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and US Defense
Dollar Cost Comparison
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Natloml Foreign Assessment Center
Soviet and US Defense
:
A Dollar Cost Comparison
A Research Piper
Information available as of SI9 was used In the preparation this paptr.
Comments and queries on this unclassified report arc welcome and may be directed to: i irector for Public Affair* I .Central intelligence Agencyj|:
| or information on obtaining additional copies, see the inside of front cover,;
SRfo-ims
Soviet and US Defense
:
A Dollar Cost Comparison
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The military establishments of the USSR andStates are difficult to compare because theyso much in missions, structure, andAny common denominator used foris imperfect, and its limitations must bein interpreting such comparisons. Thehere is to compare the defense activities ofcountries using the familiar'. -
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This paper presents estimates of what it would cost to produce and man in the Unitedilitary force of the same sire and with the same weapons inventory as that of the USSR and to operate that force as the Soviets do. It then compares these estimates with known US defense outlays. This approacheneral appreciation of the relative magnitudes of the defense activities of the two countries. Dollar cost data alsoeans of aggregating elements of each1 country's military program into comparable categories and thus can show trends and relationships between the two defense establishments that are difficult to discern and measure in other ways.
Definitions
The defense activities used in this comparisonthe following:
security programs that in the United States would be funded by the Department of Defense.
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Defense-related .'uclcar programs such as those funded tn the Unit si Slates by the Department of Energy.
Selective Service activities, i
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defense-related activities of the US Coast Guard
and the Soviet Border Guards, jj i'-:
The following activities nre not Included In this comparison:
Military retirement pay, which reflects the cost of past rather than current military activities.
Space activities that in the United Stales would be funded by the National Aeronautics and Space Administration.
Civil defense, foreign military sales, and military assistance programs, excepte nay and allowances of uniformed personnel engaged in such programs.
Veterans' programs.
Soviet Internal Security Troops who perform police functions and Soviet railroad und consiruclion troops who are not directly involved in national security matters,
US Data
US dala are derived Trom the US budget and The Five Year Defense Program issued by the Department of Defense inhe US data have been converted to calendar year outlays, and defense-related activities of the Department of Energy and the Coast Guard have been added. AllaVj are expressed in constant prices to eliminate the effects of inflation. The US figures in this report, therefore, dotch actual defense budget authorizations or appropriations.
Estimates ofSotiet Defense ActMtles The dollar costs of Soviet defense activities are developed on ihc basisetailed identification and listing of Soviet forces and their supporting elements. The component* thai mnke up these force* and their support arc multiplied by estimates of what they would cost in the United States in dollars. The results ore then aggregated by military mission and by resource category.
The rcllubilily of the estimates depend* on ihc precision and iiccuracy of our estimates of (he Soviet activities und (he com factors applied to (hot data base. In sum. we believe that our dollar cost cstimrtc for total defence activities is unlikely to be in error by more thanercent in the current period or by more thanercent early in the decade. This judgment, while aided by the use of statistical techniques, nonethelessarge subjective clement. Moreover, the margin of error can be much wider for some of the individual items and categories. We arc morein the higher levels of aggregation than in the lower ones, and within the lower levels our confidence varies from category to category.
We place our highest confidence in the estimate of the pay and allowances for uniformed personnel. These costs represent aboutercent of the total estimated dollar cost of Soviet defense activitieseriod. We obtain these manpower costs by applying US factors for pay and allowances to our estima(es of Soviet military manpower. Soviet military personnel performing duties similar to those of US counterparts are assigned the sameof pay as their counterparts.
We also have substantial confidence in our estimate of total military Investment, which represents aboutercent of the estimated total dotlur cost. Thement category Includes the procurement of weapons and equipment and (he construction of facilities.ollar costs arc based primarily on detailedf Soviet weapons production rates andhich can be ascertained with confidence through intelligence method*.
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Although we have continued to make improvements In our estimates of operation and maintenanceosts, which are aboutercent of the totalstimate, we remain somewhat less confident Instimates than In those for investment.
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The estimated dollar costs for Soviet research,testing, and evaluationhich are derived in the aggregateess certainshould be regarded as significantly less reliable than those for either investment or operating. The level and (rend of these estimates, however, arc consistent with the judgment, made with high confidence, that
the Soviet mllilt-ryffort is large undowing.
Dollar Costs and Military Capabilities US defense expenditures and our estimates of the dollar costs of Soviet defense activities arc measures of (he annual flows of resources devoted to defense. Such measures can be used to compare the overalland trends of the defense activities of the two countries in terms of resource inputs. They have an important advantage over many of the other inputas the numbers and types ofthat theyommon denominator which permits aggregative comparisons. Dollar cost valuations, for example, take into account differences in the technical characteristics of military hardware, the number and mix of weapons procured, manpower strengths, nnd the operating and training levels of the forces.
But dol'ar valuations still measure input rather than output and should not be used aloneefinitive measure of the relative effectiveness of US and Soviet forces. Assessments of capability must also (nkc into account strategic doctrine and battle scenarios; the tactical proficiency, readiness, and morale of forces; the numbers and effectiveness of weapons; logistic factors;ost of other considerations. As with other input measures, dollar valuations arc probably more Instructive as general Indicators of changes in (he military capabilities of the two nations' forces over time than as indicators of the comparative capabilities of the foreedrlt"-H " I'ii-t i
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Dollar Com and Soviet Perceptions. Estimated dollar costs do not measure actual Soviet defense expenditures or their burden on the Soviet economy. These questions are addressed by different analytical techniques that yield estimates of the ruble costs of Soviet military programs.
Similarly, dollar cost analysis does not reflect the Soviets' view of the distribution of their defense effort. Neither tho system of accounts nor the structuring of expenditures by military mission Is the same for (he Soviet Ministry of Defense and the US Department of Defense. In addition, the sharp differences between relative prices of various defense activities in the United States nnd the USSR affect the distribution of
defense expenditures significantly. How the Soviets view their own defense effort is best inferredimules made in terms of rubles, not dollars.
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Price
The data presented here are expressed in constant dollarsat trends in cost csiimatcs will reflect real changes in military forces and activities rather than the effects of inflation. This paper uses pricesepresent the purchasing power of the dollar for defense goods and services at
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Dollar Cost Comparisons I
Aggregate Defense Costs orecade, the cumulative estimated dollar costs of Soviet defense activities exceeded US outlays by almostercent! The trends of the defense activities of the two countries, moreover, differedarkedly. Estimated in constant dollars, Sovietactivities increased at an average annual ratehile growth rales fluctuated somewhat from year toprimarily the phasing of major procurement programs for missiles, aircraft, andpattern was one of continuous growth throughout thc.decade. Evidence on weapon systems currently in production and development, continuing capital construction nt major defense industries plants, and the increasing costs of modern weapons indicate that this long-term trend in Soviet defense activities will continue intot about the same rate of growth.
In contrast, the trend In US outlays was downwardof the period, US outlays fell from thethe decadeince then they haveas increases in procurement,ffset continuing declines In militaryand In construction,
' M"esult of these diverging trends, theollar costs of Soviet defense activities caught up with US defense outlays1 and exceeded themidening margin9 theotal wus aboutillion, approximatelyercent higher than Ihe US total ofillion,
1 When vilncd In ru bio. tots irowtfc5 percent, reflecting the different pricing Mroeinre in the Soviet Union.
If uniformed personnel costs (which are based on US pay rates) ore excluded from both sides, the estimated dollar costs of Soviet defense activities exceed IS outlays9 byercent and areercent greater for the entire decade. Ifosts (estimates for which are considerably less reliable than those for other activities) are excluded from both sides, the estimated Soviet dollar cost total exceed* the US total9 by aboutercent and isercent greater for the decade.
The Index Number Problem Evaluating the defense activities o' both countries in dollar termsasic measurement problem common to all international economic comparisons and known to economists as the index number problem. Because of thisomparison will yield different results depending on which country's prices are used, Given different resource endowments andountries tend to use more of Ihe resources that are relativelyand less of those that are relativelya givenomparison drawn in terms of the prices of one country thus lends to overstate the relative vulue of the activities of the other. This tendency is morethe greater the disparity between the two countries' resource endowments and technologies.
The degree of overstatement of Soviet defenserelative to those of the United Statesent in the dollar cost comparison cannot be measuredWe can obtain an appreciation of Its magnitude, however, by the reverseis. by computing the ratio of Soviet to US defense activities measured In ruble cost terms, which overstates US activities relative to Soviet. Whereas our dollar cost comparison show* the total cost of Soviet defense activities9 to be approximatelyercent higher than the USuble cost comparisonit to be aboutercent higher.
Economic Impact of Defense Aetititles Although no single measure accurately describes (he economic impact or burden of defense activities, defense spendinghare of GNP is often used for this purpose. This measure uses each country's own prices to reflect relative scarcities and efficiencies In production. Measured0 rubles and calculated at factor cost, the Soviet defense activities as defined in
Total US and Soviet Defense Activities
A Companion ol USjlod dollar COtl*t duplicated ii Iho United Sia'ci
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this report accounted Tor someoercentoviet GNP throughout the decade of the seventies^ Defense activities in the United Slates accounted forercent of0ercent j
ResourceSoviet and US defense activities can be compared in lerms of the major resourceinvestment, operating, andosts:
The investment category covers the dollar cost of the procurement of equipment (including major spare parts) and the construction of facilities. Investment costs represent the flow of equipment and facilities into the defense establishment. They are not anndication of the size of the force in any given year.
The operating category covers the costs associated with maintaining current forces (including personnelhey are directly related lo the size of the forces and to the level of their activity.
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ategoryariety of activities including exploring new technologies, developing advanced weapon systems, and improving existing
systems.
Military Investment. The trends in military investment in both countries followed those for the respective totals over the decade of the seventies. US Investment fell sharply06 but then grew by moreercent per year until the end of the period. Soviet investment showed an upward trend butcycles in annual growth rates that were related to the phasing of major procurementespecially those for missiles and aircraft. Theated dollar cost of Soviet investment programs rose throughout the decade. This growth rate is expected to continue In the, jk*
The estimated dollar cost of Soviet military Investment exceeded comparable US spending byercentThe difference was as large asercent) Over the decade, the estimated dollar costs wereercent larger than comparable US outlay*.
Operating Costs. Measured in dollar terms, operating costs made up the largest share of the total defense costs for bothS outlays declined rapidly0eflecting the scaling down and eventual termination of the Vietnam involvement. Since then, growthosts has partially offset the continuinc decline in military personnel costs, slowing the decrease of total operating costs,Soviet dollar costs for operating, on the other hand, grew continuously during thegrowing forceexceeded those of the United Statesidening margin9 they wereercent higher than comparable US outlays. Over the entire decade, they exceeded the US total byercent.
RDT& E. Estimates of the dollar costs of Sovietre derived in the aggregateess certain methodology than the other estimates in this assessment. Although wc consider the estimates to be leu precise, it is clear thereubstantial Soviet military RDTAE program. The available information on particularrojects and published Soviet statistics on science indicate that militaryxpenditures were both large and growing duringeriod, This assessment is reinforced by evidence on increases in the manpower and facilities devoted to Soviet militaryrograms. US outlays for RDT&E. on the other hand, declined steadily over the early years of the period, before turning upesult, the estimated dollar cost of Sovietctivities over the decade was approximately one and one-half limes the US outlays.
Military Manpower
The Soviets historically havearge standing force thatroader range ofthan does the US military. The uniformed personnel strength of Soviet forces9 was estimated totwice ihe US level. The Soviet figure includes tho five armed services of the Ministry of Defense and the Soviet Border Guards,
' This reaulu from ihe uk of US per rata in cMlmitini dollar operating ccau for the USSR. In ruble lermt. investment (ooi opcratini coili) conitltulei Ihe larteii ihire of csilmitcd total Soviet daft im coat*.
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and Soviet Defense Activities
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71 73 73 74 75 75 77 78 79
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US USSR
aata lar lhamtMoj hifdnv*olpa>aa*Biaom*- lha aaaapliOHend ai goaia
US and Estimated
Active Military Manpower
M'tion wn (midyear)
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7t 72 71 76 7t) 77 789
Troopi*doU8ational Motoltf
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which arc subordinate to the Committee forecurity but have some military responsibility. Wellalf million men in the internal security forces of the Ministry of Internal Affairs and in railroad and construction troop units are not Included In the comparison, because they do not fill what In the United States would be considered national security roles.
Military manpower trends paralleled those for total coats In the two defense establbhmcnts. Estimated Soviet military manpower grew by moreen0hen the Oround Forces,ontrast, the level of US military manpower hrs fallen every year since the peak of theillion men0illion
Military Million Comyarlioni
Comparisons of Soviet and US activities can alsc be made by US accounting definitions, which are used to array defense authorizations by the missions they are designed lo support. The missions in this section follow the guidelines in the Defense Planning and Program' mint Categories (DPPC) Issued by the Department of Defense In
Stra'eglc Forces. This mission includes all forces assigned to intercontinental attack, strategic defense, and strategic control and surveillance, p'us the Soviet peripheral attack forces, but excludeshe level of Soviet activity for strategic forces (excluding the Soviet peripheral attack forces, for which the United States has noeasured in dollars, was two and two-thirds times that of the United States overeriod and nearly three times the US levelf Soviet peripheral attack forces are included, the estimated dollar costs of the Soviet forces were three times the comparable US outlays over the period.
Within the strategic forces mission, intercontinental attack forces accounted for aboutercent of the total dollar cost estimate of Soviet strategic forces for the period. US outlays for intercontinental attack forces accounted forercent of US strategic force outlays for the period.
Estimated dollar costs of Soviet intercontinental attack activities dipped in theith the completion of third-generation ICBM deployment programs, then rose sharply in theith the deployment of fourth-generation systems. As the Soviets complete deployment of their fourth-generation ICBMs. the estimated dollar cost of intercontinental attack will dip again before rising sharply in the, when the Soviets are expected to deploy the new ICBM systems now In development.
Our cost estimates for intercontinental attack forcesubstantial difference In the mix of weapons in the Soviet and US forces. During the period, ICBM forces accounted for more than half of the estimated dollar cost of Soviet intercontinental attack forces, compared with only about one- fifth for the United States. On the other hand, bomber forces represented about one-third for the United Stales but lessercent of the Sovietn every year of the decade, the dollar costs of Soviet programs for ICBMs aw* ballistic missile submarines exceeded those of the United States, but the dollar costs of Soviet bombers were lower than comparable US outlays.
1 Backfire aircraftto Lonj Rante Aviation arc- Included in peripheral attackoteto the Navy are Included In iinaral purpose forcci.
US and Soviet Major Millions
Dorter coat ol Serial- . nd US defer.se Ou tiara
SttaUfllc Force a
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Oollar -an o> Soie*
af US dafanaa outlet*
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71 72 73 T4 78 76 77 78 T8
US and Soviet Forces for Intercontinental Attack
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Peripheral attnek forces accountedercent of the total dollar cost of the Soviet strategic mission. (Peripheral attack forcea Include medium- and Intermedialc-range ballistic missiles, mediumand some older ballistic missile submarines. These forces are assigned strategic targets on the periphery of the Sovieti
Fjiilmaicd costs of Soviet forces for strategic defense accounted for roughly half of the dollar cost* of the Soviet strategic mission during the decade. US outlays for strategic defense, on (he other hand, accounted for only aboutercent of US strategic mission outlays during the period. Soviet strategic defense activitiesemainedigh level, while US strategic defense activities declined during the period.esult, the dollar cost of Soviet strategic defense activities increased from five limes US outlays0 loimes US outlaysoviet strategicefense activities will probably continue to grow in thes the Sovietsew generation of irtcrccptnr aircraft and surface-to-air missiles, in an nitcmpl to further improve their air defenses.
General Purpose Forces. This mission includes all land, tactical air, naval, and mobility (airlift and seatift) forces. Estimated dollar costs of Soviet activities for general purpose forces (exclusive of RDT-ftE) have exceeded comparable US outlayslthough the absolute difference between them has remained relatively constantor the decade, the Soviet total for (his mission was aboutercent higher than the US total.
Within both the Soviet and ihc US general purpose forces, land forces accounted for the largest shure of the dollar coal. The cstimottd dollar cost of Soviet land forces increased steadily throughout the period. Outlays for US land forces continued to drop from the Vietnam-era high3 they have grownoderate rale.
dollar cosis of ihe two countries' general purpose naval forces (excluding stuck ind multipurpose carri-ers and their associated aircraft, which by DoD DPPC definitions are included in tactical air forces) showed divergent trends, US outlays for this mission fell until
then were relatively constant for the restdecade. The estimated dollar costs ofpurpose naval forces also declined untilthen grewapid rate for the rest of thea result of these trends, the estimated dollar comactivities9 were morehnn US outlays. Over the whole decadeapproximately equal to US outlays. (If thethe US carriers and their associated aircraftin general purpose navtl forces, USbeercent more than the estimatedof Soviet forces9 andercentihe Soviet total for the entire period.)
US outlays for tactical air forces (Including aircraft carriers and their associated aircraft) fell0 to
have grown since then. The estimatedof the Soviet forcesjclical aira cyclical, but upword, growth pattern related to the procurement cycle for new aircraft. By the end of the decade. US outlays exceeded estimated Soviet dollar costs for tactical air forcesonsiderable decreasever the decade. US outlays were about one-third more. (If the US carriers and their associated aircraft were excluded, estimated Soviet dollar costs would beercent higher thanutlays9 andercent higher for the periodhole.)
Support Forcrt. In addition to (he training,major headquarters and logistic activitiesconsidered lupport. this mission alto includes military apace programs. Over the decade, US outlays on support activities exceeded the estimated Soviet total by approximatelyercent, but while the US level was two-thirds higher than the estimated Soviet levelhe two were equal it the end of Ihe decade. The estimated dollar cost of Soviet support forces grew steadily over the period to match the growth of the other major missions.
Forces Opposite China
Both countries structure their forces not onlyajor East-West war but also for other possible conflicts. For example, betweenndercent of the estimated dollar cost of Soviet defense activities (excluding RDT&E) is for units that we believe have primary missions against China. Some of these forces also could be used to meet other contingencies.
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Comparisons With Previous Estimates
Estimates of the dollar costs of Soviet defense activities are revised each year to take into account new information and new assessments of the size,and technical characteristics of the Soviet forces and activities, as well as improvements in costing methodologies. The US data used for comparative purposes are similarly revised each year to take into account changes in The Five Year Defense Program and the Defense Planning and ProgrammingBoth the Soviet and the US data are updated annually to reflect the most recent price base.
This year's estimate of the dollar cost of Soviet defense activities8 isercent higher than the estimate for that year in last year's publication. Almost all ofercent difference is the result of changing89 price base. The refinements made since our last report in our assessments of Soviet defense activities and their costs for the8 have resulted in no appreciable change in our estimate.
Readers making cumulative comparisons withversions of this report should be aware that this year we areyeardecade of thethanyear period, as was the case with the earlier reports.
Original document.
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