Beautifully researched and presented, thank you. We have a defense industry that is like the US healthcare sector - twice as expensive as everyone else's and half as effective. Restoring competition is going to be tough but critical...
Uh, no, we are not half as effective as all of Western Europe. Russia is a catastrophe and has to buy its munitions from North Korea but those don't work. China remains relatively untested. I agree we have problems and need an overhaul but your doom and gloom is overstated.
I just can't get my head around the China cope. They manufacture EVERYTHING for EVERYONE. They have built world class megacities that put the west to shame in a matter of YEARS. They have a pool of 1.4 BILLION people to turn to in a time of war.
I don't understand why the west isn't shitting themselves. It's like the early days of Covid all of again. Somehow if it's happening over in Asia, it isn't "real" enough for people to care.
Russia is clearly a basket case, but it's late-empire hubris to underestimate China like how we do. The peril of overestimating them is far less than the peril of underestimating them.
As I keep pointing out, ships are a waste of money. Ukraine had a (small) navy which was sunk or captured on Day 1 of the Russian invasion. Despite this loss, Ukraine has inflicted a crushing defeat on the Black Sea Fleet, which was the subject of numerous chinstroking articles before 2022. Building a billion dollar boat that can be sunk by a million dollar missile is a really dumb idea. Let the Chinese do that, and send Taiwan lots of missiles.
They have 567,000 fishing boats, in a war every one of those will have to be dealt with by someone, and they often range into Indonesia and as far as Argentina. Both those areas are maritime chokepoints that the US would use to respond to a crisis near Taiwan.
And the reason they are building aircraft carriers as fast as possible? And spending a great deal more on them than on their very, very disposable missile boats? Is that their dumb side?
Airbases are also vulnerable to missiles, and the Chinese know exactly where they are. If you want to have aircraft available in a conflict (and not reliant on an ally allowing you to launch offensive sorties from their territories), then an aircraft carrier is pretty handy. And the ocean is a big place
Basically, it looks like super expensive ships are a bad idea going forward. There are several technological vectors meeting up in ways that are not easy to predict. Ship killing missiles are getting better, but missile jamming and missile interception are getting better too.
If the war isn't going to be fought with the materiel on hand, stuff still needs to be transported across oceans. At the end of World War II, they were building temporary ships out of concrete, good for maybe one trip across the Atlantic. Maybe we can go in that direction for cargo. Maybe these cheapo concrete ships can be unmanned and controlled remotely. War never stands still.
There's competition there too. It used to be that US subs were vastly superior to Soviet subs, because we had super quiet propellers, and the Soviets had loud propellers that sonar could pick up easily. I heard that we used to have a US sub discreetly on the tail of every single Soviet sub.
I don't know if our technology is that superior today, and whether there is not a Chinese sub on our tail.
In any global conflict you still need ships, at a minimum, to move stuff around. If they’re so much easier to sink, you’ll need that many more of them to end up moving a given amount of stuff (in WWII the Battle of the Atlantic was won in large part because America could build boring old merchant ships faster than the U-boats could sink them). And you’ll probably want to make them as hard to sink as possible, within the economic calculus of “cost of making the ship hard to sink vs cost of the stuff that you’d lose, were it sunk.” So it turns you’ll need some sort of surface fleet, and a pretty huge shipbuilding capacity to keep it functioning in the face of attrition.
The problem is that the odds have changed massively since WWII. Ships don't go any faster than they did then, and aren't any better armored. But missiles, planes, drones, satellites are massively bigger threats. And there's only so much you can improve the defense against such threats, given the constraint that the defense has to fit on a floating platform.
So, if you need ships for a military goal, then that goal is no longer achievable in the face of a well-armed opponent. Let China bet on outrunning attrition - they will lose.
Interesting: by this logic, any large scale conventional global conflict is now prohibited, at least until ship defences catch up. Which is either great, or very scary, depending on one’s assessment of the alternatives...
For military freight, not being easily detected and destroyed could change the calculation.
The point responded to was about military shipping in any case, so comparisons to land freight are a bit besides my point.
But looking at land transportation, per tonne costs of rail vs. trucks are not all that different, depending on the parameters of the calculation. Imagine a military situation where vital rail transport would easily be bombed, and I could see that transport going by the equivalent hundreds or thousands of slightly more expensive trucks instead, especially if trucks were very hard to spot, and could travel anywhere.
My suggestion was based on unmanned submarines, probably not a stretch these days. Fueling and refueling would be a challenge, but a maybe not much of one.
You are right that war brings an element of security into the picture that is not there for peacetime transport.
I can see by your spelling that you seem to be thinking of a European context. When it comes to long-distance transport in North America, railroad is far more cost effective than truck transport. Here, containers are ubiquitous, moving from ship to rail to truck.
Freight lands on one of our coasts and is hauled by train close to its destination and then taken the final couple of hundred miles by truck.
The calculus of aerial warfare is changing so rapidly in Ukraine, that one cannot say whether offense is prevailing over defense. There are many ways to attack any target by air these days, but with jamming and defensive firepower there are also many ways to defend.
It is hard to tell how important stealth will be in the next few years. Trains and trucks may carry their own anti-aerial attack complement. I continue to think that track sabotage or bombing bridges is the best way to interrupt rail transport.
Given the absolutely fluid state of aerial combat these days, I think our guess is about what might be most effective have little chance of hitting the mark.
I don't know, man. It feels like this entire piece hinges on the literary sleight of hand of assuming China and Russia can dominate Eurasia.
Which seems.... impossible? I think we need a concrete example of how they dominate India AND Germany AND France AND Indonesia AND Japan AND South Korea .... All simultaneously.
And then decide to invade and occupy Hawaii setting off a decades long insurrection?
Yeah I’m legit worried about a possible Taiwan invasion and China dominating the South China Sea but the idea that China and Russia are going to be able to sustain a blockade of the entire US coastline seems questionable at best.
Russia has shown they present zero conventional threat to Western Europe. Also, Russian troops and nukes are already in Belarus, which Russia has effectively armed subjugated with nary a peep from the EU and US, and Belarus is on NATO’s borders and even more strategically located for “invasion” of Europe than Ukraine would be. Essentially the “worst case” scenario people envisage for Ukraine has already been allowed to happen in Belarus and people don’t seem too fussed.
As for Asia, if the US were to write off Taiwan, then S Korea, Philippines, Indonesia and perhaps Japan would likely seek accommodation with China (and all of their pols and political parties and industrialists would be heavily bribed). Nearly the entire pacific rim. India and Vietnam probably not.
Even time Noah pisses me off with an article, he comes back with something like this which reminds me why I pay to read him. Great article.
One question I had was, if defense spending is lower %GDP than 50 years ago, where did that money go? Because we're clearly not spending less overall, so we must have redirected it somewhere. Fortunately, the US government has data...
Over that time period, every budgetary category stayed essentially flat as a % of GDP, except 2. Defense spending dropped by about GDP 2.5% and health care spending (Medi-care/aid) went up by about 3.5%. Nothing else changed significantly.
Bottom line: we took the money we used to spend building battleships and used it to keep extremely elderly and sick people alive for a little longer. Yes, probably for some (maybe many) other good things too, but the bulk of healthcare costs take place in the first year and the last year of life.
That's how we got here. What do we do? Since we're unlikely to throw Grandma under the bus (because only uncivilized countries like Britain and Canada force babies and old people to die), it seems tax increases will be the answer. I cringe at that as a conservative, but I don't see another viable option. As Noah says though, whether we can agree to do it (in a country that can't agree on what a woman is) seems doubtful.
One way or another, the problem will eventually get solved. A strategic military defeat has a way of focusing a nation, getting it to accept limits and get serious about waste, navel-gazing and decadence. It's a terrible price, but it does work. A defeated and isolated people whose standard of living has suddenly dropped are too busy trying to put food on the table do obsess about what a woman is.
Yes, we spend a lot on defense. No, that doesn't mean we spend enough. No, it doesn't mean we are wasting money on obsolete systems.
I would argue that most of the waste in the system is structural, from having DoD and 5 services instead of a Department of the Navy and a Department of War. From there, we have a sclerotic career system designed to support a mass mobilization in which we expand the military to 40x its present size. We simply don't have the manufacturing capacity to build enough military equipment for a military that large, and yet the officer corps and some civilian functions have been designed around it.
It's absolutely correct that entitlement spending and interest are crowding out military spending, but absent a huge increase in productivity there's going to be a huge debate about how to retire the Baby Boomers in luxury while also remaining a superpower. Cutting health care spending in half is a pipe dream that would never happen in a world where Boomers want all the health care that can possibly be provided to them.
Right now I would settle for a $25B, multi year munitions buy to load up on guided missiles. If we don't do that we risk running out after a week of fighting. I don't think a long war is a the risk. The risk is losing the Pacific Fleet in a week or two and then being shut out of Asia by countries that are too afraid to partner with us.
A. If we don't go to a National Healthcare system and reduce spending from 20% to 10%.of GDP and save $2.5 Trillion annually, we will never have the fiscal horsepower. Healthcare Insurance is killing America.
B. I worked and managed in Automotive, Aerospace, Medical Device industries. The ONLY engineers that design; tool and produce more than 10 things a day are Automotive manufacturers. Exaggerated, but true.
C. So, the ONLY route to make 10,000 artillery shells a day, is to move 30% of Defense funding to GM and Ford. And then make 10,000 artillery shells...every hour.
D. Also build new shipyards not in Senator Tubbyvilles state.
Moving production to Ford and GM is an intriguing idea. After all, that's what we did in WWII and that only after the military messed up logistics and production.
Thanks, Doug. Perhaps you recollect, I had to do a google search for a brush-up, that a bunch of military officers moved to Ford management after 1945/6, including McNamara who later became Ford's CEO. We often decry these movements but maybe they aren't all bad. Industry and the government need to share and harness knowledge. Russia couldn't do it and I'm pretty sure China can't either. One can imagine that shared learning about supply chains post-pandemic could be shared to positive result.
I do remember ! He was Henry Ford's needed response the organizational horsepower that CEO Alfred P Sloan created at GM. Sloan, you may recall essentially invented modern corporate management, departments, divisions, etc.
America has 10x the capacity of China to compete, but lacks a unifying strategic leadership.
We don’t need the DPA, we need long-term contracts and higher inventories. That is starting to work for things like 155mm shells, but our stocks of rockets and missiles (incl cruise missiles and JSSAMs) are ridiculously low- perhaps a few weeks to a few months worth in a real conflict. Part of this is because Congress and the Pentagon prioritize keeping weapon systems alive through trickling procurement rather than keeping these systems armed and well maintained (eg subs and naval ships generally, as you noted). . Another is the guns/butter tradeoff. Dems don’t want higher defense spending and when they do they often try to buy votes with it (higher health benefits) or reward campaign contributors (the trial bar with the “burn pile” and camp Lejeune water issues)rather than exclusively focusing on readiness and capability.
Anything over a few hundred million in DPA needs Congressional approval (I think) so better to simply budget and fund more ammo rather than directing it. Or within the Biden’s control maybe take the $50-100 mm of DPA spending that Biden mandated on solar panels and use that for ATACMs missiles?
Something needs to be done to simplify the procurement process as well as getting procurement officers out of bed with the so called primes. Often government is unable to use the best providers because of their lack of familiarity with federal regs surrounding procurement. My father who was a jobber who sold corrugated cartons once joked -- never do business with the government, you can charge them twice as much but its never enough. I once worked at Lawrence Livermore National Lab. There I learned about the difference between efficiency and effectiveness. Livermore scored high on the latter but low on the former.
"[T]he pandemic also normalized the use of the DPA, so this is a very realistic option."
I don't like the way you casually suggested abusing emergency powers. The public health industry abused emergency powers during the pandemic, and their power was curtailed in many places as a result, probably to our detriment in future pandemics. Promoting abuse of emergency war powers, which is what the DPA is, will inevitably lead to those powers being curtailed by Congress, to the detriment of our national security.
Great article and I don't want to be a complainer but I would love to see an article of baumol's cost disease as it relates to the US military. We spend a lot and I am sure things like a lack of competition play a role but I also think a combination of high wages relative to the rest of the world and exceptional benefits for US military vets also play a role. Since I am not particularly interested in cutting benefits to those who served I would love to get a better sense of how wages/benefit costs impact our defense spending.
I see this the same issue with our health care system. I have family and friends that work in healthcare in the US and in the UK. The US ones make ALOT more money. I am guess the military issues are similar.
“ The situation is serious enough that Washington may need to invoke the Defense Production Act and begin converting some civilian industry to military purposes.”
I don’t understand. The U. S. spends annually about 40% of the world’s military budget for its own military. The system is fundamentally broken and converting existing industry makes no sense.
US military budget is 39% of global military spending, not the world’s budget. Also that includes mostly personnel and operations. For example the US Navy spent $243 billion in 2023, $58 billion of which was personnel and $80 billion for operations and maintenance and only $72 billion for procurement. Other departments are similar, or like the US Army more slanted toward personnel and ops.
I worry about how America would cope with losing a war started by China over Taiwan. America has only lost imperial adventures, ie wars of choice (Vietnam and Afghanistan) that we've agreed ex post should never have been fought in the first place. When I was in first grade I recall my teacher asked what we were thankful for about America and one of my classmates used the fact that we had never lost a war. This status of "back to back world war champs" is a pretty deeply ingrained part of our national identity, and I really think becoming definitively the lesser power would render America totally unrecognizable. I wouldn't analogize this to the fall of the Roman Empire, but more to Weimar Germany, the fall of the USSR, or Tsarist Russia.
Thank you for doing that! I know from work I did consulting with local government that pension costs and medical costs (like everything else in the economy) have blown up over that last couple decades as a source of costs. Given that the military has both costs it actually is surprising that the total cost is not more.
I think we need accept that the return on each dollar of military spending in the US will less than that for countries like Russian and China (possibly even after adjusting for PPP) because of the composition and nature of US costs.
If that is the case it is likely that China is hugely outspending us in terms total military power. I saw a lot of quotes saying we spend plenty on the military but I think those folks are not considering how the composition of our costs limit the actual return on that money in terms of military power.
Europe is already spending more than the US ($100 bn vs $70 bn), and spending real money. Most of the US "spending" consists of donations from existing stockpiles.
While I agree with your assessment of the problem, I fail to see, though I support an arms buildup, how, with our deficit/interest payment problem, we'll finance more defense. Clearly, our European allies ought to do more, but they're sclerotic. They're rent-seekers on our defense umbrella in order to protect their social welfare system. Maybe we're going the way of the British empire...just fade away. In the end, democracy may not be sustainable.
Beautifully researched and presented, thank you. We have a defense industry that is like the US healthcare sector - twice as expensive as everyone else's and half as effective. Restoring competition is going to be tough but critical...
Uh, no, we are not half as effective as all of Western Europe. Russia is a catastrophe and has to buy its munitions from North Korea but those don't work. China remains relatively untested. I agree we have problems and need an overhaul but your doom and gloom is overstated.
I just can't get my head around the China cope. They manufacture EVERYTHING for EVERYONE. They have built world class megacities that put the west to shame in a matter of YEARS. They have a pool of 1.4 BILLION people to turn to in a time of war.
I don't understand why the west isn't shitting themselves. It's like the early days of Covid all of again. Somehow if it's happening over in Asia, it isn't "real" enough for people to care.
Russia is clearly a basket case, but it's late-empire hubris to underestimate China like how we do. The peril of overestimating them is far less than the peril of underestimating them.
What I don't understand is why no major Western democracy saw a single-issue "ban Chinese goods" mass political movement after 2000.
As I keep pointing out, ships are a waste of money. Ukraine had a (small) navy which was sunk or captured on Day 1 of the Russian invasion. Despite this loss, Ukraine has inflicted a crushing defeat on the Black Sea Fleet, which was the subject of numerous chinstroking articles before 2022. Building a billion dollar boat that can be sunk by a million dollar missile is a really dumb idea. Let the Chinese do that, and send Taiwan lots of missiles.
China's defense planners are smart, which is why they're building a ton of little disposable missile platform ships.
They have 567,000 fishing boats, in a war every one of those will have to be dealt with by someone, and they often range into Indonesia and as far as Argentina. Both those areas are maritime chokepoints that the US would use to respond to a crisis near Taiwan.
And the reason they are building aircraft carriers as fast as possible? And spending a great deal more on them than on their very, very disposable missile boats? Is that their dumb side?
And the US is stupid? We have over-the-horizon radar and other leading edge technology that helps as well as surprising forms of stealth.
Airbases are also vulnerable to missiles, and the Chinese know exactly where they are. If you want to have aircraft available in a conflict (and not reliant on an ally allowing you to launch offensive sorties from their territories), then an aircraft carrier is pretty handy. And the ocean is a big place
Basically, it looks like super expensive ships are a bad idea going forward. There are several technological vectors meeting up in ways that are not easy to predict. Ship killing missiles are getting better, but missile jamming and missile interception are getting better too.
If the war isn't going to be fought with the materiel on hand, stuff still needs to be transported across oceans. At the end of World War II, they were building temporary ships out of concrete, good for maybe one trip across the Atlantic. Maybe we can go in that direction for cargo. Maybe these cheapo concrete ships can be unmanned and controlled remotely. War never stands still.
I think we need more and more types of submarines.
We don’t need to build big and expensive aircraft carriers.
There's competition there too. It used to be that US subs were vastly superior to Soviet subs, because we had super quiet propellers, and the Soviets had loud propellers that sonar could pick up easily. I heard that we used to have a US sub discreetly on the tail of every single Soviet sub.
I don't know if our technology is that superior today, and whether there is not a Chinese sub on our tail.
If we're still away ahead, build more subs!
Don't submariners have a saying that "there are two types of ships: submarines and targets"?
Exactly. I would like us to build fewer targets.
BTW, you can't beat an aircraft carrier as a base for recon before the war breaks out.
In any global conflict you still need ships, at a minimum, to move stuff around. If they’re so much easier to sink, you’ll need that many more of them to end up moving a given amount of stuff (in WWII the Battle of the Atlantic was won in large part because America could build boring old merchant ships faster than the U-boats could sink them). And you’ll probably want to make them as hard to sink as possible, within the economic calculus of “cost of making the ship hard to sink vs cost of the stuff that you’d lose, were it sunk.” So it turns you’ll need some sort of surface fleet, and a pretty huge shipbuilding capacity to keep it functioning in the face of attrition.
The problem is that the odds have changed massively since WWII. Ships don't go any faster than they did then, and aren't any better armored. But missiles, planes, drones, satellites are massively bigger threats. And there's only so much you can improve the defense against such threats, given the constraint that the defense has to fit on a floating platform.
So, if you need ships for a military goal, then that goal is no longer achievable in the face of a well-armed opponent. Let China bet on outrunning attrition - they will lose.
Interesting: by this logic, any large scale conventional global conflict is now prohibited, at least until ship defences catch up. Which is either great, or very scary, depending on one’s assessment of the alternatives...
However good the advice for used to be for the US to never (EVER!) fight a land war in Asia, the shipping issue makes it even better.
Of course, Japan and S Korea ought to be valuable allies on this.
Unless unmanned submarine freight, possibly in small entities accessing multiple small harbors becomes a thing.
When it comes to freight, small is always vastly more expensive. One train or one super tanker can haul the freight of hundreds/ thousands of trucks.
For military freight, not being easily detected and destroyed could change the calculation.
The point responded to was about military shipping in any case, so comparisons to land freight are a bit besides my point.
But looking at land transportation, per tonne costs of rail vs. trucks are not all that different, depending on the parameters of the calculation. Imagine a military situation where vital rail transport would easily be bombed, and I could see that transport going by the equivalent hundreds or thousands of slightly more expensive trucks instead, especially if trucks were very hard to spot, and could travel anywhere.
My suggestion was based on unmanned submarines, probably not a stretch these days. Fueling and refueling would be a challenge, but a maybe not much of one.
You are right that war brings an element of security into the picture that is not there for peacetime transport.
I can see by your spelling that you seem to be thinking of a European context. When it comes to long-distance transport in North America, railroad is far more cost effective than truck transport. Here, containers are ubiquitous, moving from ship to rail to truck.
Freight lands on one of our coasts and is hauled by train close to its destination and then taken the final couple of hundred miles by truck.
The calculus of aerial warfare is changing so rapidly in Ukraine, that one cannot say whether offense is prevailing over defense. There are many ways to attack any target by air these days, but with jamming and defensive firepower there are also many ways to defend.
It is hard to tell how important stealth will be in the next few years. Trains and trucks may carry their own anti-aerial attack complement. I continue to think that track sabotage or bombing bridges is the best way to interrupt rail transport.
Given the absolutely fluid state of aerial combat these days, I think our guess is about what might be most effective have little chance of hitting the mark.
I don't know, man. It feels like this entire piece hinges on the literary sleight of hand of assuming China and Russia can dominate Eurasia.
Which seems.... impossible? I think we need a concrete example of how they dominate India AND Germany AND France AND Indonesia AND Japan AND South Korea .... All simultaneously.
And then decide to invade and occupy Hawaii setting off a decades long insurrection?
They can absolutely do this
Yeah I’m legit worried about a possible Taiwan invasion and China dominating the South China Sea but the idea that China and Russia are going to be able to sustain a blockade of the entire US coastline seems questionable at best.
Russia has shown they present zero conventional threat to Western Europe. Also, Russian troops and nukes are already in Belarus, which Russia has effectively armed subjugated with nary a peep from the EU and US, and Belarus is on NATO’s borders and even more strategically located for “invasion” of Europe than Ukraine would be. Essentially the “worst case” scenario people envisage for Ukraine has already been allowed to happen in Belarus and people don’t seem too fussed.
As for Asia, if the US were to write off Taiwan, then S Korea, Philippines, Indonesia and perhaps Japan would likely seek accommodation with China (and all of their pols and political parties and industrialists would be heavily bribed). Nearly the entire pacific rim. India and Vietnam probably not.
Exactly. The non-defense of Taiwan would have a “domino” effect.
Taiwan is Japan's jugular. If it falls Japan must accomodate. Korea I'm not as sure but it seems likely.
Even time Noah pisses me off with an article, he comes back with something like this which reminds me why I pay to read him. Great article.
One question I had was, if defense spending is lower %GDP than 50 years ago, where did that money go? Because we're clearly not spending less overall, so we must have redirected it somewhere. Fortunately, the US government has data...
1983: https://usgovernmentspending.com/federal_budget_detail_1986ps11983n_10
2000: https://usgovernmentspending.com/federal_budget_detail_2000ps12018n_10
2022: https://usgovernmentspending.com/federal_budget_detail_2022ps12018n_10
Over that time period, every budgetary category stayed essentially flat as a % of GDP, except 2. Defense spending dropped by about GDP 2.5% and health care spending (Medi-care/aid) went up by about 3.5%. Nothing else changed significantly.
Bottom line: we took the money we used to spend building battleships and used it to keep extremely elderly and sick people alive for a little longer. Yes, probably for some (maybe many) other good things too, but the bulk of healthcare costs take place in the first year and the last year of life.
That's how we got here. What do we do? Since we're unlikely to throw Grandma under the bus (because only uncivilized countries like Britain and Canada force babies and old people to die), it seems tax increases will be the answer. I cringe at that as a conservative, but I don't see another viable option. As Noah says though, whether we can agree to do it (in a country that can't agree on what a woman is) seems doubtful.
One way or another, the problem will eventually get solved. A strategic military defeat has a way of focusing a nation, getting it to accept limits and get serious about waste, navel-gazing and decadence. It's a terrible price, but it does work. A defeated and isolated people whose standard of living has suddenly dropped are too busy trying to put food on the table do obsess about what a woman is.
Yes, we spend a lot on defense. No, that doesn't mean we spend enough. No, it doesn't mean we are wasting money on obsolete systems.
I would argue that most of the waste in the system is structural, from having DoD and 5 services instead of a Department of the Navy and a Department of War. From there, we have a sclerotic career system designed to support a mass mobilization in which we expand the military to 40x its present size. We simply don't have the manufacturing capacity to build enough military equipment for a military that large, and yet the officer corps and some civilian functions have been designed around it.
It's absolutely correct that entitlement spending and interest are crowding out military spending, but absent a huge increase in productivity there's going to be a huge debate about how to retire the Baby Boomers in luxury while also remaining a superpower. Cutting health care spending in half is a pipe dream that would never happen in a world where Boomers want all the health care that can possibly be provided to them.
Right now I would settle for a $25B, multi year munitions buy to load up on guided missiles. If we don't do that we risk running out after a week of fighting. I don't think a long war is a the risk. The risk is losing the Pacific Fleet in a week or two and then being shut out of Asia by countries that are too afraid to partner with us.
A couple of points.
A. If we don't go to a National Healthcare system and reduce spending from 20% to 10%.of GDP and save $2.5 Trillion annually, we will never have the fiscal horsepower. Healthcare Insurance is killing America.
B. I worked and managed in Automotive, Aerospace, Medical Device industries. The ONLY engineers that design; tool and produce more than 10 things a day are Automotive manufacturers. Exaggerated, but true.
C. So, the ONLY route to make 10,000 artillery shells a day, is to move 30% of Defense funding to GM and Ford. And then make 10,000 artillery shells...every hour.
D. Also build new shipyards not in Senator Tubbyvilles state.
Moving production to Ford and GM is an intriguing idea. After all, that's what we did in WWII and that only after the military messed up logistics and production.
Thanks Nancy.
The ONLY reason America had any capacity to be the Arsenal of Democracy in WW2, was totally the Automotive industry.
Thanks, Doug. Perhaps you recollect, I had to do a google search for a brush-up, that a bunch of military officers moved to Ford management after 1945/6, including McNamara who later became Ford's CEO. We often decry these movements but maybe they aren't all bad. Industry and the government need to share and harness knowledge. Russia couldn't do it and I'm pretty sure China can't either. One can imagine that shared learning about supply chains post-pandemic could be shared to positive result.
I do remember ! He was Henry Ford's needed response the organizational horsepower that CEO Alfred P Sloan created at GM. Sloan, you may recall essentially invented modern corporate management, departments, divisions, etc.
America has 10x the capacity of China to compete, but lacks a unifying strategic leadership.
We don’t need the DPA, we need long-term contracts and higher inventories. That is starting to work for things like 155mm shells, but our stocks of rockets and missiles (incl cruise missiles and JSSAMs) are ridiculously low- perhaps a few weeks to a few months worth in a real conflict. Part of this is because Congress and the Pentagon prioritize keeping weapon systems alive through trickling procurement rather than keeping these systems armed and well maintained (eg subs and naval ships generally, as you noted). . Another is the guns/butter tradeoff. Dems don’t want higher defense spending and when they do they often try to buy votes with it (higher health benefits) or reward campaign contributors (the trial bar with the “burn pile” and camp Lejeune water issues)rather than exclusively focusing on readiness and capability.
Anything over a few hundred million in DPA needs Congressional approval (I think) so better to simply budget and fund more ammo rather than directing it. Or within the Biden’s control maybe take the $50-100 mm of DPA spending that Biden mandated on solar panels and use that for ATACMs missiles?
Something needs to be done to simplify the procurement process as well as getting procurement officers out of bed with the so called primes. Often government is unable to use the best providers because of their lack of familiarity with federal regs surrounding procurement. My father who was a jobber who sold corrugated cartons once joked -- never do business with the government, you can charge them twice as much but its never enough. I once worked at Lawrence Livermore National Lab. There I learned about the difference between efficiency and effectiveness. Livermore scored high on the latter but low on the former.
Some of this looks like discussions of the supposed "missile gap" and "bomber gap" during the Cold War.
https://en.wikipedia.org/wiki/Missile_gap
https://en.wikipedia.org/wiki/Bomber_gap
"[T]he pandemic also normalized the use of the DPA, so this is a very realistic option."
I don't like the way you casually suggested abusing emergency powers. The public health industry abused emergency powers during the pandemic, and their power was curtailed in many places as a result, probably to our detriment in future pandemics. Promoting abuse of emergency war powers, which is what the DPA is, will inevitably lead to those powers being curtailed by Congress, to the detriment of our national security.
Thank goodness we made all those ventilators instead of 25 cent corticosteroids and blood thinners
Great article and I don't want to be a complainer but I would love to see an article of baumol's cost disease as it relates to the US military. We spend a lot and I am sure things like a lack of competition play a role but I also think a combination of high wages relative to the rest of the world and exceptional benefits for US military vets also play a role. Since I am not particularly interested in cutting benefits to those who served I would love to get a better sense of how wages/benefit costs impact our defense spending.
I see this the same issue with our health care system. I have family and friends that work in healthcare in the US and in the UK. The US ones make ALOT more money. I am guess the military issues are similar.
I ran the numbers for a SGT and it works out to an increase of 40% over inflation over the last 55 years. Not including benefits.
“ The situation is serious enough that Washington may need to invoke the Defense Production Act and begin converting some civilian industry to military purposes.”
I don’t understand. The U. S. spends annually about 40% of the world’s military budget for its own military. The system is fundamentally broken and converting existing industry makes no sense.
It sounds like we just need more heavy industry.
US military budget is 39% of global military spending, not the world’s budget. Also that includes mostly personnel and operations. For example the US Navy spent $243 billion in 2023, $58 billion of which was personnel and $80 billion for operations and maintenance and only $72 billion for procurement. Other departments are similar, or like the US Army more slanted toward personnel and ops.
https://comptroller.defense.gov/Portals/45/Documents/defbudget/FY2024/FY2024_Budget_Request_Overview_Book.pdf
Thanks clarified that and fixed a typo.
I worry about how America would cope with losing a war started by China over Taiwan. America has only lost imperial adventures, ie wars of choice (Vietnam and Afghanistan) that we've agreed ex post should never have been fought in the first place. When I was in first grade I recall my teacher asked what we were thankful for about America and one of my classmates used the fact that we had never lost a war. This status of "back to back world war champs" is a pretty deeply ingrained part of our national identity, and I really think becoming definitively the lesser power would render America totally unrecognizable. I wouldn't analogize this to the fall of the Roman Empire, but more to Weimar Germany, the fall of the USSR, or Tsarist Russia.
Thank you for doing that! I know from work I did consulting with local government that pension costs and medical costs (like everything else in the economy) have blown up over that last couple decades as a source of costs. Given that the military has both costs it actually is surprising that the total cost is not more.
I think we need accept that the return on each dollar of military spending in the US will less than that for countries like Russian and China (possibly even after adjusting for PPP) because of the composition and nature of US costs.
If that is the case it is likely that China is hugely outspending us in terms total military power. I saw a lot of quotes saying we spend plenty on the military but I think those folks are not considering how the composition of our costs limit the actual return on that money in terms of military power.
Maybe the US isn't spending/investing on defense in the right ways, but it's somewhat difficult to believe we're not spending enough.
Europe is not spending enough. It should be funding the entire cost of weaponry and ammo to Ukraine, procuring from the US as necessary
Europe is already spending more than the US ($100 bn vs $70 bn), and spending real money. Most of the US "spending" consists of donations from existing stockpiles.
While I agree with your assessment of the problem, I fail to see, though I support an arms buildup, how, with our deficit/interest payment problem, we'll finance more defense. Clearly, our European allies ought to do more, but they're sclerotic. They're rent-seekers on our defense umbrella in order to protect their social welfare system. Maybe we're going the way of the British empire...just fade away. In the end, democracy may not be sustainable.