June 16, 2013

WHAT SHALL WE DO WITH THE SURLPUS?:

The End of the Military Industrial Complex ( DAVID FRANCIS, 6/14/13, The Fiscal Times)

Hubert van Tuyll, a professor of economics at Georgia Regents University and co-author of Castles, Battles, and Bombs: How Economics Explains Military History, said he was not concerned about DOD dragging down the broader economy.

"When you have a big defense drawdown, it doesn't really hurt the overall economy that much. But when you have a drawdown, the military establishment has to make a decision to lose people or equipment," van Tuyll told The Fiscal Times. "It's the equipment that will go first."

This is bad news for defense contractors. In the coming years, the massive post-9/11 military industrial complex will be forced to confront a series of challenges, from the drawdown to a poorly defined mission, that will eat away at their bottom lines. This will force defense contractors to make tough decisions regarding their futures their research and development budgets shrivel. 

Just cutting defense from 6% to 3% of GDP nearly balances the budget by itself and 3% would be historically high in peacetime.

Posted by at June 16, 2013 6:42 AM
  

blog comments powered by Disqus
« THE CONTINUING COST OF THE LEAGUE OF NATIONS: | Main | WHAT DOCTOR?: »