U.S. military $886 billion per year – $21 trillion lost

October 1, 2018 through September 30, 2019 – estimated U.S. military spending is $886 billion; military spending is the second largest item in the federal budget after Social Security. The U.S. military spending is higher than the next ten countries combined.

U.S. Military Spending History
FY DoD Base Budget Total Spending
2016 $521.7 $767.3
2017 Actual $523.2 $818.2
2018 Enacted $574.5 $874.4
2019 Budget $597.1 $886.0

The 2019 military budget, gives an $82 billion increase from 2017. The military has called the additional funding necessary to improve its ability to respond to international crises, while critics say Congress should not be giving a significant boost to spending at the Defense Department at a moment of relatively diminished U.S. military involvement around the globe. About 17 percent of America’s $4 trillion federal budget goes to the military, according to the Congressional Budget Office. Budget experts said the dramatic increase in military spending will exacerbate America’s debt hole, by pushing the government further into the red and increasing the amount the federal government spends on debt interest payments. Congress’s official budget scorekeeper recently projected the federal deficit will rise to more than $1 trillion a year by 2020, sparking concerns among both Republicans and Democrats in Congress that spending is growing at an unsustainable rate and could trigger higher inflation.

“Our regional competitors in the Pacific and in Europe have been studying our strengths and our vulnerabilities for more than a decade,” Maj. Gen. Paul A. Chamberlain said. “Their modernization efforts are slowly eroding our competitive advantage, and this budget request addresses that, by providing the necessary resources to ensure the Army’s superiority.”

Critics also say the Pentagon is bloated with administrative waste and contracts, pointing to a 2016 internal report finding that the military buried evidence of $125 billion of bureaucratic waste, and that America already spends far more on its military than any other country. America spends more on its military than the next 11 countries combined, according to Matthew Fay, director of defense and foreign policy studies at the Niskanen Center, a think tank. Pouring billions into the military also limits America’s ability to spend on health care, child care and other key domestic spending priorities, Sen. Bernie Sanders (I-Vt.) said in a recent speech on the Senate floor, noting the nation has among the worst health and child poverty rates in the developed world. The increase in military spending is one of the largest in modern U.S. history, jumping by 9.3 percent from 2017 to 2019

2017 – Military spending

U.S. $587.8 billion 

Next Top 10 military spending budgets: Russia $44.6 billion + China $161.7 billion + India $51 billion + France $35 billion + United Kingdom $45.7 billion + Japan $43.8 billion + Turkey $8.2 billion + Germany $39.2 billion + Egypt $4.4 billion + Italy $34.4 billion = $468 billion

U.S. compared to the Next Top 10 combined:

Total aircraft: 13,762 to 16,276
Fighter aircraft: 2,296 to 4,140
Combat tanks: 5,884 to 39,752
Total naval assets: 415 (19 aircraft carriers) to 2,423 (19 aircraft carriers)
Defense budget: $587.8 billion to $468 billion

It should be noted, that five of the Next Top 10 military spending budgets are from our NATO allies.
(France, United Kingdom, Turkey, Germany, Italy).

U.S. Financial Relations (with counties outside of NATO – in the Next Top 10 military spending)

Summary – In August 2018, China owned $1.17 trillion of U.S. debt. It’s the largest foreign holder of U.S. Treasury securities. The second largest holder is Japan at $1.03 trillion. Both Japan and China want to keep the value of the dollar higher than the value of their currencies. That helps keep their exports affordable for the United States, which helps their economies grow. Despite China’s occasional threats to sell its holdings, both countries are happy to be America’s biggest foreign bankers. China replaced the United Kingdom as the second largest foreign holder on May 31, 2007. That’s when it increased its holdings to $699 billion, outpacing the United Kingdom’s $640 billion. Brazil and Ireland are third and fourth respectively, each holding around $315 billion.

Russia

Russia recognized the United States on October 28, 1803, and diplomatic relations between the United States and Russia were formally established in 1809. Between March and May 2018, Russia’s holdings of US Treasury bonds plummeted by $81 billion, representing 84% of its total US debt holdings. The sudden debt dump may have contributed to a short-term spike in Treasury rates that spooked the market. 10-year Treasury yields topped 3% in April for the first time since 2014. Even at Russia’s recent peak of $105.7 billion in November 2017, it only ranked as the 15th biggest foreign holder of US debt. China owns about $1.2 trillion — or roughly 10 times as much as Russia.

China

In August 2018, China owned $1.17 trillion of U.S. debt. It’s the largest foreign holder of U.S. Treasury securities. Two-way trade between China and the United States has grown from $33 billion in 1992 to over $772 billion in goods and services in 2017. China is currently the third-largest export market for U.S. goods (after Canada and Mexico), and the United States is China’s largest export market. The American Enterprise Institute and The Heritage Foundation’s China Global Investment Tracker follows large Chinese investments, excluding bonds, around the world. The leading recipient of these kinds of investments is the United States, which received approximately $175 billion from 2005 through June 2018. On the initial estimate, Chinese investment in the first half of 2018 fell below W$6 billion. The US has now passed legislation limited Chinese access not only to technology, but also personal data, so the 2017 spending level of $25 billion will be difficult to repeat. Chinese investment totaled only $1.8 billion between January and May. That’s a 92% drop compared to the same period in 2017, and the lowest level in seven years, according to a report released Wednesday by Rhodium Group, a research firm that tracks Chinese foreign investment.

India

In August 2018, India owned between $141 billion and $194 billion of U.S. debt. One of the largest foreign holder of U.S. Treasury securities. Bilateral trade with the US, for India has been consistently growing at an impressive rate since 1991.The country’s bilateral trade in goods with the United States in that year stood at $5.2 billion with exports of nearly $3.2 billion and imports amounting to roughly $2 billion. Last year, the India-US bilateral trade volume was more than $74 billion. Adjusting for inflation, $5.2 billion in 1991 is $9.2 billion in today’s dollars. This means that the bilateral trade has grown eight-fold in this time period.

Japan

In August 2018, Japan owned $1.03 trillion of U.S. debt. It’s the second largest foreign holder of U.S. Treasury securities. The U.S.-Japan Alliance was strengthened in 2015 through the release of the revised U.S.-Japan Defense Guidelines, which provide for new and expanded forms of security-oriented cooperation. Japan provides bases as well as financial and material support to U.S. forward-deployed forces, which are essential for maintaining stability in the region. In January 2016 the United States and Japan signed a new five-year package of host nation support for U.S. forces in Japan. Because of the two countries’ combined economic and diplomatic impact on the world, the U.S.-Japan relationship has become global in scope. The United States and Japan cooperate on a broad range of global issues, including development assistance, global health, environmental and resource protection, and women’s empowerment. The countries also collaborate in science and technology in such areas as brain science, aging, infectious disease, personalized medicine, and international space exploration.

Egypt

The United States established diplomatic relations with Egypt in 1922, following its independence from protectorate status under the United Kingdom. The United States and Egypt share a strong partnership based on mutual interest in Middle East peace and stability, economic opportunity, and regional security. Promoting a stable, prosperous Egypt, where the government protects the basic rights of its citizens and fulfills the aspirations of the Egyptian people, will continue to be a core objective of U.S. policy. U.S. assistance to Egypt has long played a central role in Egypt’s economic and military development, and in furthering the strategic partnership and regional stability. Since the 1979 Egypt-Israel Treaty of Peace, the United States has provided Egypt with what now totals over $40 billion in military and $30 billion in economic assistance.

2017

U.S.

Total population: 323,995,528
Total military personnel: 2,363,675
Total aircraft: 13,762
Fighter aircraft: 2,296
Combat tanks: 5,884
Total naval assets: 415 (19 aircraft carriers)
Defense budget: $587.8 billion

Russia

Total population: 142,355,415
Total military personnel: 3,371,027
Total aircraft: 3,794
Fighter aircraft: 806
Combat tanks: 20,216
Total naval assets: 352 (one aircraft carrier)
Defense budget: $44.6 billion

China

Total population: 1,373,541,278
Total military personnel: 3,712,500
Total aircraft: 2,955
Fighter aircraft: 1,271
Combat tanks: 6,457
Total naval assets: 714 (one aircraft carrier)
Defense budget: $161.7 billion

India

Total population: 1,266,883,598
Total military personnel: 4,207,250
Total aircraft: 2,102
Fighter aircraft: 676
Combat tanks: 4,426
Total naval assets: 295 (three aircraft carriers)
Defense budget: $51 billion

France

Total population: 66,836,154
Total military personnel: 387,635
Total aircraft: 1,305
Fighter aircraft: 296
Combat tanks: 406
Total naval assets: 118 (four aircraft carriers)
Defense budget: $35 billion

United Kingdom

Total population: 64,430,428
Total military personnel: 232,675
Total aircraft: 856
Fighter aircraft: 88
Combat tanks 249
Total naval assets: 76 (two aircraft carriers)
Defense budget: $45.7 billion

Japan

Total population: 126,702,133
Total military personnel: 311,875
Total aircraft: 1,594
Fighter aircraft: 288
Combat tanks: 700
Total naval assets: 131 (four aircraft carriers)
Defense budget: $43.8 billion

Turkey

Total population: 80,274,604
Total military personnel: 743,415
Total aircraft: 1,018
Fighter aircraft: 207
Combat tanks: 2,445
Total naval assets: 194
Defense budget: $8.2 billion

Germany

Total population: 80,722,792
Total military personnel: 210,000
Total aircraft: 698
Fighter aircraft: 92
Combat tanks: 543
Total naval assets: 81
Defense budget: $39.2 billion

Egypt

Total population: 94,666,993
Total military personnel: 1,329,250
Total aircraft: 1,132
Fighter aircraft: 337
Combat tanks: 4,110
Total naval assets: 319 (two aircraft carriers)
Defense budget: $4.4 billion

Italy

Total population: 62,007,540
Total military personnel: 267,500
Total aircraft: 822
Fighter aircraft: 79
Combat tanks: 200
Total naval assets: 143 (two aircraft carriers)
Defense budget: $34 billion

Something Smells Real Fishy – $21 Trillion Missing, Lost or Stolen from DOD

On September 10, 2001, Secretary of Defense Donald Rumsfeld stated in a Congressional hearing that the Department of Defense had lost track of $2.3 trillion in transactions. Mr. Rumsfeld made the following statement:

According to some estimates, we cannot track $2.3 trillion in transactions. We cannot share information from floor to floor in this building because it’s stored on dozens of technological systems that are inaccessible or incompatible.”

– Monday, September 10, 2001

Since that time, numerous documents produced by the Office of the Inspector General have reported trillions of dollars as “unsupported journal voucher adjustments”. The DOD’s (Department of Defense) as well as HUD’s (Department of Housing and Urban Development) Offices of Inspector General (OIG) reference these transactions as “unsupported journal voucher adjustments.” They totaled some $21 trillion between 1998 and 2015.

The Inspector General’s report for the Army in fiscal year 2015 is also notable: this document reported $6.5 trillion in unsupported journal voucher adjustments (hhp://www.dodig.mil/pubs/documents/DODIG-2016-113.pdf, see page 4). The report indicates that unsupported journal voucher adjustments are the result of agencies failure to correct system deficiencies. Also, there was a lack of guidance on system-generated adjustments. The result, according to the report, is that data used to prepare the year-end financial statements were unreliable and lacked an adequate audit trail. For context, consider the fact that the entire budget of the Department of Defense (DOD) in 2015 was $565 billion. Therefore, the unsupported journal voucher adjustments for the Army were more than 10 times the entire DOD budget.

These two reports (the Rumsfeld announcement in 2001 regarding the “lost” $2.3 trillion and the $6.5 trillion in unsupported adjustments in 2015) prompted us to conduct a search at the website of the Office of the Inspector General and the Government Accountability Office to compile documents between the years 1998 and 2015 for the DOD and the Department of Housing and Urban Development (HUD) that indicate the amounts of unsupported journal voucher adjustments. While we were unable to recover data for a number of years, we were successful in identifying $21 trillion in unsupported adjustments for DOD and $350 billion for HUD. For those unaccustomed to dealing with large figures, $21 trillion is equal to about $166,000 per household in the United States.

William Hartung, Director of the Arms and Security Project at the Center for International Policy, summed up the accountability crisis at the Pentagon by saying:

“Call it irony or call it symptomatic of the department’s way of life, but an analysis by the Project on Government Oversight notes the Pentagon has so far spent roughly $6 billion on ‘fixing’ the audit problem — with no solution in sight.

If anything, the Defense Department’s accounting practices have been getting worse.”

If you have a system that does not accurately know what its spending history is, and does not know what it is now (and does not care to redress the matter), how can you expect it to make a competent, honest estimate of future costs? It is self-evident that an operation that tolerates inaccurate, unverifiable data cannot be soundly managed; it exempts itself from any reasonable standard of efficiency. Recall, also that the errors in cost, schedule and performance that result are not random: actual costs always turn out to be much higher than, sometimes even multiples of, early estimates; the schedule is always optimistic, and the performance is always inflated. The Pentagon, defense industry and their congressional operatives want – need – to increase the money flow into the system to pretend to improve it. Supported by a psychology of excessive secrecy, generated fear and the ideological belief that there is no alternative to high cost, high complexity weapons, higher budgets are easier to justify, especially if no one can sort out how the Pentagon actually spends its money. The key to the DOD spending problem is to initiate financial accountability. No failed system can be understood or fixed if it cannot be accurately measured.

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