US Secretary of Defence Pete Hegseth. Omar Havana/Getty Images

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War economy? Hegseth urges record US defence spending to protect growth

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US defence secretary said the greatest threat to national security was under-investment in the military rather than the growing national debt.

United States defence secretary Pete Hegseth has urged a sharp rise in military spending, arguing that American economic stability depends on armed forces strong enough to deter rivals such as China.

Writing in the New York Post on June 23, he said the greatest threat to national security was under-investment in the military rather than the growing national debt. He claimed that if the country lost its military edge, “no amount of fiscal austerity” could keep its economy healthy.

The intervention was intended to defend President Donald Trump’s proposed $1.5 trillion (€1.32 trillion) defence budget for the 2027 fiscal year. That request is the largest in US history and around 42 per cent above current levels.

It has drawn criticism from fiscal conservatives and non-interventionists, and Hegseth has been briefing members of Congress to win their backing. He said the Pentagon, renamed the Department of War in 2025, had stripped out billions of dollars in redundant spending after an internal review.

He added that the department would aim to pass its first full financial audit by 2028, earlier than planned, having never managed to do so before.

The argument echoed the pressure Hegseth has placed on European allies. On June 18 at NATO headquarters in Brussels, he ordered a six-month review of US forces in Europe and warned that American contributions would fall if member states did not meet agreed spending targets.

NATO leaders pledged at The Hague in June 2025 to spend 5 per cent of GDP on defence by 2035, of which 3.5 per cent would go on core military needs. Allies are due to set out credible plans at a summit in Ankara, Turkey, beginning July 7.

Hegseth has repeatedly accused European governments of leaning on US power while underfunding their own forces. Spain, which secured an exemption from the 5 per cent goal, has faced scepticism from other members over whether it can meet its commitments.

In the article he cast military strength as the bedrock of American prosperity, writing that an unchallenged United States could borrow cheaply and set the terms of global trade. He listed urgency, speed, efficiency, competition and lethality as the new guiding principles of the renamed department.

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