What is the current level of JSA?

What does the United States risk by investing in its military at its current level of spending (4.7% GDP)?

• By pursuing spending in the military sector at the current level, what risks in all areas does this spending incur?

• Answer:

  The military is the one area in which even the most ardent conservatives admit that "socialism" is the answer, in their anything-the-government-does-is-socialism definition.  It's perhaps the most obvious example of the "free rider" problem that plagues laissez-faire economics: some things benefit everybody whether they pay for it or not.  Therefore, it is justifiable to force people to pay for it. But it's not clear how much, and at 4.7% of GDP, it is the highest in the developed world.  That's not necessarily out of line: as the world's sole superpower, it's also the world's biggest target.  A cost-benefit analysis of military spending would have to be computed based on what would happen without it.  China sends an army to take?  Terrorists grind the economy to a halt?  Absolutely nothing? The military is a service, and the value of a service to the GDP is usually computed as the price paid for it.  If a plumber charges $100, it's assumed you needed exactly $100 worth of plumbing.  If you didn't, you'd have paid less.  In computing the GDP, government expenditures (including the military) are priced in as a separate term: the military doesn't just cost 4.7% of GDP; it IS 4.7% of GDP. But unlike a plumber, you don't know how much military you need.  And with the power of taxation, the number is heavily skewed by politics.  A recent debate revolves around a fighter engine that is literally redundant: we already have one that does the job.  Many fought for a second one as "competition", but it's not competition in any usual sense of the word, since we'd be getting BOTH.  A second plumber in town provides competition if he's charging $90 for the job.  If you now have to pay $190 to have both plumbers do it, it's hard to imagine how this is "competition" in the economic sense. The downside to military spending is opportunity cost, but that's also hard to measure.  The "extra engine" provides jobs that, in basic laissez-faire economics would presumably go to doing something else. But what else?  With unemployment well above structural levels, it's not just the engine that's redundant; it's the workers.  Jobs for them don't appear out of nowhere, and yet paying them to build an engine is essentially the high-tech equivalent of alternately digging and filling ditches. The economics is still more complicated, because military work has follow-on value.  Research sometimes makes it into the private sector.  Sometimes that's direct, but more valuably it drives up the demand for high-skilled jobs.  People who educate themselves to do it can do all sorts of things, and often they make jobs for themselves.  And sometimes those jobs result in work for those who couldn't be engineers, with net value added to the economy. Measuring any of that, though, is fiendishly difficult.  It's clear that other countries spend far, far, far less on their militaries (in absolute dollar terms, the US spends as much as everybody else combined.)  And that's for a nation which faces no realistic threat of invasion on any border.  There is one measure, though, which is simple and objective: the US is a debtor nation.  Money not spent on the military could go to paying off its debts, and the accumulated debts may be far more dangerous than any threat that a military could cope with.  Cutting the US military's expenditures would go a substantial way to closing the deficit.  (Though sadly, in the current economic environment, not even eliminating the military would close it.  That's more a matter for the revenue side than the spending side.)