Can the U.S. Afford a Major War? The Impact of the Deficit on National Defense

The question of whether the United States can afford to engage in a major war is increasingly relevant given the current deficit. The future is uncertain, with potential threats such as China’s possible invasion of Taiwan, the need to defend NATO allies against Russia, or responding to terrorism in regions like the Middle East or Africa.

The federal budget is inadequately prepared for such eventualities. With the current deficit, engaging in a prolonged, large-scale conflict would exacerbate budgetary issues, pushing it into riskier territory. Former Chairman of the Joint Chiefs of Staff Michael Mullen once remarked that the national debt poses the biggest threat to U.S. national security. This insight, from 2010, highlighted concerns when the debt was significantly lower than today.

Historically, national defense was the main focus of federal spending. This was clear during World War II, where defense constituted 90% of federal expenditures. During the Vietnam War, defense spending ranged from 35% to 50%. After the Cold War, by 1999, defense spending had dropped to 16%. Despite the wars in Afghanistan and Iraq, defense spending post-9/11 rarely exceeded 20%.

This year, defense spending accounts for 13% of federal outlays and projections suggest it will decrease to single digits by 2035. By 2032, over half of federal spending is expected to go towards Social Security and major healthcare programs.

The U.S. defense budget remains substantial, surpassing $900 billion. The higher costs are largely due to the country’s high wages and reliance on an all-volunteer force. Recruiting volunteers instead of conscripts means competing with private employers, affecting military budget allocations. Roughly 40% of the Pentagon’s budget compensates military personnel and civilian employees. The compensation costs for U.S. military personnel are much higher than those of the Indian military, which is the only employer larger than the U.S. military.

There is an urgent need to modernize the U.S.’s conventional forces and nuclear deterrent, which depend on outdated technology. The triad, consisting of bombers, submarines, and land-based missiles, needs technological updates. The conflicts in areas like Iran have shown strains on the Army, Navy, and Air Force. These modernization efforts have begun but will continue into the 2030s.

Emerging demands, such as drone warfare, require more agile procurement systems. The Ukraine experience illustrates that technology can quickly become outdated. Drones offer a cheaper unit price but accumulate costs due to high quantities and fast depletion rates. They add to existing costs, as they don’t yet replace pricier conventional weapons.

The Pentagon can improve efficiency. Like any bureaucracy, it can suffer from bloat as larger budgets often symbolize bureaucratic success. The defense market’s lack of competitiveness, with the government dealing with few contractors, often leads to inefficiencies.

It’s important to note that defense spending isn’t a primary driver of national debt. The Congressional Budget Office projects the defense budget will grow slower than the economy over the next decade. This could potentially reduce the debt-to-GDP ratio. However, projections assume no wars and exclude some ambitious proposals, such as the suggested $1.5 trillion annual defense budget.

To put things in perspective, the cost of a Gerald R. Ford-class aircraft carrier matches about three days of Social Security spending. The expenditure on guns up to 30mm caliber across all military branches in 2025 amounts to $650 million, less than four hours of Social Security costs. Over its lifecycle, the expensive F-35 program costs less than last year’s Medicaid and Social Security spending.

Defending the nation remains Washington’s most vital duty. Governments should incur debt during wartime and aim to reduce it in peacetime. Stretching debt limits in peacetime could compromise national defense capabilities.