Amit's Blog

A Golden Parachute for Allies, a Budget Sinkhole for Rivals   The United States’ massive defense spending, averaging 3.4–3.7% of GDP ($778–968 billion annually from 2020–2024), has reshaped global geopolitics, providing a security blanket for allies like Japan, Germany, South Korea, Canada, and Australia while forcing adversaries like Russia to overspend on defense. Allies thrive with low budgets—Japan at 1.4%, Canada at ~1.5%, South Korea at ~2.5%, Australia at ~2.1%, and Germany at 1.8% in 2024—channeling savings into economic growth that fueled their prosperity over 50 years. Russia’s spending soared to 7.1% of GDP ($149 billion) in 2024, driven by Ukraine and NATO pressures, while China’s 1.7% ($314 billion) and India’s 2.4% ($86.1 billion) reflect strategic priorities. This note dives into how the U.S. security umbrella enabled allies’ wealth, compares budgets with major spenders, explores U.S. impatience with allies, and reflects on the sustainability of this lopsided sys...

The U.S. Security Umbrella: A Golden Parachute for Allies, a Budget Sinkhole for Others The United States’ massive defense spending, averaging 3.4–3.7% of GDP ($778–968 billion annually from 2020–2024), has reshaped global geopolitics, providing a security blanket for allies like Japan, Germany, South Korea, Canada, and Australia while forcing adversaries like Russia to overspend on defense. Allies thrive with low budgets—Japan at 1.4%, Canada at ~1.5%, South Korea at ~2.5%, Australia at ~2.1%, and Germany at 1.8% in 2024—channeling savings into economic growth that fueled their prosperity over 50 years. Russia’s spending soared to 7.1% of GDP ($149 billion) in 2024, driven by Ukraine and NATO pressures, while China’s 1.7% ($314 billion) and India’s 2.4% ($86.1 billion) reflect strategic priorities. The U.S. security umbrella enabled allies’ wealth, but now The U.S. is impatient with allies. Is this lopsided system sustainable?   Historical Context: The U.S. as Global Sheriff Sinc...