The United States became involved in the Korean War in 1950, as it led a UN military force which entered the war on the side of the Republic of Korea (South Korea) against the communist forces of the Democratic People's Republic of Korea (North Korea), and later the People's Republic of China. The war was fought in the context of the Cold War, the period of heightened geopolitical tensions and rivalry between the world's two military and economic superpowers, the United States and Soviet Union. U.S. military expenditures and Korea During this period the two sides engaged in a number of proxy conflicts, rather than fighting a direct war (hence the 'cold' war), of which the Korean War was one of the most consequential. The war killed at least 1.5 million people and has led to the Korean peninsula being divided between the North and South to this day. In order to maintain large standing armies, fund innovations in military technologies, and to support allied regimes, both sides spend vast sums of money on military expenditures during the Cold War. Annual U.S. military expenditure more than doubled over the course of the Korean war, from less than 15 billion U.S. dollars to over 50 billion. This expansion of military expenditures would be repeated during the Vietnam War (1964-1975) and in periods of heightened competition in military technologies with Soviet Union (particularly the early 1980s).

In 1938, the year before the Second World War, the United States had, by far, the largest economy in the world in terms of gross domestic product (GDP). The five Allied Great Powers that emerged victorious from the war, along with the three Axis Tripartite Pact countries that were ultimately defeated made up the eight largest independent economies in 1938.

When values are converted into 1990 international dollars, the U.S. GDP was over 800 billion dollars in 1938, which was more than double that of the second largest economy, the Soviet Union. Even the combined economies of the UK, its dominions, and colonies had a value of just over 680 billion 1990 dollars, showing that the United States had established itself as the world's leading economy during the interwar period (despite the Great Depression).

Interestingly, the British and Dutch colonies had larger combined GDPs than their respective metropoles, which was a key motivator for the Japanese invasion of these territories in East Asia during the war. Trade with neutral and non-belligerent countries also contributed greatly to the economic development of Allied and Axis powers throughout the war; for example, natural resources from Latin America were essential to the American war effort, while German manufacturing was often dependent on Swedish iron supplies.

The United States led the ranking of the countries with the highest military spending in 2023, with 916 billion U.S. dollars dedicated to the military. That constituted over 40 percent of the total military spending worldwide that year, which amounted to 2.4 trillion U.S. dollars. This amounted to 3.5 percent of the U.S. gross domestic product (GDP), placing the U.S. lower in the ranking of military expenditure as a percentage of GDP than for instance Saudi Arabia, Israel, Algeria, and Russia. China was the second largest military spender with an estimated 296 billion U.S. dollars spent, with Russia following in third. Defense budgetAccording to the U.S. Congressional Budget Office, the outlays for defense will rise to 1.1 trillion U.S. dollars by 2033. The largest parts of the budget are dedicated to the Departments of the Navy and the Air Force. The budget for the U.S. Air Force for 2024 was nearly 260 billion U.S. dollars.Global military spendingThe value of military spending globally has grown steadily in the past years and reached 2.44 trillion U.S. dollars in 2023. Reasons for this are the outbreak of the Russia-Ukraine war in 2022, the war in Gaza, as well as increasing tensions in the South China Sea. North America is by far the leading region worldwide in terms of expenditure on the military.