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Posts Tagged ‘defense spending’

Croatia has to increase defense budget by 2,8 billion HRK

Posted by picard578 on February 17, 2017

Source: Večernji list

A day after new US defense minister James Mattis requested allied countries to increase defense spending to 2% of GDP, Croatian Minister of Defense Damir Krstičević stated that a decision on Croatian Air Force can help Croatia meet the target, increasing defense expenditure from current 1,23% of GDP. At this moment, only seven NATO members has no air force. Reaching the 2% target would mean increasing the defense budget by 400 million USD (2,8 billion HRK). Currently, United States are responsible for 70% of NATOs military capabilities. Mattis has also stated that “Americans cannot care more for the future of your children than you can”.


Freedom is not free but unfortunately Croatian politicians do not want free Croatia. For this reason, the Communist Party of Croatia (divided into so-called HDZ and SDP) has systematically gutted Croatian military.

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Defense Budget Tutorial #2 Smoke and mirrors in Congress’ Defense Appropriations bills

Posted by picard578 on June 22, 2013

January 23, 2006

Defense Budget Tutorial #2: Smoke and mirrors in Congress’ Defense Appropriations bills

The Smoke and Mirrors in Congress’ Defense Appropriations Bills: You’ll need a Rosetta Stone


Understanding how Congress allocates spending in the defense budget requires a comprehension of obscure terms, opaque practices, and sometimes complex ruses. The explanation below of the gimmicks in Congress’ 2006 Department of Defense Appropriations Act is based on over 30 years of experience in congressional appropriations. Some of that experience was in crafting the very same dodges explained below; there did, however, come a point during the author’s Hill career when the focus shifted to opposing the same.

“Defense Budget Tutorial #1” established that Congress appropriated $454.5 billion for the Department of Defense in H.R. 2863, the DOD Appropriations Act, which is now Public Law 109-148. The amount constitutes most, but not all, of what the Defense Department will get in fiscal year 2006. The question here is, how did Congress distribute that money, and what does that say about the nature of Congress’ exercise of its “power of the purse?”

Appropriations Bill Basics

To understand the defense appropriations bill, it is necessary to briefly review its basic contents. These bills are typically divided into eight categories, or “Titles,” as follows: Read the rest of this entry »

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Myth of the defense spending as a job creator

Posted by picard578 on March 16, 2013

Many neoconservatives in United States defend the military budget from cuts with arguments that range from “it will threaten US security” to “it will lead to loss of jobs”. In this article, I will be adressing the latter argument.


But, fact is that long wars always cause recession, as money flow is redirected from civilian market to less efficient military one. In fact, since 2001 on, defense sector has accounted for virtually all new jobs. Net loss of jobs is also result of money flow redirection, as military spending is very inefficient job creator. While spending 1 billion USD on defense creates 11 600 jobs in military and related areas (military industry etc), tax cuts for individuals (not for corporations) create 14 800 jobs, spending on clean energy creates 17 100 jobs, spending on health care 19 600 and spending on education 29 100 jobs. As such, if just 100 billion USD from 700 billion USD of US direct defense spending was to be redirected on clean energy, health care and education in equal amounts, net gain would be over 1 million new jobs. Even when only mid-to-high wages are counted, 1 billion USD of military spending would create 7 300 such jobs, compared to 11 500 for clean energy and 18 500 for education.


Further, while smaller number of people with relatively high wages will likely save some money, average-wage worker will spend greater proportion of his wage, thus encouraging circulation of money and helping the economy. And military contractors are not exempt from neoliberalization-induced differences between worker and CEO pays: at Lockheed Martin, average worker earns 58 000 USD, but CEO earns 25 million USD, a gap of 431:1.


While 500 000 Americans are employed in aerodspace manufacturing, only around 150 000 of these jobs are in military sector.


Even increased military spending does not necessarily mean more jobs. In fact, since 2006, the largest military contractor – Lockheed Martin – has cut jobs while revenues have increased . Between 2006 and 2011, it received 10% increase in revenues (from 101 billion to 113 billion USD in constant year 2011 dollars) but cut 3% of the jobs, and pattern was similar in Raytheon. While defense contracts are not only sources of revenue for these companies, this is likely main reason for why stealth fighters are becoming so popular – since they are very expensive to make, but are produced in small quantities, corporation can employ smaller number of workers while receiveing same – or larger – amount of money. Result is increased profit, which is main concern of any corporation.


Increased military spending does not mean better weapons either – 44 million USD Gripen is far better weapon than 200 million USD Joint Strike Fighter. Yet despite that, it creates a massive brain drain due to large military R&D budgets, causing civilian sector to loose competetivness.


While war spending can help to stimulate economy, it only happens in absence of other areas to spend money at, or in cases when entire industrial potential of country is mobilized. World War II, for example, pretty much wiped out unemployment. But, as shown above, that is not the case with current defense spending, and World War II defense spending also reduced other parts of the economy.

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How to reduce US defense spending without harming the capability

Posted by picard578 on January 5, 2013

Defense spending must be cut to help economy (hint: no economy – no money to support military); charts show that US debt exploded after 2001 – in FY 2001, US Government ran a budget surplus of 1,3% GDP, which was expected to increase. If that had continued, entire public debt would have been paid by 2008 – 2012. However, it did not continue – it could not, due to the massive rearmament of 2000s as well as tax cuts aimed primarly at the rich. On the contrary, 1993 tax increase fell mostly on the rich.

While Federal spending in 2011 equated 24,1% of GDP, revenues were 14,8% of GDP. 36% of 2011 spending was borrowed. While Social Security and Medicare were largest spenders (33,5% of GDP) defense spending was next-largest (20,1% of GDP). Meanwhile, corporate taxes brought in only 8,9% of federal receipts, and income tax 41,5%.

Is it possible to solve this? It is, by transferring tax burden to the rich, by returning production jobs to United States, by reining in fast food, tobacco and alcohol companies – therefore reducing health care expenses (first and foremost, fast food companies should be thrown out of educational system), and by reducing defense spending. It is the last point that I will take the look at here, and I have already adressed the health care issue.

Defense spending can be cut without reduction in overall military effectiveness through elimination of waste and replacement of costly existing and proposed weapons with more effective and efficient weapons.

Now, savings proposal:

F-35 Joint Strike Fighter

Both Dassault Rafale and Harrier II are cheaper and more effective than F-35; rebuilds of F-16, F-18 and Harrier II also can serve as stopgap measure. Thus, replacing variants of F-35 with variants of these jets could save a great amount of money. At the same time, US industry should focus on designing new non-VLO aircraft.

USAF standard is 240 hours a year of operation per aircraft.

Out of 2.443 F-35s, 340 will be CATOBAR F-35C, another 340 will be STOVL F-35B and 1.763 will be CTOL F-35A. F-35s R&D costs have been paid, so I’ll use weapons system flyaway costs – 197 million USD for F-35A, 237,7 million USD for F-35B and 236,8 million USD for F-35C. 15 F-35s – likely A variant – are in service.

In next 10 years (2013 – 2022), 424 F-35As are planned to be delivered – 29 will be delivered each year from 2013 – 2016, 32 in 2017, 48 in 2018 and 2019, 60 in 2020, 2021 and 2022. If we cut orders from 2014 on, it cuts 395 F-35As, totalling 77.815.000.000 USD, plus 81.984.000 USD in maintenance costs.

Rafale C costs 82,3 million USD, Rafale M costs 90,5 million USD, and Rafale’s operating costs are 16 500 USD per hour of flight. Harrier II costs 34,28 – 44,11 million USD and operating cost is 18 900 USD per hour of flight.

Replacing F-35As with (far more capable) Rafale C on 1-on-1 basis, we get cost of 32.508.500.000 for procurement plus 7.801.200.000 USD for operation over next 10 years.

CONCLUSION: 37.587.204.000 USD can be saved over next 10 years by replacing F-35A with Rafale C.

Next-generation bomber

Next Generation Bomber is assumed to have program cost of 55 billion USD for 100 aircraft (up from previous estimate of 40 – 50 billion USD). Given US history, however, it is unlikely to provide on time and on budget – in fact, it is likely to have program cost of more than 100 billion USD and production run of 20-25 aircraft. Its utility is also questionable, as it will be easily detectable by space-based surveillance systems, long-wavelength and multistatic radars as well as ground- and aircraft- -based IR detection systems. In all likelihood, it will follow the path of overexpensive, underperforming B-2 bomber. In fact, it is more likely that NGB is USAF’s “budget insurance policy” than an actual attempt at useful weapons system. That is supported by the fact that design is being accelerated while its operational priorities have not been clearly defined, virtually assuring large cost overruns. Another thing making cost overruns a near-certainity is USAF’s wish to stuff it with all possible technology – including the capability to fly unmanned (which basically means that Chinese can steal it while airborne.).

Operationally, it is unlikely that USAF will let its super-expensive toys run across China without fighter escort – and F-22 fighter can be easily detected by VHF radars. In fact, attacking China directly is the last thing US should do in case of war – containing it from breakthrough into Pacific while at the same time cutting off its trade and supply lines is a far cheaper, more effective and less dangerous alternative – especially when having in mind traditional numerical advantage required from attacker. If direct attack is required, cruise missiles can be used to deal with air defense networks (another possibility are relatively small armed drones).

While I do not like to judge aircraft before it has actually flown, B-2s operational history suggests that NGB will cost far more than expected, while being next-to-useless in a war. In fact, any stealth aircraft in service or proposed is in danger of being detected by HF radars operated by China, Australia and United States.

Conclusion: 55 billion USD can be saved over the next 10 years by cancelling Next Generation Bomber

Aircraft carriers

If there is a war against China, aircraft carriers will not be very relevant, as Western Pacific is filled with islands to brim. Islands are less vulnerable (for example, they can’t be sunk) and air bases can be made. Moreover, aircraft carriers are very vulnerable against enemy cruise missiles, air forces and submarines, and as such are very bad choice for destroying enemy troops, merchant marine and supply convoys – tasks possibly more important than any other in naval war. Nimitz class carriers are large, putting too many eggs in a single basket. Nuclear carriers are not environment-friendly – aside from very expensive nuclear waste disposal, they routinely release irradiated coolant water into sea. Due to that, most countries refuse to allow them to make port, and even less to homeport them, reducing long-term deployment capability.

Thus, two of Nimitz class carriers could be retired. Average operating cost of each was 243 million per year in FY 1998 USD or 340 million USD per year in 2012 USD. Retiring two early would save 6,8 billion USD for next 10 years. Gerald R Ford will be comissioned in 2015, and Navy hopes that its operating cost will be 173 million USD per year. It could replace third Nimitz class carrier, thus saving further 1,169 billion USD over next ten years as opposed to putting it in service without retiring additional Nimitz class carrier.

Decomissioning Nimitz-class carrier costs 750 – 900 million USD.

As such, retiring two Nimitz class carriers would save 5 – 5,3 billion USD over next 10 years

Conventional carriers are a better option, as same force can provide 10% larger force presence. Maintenance of conventional carrier is easier and takes up smaller percentage of lifetime compared to nuclear carrier, and they are easier to replace if lost. While nuclear carriers don’t have to replenish their own fuel, aviation fuel and ammunition still have to be replenished, and conventional carriers are less maintenance-intensive. At no time was USN deployment adversely affected by deploying conventional, as opposed to nuclear, carrier. Conventional carriers can carry more aircraft than similar-sized nuclear carriers, can deploy equally quickly, and spend same amount of time on-station. Meanwhile, air wing size is most important factor in carrier’s combat performance during time on station. Losses in conventional carriers can be replaced far more quickly than nuclear carriers – in peacetime, nuclear carriers take 71% longer to construct than conventional ones – 7,2 against 4,2 years between funding and comissioning. As proven in World War 2, construction time of conventional carrier can be reduced to one-third in case of massive war, whereas such reduction in construction time of a nuclear carrier is questionable at best.

Retirement of six Nimitz-class carriers can be compensated with having five conventional carriers. Retiring of six Nimitz-class carriers would save 20,4 billion USD over next 10 years, whereas six similar-sized conventional carriers would cost 8,568 billion USD to operate over the same time, while providing greater force projection capability. Assuming two carriers per year enter service, with Nimitz retirements being designed to fit timeframe, total costs would be 4,284 billion USD, with to-be-retired Nimitz class carriers adding 10,2 billion USD over the same timeframe.

Decomissioning Nimitz-class carrier costs 750 – 900 million USD. For comparision, decomissioning conventional carrier would cost no more than 60 – 90 million USD. This plan would cost 21,684 billion USD, compared to 20,4 billion USD of operation of nuclear carriers plus 23,748 billlion USD for Gerald R Ford-class procurement, thus saving 22,464 billion USD.

Conclusion: Replacing six Nimitz-class carriers with conventional carriers at rate of two per year would save 22,464 billion USD over the next 10 years. This is my preferred option, as it does not lead to reduction of combat capability of USN surface combatants (in fact, this proposal would increase US carrier capability), and even carriers, while not being very useful in naval warfare, are very good at providing support for troops during amphibious landings, and can be used for transporting aircraft to land bases (as they were in World War 2). For that reason I will not make any change to number of Marine amphibious ships, which would be ideal for convoy escort duties.

V-22 Osprey programme

V-22 programme is another very expensive but not so useful program. It offers very few advantages over helicopters, and has far lower mission capable rate. Cancelling it would save 9,15 billion USD.


Nuclear submarines are an effective weapon. However, they have many shortcomings too. Compared to AIP submarines, they are very costly to both buy and operate, very large and very loud. They are designed for open ocean warfare in the East Pacific and Atlantic; in Western Pacific, nuclear submarines can easily fall prey to smaller and more agile subs without even detecting them, due to being outmaneuvered. While nuclear submarines are much faster than AIP ones (over 30 kts vs ~20 kts submerged), that is not advantage in the Western Pacific.

Thus, a mix of nuclear and AIP submarines would be best suited for large-scale warfare, especially in the Western Pacific. Nuclear submarines cost over 1 billion USD per sub. AIP submarines cost 100 to 250 million USD per sub, and can operate submerged for a month, carrying 25 – 40 crew members.

Per-year operating cost for nuclear attack submarine is, on average, 21 million USD, and typical service life is 30 years. Midlife refuelling and modernization costs 200 million USD. USS Dolphin, US last diesel-electric submarine, has cost 18 million USD per year, however that cost is unusually high for a non-nuclear submarine. UK WWI J-class submarine had operating cost of 28 300 GBP per year in 1921, or 6,023644 million 2012 USD (I have been unable to find figures for modern diesel AIP submarines, so I have to use this). Here, I will use estimate of 7,45 – 12 million USD for modern AIP sub, to stay on the safe side. Swedish Gotland sub costs 100 million USD.

Cost of decomissioning nuclear submarine is 36,5 – 38,8 million USD.

Decomissioning 40 nuclear subs would save 8,4 billion USD over next 10 years, whereas costs incurred would be 8,44 to 10,35 billion USD. However, over the next 20 years savings would be 16,8 billion USD, whereas costs incurred would be 11,42 to 15,15 billion USD.

Conclusion: replacing 40 nuclear submarines with AIP ones would save 1,65 – 5,38 billion USD over the next 20 years. However, cost saving for next 10 years would be 0,04 to 1,95 billion USD in negative – that is, replacement would cause additional costs to be incurred.

As for effectiveness, in WW2 US submarines sunk more Japanese aircraft carriers and (more importantly) supply ships than all USN surface assets combines, despite having only 2% of total US manpower in the Pacific. In World War I, Germany lost 187 submarines, sinking 5.234 merchant ships, 10 battleships, 20 destroyers and 9 submarines. (dodati težinsku i cjenovnu usporedbu)

In exercises, diesel subs routinely sank disproportionately large numbers of surface vessels and nuclear submarines. During RIMPAC 2000, the Australian Collins Class diesel sub HMAS Waller “sank” two US fast attack nuclear submarines and almost “sank” the carrier USS Abraham Lincoln. Similar record has repeated itself in exercises to follow, where diesel and AIP subs routinely sunk large numbers of nuclear submarimes and surface assets. Unlike nuclear subs, diesel submarines can shut down powerplant, lie on seafloor and monitor activity in their surroundings.

Using submarines, United States could easily keep China bottled up in Western Pacific at low cost.

DoD contractors

DoD contractors are very inefficient, and should be replaced with military personnell and DoD civilians wherever possible.

In 2011, contractor employees cost 2,94 times more than DoD civilian employees doing the same job. 622.000 DoD service contractors have cost $253.8 billion and 778.000 DoD’s civilian employees have cost $72 billion (base) or $108 billion (base plus overhead) in FY 2010. Similar ratio is when comparing DoD contractors with military personnell. Contractor jobs are also not easy to cut when not necessary, possibly harder than military or civilian ones.

By taking numbers above, it can be calculated that replacing said 622.000 contractors with equal number of civilians and military personnell can save 167,46 billion USD per year, or 1,67455 trillion USD over next 10 years.


US military only needs one-third of generals it has right now. Many generals are, in fact, professionall lobbysts, pushing for increases in defense spending; and many members of Congress are reluctant to oppose a “distinguished top officer” – even though many, if not most, of them are really bureocrats of questionable leadership ability and military knowledge. Even after they retire, they retain rank and can be called back; most of them go into armaments industry, continuing to work to influence active officers of lower rank.

There are 970 generals and admirals in armed forces. Average salary is 14.000 – 17.000 USD per month, or 168.000 – 204.000 USD per year. Thus, by cutting number of high officials in US military to appropriate number, 1,08696 – 1,3192 billion USD can be saved over the next 10 years just on their salaries. In fact, while in World War 2 there were 130 ships per admiral, and three ships per admiral at the end of the Vietnam War, in 2011 Navy had 254 admirals and 285 ships.

However, staff provided to generals and admirals can cost 1 million USD per general. That is 647 million USD that will further be cut over the next 10 years.

DoD also spends 500 million USD annualy on marching bands. That amount could be cut in half, saving 2,5 billion USD over the next 10 years.

There are 79.000 US military personnell stationed in the Europe. Removing them, and turning bases over to European militaries, would save 110,6 billion USD over the next 10 years. However, as withdrawal per person costs 8.800 USD, actual savings would be 695,2 million USD less

In total, 114,1 – 114,36 billion USD can be saved in next 10 years by cutting personnell costs.

War in Afghanistan

In 2013, War in Afghanistan is expected to cost 97 billion USD. Assuming average of 90 – 100 billion over the next 10 years (it is expected to last until 2025), it comes to 900 billion to 1 trillion USD.


Measures proposed above would save 2,8 – 2,9 trillion USD over the next decade, while at the same time increasing US combat capability. It is important to remember that larger defense spending does not necessarily increase combat capability – in fact, it can decrease it, by reducing the discipline in the weapons design process and other practices.

Cuts are even more important because military that is not reined in by civilian authorities is, in itself, a serious danger to democracy. For the last 60 years, we were witnessing Prussization of United States, a process that may have serious repercussions on democracy beyond United States themselves. Thus processes going on in United States must be carefully observed even by people not living in US themselves.

It is nonsense that defense cuts automatically lead to job losses – workers can transfer to civilian industry, and civilian shipyards can easily build aircraft carriers and other warships – especially if they are not nuclear. Simpler weapons will make it easier to increase production during war, and thus sustain force levels during protracted war.

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On US defense budget

Posted by picard578 on December 1, 2012

While Chinese and Russian defense budgets are incomplete, so is the US defense budget. In reality, US defense sprending is between 1 and 1,4 trillion USD a year, that is 6,3 to 8,8 % of US GDP of 15,974 trillion USD as opposed to the base budget of 711 billion USD in 2012 (or 4,5 % of GDP; to compare, Croatian defense budget accounts for 1,7% of GDP). 2012 defense-related budget request was between 1,09 and 1,42 trillion USD, depending on variables.

For another comparision, base UK defense budget was 62,7 billion USD, around 2,6% of GDP, and that of China was 143 billion USD, or 2% of GDP. When adjusted for Purchasing Power Parity, base defense budget of China was 228 billion USD, or 32% of US one, while China’s GDP is 48,4% of US one. While it is indeed correct that China’s total defense spending is higher than these figures – up to 250 billion USD, not accounting for PPP – that is, as I have shown above, also true of the US defensu spending, so the ratio remains similar.

In fact, using PPP values, total defense budgets of largest NATO spenders (US, UK, France, Germany, Italy, Canada, Turkey) combined add up to 932,6 billion USD. When major non-NATO allies (Japan, Australia) are thrown in, value goes up to 993,9 billion USD in PPP, with United States accounting for 71,5 % of total value. Thus, United States outspend China 5:1, or 3:1 when PPP is taken into account. However, unless United States are going to attack China first, they will have support of NATO, as well as Japan and Australia. Thus, spending ratio will be – even with PPP – in 4,4:1 neighbourhood. For comparision, take a look at the graph below.

defense spending comparision

defense spending comparision

US major allies alone spend more than China on defense, while United States alone spend more than four times as much as China does. Yet, China has populace of 1,347 billion people, compared to the US 314 million.

In 2011, there have been many developmental programmes. Low-performance bomber F-35 was the most costly at 11,4 billion USD. By cutting it, and other programmes of very questionable usefulness (LCS, UAVs), 16,6 billion USD could have been saved.

Fact is that large US defense budget does not produce military capability that is in line with size of the budget. Reasons for that have to be looked for in how weapons procurement works: contractors in armaments industry are free to work with almost no oversight, and lessons from past wars are ignored. In fact, armament manufacturers are inclined to increase complexity and cost of every single weapons system, as it means that they spend less on raw materials and work force, while receiveing large sums of money on both production and drawn-out R&D. Such complexity increases do not, however, mean that weapon is really more capable. Due to that, we get to the paradox where less defense spending could result in more capable military.

Many spending-defenders argue that defense spending saves jobs. That is not true even when looking only at the defense industry. In fact, Lockheed Martin and Boeing have fired thousands of workers at the same time they were receiveing very lucrative contracts.

While increase in defense spending can indeed create jobs when done right, it is terrible job creator even then. For example, only 1,5% of F-35 program costs goes on workers’ pays. In fact, same amount of defense spending creates 25% fewer jobs than a tax cut; one and one-half times fewer jobs than spending on clean energy production; and two and one-half times fewer jobs than spending on education. It also creates less jobs than public works. For exact figures, consider that every 100 billion USD of a military budget (not spending) creates, approximately, 830 000 jobs in military and military industry. When same amount of money is spent for education, both the number of jobs and the average pay are going to be higher. If it is spent on health care or infrastructure, average pay will be less, but total pay compensation will be more than with military industry, and number of jobs created will be far more (for the same amount of money, health care 151%, education 207%, mass transit 231% and construction of infrastructure 150% as much jobs as defense establishment. All of them have additional benefits: more capable work force, reduced pollution, etc. Also, US infrastructure is currently in very poor shape). Total compensation to economy is also larger than that of defense, at 23 – 124% more.

In fact, “Converting the American Economy” study from 1990s has found that a gradual reduction in military spending, starting with $35 billion in 1990 and reaching $105 billion in 1994, would have produced a net gain of 477,000 jobs within the U.S. Economy.

Yet, only 75 billion USD were spent on education in 2007, and military spending accounts for 50% of total Federal spending.

Tax cuts, however, are the worst option for helping the economy, possibly even worse than defense spending. One of reasons is the fact that tax cuts primarly target the wealthy part of the populace, who accumlate money. As economy is all about flow of money, not its accumulation, result is economy slowdown. Tax evasion has similar effect, however – and major armaments companies are spending large sums on lawyers so as to evade taxes.

Important thing about the defense budget is that it must not be governed by GDP, but by military realities. One reality is that United States should not, as it is doing now, fixate on China as a threat. China does seem to be impatient and agressive, but question remains how much of blame for that goes to the United States themselves. While United States should be able to defend itself, military solution of its issues with China should be the last option. However, there are more powers on work here, such as US military contractors, who need a dangerous opponent so as to justify further defense spending increases, and maintain their influence as well as their peace of the budget cake. As such, realistic assessment of situation cannot be expected, at least from the US Government and weapons contractors.

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