Since a prompt jump in shipbuilding, especially SSNs, isn’t in the cards, are we aggressively pursuing overseas manufacturing of hulls and working on Congress and DoD to use the Defense Production Act to significantly step up production of critical and long lead time systems and parts?
I do not normally comment but this commentary is spot on- the growing fiscal mismanagement in government and the failure by Congress and the White House over the decades has led to a delusional situation where we are avoiding the train wreck that is coming. I fear we will pay in Sailors lives if the threat in the South China Seas materializes
No one can be sure when the fiscal reckoning will finally arrive in full force, but the contest between interest payments on the national debt, mandatory payments (primarily Social Security and Medicare) and discretionary expenditures (defense and other government spending) is well underway.
It appears a smaller version (approx 240-250 "battle force" ships) of today's Navy is the inevitable result.
I suspect anticipated unit costs of next generation ships, subs and a/c will only accelerate overall ship count decline (CONSTELLATION FFG is a good example).
Look at rate of funded new construction vs decomm schedule.
And yet the oceans have not gotten any smaller, so we resign ourselves to a regional naval power (unless you buy into the 1000 ship virtual navy of western civilization.) In 1946 the U.S. had the largest and most modern merchant fleet in the world protected by the largest navy. The integrated global supply chain that we have today developed because of that. In 78 years we have managed to flip it so that the CCP has the largest, most modern merchant fleet in the world and a navy rising to protect it around the globe. We are well down the course of Great Britain and I see no easy way to alter it.
Burke, Zumwalt, Holloway, Hayward, Watkins and Trost all demanded more/better ships. submarines, and aircraft and all had good careers, Holloway event directly contradicted Harold Brown in SASC testimony, saying that OSD was wrong on its estimate of carriers needed for the Navy. I would like to see a CNO say that they disagree with OSD on ship numbers and funding. Not sure any would today.
Different guys for sure, but both to their credit spoke their minds. Burke even said later (after the Bay of Pigs,) that he and other flag and general officers should have pounded the table and demanded more forceful action.
I was going to make a similar comment. I have an economics PhD, and unfortunately many of the people who do are disinclined to say “government spending needs to shrink because we can’t pay for everything” and instead pretend we can grow out from under the debt. The government buys the economists it wants to say what it wants; Truth has a relatively small marketing budget.
The way I see it, the size of the pie remains the same, the number of diners increases, the slices become smaller, and smaller. We all get pretty thin in the end.
Endless wars and badly designed social programs. Social Security and Medicare/Medicaid are eating up the revenue by themselves. The wars are not so much by comparison, though far more than one wants. The rest of the budget doesn’t help, either. At the end of the day we’ve been spending too much on everything.
I'm not upvoting because I disagree. Admiral Franchetti is clearly trying to both walk the walk and talk the talk. What she is not getting, and what she is unlikely to get regardless of the election outcome in two weeks, is either the political support or the dollars necessary to do more than pontificate and needle gun a little rust off the worst spots. Here is her speech to the Atlantic Council that posted a few days ago. I would be interested in knowing what parts you disagree with. https://www.youtube.com/watch?v=a4uKB5nrLjs
There is a strong percentage of Negative Nancys on the blog. What more can a CNO do than advocate strongly for a position? As one famous navalist once said, "its not the critic that counts."
I would like to go against the current wisdom and call for a smaller navy by scrapping every unseaworthy vessel, husbanding our strength and protecting only those things absolutely vital to our security. Scrap DEI and the Green Agenda, too.
Jacky Fisher rebuilt the Royal Navy in ten years so we should start yesterday.
The UK in Fisher's day had a great shipbuilding industry. We have almost none, and what we do have is struggling to keep up with our current trickle of orders. Our steel making, heavy industry, machine tool industry, ship yards, and the workers with the skills to do those jobs are almost all gone, with nowhere near sustaining our current limited capacities.
Buy American, but we don't have anyone who can build anything to sell us.
We don't have many little guys, and few would be willing to jump through all the procurement bureaucratic hoops and certifications for what would likely be a one time small order. Worth a try, if we have funding in hand, but over-regulation may deter any potential takers.
I'd say we have sufficient domestic boatyard and bargeyard capacity however you are correct about the willingness to jump through the procurement hoops. The juice wouldn't be worth the squeeze as it currently stands.
C’mon. Everyone knows the best customer in the world slow pays his bills, issues constant change orders and shuts the project down early. Sound like any government we know?
By the hulls NAVSEA free and outfitting can happen at the main yards, plug and play gear only. Plus we would need to not buy small batch. Multi year or nothing. Plus I don't want to buy anything we can't deliver at a rate of one per year aside from flat tops.
I'd knit pick that. My personal logistics has gotten way easier since I switched to a hybrid. Tank up every 2 weeks instead of one. No plug. Building ships with brand new, ancient tech propulsion plants cost us money and resources we don't have.
Until the politicians get serious about fiscal restraint, or we magically have a super-boom in the economy without inflation (quit laughing at my dreams), we aren't likely to advance the military's cause much, any branch. Nearly all (all?) of the pols are in the business of getting re-elected and continue the gravy train, rather than doing the serious work they were supposedly elected to do. Our government has veered so far outside of its constitutional mandate that we aren't likely to see the needed change in priorities unless we elect someone like Milei. And I just don't see that happening with any candidate in the near future. Given what we've got, I think we need to prioritize acquisition of more SM3s and training to fight the enemy rather than coddle the marxists within our ranks. Just my opinion.
Don't forget that we are massively wasting the money we have. Recently you posted a graphic showing the purchase of SM-3 missiles. They were buying 12 missiles a year at 36 million dollars a piece. that is a third the price of an F-35 for a single expendable munition and the DOD is replete with this kind of thing. I work as an engineer for the USAF and the price increases have been ridiculous mainly due to horrible procurement decisions made 15-20 years ago and no one at a reasonable level has the authority to say this is ridiculous cancel the contracts and start over. I have been seeing price increases annually of 10%-20%. compound that over 10-15 years and we are paying 2-3 times as much for the same equipment relative to GDP. If we are going to fix the DOD the first thing that need to happen is the DFARs need to get thrown in the trash and we need to start again. There are literally thousands of pages of regulation that are constantly changing on how we procure things. It requires significant manning just to keep track of all the changes in regs much less implement them. The second thing that needs to get fixed is delegation of authority. The number of things I see not getting fixed because no one at the working level has authority to make a change and the person who does have the authority is so far up the chain of command that you will never get an appointment due to schedule is nuts. On top of that I see a lot of blame the messenger going on and my first and second line supervision is not willing to even try to take things up the chain because they are worried about getting blamed for not being able to handle it despite not having the authority.
Yes, and there is a lot of redundancy and overlap. Don't the Patriot and SM-3 do about the same thing? Wouldn't it be cheaper to buy one missile type? Why do the Army and Marines use different tactical trucks (they used the same ones from the 1940s-2000)? There are tons of examples like this and it was pointed out in a good book "To Arm a Nation" written in the 1980s but nobody listened.
Brian, I am 100% behind your point that we are wasting money. We need to stop procuring and start building. Why doesn't' the USAF build it's own missiles? Why doesn't the USN build it's own ships? When you spend money building weapons you own the infrastructure required to build weapons. When you spend money with LockMart, you own nothing.
2 isn't competition. Don't kid yourself. Its illegal for them to collude, yet they can basically do so because they both have enough transparency the other can see what the other guy is doing.
From my perspective keep in mind two ideas: One, those who keep voting for Congressional Representatives and Senators whose chief legislative goal is tax cuts are voting for those who will deliver a smaller less capable USN; Second, our debt is in dollars and we could direct the Federal Reserve (through an act of Congress) to pay off all debt if necessary. Done. Usually Big Time Concern over debt is usually a dog whistle by those who want lower taxes, not a larger, more capable Navy. YMMV.
I personally consider any federal taxes beyond the tariffs and excise taxes of the early Republic to be an exanthema. Therefore I abhor politicians offering me 5% back of the 100% they've taken and it doesn't matter their leanings. All politicians are crooks and all political parties are criminal syndicates. I also recognize that I can't do a dadgum thing to change it. That said, after looking up your background I can definitely appreciate your early insight into farm labor while at the Dallas Fed. As someone whose father was the youngest of a bakers dozen in an Illinois farm family, I think that you may have artificially constrained your results on spousal farm labor contributions by simply thresholding the number of children under five in a farm household. By the time the first one or two children enter preadolescence, my family experience is that they start contributing to the child-rearing duties and greatly free up the spouse. Or, it could be my paternal grandmother was just filled with more piss and vinegar than most. Finally as to waving a wand and making the debt go away, I've learned never to underestimate the moneychangers populating the temple on their ability to work the books. Its not like there are laws of physics that they must respect.
No wonder our ships are covered with rust. Hasn't anyone in DC heard of Bristol fashion? Also, why does the Navy brass assume "our allies" will help take up the slack? Does that include China providing the fuel needed to replace the facilities Mr. Konrad wrote about. The same China that is the largest importer of crude oil in the world including from the USA (up 81% from 2022 to 2023)? As we cede more and more sectors of the maritime industry to China, we are ceding not only our defense, but our independence. We are squandering our maritime power and our maritime heritage. No "master and commander" fans in DC?
If the Chinese decided to stop turning crude oil into plastic trinkets for shipment around the world and focused on munitions instead, their domestic capacity combined with the pipeline imports from Russia would be plenty.
There is still a lot of waste and redundancy that could be cut in DoD to free up funds. The Air Force has massively drawn down its fleet in the last 20 years but hasn't been allowed to close down a base. Why is the funding still basically split 1/3, 1/3, and 1/3 between the departments? The Air Force/Navy are preparing for a different war than the Army... However, there are too many sacred cows that people are so emotionally invested in that you can't even have a conversation about (service academies, two armies, Navy's army has its own air force, etc.) let alone make an executable plan about.
Yup. BRAC Round 1 closed everything that was obviously surplus to need. Round 3...had a lot of input from real estate developers, combined with desires from the services to do some consolidation/RIF. There were some very questionable decisions made in Round 3.
To a lawyer there is “real” property, and everything else. Closing a base? No big deal, we can always open her back up.
It is the loss of the land that is criminal. Never give up real property. The loss of land in BRAC is what damaged the nation. That was the false economy, the loss of land we could need in the future.
BRAC didn’t realize the savings they intended. In fact it crippled us: Mare Island, Charleston, Hunters Point, Treasure Island, Alameda, Philadelphia SY, Long Beach, Brooklyn etc..
BRAC also cost the services political support. Remember the Lesson of Six Frigates...President Adams built the Navy's first six ships in six different cities, spreading the spending among six states. This gave the Navy six ships. Had he concentrated the building in one location, it would have been more efficient...and the Navy would have gotten three ships, not six.
I would note another aspect of this problem that I think will REQUIRE politicians to cut even more from defense. They believe they MUST service the debt and the believe they MUST continue pumping money into entitlement programs. Failing to do either of those would kill them politically in the short term, while they can continue to hollow out defense because The Day hasn't arrived. We are literally at the point of having to choose, I guess, only two out of the following three things: butter, guns, or the credit card payment.
They MUST continue pumping money into entitlement programs because folks are entitled to them. If you serve in the Navy for 20 years, you are "entitled" to the retirement you earned. Social Security is not a gift. We pay in for 45 years and are "entitled" to the payment we earned.
...and things will continue until they can't. "Entitlement" is one of those things. I don't know if you've ever studied physics, but there is no physical law that suggests otherwise. My kids, for instance, were 'entitled' to 3 hots and a cot when growing up in my house...unless I died or went broke or was hit by an asteroid. Same with my retirement AND social security.
Legally, that's not quite true. SCOTUS has held that retirement benefits are deferred pay, and thus mandatory. Social Security...is a welfare, and can be zeroed at any time. Which is one of the stronger arguments for getting that money OUT of Washington and into something like the Thrift Savings Plan.
TSP won't work. Some folks are idiots. They make bad investment, or they take money out for stupid reasons. We can't have 80 year old widows living in cardboard tents just because they were not financially literate.
We need to spend a little on financial literacy too. Think it needs required for a high school diploma and I think we need to hold people's asses in school until they've earned one. Even if school means they are doing even more things they don't want to do because they didn't get to it. This will take a culture shift back to the days when juvenile's basically had few if any rights in school. Too many teachers are forced to live in fear allowing the good kids to suffer because of the bad ones.
Social Security is not welfare. I have been paying in for 50 years. Going to war on entitlements is just stupid.
"Nature is bloody in tooth and claw." I'd rather see you lose your retirement than I lose my social security. Why not accept the fact we both earned our payoff and that we are "entitled" to it?
I was always offered a choice to participate in retirement plans. Social Security didn’t ask. They just took. So when it comes time to collect, I ain’t gonna be asking.
We cannot live in a society where stupid folks, about half the population if I read the polls right, are consigned to live in abject poverty in their old age. If you are thrifty, and amass savings for your retirement, good on you. You will have a far more comfortable retirement than folks with nothing but social security. "Virtue," they say, "is its own reward."
Trick is you paid into SS which is structured like a pyramid. So long as the pyramid grew it paid out handsomely. It needed to work just like any other retirement or pension account.
With this fantastic labor market we may never have a better opportunity to cut entitlements. Unfortunately any real plans don't get heard in the current media and politics. Just dead men's junk and the Golden Arches.
Phib, I have always appreciated your intellectual honesty. I’m glad you have reevaluated and recalibrated and caged the gyros. I was a little flustered at your happy talk when the CNO guidance came out. The fiscal realities of our current republic should scare the shit out of everyone. We aren’t that far removed from the mid 90’s to 2000’s endless committees and boards led by people like Punaro who have done much to damage our military under the guise of reform.
The way ahead is easy in its basic simplicity: increase the industrial capacity of our navy regarding munitions and ship repair. Next: increase capacity for ship building.
Next: shoot anyone idiot publicly that tries to modify “requirements” after the first arch in the welder goes to cutting. Yes. It is that simple.
Since a prompt jump in shipbuilding, especially SSNs, isn’t in the cards, are we aggressively pursuing overseas manufacturing of hulls and working on Congress and DoD to use the Defense Production Act to significantly step up production of critical and long lead time systems and parts?
Do "we" have a checkbook that can pay for any of that? Will people take IOUs from someone $36 trillion in debt?
I do not normally comment but this commentary is spot on- the growing fiscal mismanagement in government and the failure by Congress and the White House over the decades has led to a delusional situation where we are avoiding the train wreck that is coming. I fear we will pay in Sailors lives if the threat in the South China Seas materializes
No one can be sure when the fiscal reckoning will finally arrive in full force, but the contest between interest payments on the national debt, mandatory payments (primarily Social Security and Medicare) and discretionary expenditures (defense and other government spending) is well underway.
It appears a smaller version (approx 240-250 "battle force" ships) of today's Navy is the inevitable result.
I suspect anticipated unit costs of next generation ships, subs and a/c will only accelerate overall ship count decline (CONSTELLATION FFG is a good example).
Look at rate of funded new construction vs decomm schedule.
Bingo. That math and chart speaks for itself, and the story it tells should sober everyone up.
Sober up or drive to drink?
And yet the oceans have not gotten any smaller, so we resign ourselves to a regional naval power (unless you buy into the 1000 ship virtual navy of western civilization.) In 1946 the U.S. had the largest and most modern merchant fleet in the world protected by the largest navy. The integrated global supply chain that we have today developed because of that. In 78 years we have managed to flip it so that the CCP has the largest, most modern merchant fleet in the world and a navy rising to protect it around the globe. We are well down the course of Great Britain and I see no easy way to alter it.
None of the recent CNO's have really pounded the table and made a strong case for a larger navy. Instead they hide behind slogans and buzzwords.
…and were they rewarded or punished for such action?
Everyone gets a medal.
Burke, Zumwalt, Holloway, Hayward, Watkins and Trost all demanded more/better ships. submarines, and aircraft and all had good careers, Holloway event directly contradicted Harold Brown in SASC testimony, saying that OSD was wrong on its estimate of carriers needed for the Navy. I would like to see a CNO say that they disagree with OSD on ship numbers and funding. Not sure any would today.
Not familiar with them all, but Zumwalt clearly provided an affordable way to get there with the ask.
Better to not have an OSD.
Burke and Trost in the same sentence.:.. nah.
Different guys for sure, but both to their credit spoke their minds. Burke even said later (after the Bay of Pigs,) that he and other flag and general officers should have pounded the table and demanded more forceful action.
https://www.youtube.com/watch?v=L5rqu4rzTE4 ADM Burke and Admiral Connelly talk here about the challenges of OSD rule and McNamara.
Aka Revolt of the Admirals
Sadly most not willing. Its been too long since Goldwater Nichols made many of them just members of the joint purple team.
CNOs...nor SECNAV.
The economics PhDs and MBAs got us in this mess. We need more engineers and scientists not economists.
Economist can easily solve the problem. Assume you have 600 ships…..
I was going to make a similar comment. I have an economics PhD, and unfortunately many of the people who do are disinclined to say “government spending needs to shrink because we can’t pay for everything” and instead pretend we can grow out from under the debt. The government buys the economists it wants to say what it wants; Truth has a relatively small marketing budget.
The way I see it, the size of the pie remains the same, the number of diners increases, the slices become smaller, and smaller. We all get pretty thin in the end.
pie is getting smaller due to lack of ingredients
The debt would not be so bad if it were used to acquire productive assets like new bridges and roads. Instead we squander our money on endless wars.
Endless wars and badly designed social programs. Social Security and Medicare/Medicaid are eating up the revenue by themselves. The wars are not so much by comparison, though far more than one wants. The rest of the budget doesn’t help, either. At the end of the day we’ve been spending too much on everything.
💯
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Engineers...but soak them in military history. The more they understand about the operator's perspective, the better.
Soak them in operating out in the field with the operators. Helps if the operators know a trade aside from the pure shooting side of things too.
Admiral Franchetti is a credit to her degree in journalism. Not a single split infinitive in her entire report.
I'm not upvoting because I disagree. Admiral Franchetti is clearly trying to both walk the walk and talk the talk. What she is not getting, and what she is unlikely to get regardless of the election outcome in two weeks, is either the political support or the dollars necessary to do more than pontificate and needle gun a little rust off the worst spots. Here is her speech to the Atlantic Council that posted a few days ago. I would be interested in knowing what parts you disagree with. https://www.youtube.com/watch?v=a4uKB5nrLjs
Fine words butter no parsnips
There is a strong percentage of Negative Nancys on the blog. What more can a CNO do than advocate strongly for a position? As one famous navalist once said, "its not the critic that counts."
I would like to go against the current wisdom and call for a smaller navy by scrapping every unseaworthy vessel, husbanding our strength and protecting only those things absolutely vital to our security. Scrap DEI and the Green Agenda, too.
Jacky Fisher rebuilt the Royal Navy in ten years so we should start yesterday.
The UK in Fisher's day had a great shipbuilding industry. We have almost none, and what we do have is struggling to keep up with our current trickle of orders. Our steel making, heavy industry, machine tool industry, ship yards, and the workers with the skills to do those jobs are almost all gone, with nowhere near sustaining our current limited capacities.
Buy American, but we don't have anyone who can build anything to sell us.
That's not entirely true. We could have LSMs, MUSV, LUSV, and corvettes in short order if someone fed the little guys just a bit of the pie.
We don't have many little guys, and few would be willing to jump through all the procurement bureaucratic hoops and certifications for what would likely be a one time small order. Worth a try, if we have funding in hand, but over-regulation may deter any potential takers.
I'd say we have sufficient domestic boatyard and bargeyard capacity however you are correct about the willingness to jump through the procurement hoops. The juice wouldn't be worth the squeeze as it currently stands.
C’mon. Everyone knows the best customer in the world slow pays his bills, issues constant change orders and shuts the project down early. Sound like any government we know?
By the hulls NAVSEA free and outfitting can happen at the main yards, plug and play gear only. Plus we would need to not buy small batch. Multi year or nothing. Plus I don't want to buy anything we can't deliver at a rate of one per year aside from flat tops.
"....scrapping every unseaworthy vessel..."? Not so fast, Pete. Shouldn't they be dismasted and beached in the mud as prison hulks?
I'd knit pick that. My personal logistics has gotten way easier since I switched to a hybrid. Tank up every 2 weeks instead of one. No plug. Building ships with brand new, ancient tech propulsion plants cost us money and resources we don't have.
Until the politicians get serious about fiscal restraint, or we magically have a super-boom in the economy without inflation (quit laughing at my dreams), we aren't likely to advance the military's cause much, any branch. Nearly all (all?) of the pols are in the business of getting re-elected and continue the gravy train, rather than doing the serious work they were supposedly elected to do. Our government has veered so far outside of its constitutional mandate that we aren't likely to see the needed change in priorities unless we elect someone like Milei. And I just don't see that happening with any candidate in the near future. Given what we've got, I think we need to prioritize acquisition of more SM3s and training to fight the enemy rather than coddle the marxists within our ranks. Just my opinion.
Don't forget that we are massively wasting the money we have. Recently you posted a graphic showing the purchase of SM-3 missiles. They were buying 12 missiles a year at 36 million dollars a piece. that is a third the price of an F-35 for a single expendable munition and the DOD is replete with this kind of thing. I work as an engineer for the USAF and the price increases have been ridiculous mainly due to horrible procurement decisions made 15-20 years ago and no one at a reasonable level has the authority to say this is ridiculous cancel the contracts and start over. I have been seeing price increases annually of 10%-20%. compound that over 10-15 years and we are paying 2-3 times as much for the same equipment relative to GDP. If we are going to fix the DOD the first thing that need to happen is the DFARs need to get thrown in the trash and we need to start again. There are literally thousands of pages of regulation that are constantly changing on how we procure things. It requires significant manning just to keep track of all the changes in regs much less implement them. The second thing that needs to get fixed is delegation of authority. The number of things I see not getting fixed because no one at the working level has authority to make a change and the person who does have the authority is so far up the chain of command that you will never get an appointment due to schedule is nuts. On top of that I see a lot of blame the messenger going on and my first and second line supervision is not willing to even try to take things up the chain because they are worried about getting blamed for not being able to handle it despite not having the authority.
Yes, and there is a lot of redundancy and overlap. Don't the Patriot and SM-3 do about the same thing? Wouldn't it be cheaper to buy one missile type? Why do the Army and Marines use different tactical trucks (they used the same ones from the 1940s-2000)? There are tons of examples like this and it was pointed out in a good book "To Arm a Nation" written in the 1980s but nobody listened.
Patriot is to SM3 what a 410 shotgun is to a 3.5" 10 gauge
Maybe SM-2 and Patriot is a better comparison.
PBAR missed graphic #2 on your earlier post. Someone needs to clean the chalk board and beat the erasers after class! https://cdrsalamander.substack.com/p/running-out-of-sm-3-at-sea
Brian, I am 100% behind your point that we are wasting money. We need to stop procuring and start building. Why doesn't' the USAF build it's own missiles? Why doesn't the USN build it's own ships? When you spend money building weapons you own the infrastructure required to build weapons. When you spend money with LockMart, you own nothing.
The U.S. arsenal system ended bc someone thought private guys (aerospace overlap with civil, for one) would be innovative….
See how that turned out.
Private guys have one job - maximizing profit to shareholders. That is not the job of the USA or USN.
Retired USAF Acqn mgr.
You are correct, we threw out mil specs and contracting/accounting/budget burden exploded.
We could not afford design tests, depended on under done “audits” and pencilwhipped ops tests.
We cut experienced GS, and revolving door Ed retired colonels.
Start by terminating dogs, no more F-35 until new engine passes muster..
Outside procurement a decade of refusing to O and M senseless theater ops.
Time for top down reform
This. 100% this. It's the biggest reason why I support a two-vendor policy...real competition eliminates the need for a whole lot of oversight.
Even so, weren't there two vendors for the LCS?
2 isn't competition. Don't kid yourself. Its illegal for them to collude, yet they can basically do so because they both have enough transparency the other can see what the other guy is doing.
From my perspective keep in mind two ideas: One, those who keep voting for Congressional Representatives and Senators whose chief legislative goal is tax cuts are voting for those who will deliver a smaller less capable USN; Second, our debt is in dollars and we could direct the Federal Reserve (through an act of Congress) to pay off all debt if necessary. Done. Usually Big Time Concern over debt is usually a dog whistle by those who want lower taxes, not a larger, more capable Navy. YMMV.
What you’re telling me Hilary is that you do not understand macroeconomics, money supply, and inflation.
And the whole "full faith and credit" thing.
Money Monetary Theory says “ you can print new fiat until you can’t.
Everyone forgets the second half.
Mainstream economist are MMT, and they have burned Milton Friedman’s books.
MMT assumes the pecking order of fiat currencies will never change.
The problem, is that it has in the past, and may again.
Perhaps so. I'll have to read the fine print on my Ph.D. in economics. What does yours say?
Oh I’ll bet my pay check on Phib over your sheepskin. Any day.
Tell me how exploding debt worked out for Weimar Germany.
I personally consider any federal taxes beyond the tariffs and excise taxes of the early Republic to be an exanthema. Therefore I abhor politicians offering me 5% back of the 100% they've taken and it doesn't matter their leanings. All politicians are crooks and all political parties are criminal syndicates. I also recognize that I can't do a dadgum thing to change it. That said, after looking up your background I can definitely appreciate your early insight into farm labor while at the Dallas Fed. As someone whose father was the youngest of a bakers dozen in an Illinois farm family, I think that you may have artificially constrained your results on spousal farm labor contributions by simply thresholding the number of children under five in a farm household. By the time the first one or two children enter preadolescence, my family experience is that they start contributing to the child-rearing duties and greatly free up the spouse. Or, it could be my paternal grandmother was just filled with more piss and vinegar than most. Finally as to waving a wand and making the debt go away, I've learned never to underestimate the moneychangers populating the temple on their ability to work the books. Its not like there are laws of physics that they must respect.
Laffer curve
No wonder our ships are covered with rust. Hasn't anyone in DC heard of Bristol fashion? Also, why does the Navy brass assume "our allies" will help take up the slack? Does that include China providing the fuel needed to replace the facilities Mr. Konrad wrote about. The same China that is the largest importer of crude oil in the world including from the USA (up 81% from 2022 to 2023)? As we cede more and more sectors of the maritime industry to China, we are ceding not only our defense, but our independence. We are squandering our maritime power and our maritime heritage. No "master and commander" fans in DC?
I found this graph that extends the FRED numbers back to 1900. Clear eyed but very depressing. https://www.cbo.gov/sites/default/files/styles/1078/public/2020-09/56516-home-debt.png
And the Chinese are forcing the use of electric and LNG vehicles to reduce their oil needs, thus reducing the utility of one of our trump cards.
If the Chinese decided to stop turning crude oil into plastic trinkets for shipment around the world and focused on munitions instead, their domestic capacity combined with the pipeline imports from Russia would be plenty.
There is still a lot of waste and redundancy that could be cut in DoD to free up funds. The Air Force has massively drawn down its fleet in the last 20 years but hasn't been allowed to close down a base. Why is the funding still basically split 1/3, 1/3, and 1/3 between the departments? The Air Force/Navy are preparing for a different war than the Army... However, there are too many sacred cows that people are so emotionally invested in that you can't even have a conversation about (service academies, two armies, Navy's army has its own air force, etc.) let alone make an executable plan about.
Base closings is a false economy.
Yup. BRAC Round 1 closed everything that was obviously surplus to need. Round 3...had a lot of input from real estate developers, combined with desires from the services to do some consolidation/RIF. There were some very questionable decisions made in Round 3.
To a lawyer there is “real” property, and everything else. Closing a base? No big deal, we can always open her back up.
It is the loss of the land that is criminal. Never give up real property. The loss of land in BRAC is what damaged the nation. That was the false economy, the loss of land we could need in the future.
BRAC didn’t realize the savings they intended. In fact it crippled us: Mare Island, Charleston, Hunters Point, Treasure Island, Alameda, Philadelphia SY, Long Beach, Brooklyn etc..
BRAC also cost the services political support. Remember the Lesson of Six Frigates...President Adams built the Navy's first six ships in six different cities, spreading the spending among six states. This gave the Navy six ships. Had he concentrated the building in one location, it would have been more efficient...and the Navy would have gotten three ships, not six.
And it created a huge need to build at other bases from what I've seen.
The Navy cannot exist without a Navy air arm. The Army too. The useless branch is the USAF.
The National Security Act of 1947 should have been an amendment if we really needed them to stay a separate branch.
The constitution says we should have an “army” and a “navy.” Interestingly, they then treat funding them entirely differently.
I would note another aspect of this problem that I think will REQUIRE politicians to cut even more from defense. They believe they MUST service the debt and the believe they MUST continue pumping money into entitlement programs. Failing to do either of those would kill them politically in the short term, while they can continue to hollow out defense because The Day hasn't arrived. We are literally at the point of having to choose, I guess, only two out of the following three things: butter, guns, or the credit card payment.
They MUST continue pumping money into entitlement programs because folks are entitled to them. If you serve in the Navy for 20 years, you are "entitled" to the retirement you earned. Social Security is not a gift. We pay in for 45 years and are "entitled" to the payment we earned.
...and things will continue until they can't. "Entitlement" is one of those things. I don't know if you've ever studied physics, but there is no physical law that suggests otherwise. My kids, for instance, were 'entitled' to 3 hots and a cot when growing up in my house...unless I died or went broke or was hit by an asteroid. Same with my retirement AND social security.
Legally, that's not quite true. SCOTUS has held that retirement benefits are deferred pay, and thus mandatory. Social Security...is a welfare, and can be zeroed at any time. Which is one of the stronger arguments for getting that money OUT of Washington and into something like the Thrift Savings Plan.
TSP won't work. Some folks are idiots. They make bad investment, or they take money out for stupid reasons. We can't have 80 year old widows living in cardboard tents just because they were not financially literate.
We need to spend a little on financial literacy too. Think it needs required for a high school diploma and I think we need to hold people's asses in school until they've earned one. Even if school means they are doing even more things they don't want to do because they didn't get to it. This will take a culture shift back to the days when juvenile's basically had few if any rights in school. Too many teachers are forced to live in fear allowing the good kids to suffer because of the bad ones.
Don't leave financial literacy to the public school system. They insist on teaching math equity.
Well, the people who are most the problem would be the same people we need to straighten up, so from that vantage point, you have a point.
Social Security is not welfare. I have been paying in for 50 years. Going to war on entitlements is just stupid.
"Nature is bloody in tooth and claw." I'd rather see you lose your retirement than I lose my social security. Why not accept the fact we both earned our payoff and that we are "entitled" to it?
I was always offered a choice to participate in retirement plans. Social Security didn’t ask. They just took. So when it comes time to collect, I ain’t gonna be asking.
We cannot live in a society where stupid folks, about half the population if I read the polls right, are consigned to live in abject poverty in their old age. If you are thrifty, and amass savings for your retirement, good on you. You will have a far more comfortable retirement than folks with nothing but social security. "Virtue," they say, "is its own reward."
Trick is you paid into SS which is structured like a pyramid. So long as the pyramid grew it paid out handsomely. It needed to work just like any other retirement or pension account.
With this fantastic labor market we may never have a better opportunity to cut entitlements. Unfortunately any real plans don't get heard in the current media and politics. Just dead men's junk and the Golden Arches.
The battle is Discretionary v non-discretionary outlays
Phib, I have always appreciated your intellectual honesty. I’m glad you have reevaluated and recalibrated and caged the gyros. I was a little flustered at your happy talk when the CNO guidance came out. The fiscal realities of our current republic should scare the shit out of everyone. We aren’t that far removed from the mid 90’s to 2000’s endless committees and boards led by people like Punaro who have done much to damage our military under the guise of reform.
The way ahead is easy in its basic simplicity: increase the industrial capacity of our navy regarding munitions and ship repair. Next: increase capacity for ship building.
Next: shoot anyone idiot publicly that tries to modify “requirements” after the first arch in the welder goes to cutting. Yes. It is that simple.