement programs is set to consume 100 percent of tax revenue by 2052.