Once upon a time, Jeffrey Tucker, one of the anarcho-capitalist contributors to the Mises Economics Blog, posted "Why Libertarians Should Care about Defense". The entire post consisted of this chart (which has since vanished from the web):
Because Tucker didn’t state the point of the chart, I had to read his mind. He was probably trying to convey a message like this:
Defense spending was just "right" (i.e., close to zero) after demobilization from World War II.
Look at what has happened since then: Defense spending (in inflated dollars) has risen to a very large number, even though there hasn’t been a war on the scale of World War II.
The absence of a major war since World War II obviously means that the U.S. spends far too much on defense.
Defense spending, unlike domestic spending is driven by the outside world, by what others could or would do to us, regardless of our delusions about their benignity. It is necessary to spend a lot on defense even when we are not at war, for two purposes: deterrence and preparedness.
With that thought in mind, let's look at the indicies in following chart (government spending includes State and local as well as federal outlays):
Sources: Current dollar values of government spending derived from Bureau of Economic Analysis, National Income and Product Accounts, Tables 3.1 and 3.95. Population statistics, constant-dollar GDP, and GDP deflators applied to government spending derived from Measuring Worth. (GDP - US data set).
What does the chart suggest? This:
The benchmark for "necessary" defense spending is World War II. Real defense spending has yet to return to that level. But, as a result of our foolish rush to demobilize after World War II, defense spending had to rise in response to Soviet- and Communist Chinese-backed aggression in Korea and the growing military power and aggressiveness of the Soviet Union. Subsequent “bumps” represent the Vietnam War; the Reagan defense buildup, which drove the USSR to its knees and thence to dissolution; and the squandered wars in Iraq and Afghanistan. The most recent rise in defense spending, due to Trump, was cut short by Biden, in keeping with his unarticulated but obvious policy of “accommodating” Russia and China.
The gorilla in the room is redistributive spending: transfer payments (Social Security, Medicare, Medicaid, and their expansion by Obamacare; food stamps; easier access to disability payments; more generous unemployment benefits; Covid-19 “stimmies”; etc., etc. etc.); subisidies (mainly for not growing crops and for wasteful “rewable energy” schemes); and interest on government debt — all of which rob Peter to pay Paul.
Non-defense spending hasn’t been ignored by any means.
All spending categories have outpaced GDP and (by a long shot) population. Defense spending should be driven by external threats, not population. Other government spending should be related to population, but they are obviously more strongly related to the greed of politicians (for votes) and various interest groups (for other people’s money).
Non-defense spending (including transfer payments, etc.) is now almost five times as great as defense spending.
It is evident that defense spending is far too low. If it had risen sufficiently, Russia and China would have remained content to rebuild their economies and refrain from military adventurism. By the same token, the gargantua of non-defense spending (and the regulatory burden that goes with it) has decimated the U.S. economy (see this and this). The far more robust economy that would have resulted absent regulation and profligate spending on “social services” would have had ample room in it for voluntary charity to assist the truly needy (as opposed to the conveniently disabled and lazy).
I will end with this:
It is customary in democratic countries to deplore expenditures on armaments as conflicting with the requirements of the social services. There is a tendency to forget that the most important social service that a government can do for its people is to keep them alive and free. — Marshal of the Royal Air Force Sir John Slessor in Strategy for the West