Re-arming the arsenal
U.S. defense outlays reached $920 billion in 2025, up 14 percent since 2021. The Ukraine war, Indo-Pacific deterrence, and modernization of nuclear triad systems have revived the defense-industrial complex.
Table 1. U.S. Defense Budget Overview ($ B)
| Category | 2021 | 2023 | 2025 (f) |
|---|---|---|---|
| Personnel & Operations | 303 | 327 | 340 |
| Procurement | 133 | 164 | 180 |
| R&D | 106 | 130 | 145 |
Source: DoD Comptroller; CBO.
Table 2. Global Military Spending Share (%)
| Country | 2015 | 2020 | 2025 (f) |
|---|---|---|---|
| United States | 37 | 39 | 40 |
| China | 13 | 14 | 15 |
| Russia | 4 | 3 | 3 |
Source: SIPRI 2025.
Economic effect
Defense manufacturing adds high-skill employment but crowds out civilian R&D if unchecked. Supply constraints in semiconductors and propellants expose fragility.
Strategic implication
Diversify suppliers and digitalize procurement chains. Public-private partnerships will define industrial readiness as the Pentagon leans on commercial innovation ecosystems.