This article published in Forbes the day after the election pretty much says it all: For The Defense Industry, Trump’s Win Means Happy Days Are Here Again. So much for “draining the swamp” and sending the special interests packing. (By the way, this isn’t fair to swamps. Before Washington D.C. was drained and became a cesspool of legalized corruption, it was a highly productive wetland ecosystem. And what I just said isn’t really fair to cesspools which are a low-tech but highly cost-effective means of treating wastewater. How about we just go with shit-pile? But that’s not really fair to shit-piles, which contain valuable nutrients…)
First, Trump has repeatedly stated that he will modernize the nation’s aging nuclear arsenal, which consists of missile-carrying submarines, land-based missiles in Midwestern silos, and long-range bombers. The Obama Administration has nuclear modernization plans, but it hasn’t explained where the money will come from. Now, it is sure to come. Big winners: General Dynamics and Huntington Ingalls Industries which make subs, Lockheed Martin which makes sub-launched missiles, Northrop Grumman which is building a new bomber, and Boeing which builds tankers and airborne command posts to support the nuclear force. One of these companies will also be tapped to replace land-based Minuteman missiles.
Second, Trump has proposed significantly increasing the size of the Army and Marine Corps, which will require major equipping initiatives. Vehicle makers BAE Systems and General Dynamics will benefit not only from new production, but also upgrades to the existing fleet making it more lethal and resilient. Helicopter makers Boeing and Lockheed Martin will almost certainly get more money, as will companies like BAE Systems and Raytheon that provide radios, electronic warfare gear, and ground-based air defense systems.
Third, Trump has stated an intention to expand the Navy’s fleet to 350 warships from less than 300 today. That probably means buying aircraft carriers and surface combatants faster, which would be good news for General Dynamics and Huntington Ingalls Industries — the nation’s two leading producers of warships. The Obama Administration already has programmed fairly robust spending on Virginia-class attack subs (not to be confused with ballistic missile subs) which are built in partnership by GD and Huntington; Trump’s win will do nothing to undermine that plan, and may expand it. If the Marine Corps grows, Huntington Ingalls will also be building more amphibious warships.
Apparently, a lot of this assessment comes from a report card on the military by the Heritage Foundation, which rates our nation’s military as “marginal” and the army in particular as “weak”, despite the fact that we outspend our “enemies” by orders of magnitude.
A think tank from the opposite end of the spectrum called Center for International Policy had this to say in 2011:
Current reductions must also be measured against the unprecedented growth in Pentagon spending over the past 13 years. Since 1998, the Pentagon’s base budget has grown by 54% (adjusted for inflation).4 Moreover, with the country turning the page on a long decade of war in Iraq and Afghanistan, the planned reductions represent a historically small drawdown when compared with those following the end of Korea, Vietnam, and the Cold War…
We spend more on the Pentagon and related military activities than all of our potential adversaries combined – over four times what China spends – and roughly double what we spent in 2001. 6 Defense spending includes not just the Pentagon’s budget, but also intelligence, veteran’s affairs, defense-related atomic energy programs, defense-related interest on the national debt and other defense-related agencies such as the Department of Homeland Security. Altogether, this constitutes 23% of the entire federal budget, more than half of discretionary spending, or $832 billion…
Our conventional and nuclear forces are more capable, better equipped, and better trained than any other military force in the world.14 For example, as former Secretary of Defense Robert Gates explains, with 11 large, nuclear-powered carriers, the U.S. Navy can carry twice as many aircraft at sea as the rest of the world combined, and the Marine Corps is the largest force of its type, exceeding in size most nations’ armies.
Let’s look at a few more numbers. I’m piecing together numbers from multiple sources and years here so I don’t expect them to be highly accurate, just to give a general idea.
- U.S. federal government spending is about $3.85 trillion for 2016. (Source: http://www.usgovernmentspending.com, which sounds like an official government website at first glance but is obviously not.) $916 billion of this is for Social Security. $595 billion on Medicare. If I can do math, this leaves $2.3 trillion for everything else.
- So let’s take that $832 billion estimate from above for all security related spending. 22% of all federal spending, and 36% of spending outside of Social Security and Medicare, which are funded mostly by their own dedicated taxes rather than income tax. In other words, more than a third of our federal income taxes go to support the military and national security.
- The federal budget deficit in 2016 was $587 billion. This sounds bad at 15% of federal spending, but sounds less bad at about 3% of GDP. Our creditors (which include ourselves) don’t worry too much because we could probably cut spending and/or increase taxes by this amount if we absolutely had to. Just like my mortgage, my creditors don’t actually want me to pay it off, they just want to know that I could if I had to.
- The nuclear weapons “modernization” program (this is a code word for new nuclear weapons) has been estimated to cost a total of $1 trillion over 30 years. Ignoring inflation, interest, and all principles of finance and accounting, this is $33 billion per year, which doesn’t sound so big next to the other numbers above. It is a diabolical fact that nuclear weapons are relatively cheap compared to conventional weapons. This is one thing that makes them so hard to get rid of – we could never afford to replace them with an equal amount of conventional power, so to get rid of them we would have to give up some power relative to the other countries of the world.
So, let me come up with some of my naive policy prescriptions just for fun:
- The Army and Marine Corps obviously do the same thing. Get rid of one of them. I would tend to get rid of the Army since the Marines have more experience riding on boats and getting from the boats to the shore.
- Keep the Navy the way it is or even strengthen it a bit, as it is probably the branch of the military most likely to be needed.
- Two out of three branches of the nuclear “triad” are completely useless – land based missiles and bombers. Get rid of them. If you can’t just throw them away, cancel the modernization program and retire them as they become obsolete. Store them safely or use them to generate carbon-free electricity in developing countries under UN supervision.
- Keep the submarine-based missiles for the time being. Use them as bargaining chips and retire them little by little as we convince other countries to give up their own nuclear weapons.
- The Air Force will have less to do now that it doesn’t have any nuclear weapons. Get rid of that part of it. Also get rid of most of its airplanes because the Navy has plenty of those. It will still have some satellites and what-not to take care of.
- Change the Constitution so military-industrial companies can’t buy politicians and write the nation’s laws in their favor.
- Change the Constitution so income tax revenues can be spent on the military only up to 2% of GDP. If the political system agrees to more funding, fund it through a national sales tax on everything the citizens buy, with a message printed on every receipt telling them exactly how much of every purchase goes to the “war tax”. Let them puzzle over why there is a war tax if there is no war.
- Reform the Security Council by giving up the veto in exchange for everyone else giving up the veto and replacing it with some kind of rational consensus process.
- Grow the economy, reduce the deficit, create jobs, build great infrastructure, provide great education, protect the environment, help the poor, etc.