StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



The Future of the Defense Budget: Up or Down?

14 Sep 2010
Posted by Gordon Adams

Quite a discussion today on the Diane Rehm show involving the future of the defense budget.  Kori Schake of the Hoover Institution thinks the budget will not be cut because of emerging threats (China) and because the administration is not projecting a cut.  James Kitfield of National Journal thinks it will be cut, but shouldn't be, because it is a dangerous world, with emerging threats and stabilization needs.  I think it will be cut because the departure from Iraq and Afghanistan, which will undermine political support for high defense budgets, and deficit reduction, which will require everything to be on the table, will combine to lead both parties to agree on cuts.  Listen to the exchange on WAMU.

Your thoughts

What's your thoughts on the defense industry in general ? Do you think potential cuts in defense spending can be offset with increases overseas ? I saw an article yesterday about a potential Saudi deal worth something like 60 billion over time and also increases aid to isreal to offset that to counter Irane.

I'm just curious from a potential investment point of view.

Thanks in advance


Funny those Globalists that

Funny those Globalists that think we can still afford to be the global empire they dream we should be. As Yogi Berra might say, if we can't afford it, we can't afford it. Eventually we will hit the wall were we have to decide between being the global cop, or providing a decent standard of living for Americans. Will Americans decide to sacrifice Social Security that they pay into and earn for increased fear and paranoid fueled support for Military spending? Globalists would love if we did that, but I hope Americans are smarter then that. But hey, perhaps Americans are more stupid then I fear.


Shows a lot of faith

I have to say that all three of you show an admirable faith that decisions in Washington are actually based on the merits of the arguments. My prediction- defense budgets won't be cut because defense contractors won't let them be cut until they suck every dollar possible out of the national treasury.


Defense spending equals better national security?

"I think it will be cut because the departure from Iraq and Afghanistan, which will undermine political support for high defense budgets, and deficit reduction, which will require everything to be on the table, will combine to lead both parties to agree on cuts."

I consider this statement overly optimistic. Surely you read the other columnists on this blog and agree that neither party pays more than lip service to deficit reduction, especially when it comes to defense.

Congress and DoD may shut down a few token commands and installations that should have been gone well before 9/11, but they will continue to build the hardware for the next war and selling the surplus to whoever pays and is politically convenient at the time.

A billion here, a billion there... Are you feeling safer yet? Having your toothpaste taken by an obese TSA screener in the name of national security? Too many taxpayer dollars going to airport food if you ask me.

How is increased spending going to keep us strong against the "threat" of China? I have yet to hear a good reason for this argument. Is it because they're helping us finance the voluntary wars we're currently in by letting us use them as a credit card? What arrogance...
Maybe we should just keep asking politely to stop manipulating their currency and see where that gets us.


I suspect defense budgets

I suspect defense budgets will remain flat; and cuts won't be made (though they should) because of the job loss likely to result. Defense spending is the easiest way to stimulate jobs. Sad.




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