{"id":176,"date":"2026-05-04T10:17:46","date_gmt":"2026-05-04T14:17:46","guid":{"rendered":"https:\/\/people.bsu.edu\/econbriefs\/?p=176"},"modified":"2026-05-04T10:17:46","modified_gmt":"2026-05-04T14:17:46","slug":"the-cost-of-command-by-dr-cecil-bohanon-and-dr-john-horowitz","status":"publish","type":"post","link":"https:\/\/people.bsu.edu\/econbriefs\/2026\/05\/04\/the-cost-of-command-by-dr-cecil-bohanon-and-dr-john-horowitz\/","title":{"rendered":"The Cost of Command\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz"},"content":{"rendered":"

Recently,\u00a0Horowitz\u00a0sat down with\u00a0Sam,\u00a0a bright high school senior preparing\u00a0to enter\u00a0Ball State University.\u00a0He was curious about economics\u00a0and wanted to know\u00a0more.\u00a0“What do you want to do with your life?”\u00a0Horowitz\u00a0asked. He said he\u00a0planned\u00a0to enter\u00a0the University\u2019s\u00a0Army ROTC\u00a0program\u00a0and then join\u00a0the army.\u00a0<\/span>\u00a0<\/span><\/p>\n

Channeling physicist\u00a0<\/span>Enrico Fermi’s approach of breaking down complex problems with simple numbers<\/span><\/a>,\u00a0Horowitz\u00a0asked,\u00a0“What does the US spend on\u00a0defense?”Sam\u00a0searched his phone.\u00a0<\/span>“$841.4 billion<\/span><\/a>,” he read. Digging deeper, he found\u00a0that Operations and Maintenance consumed\u00a0$287.2 billion\u2014the largest category, which covers\u00a0training, equipment, and military healthcare.<\/span>\u00a0<\/span><\/p>\n

“How does\u00a0our defense spending\u00a0compare\u00a0to other countries?”\u00a0Horowitz\u00a0asked.\u00a0Sam\u00a0responded with amazement,\u00a0“<\/span>We spend more than the next nine countries combined<\/span><\/a>.”\u00a0“Impressive. But which is bigger\u2014Social Security or defense\u00a0spending?””Probably\u00a0defense,”\u00a0Sam\u00a0guessed confidently.\u00a0He\u00a0looked it up. Social Security paid\u00a0$<\/span>1.5 trillion\u00a0in 2024<\/span><\/a>\u2014nearly double\u00a0defense spending.\u00a0And that\u00a0excludes\u00a0<\/span>Medicare ($848 billion) and Medicaid ($890 billion<\/span><\/a>).\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cWhat percentage of our Gross Domestic Product is\u00a0defense spending?\u201d\u00a0He looked at his phone and answered,\u00a0“<\/span>Defense spending is 3.4% of GDP<\/span><\/a>.”\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

“Now\u00a0look up what percentage federal debt is of GDP.”\u00a0Sam\u2019s\u00a0eyes widened. “<\/span>120%<\/span><\/a>! And we pay\u00a0$<\/span>882 billion\u00a0annually just on interest<\/span><\/a>\u2014nearly matching our entire defense budget.”<\/span>\u00a0<\/span><\/p>\n

\u201cCalculate this: what if interest rates on our\u00a0$36.2 trillion\u00a0debt increased by one percentage\u00a0point?”He\u00a0looked at his phone\u00a0calculator. “$362 billion\u00a0more annually in interest payments.”\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cWho holds the debt?\u201d\u00a0Horowitz\u00a0asked.\u00a0Sam\u00a0paused. “<\/span>About\u00a020% of\u00a0the\u00a0debt is held by government agencies like the\u00a0Social Security\u00a0Trust Fund\u00a0and the\u00a0Federal Reserve, 55% by US investors, and 24% by foreign investors<\/span><\/a>.\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

Horowitz told Sam,\u00a0\u201cWe currently have a trade deficit.\u00a0When we import more than we export, we\u00a0trade\u00a0dollars\u00a0for their goods, and they often\u00a0reinvest those dollars in US assets,\u00a0such as\u00a0government bonds.\u00a0That is where\u00a0much of that 24% of government debt held by foreign investors is coming from.”\u00a0<\/span>\u00a0<\/span><\/p>\n

“This\u00a0is\u00a0a\u00a0paradox politicians face\u2014they want to reduce our trade deficit, but foreign dollars often return as debt investments. Make it harder for foreigners to invest, and we pay more to borrow,\u00a0which\u00a0affects\u00a0defense spending.”\u00a0\u00a0<\/span>\u00a0<\/span><\/p>\n

As\u00a0Sam\u00a0packed up,\u00a0Horowitz\u00a0could see\u00a0him thinking. Economics\u00a0wasn’t\u00a0abstract theory anymore\u2014it was the foundation underlying every policy decision that would shape his military career and the nation\u00a0he’d\u00a0serve.<\/span>\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Recently,\u00a0Horowitz\u00a0sat down with\u00a0Sam,\u00a0a bright high school senior preparing\u00a0to enter\u00a0Ball State University.\u00a0He was curious about economics\u00a0and wanted to know\u00a0more.\u00a0“What do you want to do with your life?”\u00a0Horowitz\u00a0asked. He said he\u00a0planned\u00a0to enter\u00a0the University\u2019s\u00a0Army ROTC\u00a0program\u00a0and then join\u00a0the army.\u00a0\u00a0 Channeling physicist\u00a0Enrico Fermi’s approach of breaking down complex problems with simple numbers,\u00a0Horowitz\u00a0asked,\u00a0“What does the US spend on\u00a0defense?”Sam\u00a0searched his phone.\u00a0“$841.4 billion,” […]<\/p>\n","protected":false},"author":112,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[196,1618,1095,1187,42,94,106,1442,1617,1318],"class_list":["post-176","post","type-post","status-publish","format-standard","hentry","category-macroeconomics","tag-defense-spending","tag-economic-literacy","tag-federal-debt","tag-fiscal-policy","tag-gdp","tag-interest-rates","tag-macroeconomics","tag-public-finance","tag-rotc","tag-trade-deficit"],"yoast_head":"\nThe Cost of Command\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/people.bsu.edu\/econbriefs\/2026\/05\/04\/the-cost-of-command-by-dr-cecil-bohanon-and-dr-john-horowitz\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Cost of Command\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs\" \/>\n<meta property=\"og:description\" content=\"Recently,\u00a0Horowitz\u00a0sat down with\u00a0Sam,\u00a0a bright high school senior preparing\u00a0to enter\u00a0Ball State University.\u00a0He was curious about economics\u00a0and wanted to know\u00a0more.\u00a0“What do you want to do with your life?”\u00a0Horowitz\u00a0asked. 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