The Council on Foreign Relations' Geo-Graphics blog highlights the underlying factors of America's defense spending relative to the world's:
Any change in the U.S. share can be attributed to the operation of four factors: (1) changes in U.S. GDP, (2) changes in rest-of-world GDP, (3) changes in U.S. military spending as a percent of GDP, and (4) changes in rest-of-world military spending as a percent of GDP. Real GDP growth is a sustainable source of change, whereas changes in spending as a percent of GDP require painful tradeoffs and are ultimately unsustainable. Over the past twenty years, the increase in the ratio of U.S. military spending to world military spending has been driven primarily by unsustainable forces.
Fortunately, the U.S. could make defense spending cuts and still retain an edge over any potential competitor, but it cannot do so while simultaneously insisting on the same scope of commitments.
