A lot of that spending is pork for congressional districts. A lot of it is useless and corrupt kickbacks.
http://news.bbc.co.uk/2/hi/programmes/7152595.stm
McCain has complained about it before.
http://archives.cnn.com/2000/ALLPOLITICS/stories/07/27/congress.military.reut/index.html
and
http://www.cbsnews.com/stories/2007/08/06/opinion/main3136550.shtml
US military spending is at historic lows as a percentage of GDP:
http://www.truthandpolitics.org/military-relative-size.php
We are not getting our money's worth. And that graph you are using is, to a certain extent, an apples to oranges comparison. We don't even have terribly good data for China's spending levels, for example.
BTS