President Obama visited Pentagon yesterday to announce significant military budget reductions over the next decade. The military expenses should be
Taking into consideration, that the United States spent $698 billion for its military in 2010, that translates into
However, the US military budget was close to "just" $500 billion as close as in 2005, before it shoot to the last year's level of nearly $700 billion.
Nevertheless, the announced military cut can possibly have some significant implications to the economy, for:
- military expenditures constitute close to 5% of the GDP, and
- acted as counter cyclical factor in the most recent recession.
Chart: US military expenditures 1988-2010, billion USD
Chart: US military expenditures as % of GDP, 1988-2010
Chart: growth of US military expenditures vs GDP growth, 1988-2010