I think we need to start looking at the defence budget not as a whole, but as a % of our GDP.
The US spends 4.06% of its GDP on defence, France 3.4%, Pakistan 6%, India's increased from 2.6 to 3%. By comparison, we spend 2.6% - i KNOW it's wiki and I apologise, but check out the % of GDP table - for the 6th largest economy in the world, 69th isn't really the best place to be.
List of countries by military expenditures - Wikipedia, the free encyclopedia
although in this table
Ministry of Defence | About Defence | Organisation | Key Facts about Defence | Defence Spending at the bottom of page, it apparently shows that defence used up 5.8% of the government's total expenditure. - NB made me laugh, the reduction of a whole 5% on the MoD's overheads.
World Military Spending ? Global Issues that has some interesting info as well based upon the USA's division of spending within government.
There is no real thrust in this post, its just a collection of data that show's just how skewed our priorities are. We still send aid to China for gods sake!