While responsible government investments can in some cases improve human capital and result in other positive outcomes, the same efforts may cause disincentives and inefficiencies. By all measures, national defense is important, and the defense budget is enormous. Unfortunately, large amounts of money attract opportunists who thrive on chaos and have no problem spreading fear when it suits their economic interests. The military-industrial complex refers to the institutionalized arrangement whereby military procurement authorities, certain large corporations, and executive and legislative officials of the federal government cooperate in enormous ongoing programs to develop, produce, and deploy weapons and related products (Higgs, 2012, 212). The existence of such cozy relationships is one of the reasons why new cheaper technologies are not brought to market sooner and why defense items cost more than they should in a free market.
There are many programs that have misused massive amounts of taxpayer dollars, but the F-35 fighter jet may be the poster child for waste and inefficiency. The jet began development in 2001 and is the most expensive acquisition effort in the history of the Defense Department. It has encountered numerous production setbacks and cost overruns throughout the decades. Pentagon plans for procuring approximately 2,400 of the plane variants is estimated to total $400 billion, or approximately $167 million per unit. The price tag for operations and sustainment is expected to top $1 trillion during the platform’s lifecycle (Harper, 2021).
It is safe to say that strategic long-term planning is not our nation’s strong suit, and Americans tend to be short-term planners when compared to our near-peer competitor, the Chinese, and other nations. This mentality is reflected in our budgets and national strategies. For example, the National Defense Strategy (NDS) aligns with National Security Strategy (NSS) objectives and is prepared and published every four years (Mattis, 2018). Military budgets, meanwhile, are authorized annually. For this and other reasons, significant inefficiencies and misalignments result, which ultimately affects warfighting. Referring to the Afghanistan war that suffered from the inconsistency of four administrations, a military official famously stated: “This hasn’t been a 20-year war. It’s been one-year wars fought 20 times” (Ali, 2021).
Congress recently authorized appropriations totaling an estimated $770.3 billion over the 2022 through 2024 period to cover defense outlays (Swagel, 2021). Critics point to the size of the defense budget relative to other budget priorities and feel much of the money is wasted and should be diverted. They note that every dollar spent on defense is a dollar not spent on other public services. It is a compelling argument that at least a fraction of scientific efforts and research dollars used for development of military technology might be better spend on other impactful areas such as medical or sustainable development research. In addition, such large outlays skew economic statistics, as dollars spent on the military end up in the private sector numbers as payment for goods and services (Beattie, 2021). On the other hand, national defense is the rare instance when a nation would not get another bite at the proverbial apple should it be conquered in war. While it is better to overspend than underspend because of the enormous ramifications of losing a major war, there are certainly parts of the defense budget that would benefit for more scrutiny.
Ali, Idrees, et. al. America’s Longest War: 20 Years of Missteps in Afghanistan. Reuters (2021). https://www.reuters.com/world/asia-pacific/americas-longest-war-20-years-missteps-afghanistan-2021-08-16/.
Beattie, Andrew, et. al. How Military Spending Affects the Economy. Investopedia (2021) https://www.investopedia.com/articles/investing/072115/how-military-spending-affects-economy.asp.
Harper, Jon. Program Leader Says High Costs Pose “Existential Threat” to F-35. National Defense (2021). https://www.nationaldefensemagazine.org/articles/2021/5/13/program-leader-says-high-costs-pose-existential-threat-to-f-35.
Higgs, Robert. Crisis and Leviathan: Critical Episodes in the Growth of the American Government. The Independent Institute (2012).
Mattis, James. Summary of the 2018 National Defense Strategy: Sharpening the American Military’s Competitive Edge. Department of Defense (2018). https://dod.defense.gov/Portals/1/Documents/pubs/2018-National-Defense-Strategy-Summary.pdf.
Sakamoto, T. (2020). Social Investment Policy, Economic Growth, and Welfare States: Channels of Pro-Growth Effects of Policy. Social Forces, 99(2), 590-615. https://muse-jhu-edu.ezproxy.liberty.edu/article/774259/pdf.
Swagel, Phill. H.R. 4350, National Defense Authorization Act for Fiscal Year 2022. Congressional Budget Office (2021). https://www.cbo.gov/publication/57471.