The Permanent War Economy, originating in the 1940s, has produced decades of excessive defense spending, contributing to waste that detracts funds from social expenditures to meet domestic needs. Previous research on this topic has focused greatly on the origins and causes of this economy with little emphasis on modern solutions to solve this problem and little focus on policy alternatives that can be funded with decreases in defense spending. In this thesis, I use data from the Organization for Economic Cooperation and Development (OECD), the White House Office of Management and Budget, and Federal Reserve Economic Data (FRED) to compose a timeline of how defense spending has changed from 1962 to 2020, how U.S. defense spending compares to the rest of the world, and how much the United States could have saved from 1999 to 2019 had it spent the global average percentage of GDP on defense, which I then use to illustrate a number of alternative domestic programs that could be funded with the consequent savings. My findings indicate support for the theory of the Permanent War Economy and show that it is possible for the United States to decrease defense spending and reallocate those funds to domestic programs while maintaining a position of global military strength. - Abstract.