The below visual aid from OurWorldInData.org shows exactly how much military spending occurred during World War II. The US spent over $700 Billion [in constant year 2000 USD value] fighting World War II, almost double the amount spent by Nazi Germany. In constant year 2011 US Dollars, the US spent $4.1 Trillion, according to a piece by the Federation of American Scientists. In World War II era Dollars, the US spent $296 Billion. Notice that at the peak of World War II, the US was spending 37.5% of GDP on defense! In comparison, peak defense spending in the post-9/11 world was 4.3% of GDP. World War II truly stands alone in this regard, and will hopefully never be exceeded.
The table below, with data from the US government budget office (OMB), shows how much each of the wars fought by the United States cost, in both actual dollars, and adjusted 2011 US Dollars.
|Total Cost of War, in Billions USD||Inflation Adjusted Cost, in FY 2011 Billions USD||% of GDP @ Peak War Cost|
|War of 1812||0.09||1.55||2.2%|
|Civil War: Union||3.18||59.63||11.3%|
|Civil War: Confederacy||1.0||20.11||N/A|
|Spanish American War||0.28||9.03||1.1%|
|World War I||20.0||334.0||13.6%|
|World War II||296.0||4104.0||35.8%|
|Persian Gulf War||61.0||102.0||0.3%|
|Total Post-9/11, Iraq,Afghanistan,Other||1046.0||1147.0||1.2%|
Another interesting graphic, also from OurWorldInData.org, shows that as a % of GDP, US military spending has been declining rapidly, ever since the end of the Cold War, despite an increase post-9/11.
That increase in spending ended in 2010. In 2016, military spending was 3.29% of GDP. It’s possible, and likely, that President Trump’s budget will increase defense spending, as is usually the case on Republican administrations, but we don’t have the data yet.
Notice that Russia, led by Vladimir Putin, has dramatically increased defense spending, relative to GDP.
One explanation for that may be that Russian GDP is contracting. Turns out, this is exactly the case, as we can see below. Starting in Q4 2014, Russian GDP contracted for 8 straight quarters! Interestingly enough, Russian intervention in the Syrian Civil War began in September 2015 (Q3 2015).
Notice from the above that Russian intervention began when the Russian economy was contracting most severely, at a rate of -2.5% year over year.
We know from political and military history that autocrats will often start wars when their economies are in bad shape, as a way of deflecting popular attention from the economic hardship, to patriotic duty to support nation over self. It’s called the Diversionary Theory of War.
The annexation of Crimea in March 2014, and the Russian involvement in the Ukrainian Civil War in February 2014, both coincide to the same period of severe economic contraction in Russia.