Why US military expenses are so high compared to global rivals
... and the relationship that has with offshoring, outsourcing, globalised processing, and other aspects of trade, shipping, production, and commerce.
You've likely seen examples of goods which are produced in one location, processed in another, and sold in a third, often spanning the globe. Fish shipped from the US to China and back, salt sourced in Pakistan, packed in South Africa, and sold in Canada, and other examples come to mind.
Much of what drives this is 1) the high cost of US and European wages and 2) the low cost of shipping.
This is related to what drives up the cost of US military operations, though that's largely driven by constraints on who can do what and where.
There's a great Reddit thread which breaks down drivers of US military expenses as compared with global rivals China and Russia (or if you prefer, the Taliban), by /u/GTFErinyes:
The metric that the US spends more on their defense budget than other most other nations combined is an extremely superficial look at military spending and mostly pointless as a comparison of power.
Of course the US spends a lot more than China or Russia: there is a vastly different cost of living in the US versus those nations.
To actually understand where/how the US spends on its military, take a look at the DOD Budget Request for 2018 and Table 5.1 from the Government Publishing Office for historical spending.
You'll see the actual budget breakdown:
- Military Wages - $141.7B
- Operations and Maintenance - $223.3B
- Procurement - $114.9B
- Research and Development - $82.7B
- Management - $2.1B
- Military Construction - $8.4B
- Family Housing - $1.4B
- Overseas Contingency Operations (war funds) - $64.6B
That's right - 25% of the base (day to day non-war funds) budget of the DOD is spent on JUST wages (22% if we include funds spent for war operations). That's just military personnel wages - contractor wages fall under the other categories they get contracted for (e.g. maintenance contractors fall under Ops/Maintenance)
Why does this matter? Compare this to China, where their soldiers are paid a tenth of what the US pays its soldiers. Or South Korea, a first world nation with conscription, which pay its soldiers $100 a month.
If the US paid its personnel what the Chinese do, we'd save nearly $130 billion overnight! ...
https://old.reddit.com/r/changemyview/comments/71bq8h/cmv_the_military_budget_of_the_us_is/dn9mqdq/
The comment continues, with an additional Part 2.
Input costs matter, and where there's price-sensitivity, often-paradoxical behaviours can emerge as a result.
Oh, and: Offshoring is a form of wage suppression.
Inspired by this Diaspora thread.
#offshoring #economics #wages #shipping #globalisation #MiltaryExpenses #military #outsourcing #prices
