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The coming storm

In the National Journal, Sydney Freedburg, jr. points out the challenges inherent to balancing wartime operations against future capability in the USAF and naval aviation: An increasingly geriatric (and more costly to maintain) force structure:

With the end of the Cold War, defense spending dropped by $42 billion between 1990 and 1994. Some $39 billion of that came out of the research, development, and procurement budget. So, while the military’s expenditures for operations, maintenance, and personnel stayed about level, even as the size of the armed forces shrank, the Pentagon had only about half as much to spend on new equipment.

The services weathered this “procurement holiday” in different ways. The Air Force all but stopped buying combat aircraft while it invested in research and development of a supersonic stealth fighter, the F-22 Raptor, which finally entered full production in 2005. In the meantime, the average age of the Air Force’s fighter fleet doubled, from less than 10 years old in 1991 to more than 20 today. (The Navy’s aircraft fleet has also aged, though not as dramatically as the Air Force’s.) Some major aerospace contractors went under, and some scraped by doing other work for the space, civilian, and foreign-military sectors.

Because the Navy is the sole customer for the “Big Six” shipyards that make all U.S. warships, both politics and preservation of the industrial base called for continuing ship construction, albeit at a markedly lower rate. The Navy made ends meet by retiring older, expensive-to-maintain vessels ahead of schedule, keeping the fleet relatively young at the price of halving its size.

The bottom line for both services, however, was the same: Major new purchases were delayed, stretched out, or cut. This was a stopgap, not a solution. Throughout the 1990s, a growing chorus of defense analysts warned of a coming train wreck, when all of the deferred modernization bills would arrive at once. What they did not expect was that those bills would come due during America’s biggest and most expensive war since Vietnam.

Let us pass for now on such theoretical imponderables as the cost of losing the wars in Iraq and Afghanistan – subjectively the cost of fighting them has been hideously expensive, both in human and material terms. But objectively – leaving aside the cruelly insensate calculus of human suffering – we’ve been running them both (and our recapitalization efforts) on the cheap. And yet it’s very hard to go to Congress and ask for more money for guns when the popular perception is that the butter churn has been laying idle and anyway what about those deficits?

There are two parts to a national budget deficit of course, taxes and spending. Congress has voted to let most of the Bush tax cuts expire, and so we may soon be treated to an object economic lesson in the effects of government taking more money out of the pockets of those that both spend and invest even as a recessionary cycle spins up, right on cue. Which leaves us with spending.

Solving the problem of mushrooming national deficits will not to be found in cuts to military spending accounts – discretionary spending which must each year be proposed by the president and disposed of by Congress. The real money is in so-called “mandatory” spending accounts which are not merely subject to blanket re-authorization year after year, but are also indexed to inflation as a starting point for further discussion. And all this before we figure out what to do with the pig in the social security snake that is the imminent Boomer retirement, far less the taxation – direct or indirect – that will be required to extend health insurance to 46 million people who either can’t afford to pay for it (the working poor), don’t think it a good investment (healthy young people) or are unaware of existing state-run coverage programs (morons). The point is – I think – that mandatory spending is going to continue to rise, whether in existing programs indexed by inflation and salted with fresh pork, or in new programs designed to ameliorate whatever is the next in a series of crises du jour. That bodes poorly for US military recapitalization, for those who care about such things.

Here are two statements which are simultaneously true: 1) We are not spending nearly enough money on defense accounts, 2) We are spending an awful lot of money on defense, nearly half of the world’s total. The real question we should be asking ourselves (as always) is not so much, “how much do we spend?” but, “what is it we expect to accomplish?” Answer the second question and you have answered the first, less whatever “risk” you decide to take on.

Because if our answer is that we cannot afford the force we have, then what we are really saying is that we cannot afford the mission set we have signed up for and it’s time to either 1) swallow our pride (and decimate our industrial base) by buying cheaper kit abroad, or 2) pull back from the away game and see what rushes in to fill the space we leave behind.

Splitting the difference will only lead us to a “hollow force,” and we’ve seen that show before.

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13 comments to The coming storm

  • Allen

    I often wonder about what people expect from the defense establishment. R&D dollars are down, infrastructure dollars are down, but make sure everything works when we want it. And, make sure our systems are top notch.

  • SteveC

    The famous Rummy quote “You go to war with the military you have . . . etc.” resulted from the reality of how the nation views and treats military spending during “good times.” The same people then, as Allen has pointed out, complain bitterly that the military was not “ready” when we are forced to rely on the military to do what it does.

  • I think we — as a nation — need to have a serious discussion on exactly what is important. What do we want to spend the limited amount of money we have on.

    Clearly, we need to recapitalize and revitalize our aging military equipment (not to mention the stuff that has been blown up or torn up in our current conflicts). So, cutting military spending is simply not an option.

    That leaves the social programs that the left os so fond of. Hmmm, this is not going to be pretty.

    Jim C

  • IMHO, Flag and civilian leadership in the Navy (can’t speak to other services) will not have the guts to state, in an election year that we need to go on a “spending spree.” Outside some HASC/SASC (and HAC) supported plus-ups (read MS/ME and CT/VA coalitions), I think we’re headed for option three.

    God save the Navy if we have an Obama prez, enabled by party majorities in both houses.

  • fliterman

    A nice summation lex, of the current landscape and the many challenges and hard choices ahead. (Although I still say $500 billion is not “cheap” by any measure, and supply side economics won’t help.)

    Regardless of who is in the White House next term, we will end up having to spend “smarter” rather than more in defense spending. And we will have to more narrowly and accurately define our true threats to defend against. We also need our allies to start shouldering more of the defense load.

    Many factors now are reminiscent of the Carter years – oil prices and dependency, war debt, commodity prices, slowing economy with inflation threatening (stagflation). But today there are even more pressures – the weak dollar reflecting an unhealthy economy, massive and growing debt, growing EU and Asian economies, globalization, and the imminent fiscal demands of the retiring baby boomers.

    It will be a difficult time necessitating the prioritizing and limiting of defense spending.

    A coming storm indeed.

  • Idaho

    Yep, reality is a bummer, alright! :-(

    Luckily, season one of the Smurfs has been recently released, and I can pretend like I’m Smurfette, and I live in a cute little mushroom house. :-)

  • ELP

    Be nice if we could build a combat plane from approval to design to production to full operational capability in a shorter time. When the F-22 was thought about, desktop computers were cool, if you knew what they were used for…however typewriters and carbon paper were still common ….. Audio CDs just appeared…. we had digital cameras, but you wouldn’t see them unless you had a security clearance to work on recon satellites. ..personal cell phones were the size of a large brick and still a few years away…

    Now look at F-35 JSF,… it is years away from fielding and the program was recently found with it’s pants down because it has no realistic way of telling the government what costs are and it is going to be delayed, has many technical issues to get over with less than 2% of the flight testing done on a jet that has over twice as much software code as an F-22 (which had large software issues with hair on them) .

    So just for fighter aircraft… we have a big problem….. and a lot of bills to pay.

  • DangerousDan

    Lex (as quoted from Pinches blog the other day),
    As for Obama (if hes the next prez)killing our
    next generation technology? We are already have major structural issues with the F-15 Fleet which wasn’t designed to be in service this long! And their replacement the F-22 is insanely expensive and we cant afford the same number of them.

    Also go look at the shipbuilding with DDG-1000 and the LCS and the next gen cruiser taking forever to develop and field. In contrast the PRAN has developed the Luyang II class destroyer with the equilivant of an early aegis radar in less then 2 years ! We need to pull our head out of our butt and keep pushing ahead or else were going to get a black eye in the future.

    I think there is nothing wrong with advanced technology since “quality has a quantity all its own.” However we must have the numbers available to be able to cover a larger area and be able to absorb losses…. The old adage “don’t put all your eggs in one basket!”

  • Our Paul

    Elegant post, pointing to almost a conundrum…

    It’s almost midnight in my fair city of Rochester, and it has been rather a full day culminating with an evening at the Philormonic Pops concert – Irish tenor night, and some step dancing. The old rum sodden mind just cannot handle a discourse on conundrums, enigmas, or dilemma after an evening of visual and auditory delights. I will settle on real problems.

    First, I will like to present you with a simple graph compiled by Paul Krugman, who admittedly is a highly suspect center left Economist.
    http://krugman.blogs.nytimes.com/2008/03/05/drunken-sailor-watch/
    He links to the source of his data, so we can take a look at where his claim that “what has actually happened under Bush is a surge in military spending, an increase in Medicare costs, and not much else”. Thus, all this hype about “earmarks” is nothing but a shell game, distract watchers with the left hand, while the right is in the till…

    Turns out he, and many others have pointed out that Social Security is not a brake the bank issue. That was settled during 2006 election, unfortunately, a bi-partisan attempt to ameliorate the lingering problem has proven impossible.

    Back to the National debt. You either say it ain’t no problem, or you recognize that we are slowly crawling our way to “Don’t Cry for me Argentina”. The falling dollar has already impacted our trade relations with Canada:
    http://www.badcyclopedia.com/high-canadian-dollar-hurts-sales-of-premium-bc-pot-in-us/
    It is clear from your post that raising taxes is not an option. Take a look at your graph one last time, the red line of National Debt that is going straight up started with the Reagan Tax cuts, briefly plateau and dip down during the Clinton years, and resumed its inexorable climb with the Bush Tax cuts. We either start paying now, or we hand it over to our children…

    Hate to bring up my pappy, but he used to say: “You get what you pay for”. Guess what, you do not pay by stealing from the social programs that help glue our society together.

  • Blacksmith

    About the Raptors (and technology in general), I do hope nobody still falls for that “X dollars per plane” crap the press routinely shovels at us. We can afford this stuff just fine so long as we buy enough to gain economies of scale (and thus offset the one-time R&D overhead that makes the bulk of the program cost). Total cost of materials and assembly are minimal. Too bad the Congress and the press are completely ignorant about basic economics, as a general rule.

    Overall, this sounds like the hardware equivalent of the old saw comparing the prices of training and ignorance. Either way, we’ll deserve what we get in the end. It’d be nice though if the Government gets out of the poverty-purchasing market and starts investing in defending its citizens.

  • OP,

    The graph that Lex links to is debt as a percentage of GDP. Do you think that GDP during those years could have had anything to do with what’s charted on that graph? For instance, the plateau during the clinton years… do you think that could have had anything to do with the dotcom boom or the tech bubble during that time?

    Also, it’s worth it to recognise that we have had a war on the last six years. It seems to me that that will play a rather large part in the national debt.

    I also will mention that those social programs that you are so fond of won’t make a bit of difference to anyone if we are attacked by a foreign power.

    Jim C

  • Oh yeah, one last thing about those social programs gluing our society together… that’s not exactly true. It seems to me that the social programs tend to cause more hate, discontent, and bad feelings than anything else thanks to the class warfare that’s in it.

    Jim C

  • As a provider of equipment used by the military over the last 20 plus years, we have learned not to make them a big part of our client portfolio. There are way to many things that we can not control to put all our eggs into this basket.

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