Your Tax Dollars at Work: Subsidizing the Security of Wealthy Allies

It’s Tax Day, and for millions of Americans that means ponying up to the IRS. The federal government does many things these days—most of which would be more efficiently carried out at the local level, or in the private sector. But Uncle Sam also engages in a particular form of charity that many Americans overlook: spending many tens of billions of dollars to defend wealthy, developed nations.

A new Cato infographic puts it all in perspective. It shows how much American taxpayers spend to subsidize the security, and to defend the interests, of other nations that are more than capable of defending themselves.

The average American spends $2,300 on the military, based on the latest data available. That is roughly four and a half times more than what the average person in other NATO countries spends. These countries boast a collective GDP of approximately $19 trillion, 25 percent higher than the U.S. They obviously can afford to spend more. So why don’t they? Because Uncle Sucker picks up nearly the entire tab.

Looked at another way, U.S. alliances constitute a massive wealth transfer from U.S. taxpayers (and their Chinese creditors) to bloated European welfare states and technologically-advanced Asian nations.

Despite the size and wealth of our allies, they are military dwarfs compared to the United States. The particularly galling comparison is the disparity between what the United States spends on the military as a percentage of the federal budget and what other countries spend on their military relative to total government spending. 

While the United States spends 20 percent of the budget on the military, Japan spends a paltry 2.3 percent. Our NATO allies? The average is 3.6 percent. Even South Korea’s share of military spending is roughly half of our total, and they have much bigger threats to worry about. By providing for their security, we have encouraged allies to divert resources elsewhere.

The Constitution stipulates that the federal government should provide for the “common defence.” But the document never talks about providing for the defense of other nations. Their citizens are not party to our unique social contract. On this tax day, you might rest assured that wealthy citizens around the world are grateful that you are defending them, but don’t hold your breath waiting for a word of thanks.

It is time to rethink our alliances and the culture of dependency we have created among our allies. They have become wards to Uncle Sam’s dole. Only by ceasing to foot the security bill for them will we create an incentive for them to spend more.

Additional Cato resources on defending wealthy allies:

Infographic sources:

Central Intelligence Agency. “The World Factbook 2012.” Washington, D.C., 2012.

The International Institute for Strategic Studies. The Military Balance 2013. Edited by James Hackett. London: Routledge, 20.