Subsidising NATO? You're Having a Laugh!

The claim that the United States “subsidises NATO” survives only by blurring categories and hoping nobody checks the maths.

Start with scale. The US economy is about $27 trillion. The rest of North Atlantic Treaty Organization combined is roughly $24 – 25 trillion. Comparable blocs, not a rich uncle and a gaggle of dependants.

Now defence spending. The US spends around 3.4 percent of GDP. The rest of NATO averages about 2 percent. That headline difference is where the grievance merchants stop. But it matters what that money is actually for.

Only about 5 – 10 percent of US defence spending is Europe focused. Strip out the Pacific, the nuclear triad, carrier groups, the Middle East, space, cyber and global logistics, and what remains for Europe is modest. In GDP terms, that is roughly 0.2 – 0.3 percent of US GDP.

Set that against Europe’s own effort. European NATO members are spending around 2 percent of their own GDP on defence, with some well above it. Poland exceeds 4 percent. Britain and France meet the target. Germany has crossed it. Measured properly, Europe is spending seven to ten times more of its own GDP on Europe’s defence than America is.

Per head tells the same story. Americans spend far more per person on defence overall, but that extra money buys global power projection, not European security. When you isolate what Americans actually spend on Europe, it comes out at a few hundred dollars per person at most. Europeans spend several times that on themselves.

So why does the myth persist? Because US politicians quietly bundle America’s chosen role as a global military hegemon into NATO’s ledger, then present the bill as charity. It is not. NATO is a force multiplier that gives Washington influence, basing, standardisation and political leverage at a discount.

And then there is the domestic engine behind it all. High US defence spending is not just strategy. It is industrial policy and politics. This was spelled out decades ago by Dwight D. Eisenhower, who warned about the military industrial complex precisely because it rewards spending itself. European purchases of American kit feed that system, even as the same politicians complain about carrying Europe.

Remove NATO and the spending does not collapse. It rises. Forces must be redeployed, bases duplicated, exports lost, unit costs increased. America would pay more for less influence, while Europe would finally build the industrial capacity Washington claims to want.

So the honest summary is this. The US is not subsidising NATO. It is funding its own global ambitions, with Europe as one theatre among many. NATO does not drain the American defence budget. It makes that budget more efficient. The rest is rhetoric designed to travel better than arithmetic.