The Economist magazine estimates that the new defense commitments of all countries …will generate over $200bn-$700bn in extra defense spending globally each year…
China’s defense budget has grown by about 75% in real terms in the past ten years. It wants to “basically complete modernization” of its forces by 2035, and become a “world class” military power by 2049. America thinks China wants the capability to invade Taiwan as early as 2027… Overall America’s advantage over its rivals has eroded in the past century…During the first, second and cold wars America’s adversaries had much smaller economies than America did. No longer. Today China’s GDP alone is nearly 80% of America’s.

In the decades after the cold war, the thinking was that to spend less on armies meant to spend more on infrastructure and public services and to lower debt or taxes. Since the 1960s the world has “released” about $4trn a year of spending at current prices in this way, equivalent to the global government budget for education. Now the peace dividend is turning into a “war tax”. How heavy will it be?…

America, by far the world’s largest defense spender, is devoting growing sums to research and development of future weapons. This includes hypersonic missiles, to catch up with China and Russia; “directed energy” such as powerful lasers to shoot down drones and missiles; and artificial intelligence and robotics. It is also buying as many munitions as its factories can produce—from 155mm artillery shells to anti-ship missiles. The war in Ukraine has exposed the extraordinary quantities of munitions needed in a conflict, as well as the inability of peacetime production lines to meet such demand.

America, Russia and China are investing in their nuclear arsenals, too. America is upgrading all legs of its “triad” of ground-, air- and submarine-launched nukes. Russia is working on esoteric weapons, such as the long-distance, nuclear-powered Poseidon torpedo designed to set off an underwater nuclear explosion that, propagandists boast, can cause destructive tidal waves. China is quickly expanding its arsenal, from several hundred warheads to 1,500 by 2035, according to the Pentagon…

Cyber-security, drones and satellite technology straddle both the civilian and military worlds. SpaceX, founded by Elon Musk, has launched American military satellites. Ukrainian warriors make extensive use of his Starlink constellation of satellites. It all amounts to a change of cultural mindset from tech firms that once shunned defense as morally tainted. A defense-tech ecosystem has sprung up in America…

One way or another, a new era of rearmament beckons. As General Mark Milley, chairman of America’s joint chiefs of staff, told the Senate recently: “Preventing great-power war through readiness and deterrence is very expensive, but not as expensive as fighting a war.” And the only thing more costly than that, as he explained, is losing one.

Excerpts from Farewell peace dividend: The Cost of the Global Arms Race, Economist, May 27, 2023