From Nate Silver;
The most striking feature of the chart is the extraordinary amount of military spending during World War II (and to a lesser extent, during World War I). Even after World War II, however, military spending constituted the outright majority of federal government spending until 1969.
Military spending makes up closer to 24 percent of federal expenditures today. Thatís up from the near-term low from 1998 to 2001, when it made up about 20 percent of federal spending. (One contributor to the budget surpluses achieved briefly during the Clinton administration was a peace dividend in the interim between the cold war and the Sept. 11 attacks.) And military spending in the United States has generally been rising relative to inflation and remains very high relative to most other nations. But over the longer term, it has fallen slightly relative to the gross domestic product, and substantially relative to other types of government spending.
Another surprise is how little we are paying in interest on the federal debt, even though the debt is growing larger and larger. Right now, interest payments make up only about 6 percent of the federal budget. In addition, they have been decreasing as a share of the gross domestic product: the federal government spent about 1.5 percent of gross domestic product in paying interest on its debt on 2011, down from a peak of 3.3 percent in 1991.
How is this possible? The reason is that although the government is borrowing a lot of money, it is doing so very cheaply because interest rates are low both over all and on government debt specifically. Weíre now spending less than 2 percent of the principal annually to service our debt, down from a peak of close to 7 percent in the early 1980s. Borrowing costs arenít expected to remain this low forever, so this ratio is bound to increase some. Fortunately, much of the debt we have issued has relatively long maturities, meaning that we have locked in low rates. (This wonít necessarily apply to future deficit spending: one of the consequences of failing to raise the debt ceiling would be a significant rise in borrowing costs, which would compound our debt problems later on.)