Rupert Cornwell: Out of America

Whoever wins the presidency will most likely fail to take on the unholy trinity of arms manufacturers, the Pentagon, and Congress

"Lockheed Martin," intones the fruity male voice, drenched in patriotism. "We begin with the things that matter... [pregnant pause]... Freedom." Such are the joys of listening to radio commercials as you drive to work in Washington DC. Lockheed, of course, is a giant defence contractor. Hearing this ad, and similar inspirational stuff from Boeing and the like, you might think you were on the front lines of a war that reached into your living room.

That, of course, is precisely what George W Bush would like you to think of his "war on terror", even though the closest the average citizen here ever gets to it is a security line at an airport. But those commercials are part of another struggle, less violent but no less relentless. It is being fought out by companies like Lockheed over the lucrative and effectively captive US government arms market.

Obscured by the great Obama-Hillary battle and the drama of Super Tuesday, the final budget of the Bush era was published last week. It covers the 2009 financial year, and contains one startling fact. If this President has his way, the US will next year be spending more on its military (adjusted for inflation) than at any time since the Second World War.

The raw figures are mind-boggling. The official Pentagon budget for 2009 runs to $515bn (£265bn), or around 4 per cent of America's total economy (the equivalent figure for Britain is 2.5 per cent), and about the same size as the entire output of the Netherlands. Throw in an expected $150bn of supplementary outlays and you've got defence spending larger than Australia's entire gross domestic product.

Even that may be an understatement. Add in various "black items", such as military spending tucked away in other parts of government, and some claim that America's total annual spending on the military now exceeds a trillion dollars – roughly half the entire British economy.

Students of these matters claim that the wind-down of the surge in Iraq, and the likelihood that the Democrats will recapture the White House in December, mean that the latest growth cycle in Pentagon spending, that began at the end of the Clinton era, has probably peaked. But don't bet on it.

A faltering economy may be the biggest worry for voters this election year, but national security runs it close. On Thursday, Mitt Romney justified his decision to drop out of the Republican race for the White House by his party's need to set aside divisive internal squabbling "at this time of war". As for John McCain, the man now set to carry the Republican standard in November, maintaining the strength of the US military is his top priority. The economy, he freely admits, is not his strong suit. National security, however, is. If McCain wins, it will be because Americans deem him the candidate to keep them safe.

Appearing "soft" on national security can be fatal, as Democrats know only too well after their stinging defeats in the 2002 mid-terms and the presidential election of 2004. Hillary Clinton has been trying to establish herself as a hawk ever since, while Barack Obama knows full well he also has to convince in the role of commander-in-chief. In short, even a liberal Democratic President will hesitate before taking an axe to the Pentagon budget. But he should.

The US simply does not get value for its defence dollars. The Pentagon is still fighting the Cold War, not the terrorists who rely on infiltration and ambush rather than submarines and strategic bombers. Yet for all the money Bush has lavished on the military since 9/11, Iraq has stretched America's armed forces to breaking point.

The US defence budget may reach a 60-year high next year, but the number of combat troops is smaller than ever. Politicians – Democrats as well as Republicans – all now agree the armed forces need more boots on the ground. That, however, means more, not less, Pentagon spending – unless, of course, some of those blue-chip weapons programmes are cut back.

But again, don't bet on it. Vast spending on defence is locked into the contemporary American system as firmly as it was into the former Soviet one. Paradoxically, it took a general-turned-president to warn against such excesses. Indeed, Dwight Eisenhower had hardly taken office in 1953 when he spoke of the danger of amassing military strength at the expense of all else, a policy that amounted "to defending ourselves against one disaster by inviting another".

Eisenhower famously referred to a "military-industrial complex". A better term, however, is perhaps an "Iron Triangle" whose three corners are the Pentagon, arms manufacturers such as Lockheed Martin and Boeing, and – most important – Congress. All three are locked together by a common vested interest. The Pentagon chiefs want the best weaponry possible. The companies want to keep the orders flowing ever more munificently. But the ultimate enablers are the elected representatives of the people.

Lockheed operates in 45 of the 50 states, where its factories provide jobs, and the congressmen and senators from those states will do anything to keep them. Far from voting less money for the Pentagon, they often provide more than the President of the day is seeking, to finance extra projects – needed or not – if that will keep the money flowing into their district. And, fearful of appearing soft on defence, few will oppose them. Thus the spending merry-go-round continues. In the America of 2009, that is the real war economy.