China is already spending more than the US military? Discuss “Breaking the Defense

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DF-17 hypersonic missiles at China’s 70th anniversary military parade

Bill Greenwalt worked hand in hand with the late Senator McCain as he attempted – and repeatedly failed – to clean up the defense budget of huge amounts of what isn’t really defense spending – the research about cancer, health care, groceries and the list. goes on and on. If you take that out of the defense budget, how much is America actually spending on its military and how does that compare to what China is spending? Read on! The editor.

Adam Smith, chairman of the House Armed Services Committee, is under pressure from within his party to limit defense spending, so he advocated focusing less on the first line of defense and more on the value of that. that the United States draws from its defense budget.

Given that the Chinese threat is the primary threat to the Biden administration, focusing on the value of the fiscal year 2022 budget may provide surprising answers and implications when comparing the value of US defense spending. United in relation to the PRC’s defense spending.

New data indicates that despite China’s ridiculously low official defense spending figures, the value of its defense budget may have exceeded what the United States actually spends on defense. If this is true, it does not fit the rhetoric that the United States is decades ahead of China and has time to pivot to Asia in a predictive fashion by gradually shifting resources within the existing budget.

Bill greenwalt

Predicting and advising on the significance of changes in US defense spending is one of Washington’s favorite board games. Despite persistent calls from civilian and uniformed officials for a 3-5% annual budget increase to rival China, the Trump administration has ignored this advice and slashed the FY2021 budget. As a result, this year , the Pentagon is running a budget of $ 740 billion. – $ 705 billion for the Pentagon and the rest mainly for the nuclear programs of the DOE. This Friday, the Biden administration is expected to come up with a 2022 budget that will likely be lower than inflation. The fate of the Democratic Party (affectionately called Progressive) calls for a 10% cut. This is why the perceived low rate of Chinese military spending is crucial.

The trope that the United States spends more than the next 10 countries on defense combined is regularly presented as to why defense spending could go down. The United States can limit defense spending while meeting our national security needs, is the argument that resonates in the halls of the OMB and the appropriation committees.

In popular terms, it is argued that we can buy more butter and fewer guns and still be safe. National security advocates often counter this with the somewhat thin argument that we need to spend more because the United States has more interests than anyone else in more places in the world. What if these arguments and the basic assumptions on both sides are wrong? What if we don’t spend more and get less value from what we spend than our opponents?

The first data point of this voyage of discovery comes from the Stockholm International Peace Research Institute (SIPRI), which adjusts China’s “official” defense spending from $ 184 billion to $ 252 billion. Then things get interesting. This month, The Economist published an analysis based on a defense purchasing power parity (PPP) methodology developed by an Australian professor that is similar to other algorithms used to compare countries’ GDPs. The PPA calculations are done to try to compare apples to apples in terms of the cost of things and the value one gets from spending in different economies. For example, new US military recruits cost 16 times more than in China. After consolidating global manufacturing, it’s no surprise that it’s cheaper to build things like warships and missiles in China. There is a reason why the Chinese navy is now the largest in the world.

The Economist calculates that China’s actual spending in 2020 is $ 518 billion, double the SIPRI estimate. In 2021, China announced plans to increase its defense budget by 6.8 percent, which would bring that estimate to around $ 550 billion. That would still leave the United States with an annual cushion of over $ 190 billion.

Unfortunately, that lead quickly evaporates when one takes into account a statement made last week by Representative Anthony Brown, Democratic Vice President of the HASC. Brown was frank in an op-ed on the share of non-defense spending incorporated into the US defense budget. His statement was clearly aimed at the progressive wing of his party, because his arguments, summed up, are that defense spending isn’t that bad, because it’s actually not really defense spending.

For decades, Senator McCain fought the heavyweight of liberals and Willie Sutton-style appropriators who understood that the Department of Defense Bank was where the money was. What was not clear, until Representative Brown’s article, was the extent of this expropriation – to the tune of $ 200 billion a year. “We’re spending $ 1 billion more on Medicare in the defense budget than on new tactical vehicles. We are spending more on the defense health program than on new ships, ”Brown wrote. “In total, some $ 200 billion of the defense budget is primarily intended for non-defense purposes.” Even McCain would have been flabbergasted by the magnitude of that number.

Removing that $ 200 billion of non-defense spending from US defense spending would leave the effective rate of US defense spending below the Chinese estimate, at around $ 540 billion. On top of that, the DoD doesn’t spend all of its money due to misguided appropriations and budget rules and now leaves around $ 20 billion annually on the table that ultimately goes back to the treasury. Thus, the equivalent of Chinese spending of $ 550 billion, which continues to increase by more than 6% each year, is significantly higher than the actual U.S. spending rate of around $ 520 billion which, at best, , will struggle to keep up with inflation. Conclusion: the time is not on the side of the United States.

Of course, the main budget comparisons will remain strained. The Chinese will continue to hide defense spending while the United States has pledged to hide social spending in its defense budget. Improved analysis and the use of productivity and PPP-like metrics will be key in the future to try to make sense of what the world’s two greatest powers are really doing.

As Congress considers this, it must first understand that the United States is likely on the verge of overspending and will fall further behind each year thereafter. Actual military spending must increase at the same time as sweeping changes are made to procurement and budgeting.

Congress is expected to include several hundred billion dollars in the next infrastructure bill as a down payment to rebuild our shipyards and modernize the defense industrial base. Lawmakers should also immediately shift non-defense spending from the defense budget to agencies that should, and then spend the released balances on new weapons. Finally, the current credit rules and culture must change to encourage budget savings and allow that free cash flow to be spent where the military can add significant value to compete with China.

Without these measures, extremely dire implications await our nation and free peoples everywhere.



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