Trump Wants $500 Billion More for the Pentagon As Deficits Mount

Trump wants $500 billion more for the Pentagon as deficits mount by Ryan MacMacon.

President Donald Trump last week stated that he would ask Congress for a $1.5 trillion

defense budget in 2027, an enormous $500 billion increase over 2026's military budget.

The proposed spending increase reflects how much the Trump administration has become focused

on pushing new wars and how much the White House loves to spend taxpayer money.

Trump's pledge to increase military budgets by 50% comes as we find that federal spending

in the New Fiscal Year remains at some of the highest spending levels we've ever seen.

Only three months into the fiscal year which began on October 1st,

the federal government has spent more than $1.8 trillion, which is the second highest spending

level for the period in history, even when adjusted for inflation. Not surprisingly,

the federal government has run up a deficit of $602 billion. That's the third highest deficit

total for the period in history, inflation adjusted, topped only by spending of the COVID panic

and Biden's final year in office. In spite of Trump's supporters claiming for months that we

will soon see big cuts in federal spending, there is no sign of this at all. Indeed, the opposite

is true since Trump now demands another half trillion for more spending on cronies in the defense

industry and for more military hardware with which to threaten the U.S.'s own long-time allies

and trading partners such as Denmark. This will be the first fiscal year during which the

Trump administration has been firmly in power for the duration. And if we're going off the numbers,

it's hard to see any departure at all from the Biden years. If Trump gets his way on military

spending, though, we will see a change from the Biden years. Federal spending will be much higher.

A 50% increase in military spending, in a post to his social media platform Truth Social

last week, Trump stated that after long and difficult negotiations with senators,

congressmen, secretaries, and other political representatives, I have determined that for the good

of our country, especially in these very troubled and dangerous times, our military budget for the

year 2027 should not be $1 trillion, but rather $1.5 trillion. This will allow us to build the

dream military that we have long been entitled to and more importantly, that will keep us safe

and secure regardless of foe. Military spending in the U.S. tends to increase nearly every year,

although in recent years, price inflation has been so substantial that inflation-adjusted

military spending has been largely flat around $915 trillion since 2024. At this level,

military spending is already above what it was during the 1980s when the U.S. and the Soviet Union

were in an arms race. Although the Soviet Union, a superpower that was three times the physical

size of the United States, has disappeared. The U.S. has continued to increase military spending

since it launched wars against the Iraqis and the Afghans. After spending trillions of dollars to

democratize the Middle East and defeat the axis of evil, those wars were lost, but the

financial legacy of the spending remains. An additional increase of $500 billion would, nonetheless,

be huge in relation to typical spending increases, as can be seen if we actually graph the results.

Such an increase would be off the charts, so to speak. Combined with veteran spending, which is

just deferred military spending that is placed in a separate category for political reasons,

total military spending would reach to $1.8 trillion if Trump gets his way.

Growing spending and deficits, where will the administration get this extra half trillion dollars?

It's a very safe bet that much of it will come from more federal debt and larger deficits.

Keep in mind, after all, that during this fiscal year, the federal government has been

racking up about $200 billion per month in deficits. Given recent trends, this will likely translate

into a full-year deficit of more than $1.5 to $1.8 trillion. If Trump gets his increase to military

spending, we'll be looking at annual deficits of more than $2 trillion per year, even if Trump

settles for half his goal, and the federal government spends only $250 billion extra on the Pentagon

that will drive annual deficits to levels we haven't ever seen, except during the COVID panic.

Nor will tariff revenues significantly impact this, even after months of growth in newly imposed tariffs,

that is, import taxes. The federal government continues to increase spending faster

than tariff revenue comes in. Although the administration has wrongly claimed that tariff

revenues have totaled $600 billion, the real total is less than half that, at around $280 billion

for nearly a full year. Even with growing tax collections on imports, this still constitutes

less than 3 percent of federal tax revenue. Moreover, any significant slowdown in employment

or economic growth will greatly reduce tax revenue in general. When that happens, it's a matter

of when, not if, then the deficit will explode upward. Nor is there any reason to believe that the

administration or the ruling majority in Congress will make any significant cuts to other programs.

We won't be seeing any sizable cuts to Social Security, Medicare, Medicaid, or any of the other

major programs that drive the overwhelming majority of federal spending. In response to all,

this sum may channel their inner-dick chanies and declare that deficits don't matter.

Yet Americans are paying a lot for these deficits. The new Treasury report shows, for instance,

that the taxpayers paid more than $300 billion in interest on the national debt during the first

three months of this fiscal year. In other words, the U.S. is on track yet again to shell out more

than a trillion dollars in interest this fiscal year. That's a trillion dollars for no new services

or resources of any kind. The interest expense is paid for by taxpayers who must now pay for lost

wars and welfare, boondoggles that were financed back when many of today's taxpayers were children.

Donald Trump wants to saddle the taxpayers' will, hundreds of billions more in spending and

countless trillions of dollars in future obligations on federal debt. Put another way.

A recent analysis suggests that the cost to the U.S. taxpayers to buy Greenland would be

$700 billion. That is, the U.S. taxpayer is now paying for the equivalent of more than one

Greenland every year in terms of interest payments. Indeed, broken down to the individual level,

we find that $500 billion amounts to more than $1,400 for every man, woman, and child in the

United States. For a household of two adults and child, that's well over $3,000 per household

on average. Given that any additional military spending will be at least partly be financed with

new federal debt, we must also factor in the future interests that taxpayers will be paying

indefinitely. At this point, most supporters of the administration will likely shrug and come up

with excuses for more spending, such as claims that the Chinese will occupy Greenland if the American

taxpayers don't get in line and pay hundreds of billions more for defense. This phenomenon helps

to illustrate how the radical, laissez-faire liberals of old were right, that war has always been one

of the greatest boons to ruling regimes seeking more political power. In nearly all times and places,

it has been relatively easy to scare the taxpayers, who are generally ignorant about anything outside

their local communities, into surrendering ever more freedom and treasure to the government

in the name of safety and national defense. For more content like this, visit mises.org.