In peace time, the US government used to spend very little on defense, about one percent of GDP. But that changed after World War II when the United States found itself in a global contest against Communism. Ever since, defense spending has never been less than 3.6 percent of GDP. In wartime, of course, the United States spends as much as it can command. In World War II defense spending exceeded 42 percent of GDP in 1944.
After World War II, the US stablized defense spending at 8 to 9 percent of GDP, boosting it to 15 percent during the Korean War. During the height of the Cold War with the Soviet Union US defense spending fluctuated at around 10 percent of GDP.
At the height of the Vietnam War in 1968 defense spending was 10 percent of GDP. But then it began a rapid decline to 7 percent of GDP in the mid 1970s and hit a low of 5.6 percent of GDP in 1979 before beginning a large increase to 7.0 percent in 1985.
Starting in 1986 defense spending resumed its decline, bottoming out at 3.6 percent of GDP in 2001. After 2001, the US increased defense spending to a peak of 6 percent of GDP and is expected to reduce spending to 4.7 percent of GDP by 2015.
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> US GDP CY13
Source: CBO Long-Term Budget Outlook .