The United States spends nearly $900 billion annually on a military whose primary value is its existence. The economics of deterrence are real — but so are the costs of maintaining a force permanently mobilized for wars that never come.
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The United States maintains the most expensive military in human history — a force with 1.3 million active duty personnel, 800+ bases in 80+ countries, 11 aircraft carrier strike groups, the world's second-largest nuclear arsenal, and a defense budget of approximately $886 billion in fiscal year 2024. The overwhelming majority of this force will never fire a shot in anger. Its value is not in what it does but in what it prevents — or is supposed to prevent.
This is the logic of deterrence: the threat of overwhelming military response is supposed to make adversaries conclude that aggression isn't worth the cost. It is a rational theory with genuine historical support. It is also extraordinarily expensive, resistant to cost-benefit analysis, and sustained by a political economy that has interests independent of its strategic effectiveness. See War as an Economic Engine, The Permanent War Economy, and where tax dollars go.
Breaking down the U.S. defense budget reveals a spending structure that reflects historical legacy as much as current strategic need:
Personnel costs consume approximately 25% of the budget ($220 billion) — salaries, benefits, and healthcare for 1.3 million active duty and 800,000 reserve personnel, plus 750,000 civilian DoD employees. Military compensation has increased substantially since the transition to an all-volunteer force in 1973; the average total compensation cost per active duty service member now exceeds $110,000 annually including benefits.
Operations and maintenance accounts for approximately 40% ($355 billion) — the cost of keeping existing equipment running, maintaining 800+ bases globally, conducting training exercises, and sustaining the logistics infrastructure of a globally deployed force. This category grows relentlessly as equipment ages and becomes more expensive to maintain.
Procurement (new weapons and equipment) and R&D together account for approximately 25% ($220 billion) — the F-35 program (now the most expensive weapons system in history at $400+ billion total program cost), Virginia-class submarines, B-21 bombers, and the next-generation nuclear arsenal modernization.
The nuclear enterprise — maintaining and modernizing the triad of land-based ICBMs, submarine-launched ballistic missiles, and strategic bombers — costs approximately $50–60 billion annually and is scheduled to increase significantly as Cold War-era systems are replaced.
The United States maintains military installations in approximately 80 countries — a global basing network assembled during and after World War II, expanded during the Cold War, and never substantially rationalized since. Estimates of the annual cost of maintaining this global presence range from $80 to $150 billion, depending on what costs are allocated to overseas basing versus operations that would occur regardless.
The strategic rationale for specific bases varies. Bases in Germany, Japan, and South Korea reflect post-WWII security architecture that their host nations have found sufficient value in to continue hosting (Japan and South Korea contribute billions annually in host-nation support). Bases in the Middle East reflect energy security priorities that have diminished as U.S. domestic energy production has increased. Bases in smaller, more remote locations often reflect historical accident more than current strategic logic — they exist because they were established decades ago and the political cost of closing them (jobs, relationships, congressional opposition) exceeds the perceived savings.
The base structure is politically protected by a network of local economic dependencies: a major base closing eliminates thousands of civilian jobs in host communities, generating fierce congressional opposition from affected districts regardless of strategic merit. The result is a basing structure that is almost impossible to rationalize through normal political processes.
The fundamental question about deterrence spending is whether it works — and whether the level of spending required to achieve deterrence has been correctly calibrated.
The post-WWII period is often cited as evidence for deterrence success: no great-power direct conflict for 80 years, despite repeated moments of acute tension. NATO nuclear deterrence is credited with preventing Soviet conventional aggression in Western Europe. U.S. forward presence in Asia is credited with maintaining stability in a region with multiple territorial disputes and nuclear-armed states.
The counterargument: the absence of great-power war may reflect factors other than U.S. military spending — nuclear deterrence at lower spending levels, economic interdependence, the catastrophic memory of two world wars, and changing norms of international conduct. The Soviet Union maintained nuclear deterrence against the United States at a fraction of U.S. defense spending (and eventually collapsed partly due to the economic burden of trying to match it). Whether the marginal dollar of U.S. defense spending above some lower deterrence floor produces deterrence value or merely satisfies the political economy of the defense-industrial complex is a question that cannot be definitively answered — but rarely gets asked. See What Deterrence Actually Buys and The Permanent War Economy.