President Trump’s insult tour through the NATO summit peaked (so far) Wednesday with his suggestion that not only should member countries meet their obligation to spend 2% of their gross domestic products on defense spending, they should actually double it to 4%.
His reasoning was that the US spends 4.2% of its GDP on defense in “actual numbers,” so the other member countries should pony up.
“On top of that, Germany is just paying a little bit over 1%, whereas the United States, in actual numbers, is paying 4.2% of a much larger GDP,” Trump said during a breakfast with the NATO chief, Jens Stoltenberg. “So I think that’s inappropriate also. You know, we’re protecting Germany, we’re protecting France. We’re protecting everybody. And yet we’re paying a lot of money to protect.”
He’s right that the US is paying more than anyone else, but his 4.2% figure makes less sense.
According to NATO’s official figures, the US spends only 3.5% of its GDP on defense. That’s still a whole lot of money – nearly twice the amount spent on defense by other NATO countries combined. The US spent $623 billion and other NATO countries spent $312 billion, for a total of a little less than a trillion dollars spent on defense by treaty members.
As Trump notes, the US has the largest GDP in the organization (and the world) by far – $19.39 trillion in 2017, according to the World Bank. NATO determines the US GDP at $17.79 trillion in 2017 for the purposes of its calculations.
So doing a little back-of-the-envelope math, in order for the US to meet Trump’s new suggested 4% threshold according to NATO, the US would have to shake an extra 0.5% of its GDP – $88.95 billion – loose from the nation’s couch cushions.
Trump requested $639 billion in defense spending for the 2018 fiscal year. That includes spending on everything from new weapons and overseas operations to a 2.1% pay raise for troops. NATO projects the US will spend $623 billion in dollars equivalent to the $17.79 trillion GDP.
The World Bank, which uses a different set of numbers, lists a lower percentage – 3.145% in 2017 – for US defense spending as a percentage of GDP.
All of these countries have seen a huge reduction in spending as a percentage of GDP since 1960, when the US was spending about 8.5% of GDP on the military. Of course, in real dollars, the US is spending more on the military than it did in 1960, it’s just the GDP has gotten much, much bigger even as the military has gotten relatively smaller.
Another way, perhaps more accessible, to look at defense spending is on a per-capita basis. According to the Stockholm International Peace Research Institute data used by the World Bank, the US spent more than $1,879 per capita in 2017. That’s more than double its European allies. France spent $889 per capita, the UK spent $713 and Germany spent $539 per capita. The US has increased its per capita spending at a much faster rate than the other countries. In 1988, for instance, the US per capita figure was less than $1,200 per person, so its spending has grown more than $600 per person over the past 30 years. France, the UK and Germany have all increased annual spending less than $300 per person during that time.
We’ll update the math here if it becomes clear what Trump meant by the US spending 4.2% of its GDP on defense.
As to where the US could find the $88 billion if it came to that, the country spends more than 16% of federal money on defense and homeland security. Most federal spending goes to things like Medicare and Social Security, however. If you look only at the discretionary spending Congress allocates each year, more than half goes to defense.