Nyt: F/a-22 Cut

[Ken Estes]

Typical sharp insights from Kaplan:

---------------

war stories

Rumsfeld's Dubious Deficit Cutting

Pentagon budget cuts will take years to translate into savings.

By Fred Kaplan

Posted Thursday, Dec. 30, 2004, at 3:16 PM PT

 

 

 

So, the Pentagon is finally realizing that, while money may grow on trees, the tree doesn't grow forever. The New York Times and Washington Post report today that Donald Rumsfeld & Co. are looking at ways to cut the military budget—a topic they hadn't even thought about since taking office four years ago—and that big-ticket weapons systems (including the Air Force's F-22 stealth fighter plane, a new Navy destroyer, and a futuristic Army combat vehicle) are not immune from the ax. As John Warner, chairman of the Senate Armed Services Committee, is quoted as saying, the Defense Department, while preserving "adequate funds" for operations in Iraq and Afghanistan, must "bear its share of cuts necessary to help work down deficits."

 

There are many good reasons for killing the Pentagon's white elephants, gargantuan relics from an era gone by. (I offered a couple of lists of candidates for the chopping board here and here.) But slowing the Bush-Rumsfeld weapons-buying spree is not going to have much of an effect on the deficit, at least in the short term. Like driving a hot rod at 120 miles per hour, you keep skidding for quite a while after slamming on the brakes.

 

According to news reports, Pentagon officials are thinking about cutting various weapons programs by $10 billion in the Fiscal Year 2006 military budget, which they send to Congress in February. But the way weapons programs work, a $10 billion budget cut would reduce next year's deficit by only about $2.5 billion or less.

 

There are two measures of a budget. One is "budget authority"—how much money is requested and allocated. The other is "outlays"—how much is actually spent in a given year. For most federal budgets, the two are similar; most of the money goes for payroll, which gets spent instantly. The Defense Department is one of the few federal bureaucracies that engages in large-scale capital spending. Many projects take years to build; in other words, the budget authority takes years to translate into spending. By the same token, cuts in budget authority take years to translate into savings.

 

The precise duration of this time lag is spelled out in a voluminous (and, therefore, largely unread) document called the National Defense Budget Estimate (also known as "the green book"), published each March by the Pentagon's comptroller. Among the green book's many charts is one titled "Outlay Rates To Be Used for Incremental Changes in BA Purchases" (BA standing for budget authority).

 

The chart (found in this year's edition on Pages 54-55) calculates a different rate, over a six-year period, for each category of military spending. For example, for Air Force aircraft procurement, only 26 percent of the money authorized is spent in the first year. Another 45 percent is spent during the second year, 19 percent the third year, 6 percent the fourth year, and the final 2 percent in the fifth and sixth years.

 

With this in mind, look at the Air Force's F-22 stealth fighter plane. Earlier this year, Congress authorized $4.1 billion to buy 24 planes. By the green book's calculation, only $1 billion of that amount will be spent next year (the first year of outlays). In the unlikely event that the F-22 is halted in this February's budget—that is, if $4 billion in budget authority is cut to zero—the savings for 2006 will be just $1 billion. A billion dollars is a substantial saving, but it's not $4 billion. Meanwhile, the Air Force will be spending nearly $2 billion for the second-year outlay on the planes authorized in 2004.

 

And the spending rate—and, therefore, the savings rate—of Air Force aircraft is relatively fast. Pentagon officials are thinking of cutting back on the Navy's new DD(X) destroyer, which will cost about $1.5 billion per ship. According to the green book, just 17 percent of money authorized for Navy ships is actually spent during the first year. Another 23 percent is spent the second year, 21 percent the third, 20 percent the fourth, 10 percent the fifth year, 8 percent the sixth, and the final 1 percent in the seventh year. So, a $1.5 billion budget cut in shipbuilding translates to just a $255 million spending cut. And, equally pertinent, the financial impact of ships authorized two years ago is only now beginning to be felt—and will continue to be felt strongly for the next two years to come.

 

The root of the problem is that, over the past four years, not only have President Bush and Secretary Rumsfeld pushed the military budget to its highest level in half a century (even with the effects of inflation), they've also overloaded that budget with big-ticket weapons purchases—and with research and development for big-ticket weapons to come. (For details, click here.)

 

The fastest way to save real money is to cut military personnel, spare parts, fuel, and supplies. Between 90 percent and 95 percent of budget authority for personnel gets spent in the first year. Ditto for nearly 60 percent of authority for operations and maintenance. But, of course, this is the last thing the Pentagon wants to cut, and rightly so. In fact, given the consensus for a larger Army—and the heavy rate at which supplies are being used up in Iraq and Afghanistan—these accounts are going to rise.

 

None of this is to suggest we shouldn't bother to slash wasteful, expensive weapons systems. The cuts will pay off in the long run. It's just that this long run is longer than might be expected at first glance.

 

Military budget authority for Fiscal Year 2002 (Bush's first budget year) was $362.1 billion. Authority for Fiscal Year 2005 (by the time the supplementals for operations in Iraq and Afghanistan get added in) will total about $500 billion. However, without the supplemental, it comes to $423.1 billion. Compared with FY02 (the last fiscal year before Iraq and Afghanistan), that's about a 17 percent hike. Over the same period, R & D has risen from $48.7 billion to $68.9 billion—a 40 percent increase. In other words, to get a handle on a looming budget crisis that makes the current problem look trivial, Bush and Rumsfeld need to scrutinize the R & D accounts and purge them of projects that aren't really needed. Meanwhile, another alarming trend has taken hold of the procurement account. Usually, if a budget rises steadily, outlays lag behind budget authority. This makes sense, as first-year outlays are only a fraction of the appropriation. However, in the Fiscal Year 2005 budget (passed this year), budget authority for weapons procurement amounts to $74.9 billion, while outlays total $78.2 billion. In other words, the outlays for programs passed two and three years ago are starting to overwhelm the Pentagon's ability to control spending, even assuming dramatic cuts in budget authority next year.

 

Fred Kaplan writes the "War Stories" column for Slate.

 

Article here

[Rubberneck]

I think the JTF buy was cut drastically last week as well. Something like 700 will be bought now instead of the thousands they were wanting to buy. I'll see if I can dig it up over the next few days.

[Kenneth P. Katz]

Kaplan writes:

not only have President Bush and Secretary Rumsfeld pushed the military budget to its highest level in half a century (even with the effects of inflation)

 

Nonsense on stilts. Most of the defense budget is for people. Even F/A-22A acquisition pays for people: people at LockMart, Boeing, P&W, etc. Because of dramatic increases in the cost of things like education and health care, the cost of people has risen rapidly. Since we have a free market economy including an all-volunteer force, the DoD has to pay market wages and benefits. The relevant metric is defense expenditures as a % of GDP. By that standard, the current level of military expenditures is far, far less than 1955, far, far less than 1968, even much less than 1985. We are fighting a global war of indefinite length on a peacetime military budget.

 

As a mental exercise, consider the military of 1985 that I knew, then figure out what that would cost in 2004. It would be vastly more expensive than the military of 2004.

[UN-Interested Observer]

"As a mental exercise, consider the military of 1985 that I knew, then figure out what that would cost in 2004. It would be vastly more expensive than the military of 2004."

 

Interesting exercise, might be best to actually perform the exercise before stating the results though

 

The real ways this is done is with inflation-corrected dollar amounts (using 1 of 2 techniques), or to be lazy you just look at military spending as a percentage of the budget and compare. This information I wouldn't trust the internet, any good stats you will have to pay for. Use public or University library, they will hook you up.

[Ken Estes]

Here it is: Kaplan link

[schering]

Kaplan writes:

not only have President Bush and Secretary Rumsfeld pushed the military budget to its highest level in half a century (even with the effects of inflation)

 

Nonsense on stilts. Most of the defense budget is for people. Even F/A-22A acquisition pays for people: people at LockMart, Boeing, P&W, etc. Because of dramatic increases in the cost of things like education and health care, the cost of people has risen rapidly. Since we have a free market economy including an all-volunteer force, the DoD has to pay market wages and benefits. The relevant metric is defense expenditures as a % of GDP. By that standard, the current level of military expenditures is far, far less than 1955, far, far less than 1968, even much less than 1985. We are fighting a global war of indefinite length on a peacetime military budget.

 

As a mental exercise, consider the military of 1985 that I knew, then figure out what that would cost in 2004. It would be vastly more expensive than the military of 2004.

128570[/snapback]

 

You are right. Although in absolute terms the 2004 budget authority ($450.174), with the supplemental ($74?) factored in (approximately $520 billions in 2004 dollars) is higher than the 1985 budget authority ($474.3 in 2003 dollars), which itself was the highest budget since 1953, in relative terms it is still smaller by some 2 percentage points of GDP.

 

That said, within the current economic conditions the current defence budget is not sustainable.

 

[edit:added link for past FYs] http://fpc.state.gov/documents/organization/9665.pdf

[FormerBlue]

Typical sharp insights from Kaplan:

 

The root of the problem is that, over the past four years, not only have President Bush and Secretary Rumsfeld pushed the military budget to its highest level in half a century (even with the effects of inflation), they've also overloaded that budget with big-ticket weapons purchases—and with research and development for big-ticket weapons to come.

Ken, this isn't the free fire zone so let's not get too deep into this but your position seems to be inconsistent. On a number of threads you've repeatedly accused Rumsfeld of "gutting the military" during his term in the '70s or words to that effect (and it's easy enough to find in those threads) whereas here you seem to be advancing the charge that he's spending too much on the military?

 

Without getting into the actual figures from the 1970s, or these biased* figures, it seems a little inconsistent doesn't it? So is he evil for spending too little or evil for spending too much or is it that it doesn't matter whether he spends too little or too much as you're going to thrash him either way?

 

*Yes, these figures are biased. We're all aware that all figures are biased. Find me 50 tables of defense spending and I'll show you 50 biased studies. 5 seconds with google and I can find serious studies that are completely serious and completely at odds. When we're talking about billions and trillions of dollars, there are obviously billions and trillions of ways to count it. Do we count disaster relief against DOD? VA money? Daycare on base? We all know all numbers are simply political messages. Find the source of the numbers, find their political drift, and you won't even need to look at the numbers to know what they will be.

 

Kaplan is also as biased as anyone else, if not more so:

The New York Times and Washington Post report today that Donald Rumsfeld & Co. are looking at ways to cut the military budget—a topic they hadn't even thought about since taking office four years ago—and that big-ticket weapons systems (including the Air Force's F-22 stealth fighter plane

That entire para drips bias. I also particularly enjoyed his sourcing of The New York Times and Washington Post.

 

I don't know. Maybe we should save the agitprop for the FFZ.

[pi]

I would have thought a logical place to look for savings would be the missile defence program. At least the F-22 is a finished product.

[Ken Estes]

Ken, this isn't the free fire zone so let's not get too deep into this but your position seems to be inconsistent.  On a number of threads you've repeatedly accused Rumsfeld of "gutting the military" during his term in the '70s or words to that effect (and it's easy enough to find in those threads) whereas here you seem to be advancing the charge that he's spending too much on the military?

 

Without getting into the actual figures from the 1970s, or these biased* figures, it seems a little inconsistent doesn't it?   So is he evil for spending too little or evil for spending too much or is it that it doesn't matter whether he spends too little or too much as you're going to thrash him either way?

 

Kaplan is also as biased as anyone else, if not more so:

 

That entire para drips bias.  I also particularly enjoyed his sourcing of The New York Times and Washington Post.

 

I don't know.  Maybe we should save the agitprop for the FFZ.

128695[/snapback]

 

Quite right, FormerBlue, this is not the FFZ, but that does not prevent you from refusing to think along with me on the two Rummie DOD stints. I find nothing inconsistent with finding fault with Rummie's operating the Hollow Force of the mid-70s [with help from Mel Laird, interalia], a period I served in and my buddies in 3rd TkBn (Okinawa) had their diesel fuel rationed to 50 gal./mo., etc. As for now, I fault him for spending the now huge DOD budget on the wrong things, like Star Wars, for which he was specifically appointed to bring on line by the Bushies. The system is being fielded, mind you, as we write, and has yet to pass a single test -- and spare me the drole of the launch went fine, just the guidance failed ... boom. Apart from that, I have not savaged Rummie too much, just for bad war planning and execution, failing to bring the bloated budget under control, because we all know we cannot afford it, etc. I leave it to you to demonstrate my inconsistencies with your agitprop.

 

As for your refusal to acknowledge Fred Kaplan's consistent good work, I just shrug. He uses NYT and WP to show that it is in the news, not as a research source, which he does quite well by the way. You would prefer he refer to the Drudge Report no doubt.

[Ken Estes]

The relevant metric is defense expenditures as a % of GDP. By that standard, the current level of military expenditures is far, far less than 1955, far, far less than 1968, even much less than 1985. We are fighting a global war of indefinite length on a peacetime military budget.

 

As a mental exercise, consider the military of 1985 that I knew, then figure out what that would cost in 2004. It would be vastly more expensive than the military of 2004.

 

You are right. Although in absolute terms the 2004 budget authority ($450.174), with the supplemental ($74?) factored in (approximately $520 billions in 2004 dollars) is higher than the 1985 budget authority ($474.3 in 2003 dollars), which itself was the highest budget since 1953, in relative terms it is still smaller by some 2 percentage points of GDP.

 

That said, within the current economic conditions the current defence budget is not sustainable.

 

Ken and Schering, I want to question the "relevant metric" of DOD budget vs. GNP, also used on another thread rather aggressively. We have always used this in DOD to show that we are not overspending in DOD, to challenge our NATO allies to pony up more, and so forth. Inflation seems an obvious adjustment, because we cannot build the 1985 force today at 1985 prices [probably can't build it at today's prices either].

 

But how can we use a moving target like GNP as a standard? The calculation of GNP has not remained consistent over the decades, and the nature of the economy has also altered markedly. We produce far less hard goods and the GNP reflects more services than ever. I leave the research to the qualified, but I suspect this is another form of voodoo economics.

 

Just wondering.

[swerve]

But how can we use a moving target like GNP as a standard?  The calculation of GNP has not remained consistent over the decades, and the nature of the economy has also altered markedly. We produce far less hard goods and the GNP reflects more services than ever. I leave the research to the qualified, but I suspect this is another form of voodoo economics.

 

I have to both disagree & agree. We should use GNP (or GDP, which in the long term is much the same) as a measure, since it reflects the effort, the share of resources, devoted to the military.

 

But we should also bear in mind the aaah - flexibility, I think is a suitable word - of historical GNP/GDP estimates. Measure US economic growth since 1929 by the rules the BEA used in the late 1990s, & you get a drastically different picture than if you use other rules, e.g. those the BEA used in the mid 1980s. Long-term comparisons are difficult, because you're not necessarily comparing the same things. An absolute measure comparison of military expenditure between 1955 & 2005 based on share of GDP & GDP growth will produce a different ratio than a comparison based on what was bought in 1955 priced at todays prices. The other way round is very difficult, since you have to find ways of valuing goods which weren't produced then at 1955 prices.

[Ken Estes]

Many thanks, Swerve, as that was the thrust of my suspicions. K

[FormerBlue]

Quite right, FormerBlue, this is not the FFZ, but that does not prevent you from refusing to think along with me on the two Rummie DOD stints. I find nothing inconsistent with finding fault with Rummie's operating the Hollow Force of the mid-70s [with help from Mel Laird, interalia], a period I served in and my buddies in 3rd TkBn (Okinawa) had their diesel fuel rationed to 50 gal./mo., etc. As for now, I fault him for spending the now huge DOD budget on the wrong things, like Star Wars, for which he was specifically appointed to bring on line by the Bushies. The system is being fielded, mind you, as we write, and has yet to pass a single test -- and spare me the drole of the launch went fine, just the guidance failed ... boom. Apart from that, I have not savaged Rummie too much, just for bad war planning and execution, failing to bring the bloated budget under control, because we all  know we cannot afford it, etc. I leave it to you to demonstrate my inconsistencies with your agitprop.

 

As for your refusal to acknowledge Fred Kaplan's consistent good work, I just shrug. He uses NYT and WP to show that it is in the news, not as a research source, which he does quite well by the way. You would prefer he refer to the Drudge Report no doubt.

128767[/snapback]

No Ken, maybe it didn't come through and I referenced it not being free fire zone and was just trying to understand what your positions was.

I fault him for spending the now huge DOD budget on the wrong things

That was what I was trying to understand. I said it appears your position was inconsistent, I didn't say it was I don't think. Makes sense. And no, drudge doesn't do "news," he just does links. I don't generally visit his site as it's too messy in any event.

 

I agree they are spending too much on some programs they really don't need anymore. This thread was started on the F-22. I see that as an example of run-away spending. I don't think the DOD, and the Bush administration isn't much different from Bush 1 or Clinton, and whomever will follow, in this. I don't think anyone has sat down and clearly thought out the what the end of the cold war means. What is the long term "model" for what they want the defense focus to be? I'm starting to think that it's time to rethink the 1949 DOD re-alignment and maybe do it again. Start with a fresh piece of paper as it were.

 

I don't see the NYT as much of a source. Their counters on the other side either.

[Ken Estes]

No Ken, maybe it didn't come through and I referenced it not being free fire zone and was just trying to understand what your position was.

 

I agree they are spending too much on some programs they really don't need anymore.  This thread was started on the F-22.  I see that as an example of run-away spending.  I don't think the DOD, and the Bush administration isn't much different from Bush 1 or Clinton, and whomever will follow, in this.  I don't think anyone has sat down and clearly thought out the what the end of the cold war means.  What is the long term "model" for what they want the defense focus to be?  I'm starting to think that it's time to rethink the 1949 DOD re-alignment and maybe do it again.  Start with a fresh piece of paper as it were.

 

I got it. And you can probably best take it back to the Reagan years, when Cap [formerly known as 'the knife' - ha!] Weinberg put out the word that we could count on a 5% per year ramp-up for the future years. Mr. Cheney remarked fairly recently that they learned in the Reagan years that 'deficits don't matter' but oh how they did, to the regret of Bush the First. As you so correctly point out, there is plenty of glory for all administrations [since Carter, I suppose] for failing to take the DOD bloat and pop it. The procurement bulge has been a clearly observable freight train running w/o a crew down the tracks for many years. The treasure it will and has cost to terminate many projects at more advanced stages could have been well used elsewhere. Ken

[FormerBlue]

Wow, that last post from me is pretty incoherent. I'd claim the booze defense but I don't drink.

I'd agree they cut too deep after VN. Reagan over-compensated for that. I'm always saddened to see a politico use a random number in a program, it's generally a sign of a system out of control. The "600 ship" navy is an awful sign of that. We've now completely divorced programs from reality: 147 F-22s, 205 F-22s, why such numbers?

 

I wonder if it isn't a result of WW2 and the cold war. The US military was pretty small before the war and the thought was "no standing military" in most regards. 60 years of a very large standing military has affected the way we think. A time travel to 1900 would result in some interesting perspectives regards the size and role of the military. Mark Twain would be disgusted with where we are at I'm sure.

 

How does this get corrected? My biggest knock against Bush is that he is a successful politician. This is kind of new. For 50 years GOP candidates told it like it is and lost. They've now discovered that, if they just promise everyone everything, they win. It's hard to fault them for doing it as they are political animals and want to win. So we're now at the point were both parties know that saying yes to everything results in votes. Maybe I'm too much of a pessimist but there are no more "Statesmen," we're loaded with politicians. I fault the people for only voting for candidates that promise the bread and circuses and aren't honest enough to tell people that "we can't afford it." Reagan, Bush, Clinton, Bush are all guilty regards defense. Johnson, Nixon, Ford, and Carter were no different, I mean, was "the great society" a good idea during a costly war? The '70s were so bad partly because of that spending.

 

We've got the pendulum effect going on it seems. The 1960s were too much being spent. The 1970s were too little, 1980s too much and that has continued up to the present. If we continue this pace, we're in for a really bad decade. Nobody is willing to tell the people that because it costs votes.

 

Added on to that, the DOD is creating programs that have a life of their own and are doing it in a vacuum. Programs are supposed to be a means and not an end.

 

I think we really need a reorg of DOD. The realist in me realizes that both parties now are loaded with politicians that aren't even going to try to fix spending. Maybe the bureaucrats will save us.

 

I think we're on the same page Ken. I was trying to understand your posts about the spending. It seemed inconsistent to me and I was trying to figure out what I'd missed. Spending on the wrong things is what I was missing. I don't want this thread to turn into FFZ as it's an interesting thread and was trying to avoid that.

[Ken Estes]

I think we really need a reorg of DOD.  The realist in me realizes that both parties now are loaded with politicians that aren't even going to try to fix spending.  Maybe the bureaucrats will save us.

 

Yep, but like you say, where are the leaders of sufficient stature to pull it off? Ironically, the last reform, Goldwater-Nichols Act, probably strengthened the DOD machinery against all comers, as it elevated the CINCs as budgeteers, adding more clout, but also more divergent views from the old service huddle-up.

 

Remember, even Rummie admitted that the Pentagon lacks the mechanism to even tell how the money is being spent, back when he was reigning as Mr. Candid with the press conferences. He later testified that it would take a decade or more to construct such monitoring...I bet he's working real hard on that one.

 

We are -$500B/yr and heading south, my friend. Ken

[JOE BRENNAN]

But how can we use a moving target like GNP as a standard?  The calculation of GNP has not remained consistent over the decades, and the nature of the economy has also altered markedly. We produce far less hard goods and the GNP reflects more services than ever. I leave the research to the qualified, but I suspect this is another form of voodoo economics.

 

I'd more unequivocally say % of GDP is the best measure.

 

Nominal $'s is clearly a meaningless comparison, and "inflation adjusted" $ comparisons depend on inflation adjustment indexes which have to deal with substitutions and quality changes in what's consumed, over long periods. They aren't a way around the issue of changes in the structure of the economy, but must include assumptions and errors in that regard, plus they involve applying an adjustment calculated for whole econ or all consumption on something different: military spending. Whereas comparing % of total nominal economies at each time is much more direct and less subject to methodology, most of the potential for "voodoo" cancels out of that calculation.

 

We're not comparing GDP(t1) to GDP(t2) trying to put them in the same $'s, an interesting topic when t1 and t2 are far apart, but not relevant here. We're comparing defense spending at t1 relative to GDP(t1) with spending at t2 relative to GDP(t2). The difference in economic structure isn't relevant unless we can argue that a given % of GDP(t1) devoted to military spending constitutes a much different burden at t1 than the same % of GDP(t2) committed at t2 does. Not likely.*

 

I guess some statements made on the thread, "recreating 1985's military would cost much more now" do lead away from % of GDP is the most relevant measure. But if we stick to the issue of what burden of overhead in the economy is devoted to, in strictly tangible economic terms, unproductive spending (it gains the binary intangible of adequate security) then % of GDP is the most direct and robust way to compare one time to another.

 

Joe

 

*The composition of GDP has changed a lot, and methods to try to express one time's GDP in terms of anothers can vary, largely because of that. But the definition of nominal $ GDP at a given time hasn't changed much, certainly not in last 50yrs, therefore we wouldn't assume that overhead spending (like defense) of a given % of nominal GDP at one time would be a much greater or lesser burden than the same % of another time's nominal GDP at that other time. For "hard goods", we spend $'s on military hard goods, if they are relatively more expensive than before that's reflected in the prices; but the burden is still nominal $'s spent now compared to all nominal $'s available now. The burden then was nominal $'s then compared to all nominal $'s then. Defense spending has some directly productive effects (implicit civilian RD subsidy as Airbus always claims about Boeing, mil training applied in productive economy etc) and maybe these effects could change in magnitude over time, but I wouldn't assume they did greatly.

[Guest Lurch]

Aren't the numbers of systems you buy (pork-barrel politics aside) meant to be driven by some kind of operational analysis, even if its largely hypothetical?

[Rubberneck]

To an extent, but the US Army system of procurement is so complex that I cannot understand it all, and I've been working in the system for five years now.

 

The bottom line is that the Army decides on "X" number for each system. this number is known as the Army Acquistion Objective, or AAO. The AAO means that the Army is going to buy "Y" amounts of equipment to meet the needs of the entire Army (including Guard and Reserve - the funds for equipping are federal dollars). In some cases, the AAO, despite the fact that the entire Army may have a requirement of "Z", is cut back to "R" because there aren't enough funds to procure all the needed equipment. The absolute worst case I have been involved in is with SINCGARS radios. The AAO has been hit FOUR times since the program started. The Army keeps increasing the numbers of SINCGARS it needs to make mission. Once the AAO has been hit, it takes SECDEF approval to expand the program and obligate funds against the program.

 

To make matters worse, funds are often shifted from one program to another. One of the most fundamentally wrong things I have ever seen is when the 3rd ACR had their M2A3 and M1A2SEP numbers cut so the money could be spent elsewhere. Four months later, the Army went back to Capitol Hill and said they needed $600 Million so these vehicles could be acquired.

 

Then you get the empire building Generals who are being told what programs to buy and what programs to cut. Want to know why the Guard and Reserve have such bad equipment? Well, the last reason was because in 2001, over 50 equipping programs directly associated with the Guard and Reserve were cancelled and the funds shifted into programs assocaited with Transformation.

 

There is very rarely a simple acquistion program in the Army. Politics ALWAYS come into play, and that means politics from the Program Manager level through the General Officer Corps to OSD to Capitol Hill.

 

Aren't the numbers of systems you buy (pork-barrel politics aside) meant to be driven by some kind of operational analysis, even if its largely hypothetical?

128867[/snapback]

[Kenneth P. Katz]

The other Ken wrote:

Ken and Schering, I want to question the "relevant metric" of DOD budget vs. GNP, also used on another thread rather aggressively. We have always used this in DOD to show that we are not overspending in DOD, to challenge our NATO allies to pony up more, and so forth. Inflation seems an obvious adjustment, because we cannot build the 1985 force today at 1985 prices [probably can't build it at today's prices either].

 

But how can we use a moving target like GNP as a standard? The calculation of GNP has not remained consistent over the decades, and the nature of the economy has also altered markedly. We produce far less hard goods and the GNP reflects more services than ever. I leave the research to the qualified, but I suspect this is another form of voodoo economics.

 

Just wondering.

 

Joe Brennan is our resident economics and finance expert, so I'll answer the question another way. My response is that normalizing things as a % of total economic activity is a generally good way of comparing things across time and location. For example, how could I quantify that econonically I am more affluent than my grandparents? One way to do this would be to say that I spend X% of my total income of the basic necessities of life (food, shelter, etc.) whereas they spent Y%, where Y > X. So I have more discretionary income than they did.

 

Another way to compare things is to figure out "what would it cost to do this today in America". This was a common stody during the Cold War. If you wanted to know what a Mig-21 cost in dollars, you figured out what it would cost if General Dynamics or McAir built it. You can even play that game today. For example, what would it cost to build a WWII fighter in 2004, if we built it under the same conditions as we build the F/A-22A (annual production rate < 50, modern labor costs, modern defense procurement overhead)? I suspect that in that situation a P-51D would cost at least $1 million each.

 

To further extend the point as to why I like the parameter % of GDP, consider the statement that the United States spends more on its military than the rest of the world combined. I've heard that said, and for the sake of the argument let's assume that it is true. What exactly does that mean? The only cost of keeping Private Kim in the Korean Peoples Army is a few cups of rice a day, the occasional box of 7.62mm for practice and a crummy uniform or two. Whereas the total cost of Private Smith in the US, including his pay, medical care, housing, food, educational benefits, etc. is several tens of thousands of dollars. Private Smith is probably two or three orders of magnitude more expensive than Private Kim, but that comparison doesn't reveal much. What IMHO is much more revealing that how much an economic burden Privates Kim and Smith impose on their respective economies -- it might be that from that perspective Private Smith is actually less expensive because of the enormous disparities of wealth between the USA and DPRK.

[Kenneth P. Katz]

Back to the original question of whether the possible cut to the F/A-22A program is a good thing or a bad thing ....

 

The question can only be answered in the context of the "big picture". In that big picture, I believe that the United States is fundamentally a maritime power, not a continental power. There is no risk of being invaded by a neighbor as far as I can see, or invading a neighbor. I'll leave aside terrorist attacks, which are not really an invasion that can be counted by traditional land power, or illegal immigration, which is a political and law enforcement problem and not a military threat. Yes, I know the mantra, you can only win a war by occupying terrain with "boots on the ground", and it's mostly true, but for a maritime power, project of power on land is based on winning in the air and on the sea (and these days, in space).

 

A maritime power primarily depends on its aerospace and naval forces, not its land forces. the United States has global interests and is separated by vast oceans from most likely locations of conflict. In addition, aerospace and naval forces are more capital- than manpower-intensive, and which plays to the advantage of the wealthy and casualty-averse nature of the United States.

 

As it happens, the United States is currently involved in a medium-sized land campaign of indefinite duration. Clearly the immediate priority is to win in Iraq and in Afghanistan. But I think that it would be huge mistake to shape the United States military force structure around Iraq and Afghanistan. First, I think that major American involvement in Iraq (of the current scope and intensity) is not going continue for much longer (next few years). Given the upcoming Iraqi election, we are approaching the point of diminishing returns. Either the Iraqis will get control of their country, or they won't, but given the current constraints we'll have done about all that we can do. Also, I believe in the aftermath of Operation Iraqi Freedom, the enthusiasm for occupying and reforming other countries is going to be low. Not that I want to drift into FFZ territory, but if the United States wanted to stop Syria from supporting terrorists without a repeat of the Iraqi headache, this could be done primarily with air and naval power. Syria would be reduced to the cratered wasteland, with no boots on the ground. "Boots on the ground" are required if you want to achieve something positive; if you just want to achieve something negative (the enemy can't or won't do something) bombardment will suffice.

 

More broadly, I don't think that the United States should totally shape its force structure around the War on Terror (more accurately, the War on Radical Islam and those who tolerate, incite, condone or support it). This is a important war, but the enemy is in many ways weak. We can win anytime we decide that we want to win, and the constraint is not military capability but national will. As soon as we decide to get ruthless to the necessary degree, that war will end shortly thereafter. If not, it will dribble on. Either way, I don't see it as something that ought to drive military force structure for decades to come, which is what the F/A-22A decision is all about. In general, the only things of interest about the stretch of land between Morrocco and Pakistan are all the bad things associated with radical Islam and oil. Other than that, who cares? From a economic perspective, it's a wasteland. Israel is the exception, the only First World economy in the region, but that is such as outlier that it doesn't really count.

 

What interests me, and ought to interest the United States, is Asia and the Pacific. What an region of exciting possibilities! The Asian tigers have lept into modernity and economic prosperity in two generations, and literally hundreds of millions of Indians and Chinese are becoming part of the global economy in a very short of the time. This is BIG story of our time, and this is the region that really matters for the United States. I firmly believe that the United States has no enemies in this region (putting aside DPRK, even more an outlier than Israel - maybe we could arrange a swap of location between the two. ). But that does not mean that the region is free of tensions. In particular, China is a concern because as they become wealthy and have not yet fully absorbed the standards of global conduct, they may choose to throw their weight around. We will not and should not let them stomp on Taiwan. The Chinese leadership is rational and prudent. They are not going to do rash things if they know that they will lose. A Chinese-American war, even if just a small affair, could have global economic ramifications. It could cause a depression. Bad, bad, bad. Needless to say, a quick look at a map and the population of Asia means that American military force in the region will be predominantly aerospace and naval. Not that land forces are irrelevant, just secondary. Of course this is exactly what happened in the PTO in WWII -- land forces seized and defended bases for air and sea forces.

 

I completely reject the belief that the United States can't afford both the immediate and long term military expenditures. The United States has an $11 trillion dollar economy. We can afford it, whether we choose to is another issue.

 

If you are with me so far, you probably agree that air superiority ("air dominance" is the current USAF phrase) is essential to the American way of war. The jihadis may not have an air force but the Chinese do. Without air superiority, nothing else works. Can the United States attain air superiority in the near term without the F/A-22A? Certainly. In the mid term? Maybe. I don't think that "maybe" is good enough.

 

It clear that the F/A-22A program is a clusterf$%&. It got started when I was a cadet and if I had made the USAF career I'd be eligible for my 20 year retirement next year and they still won't have a fully operational squadron. Clearly the USAF and aerospace industry have lost the recipe (another example: the V-22). But it's what we got. The F/A-35 is not yet a real airplane, it will probably be as big a debacle as the F/A-22 and anyway I think that the F/A-35 program ought to be cancelled because the era of the manned fighter is ending as UCAVs become feasible. There is also the issue of industrial base. IMHO it is essential to keep the industrial base viable for combat aircraft, nuclear submarines, armored vehicles and certain other things. To kill the F/A-22A would gravely damage the industrial base.

 

Bottom line as to what I would do with the USAF and the F/A-22A.

 

(1) Press on with the F/A-22A.

(2) Cancel the F/A-35, with the understanding that the future of the fighter/attack force is UCAVs. Cancelling the R&D for the F/A-35 would pay for much of F/A-22A procurement.

(3) Cut back the fighter/attack force structure, and build up the bomber force structure, which is more suitable for both the Pacific and Middle East where local bases may not be available. Buy an affordable, subsonic, non-stealthy cruise missile and smart bomb "truck" based on airliners components.

(4) More and newer tankers and transports.

[Slater]

How many F/A-22's would it take to constitute a viable replacement fleet for the F-15C's?

[UN-Interested Observer]

Joe Brennen is the economic expert? I would have to mention that military spending as % GNP is the ROUGHEST measure you coul use. It is meant for simple math questions for grade-school kids.

 

I don't feel like writing the equation out here, but the reason you should not use this measure is because Government Spending is one of the principle components of GNP! Therein lies the problem, the military spending effects the GNP. You would have to compare GNPs with defence spending removed, to gain any insight. Just my 2c.

 

BTW America uses GNP, GDP is for the other guys. GNP is slightly more inclusive. Bad to confuse the two.

[Ivanhoe]

BTW America uses GNP, GDP is for the other guys. GNP is slightly more inclusive. Bad to confuse the two.

 

Actually, USian economists use GDP. Haven't used GNP since the early 1980s, IIRC. GNP generally only shows up since the majority of historical data presents GNP.

[Kenneth P. Katz]

Yes, Joe is our resident economics and finance expert.