Another Way to Look at NATO Countries’ Defense Spending

President Trump blasted NATO countries a few days ago for what he sees as spending too little on defense. In 2014 at the urging of the United States, the 27 NATO member states agreed to increase their defense spending to two percent of each country’s gross domestic product (GDP) by 2024. Presently, the United States spends about 3.5% of its GDP on defense while seven other countries are expected to meet the 2% target in 2018. Those countries are the United Kingdom (2.1%), Poland (2.0%), Greece (2.4%), Romania (2.0%), Estonia (2.1%), Lithuania (2.0%), and Latvia (2.0%).

Mr. Trump seemed especially angry at Germany, the largest European economy which spends 1.2% of it’s GDP on defense. At first glance, Mr. Trump’s frustration may seem reasonable. What does Germany spend its money on anyway?

Of all NATO member countries, Germany spends the most on healthcare – both in actual euros spent and as a percentage of GDP (11.2%).

By a wide margin, the United States spends the most on healthcare – 17.9% of GDP versus an average of 8.5% in Europe (excluding Russia). The four largest European economies of Germany, France, the U.K. and Italy spend an average of 10.3% of GDP on healthcare.

But that 17.9% of GDP for the United States is deceptive as the majority of healthcare spending is paid by private insurers and individuals. When factored out, the federal government spends only 5.7% of GDP on healthcare and that puts it in a different category than Europe’s largest economies. In fact, that puts the U.S. in a similar position to those countries who are expected to meet the 2% defense spending goal in 2018: U.K. (9.9%), Poland (6.3%), Greece (8.4%), Romania (5.0%), Estonia (6.5%), Lithuania (6.5%) and Latvia (5.7%).

By this metric, the United States has opted to prioritize spending on military personnel and systems over providing secure healthcare for every citizen. The larger European countries, on the other hand, appear to value social safety net programs including quality healthcare for their residents over defense spending unless there is a serious and imminent threat. After all, Russia’s aggressive behavior of attacks in Georgia and Ukraine plus cyberattacks on Western democracies have prompted increased defense spending by NATO members over the past four years.

Regardless of the facts, however, President Trump will berate the traditional allies of the United States on trade and defense issues to satisfy his need to shake things up and appear powerful. He doesn’t often justify his actions by quoting statistics, but that has changed of late. Now, he begins with “Depending how you calculate it…” and delivers numbers that in no way match reality in order to force his issue on the region, military alliance, or trading partner in his crosshairs. It is bullying behavior with the added element of intended confusion from made up facts and labeling correct information as fake news.

In short, the larger NATO countries want to care for the needs of their people – both their physical and financial health and their safety from military attack – and they are trying to split up the available assets to meet those goals. President Trump, on the other hand, appears to care little for the welfare of the European citizen, but focuses instead on saving the United States money, even though much of the news about his administration focuses on financial excesses. In fact, with the Trump Administration’s attacks on the Affordable Care Act, the Consumer Financial Protection Board, environmental safety programs, education and other federal actions to keep Americans safe and secure, a case could be made that he cares little for the welfare of the U.S. citizen as well.

About tonyj126

I'm a 50+ married man who always seems to have a large backlog of work to do, but also a lot of flexibility in my schedule. Much of the work I do is volunteer or taking care of extended family members. I suffer from, as my priest calls it, "the sin of self-sufficiency," which means I can figure out how to do most things myself, and consequently, reduce the need for community to solve problems. As a logical extention (at least to me), I find myself called to comtemplate the country's and the world's woes and offer my observations. I hope someone out there will find them useful.
This entry was posted in Economics, Healthcare, U.S. Politics, Uncategorized. Bookmark the permalink.

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