US intelligence spending – value for money?

July 16, 2010

America’s spy agencies are spending more money on obtaining intelligence than the rest of the world put together. Considerably more. To what extent they are providing value for money is an open question.

“Sometimes we are getting our money’s worth,” says John Pike, director of, a Washington think tank. “Sometimes I think it would be better to truck the money we spend to a large parking lot and set fire to it.”

The biggest post-Cold War miss of the sprawling intelligence community was its failure to connect the dots of separate warnings about the impending attack on New York and Washington on September 11, 2001. It also laid bare a persistent flaw in a system swamped by a tsunami of data collected through high-tech electronic means: not enough linguists to analyse information.

That problem was thrown into sharp focus by the government’s disclosure, long after September 11, that it had a 123,000-hour backlog of pre-attack taped message traffic in Middle Eastern languages, clear evidence of a system drowning in its own information.

The overall amount of money spent on the collection and analysis of intelligence as well as on covert actions and counter-intelligence by civilian agencies and the military was long shrouded in secrecy. It was disclosed last September by Dennis Blair, then President Barack Obama’s director of national intelligence: $75 billion a year.

No other country comes even close and no other country has as many people working in the intelligence industry — at least 200,000, counting private contractors. Russia and China lag behind.

“Nobody is quite as ambitious as the United States because nobody is trying to project global power as much as the U.S.,” said Steven Aftergood, an expert on intelligence spending who heads the Federation of American Scientists’ Project on Government Secrecy.

There are few public estimates of its global size but a recent study by Christian Hippner for the Department of Intelligence Studies at Mercyhurst College in Pennsylvania estimated global spending on intelligence at $106 billion a year and the number of people (working for 246 different agencies around the world)  at 1.13 million.


Put into context: The United States, with around five percent of the world’s population and 23 percent of its economic output accounts for almost two thirds of global spending on intelligence. This is more than at the height of the Cold War, when annual spending, a closely held secret at the time, was estimated at around $15 billion a year in today’s dollars.

America’s Soviet superpower rival roughly matched U.S. spending, according to estimates at the time, and had more spies, counter-spies and analysts than the Americans. Oleg Kalugin, a former KGB general and head of foreign counter-intelligence, said in a radio interview this month the KGB had employed 496,000 people before the 1991 collapse of the Soviet Union.

That vast shadow army did not keep the Soviet leadership from misreading American capabilities and intentions as badly as the Americans misread the Soviet Union, whose military might it consistently overestimated and whose disintegration took Washington by surprise.

The KGB’s successor, the SVR, made headlines reminiscent of the Cold War this month when U.S. counterintelligence rolled up a ring of 10 Russian “illegals,” deep-cover agents who posed as U.S. residents or citizens. They were exchanged just 12 days after their arrest for four Russians serving jail sentences for spying for the U.S.

Tracking and arresting illegals who, by all accounts broke basic rules of spy tradecraft, is one thing, eliminating wanted terrorists is another. The FBI’s “most wanted terrorists” poster lists 29 men, including Osama bin Laden and Ayman al-Zawahiri, his right-hand man and al Qaeda’s chief ideologue. The two have $25 million bounties on their head, the rest $5 million each.

The main lesson drawn from the September 11 mass murder was that the American intelligence community was too focused on dealing with the threat of nuclear or conventional attack from nation states and not enough on terrorist groups, despite attacks on U.S. targets in the Middle East and Africa.

The 2004 Intelligence Reform and Terrorism Prevention Act, flagged as the most significant reform since 1947, was supposed to get the balance right. It added a new post, Director of National Intelligence (DNI), and yet another level of bureaucracy. Regular budget increases continued.

Should one expect improved performance as a consequence of more money? In an analysis of the reform five years after it was enacted, the Congressional Research Service, the research arm of Congress, cautioned against high expectations: “It should be remembered that intelligence analysis is an intellectual exercise; it is not possible to increase budgets by 50 percent and receive 50 percent better analysis in the next fiscal year.”

Or the year after?  And the year after that?

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Pretty easy to make a bad judgement sitting on the sidelines aint it? You have no idea. One of the main problems with American Intel is that there are too many political appointees and buttkissers. Let Intel do their job and quit messing around trying to massage the intel data to fit some obscure political end. Prior to 9/11, the Bush Administration HAD the intel, they HAD BEEN WARNED and chose to ignore it for whatever reason. I suspect they were busy developing other threats so as to score procurement contracts for business cronies…(anybody remember Hallaburton?) And we all know now that the Iraqi “WMDs” were a complete fabrication, and INTEL TOLD THE ADMINISTRATION there were serious doubts…and again, they ignored the data for their own political ploy…and now we are in Viet Nam II. The money would be well spent if the Intel Community was allowed to operate without all the political crapola. In Itelligence, its far easier to tell the what, then it is to tell the why. Sometimes we know what is going on, but often lack the why its going on.

Posted by Mainstreetman | Report as abusive

At $75B per year, we can expect that the government is doing just about every trick that can be done to promote the US imperialist agenda, from throwing money at anti-Iran terrorist groups, promoting anti-China and anti-Iran movements on Facebook, and investigating and surveillance or our own citizens and promoting phony news stories through their Dept. of Misinformation (such as was revealed during early Bush-II, before they realized it was not a good idea to talk about it), and stooges from the US military on our TV “news” shows.

Have you ever noticed the amount of innane, conversation destroying, misinformation promoted on these comment interchanges. Aljazeera is a prime target. Who is paid, and by whom, to direct of destroy the interchange of ideas? Take a guess. Seems like something worth investigating.

Whether $75B is is worth it depends on whether one likes to live in a Big Brother dream world, or wants to know what is actually going on in the world, including to be able make rational moral judgments on the desirability of our countries behavior.

Posted by xcanada2 | Report as abusive

In one sense at least, this is a mischievous article, because (a) it is impossible for average American taxpayers to know whether they are getting their money’s worth for their espionage dollars since average American taxpayers do not know the details of what the espionage agencies are doing, but (b) it is impossible for the espionage agencies to accomplish anything with any amount of espionage dollars if espionage activities are made sufficiently public to be knowable to average American taxpayers. Yes, there is a devil’s bargain here, and it probably involves overpaying for various things. However, it is hard to figure out what to do about it without sacrificing the essence of all espionage activity, which is secrecy.

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That sure is a lot of money that could be going to help small businesses recover from the plunging economy, or help the sick get better.

$75 billion a year on spies is proof republicans are full of sh*t when they claim to be conservatives. There is nothing conservative about spending that kind of money when your government is going broke.

Posted by Cali099 | Report as abusive

The catch is that spies and other intellegence gatherers have an option value. If one is in the right place at the right time, an attack can be prevented and the investment was worth it. If one is never in the right place, then maybe it wasn’t.

Trying to estimate the (potential) value of knowledge is a fool’s game. It’s only in retrospect that a spy’s true worth is known.

Posted by drewbie | Report as abusive

75B would not include the black budget.Say…100B total.Then put the total national security budget at 1 trillion per yearI was.This is close.I was blackballed from the Political Science Dept. at U.F. in 1982 for making the case that gross overestimates of Soviet intentions and capabilities were being made by those members of the academic community who were also pentagon consultants.

Posted by redcell | Report as abusive

I wonder as to what percentage of that total goes to “informants”, “double-agents”, and other foreign human assets. I have a feeling that while it may be a small percentage, it is numerically, a very high number, probably in the billions. Of course, much of that money is being wasted, and may even be used against us. See Afghanistan.

On the flip side, while electronic surveillance has become a cornerstone of our intelligence strategy, it is abhorrently expensive. One spy satellite and associated systems and analysts could easily cost 1billion or more per year. Still, satellites & electronic surveillance did not reveal the the impending dissolution of the USSR. Yet, a carefully cultivated spy network would have known that it was all smoke and mirrors.

Ironically, the Soviets were often considered to have the best human based intelligence network in the world. That is despite our large expenditures on surveillance technology. Israel is another example where the careful cultivation and usage of human assets is critical to intelligence gathering and analysis. Technology is important, however it has clearly led to an information overload.

The goal should not be “more intelligence” it should be “quality intelligence”. I would take an effective covert spy network over spy satellites any day. Satellites can only do so much. If they were so effective, then why do we know so little about the inner workings of North Korea?

Posted by LucidOne | Report as abusive

The USA spends twice as much on its spies as China spends on its entire military yet China has not been at war since 1955 while we have not had a day of peace since 1942. I would think we could do better.

Posted by SADSACK | Report as abusive

$75 billion a year would buy a lot of honey. I would like to know how much bang intelligence agencies get for their honey money buck compared with their tough love buck.

Posted by oldyeller | Report as abusive

It’s a bit of a stretch for anyone to call the disinformation America chiefly invests in, “Intelligence”. Seems more like institutional stupidity to me. Unless, of course the point of it all is to keep the Western world embroiled in a state of constant war. In which case, it’s crossed the line between stupidity and criminal insanity.

Posted by HBC | Report as abusive

I would have to agree with LucidOne, American’s are too in love with tech solutions and have backed off nearly completely from human solutions. The Israeli spy network is generally considered the best in the world with no spy satellites or any such thing, just highly trained (and motivated) agents on the ground. I think that – as may be evidenced in the way America prosecutes wars now – that the American (para)military are too scared of having their own casualties and it prevents them from doing what needs to be done. Think that all started in 1945 with the bomb…!

Posted by CDNrebel | Report as abusive

That number is absolutely staggering! but not surprising. This mentality has it’s roots in evil and world dominance, we are the “thought” police of the world and need to know every conversation or crime committed, whowever small. We encourage the US way of life and will stop at nothing to enforce our positions on others. To think we have only 5% of the worlds population, yet spend more than the whole world does on intelligence gathering, is just frightening! Our society has transitioned to service driven over the years becuase its more important for us to have strong laws that imprison citizens for small petty petty things. This drives the need for more police, more lawyers, and more jails that we cannot afford. We are huge promoters of punishment, rather than peace but our main objective is dominance at any cost! This is not the same country i remember growing up!

Posted by schmetterling | Report as abusive

“clear evidence of a system drowning in its own information”

Maybe more money should be spent designing and developing systems for analyzing the data. I imagine this would be a substantial challenge.



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In terms of terrorist threats I think it is fair to say that intelligence is our only front line hope to success, it is quite clear from Afghanistan, Hamas, Yemen, Pakistan, etc. that armed confrontations cannot remove these threats. Really we are better off spending the money we do on intelligence than on the regular military.

As far as whether or not the money spent yields the results it should we must recognize a couple things, first the difficulty of dealing with the sheer amount of information our services need to deal with, and secondly how daunting it is to really reform entrenched bureaucratic interests. The first issue makes it clear how important the second issue is. By creating the Department of Homeland Security we had hoped to solve a lot of the problems we have in duplication of efforts and sharing of information between departments. It is clear that effort at reform fell short and that we need to revisit that.

It isn’t the money we spend, it is what we get in return for it.

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