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have made this leap, as the governments of New Zealand and Australia, as well as most of
the states in the US have at least adopted some private budgeting methods with varying
degrees of success.
History Indicates Change Necessary
From a historical dimension, Defense appears to be a declining share of the federal
budget, set amongst a set of steadily growing accounts. From a historical perspective, DoD
spending looks like it follows relatively smooth, if declining, path.
Percent of GDP
25
20
15
10
5
0
1948
1952
1956
1960
1964
Figure 1. Federal Spending as a % of GDP
Not Since 1940 has Defense Been at a Lower % of GDP
1968
1972
1976
1980
1984
1988
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1992
1996
2000
2004
Net Interest
Medicare, & Other
Individual Payments
Social Security
Domestic (Educ,
Trans, etc.)
International
Defense
Total Federal
Spending
Over the last 20 years, the Defense line again looks relatively smooth, although
some turbulence appears. The Reagan buildup is apparent, as is some difference in support
for Defense between the President and Congress.