They can increase their spending whether or not NATO exists.
[They can increase their spending whether or not NATO exists.]
The alliance exists so we have a logistical footprint in Europe, so American troops are familiar with the terrain and can operate well with local troops. It also provides a reason to prevent the Democrats from cutting our defense spending to Canadian levels, and spending it on priority items on the liberal wish list.
If we had Canadian levels of defense spending, our response to 9/11 would have involved a diplomatic protest at the UN. 1% of GDP defense spending in the run-up to WWII turned out to be horrendously expensive, as we spent 200% of GDP and 400K dead fighting WWII.