“Then year” is Pentagon bureacratese for “constant” dollars. It’s trivially important to distinguish between absolute growth (or decline), both in receipts and outlays, and the inflation-adjusted variety.

The information in this table is given as a percentage not an amount. This makes it essentially a ratio.

(H/T to Blazing Saddles for the quotation)

Growth is fundamental to a free market system dedicated to an increasing standard of living for its constituents. Micro to macro, people want to earn more money in order to buy nicer things and send the kids to college, corporations want to earn more profits in order to satisfy investors who yearn to share in those profits (or in the benefits accruing to present day, discounted cost ownership of a share of anticipated future earnings), et voila: the economy grows, as do taxable receipts. Some of that growth is from new economic activity, some from trade and a very great deal in recent years has come from productivity growth through technological gains which in turn are a creation of new economic activity. Nothing inherently unstable about that, and in fact it is a virtuous cycle with occasional cyclical pauses.

I’m pleased that we can agree that the mission tells you what you capabilities you ought to buy, but it continues to sadden me that you will not understand tax receipts affect how much you can afford to spend. The difference between the mission requirements and money available determines how much risk you are willing to take in order to fund other priorities.

Which by the way, is why the issue of mandatory spending keeps coming up. I think it is useful to point out that with a 2005 DoD appropriation of ~$450 billion, you would have had to close half of DoD down, furlough half the forces, stop construction of 1/2 of all new ships, aircraft, tanks and infrastructure, stop paying on half of all retirement salaries and medical costs to make up for the annual budget deficit projected for this year. Shutting us down entirely in 2004 wouldn’t have paid the bills, and you’d have to shut it all down – all of it – for ten years to make a mark on the gross debt.

Risky, yah? Not to mention all of those poor pensioners.

Or put another way, you would have to fundamentally restructure the national military strategy. Come home and get ready to play defense at home rather than abroad.

There’s a reason why Europe was shattered after World War II, and a reason why it took a US-funded Marshall Plan to rebuild it. Not having been bombed into a pre-industrial state, all of our stuff still worked.

And your strategy of focusing on added SOF is in fact admirable – we’re already heading that way! But it isn’t like a Charlie Sheen movie, they have to have conventional forces to back them up, develop intel, move them around, etc. And while SOF can do a wonderful job of killing individuals given adequate support, they have a hard time changing the underlying conditions which led to the fact those individuals needed killing.

And you’re making the classic mistake of thinking that the campaign we’re currently engaged in will be the fight we fight tomorrow. Just as no one could have perceived twenty years ago that we’d be bug-hunting with aircraft carriers and B-52 bombers (both of which did a fine job at it, by the way) it’s challenging to know what kind of force structure to build against potential threats 10-20 years down track. The war(s) after this one.

All we do know for certain is that “only the dead have seen the end to war,” and, technologies today being ever more complex, we won’t have time to gear up for it from a standing start if we don’t invest today.

May I ask what field it is you’re studying in?

Considering that this statement is what kicked off the original discussion, I’m not seeing the “makes sense” part. You allude to 1) “the mission” and 2) tax receipts as the prime determinants of proper defense spending levels. Agree with 1, wholeheartedly disagree with 2. In fact, point 2 leads to an interesting phenomenon: Economy grows=>tax receipts go up=>military spending (a component of GDP) goes up=>economy grows=>repeat. This is a dynamically unstable system.

So, discounting point 2, we turn to point 1. Why has defense spending grown so much over the last as measured by constant dollars spent*? Are our military requirements vastly greater than they were thirty years ago? Strategically, no. We have no requirement to fight or finance a conventional world-war and/or maintain enough nuclear weapons to destroy every major city on the planet in 30 minutes. I would say that the military component of the counter terrorism mission could be accomplished for far less. At the very least, it could be accomplished far more effectively by reallocating funds towards SOF, intelligence and the conventional ground forces. Instead, we’re maintaining fleets of hugely expensive machines whose technological capability, while impressive and vastly greater than that of previous equipment, adds little to the military’s ability to influence events overseas. An F-14 is just as good as an F-22 when you’re fighting a Piper Cub.

So, yes, we are spending too much, in the wrong places. I also think we’re spending too much on mandatory entitlements, but they’re not really relevant to military requirements either. Why do they keep coming up?

(*As an aside, constant dollars reflect purchasing power, which is pretty much the only meaningful metric when examining spending tradeoffs. This answers Cassie’s question.)

second, you hit my point exactly. Even WITH much greater benefits, more military families, vastly improved technology (and vastly more expensive individual weapon systems), net net (in constant dollars) we’re STILL spending LESS. the “per capita” thread i would further be interested in is “per citizen”, not so much “per warrior”.