A History of US Defense Spending: Graph vs GDP
The Wars in Afghanistan and Iraq are costly, especially in terms of lost lives. However, they are probably not as expensive in financial terms as people think.
In 2010 national defense costs about 680 billion dollars, which translates to approximately 4.5% of GDP. The 2 wars are about 1-2% of GDP. During the cold war (1946-1989) defense spending as a share of GDP averaged 7.7%.
Overall, the share of national income that goes to defense has been declining, with the expectation of two minor bumps associated with the Iraq war and now the escalation in Afghanistan.