December
31, 2005: Japan's defense budget is currently $41.6 billion, making it the
second largest on the planet. But the budget has been falling about a percent,
or less, each year for the past seven years. That's because the Japanese
defense budget has always been something of a public works project. This was
done by paying much higher prices for military equipment (sometimes American
equipment, like warplanes, which are assembled in Japan, using many more
expensive Japanese made parts). In this way, the equipment cost two or three
times more than the same stuff bought from the lowest cost producer (usually
the United States). Japan has been rearranging it's defense spending
priorities, putting more money into missile defense and the navy, and less into
the ground forces.
