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Thread: Combat Power, Conflict Resolution, and US Economy

  1. #21
    Council Member Fuchs's Avatar
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    Quote Originally Posted by AmericanPride View Post
    There is no guarantee
    The other stuff was superfluous. Understand this quote and you'll probably get my view on military spending.

    Quote Originally Posted by AmericanPride View Post
    I think the glance at the USA, USAF, and USN trends suggests that the post-Cold War cuts did in fact significantly hollow out America's military power.
    Entirely wrong metric. Watch the difference between "to hollow out" and "to shrink".

    For a change, I will refer not to my blog but to another useful one, "Ink Spots":
    http://tachesdhuile.blogspot.de/2011...-and-isnt.html

    A "hollow force" is a force that supposes to be more than it is. It's not a small force. Insufficient training and repair budgets lead to a hollow force, a budget cut does not need to do the same at all.
    A hollow force is a failure of high-level leadership to adjust properly to a budget, it's about "not all is gold that shines" problem.
    Last edited by Fuchs; 04-28-2012 at 05:10 PM.

  2. #22
    Council Member AmericanPride's Avatar
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    US Yearly GDP and TOA to Services Growth


    This is a comparison between US GDP growth and growth of TOA appropriations to each military service by year. US GDP growth has averaged about 3% since 1973, while the growth of the budget has averaged about 1%. So, what this tells me is that the US economy is actually expanding its capacity to support military power over time. But it is important to note that this only remains true to the extent that US per dollar purchasing power remains fixed relative to the combat power purchased. If one US dollar purchased X amount of combat power in 1973, what difference from X does one US dollar in 2012 purchase?

    As discussed in a previous post, in the case of the F-35 replacement of the F-16, this problem is evident. The F-35 is 11 - 13 times more expensive than the F-16 but does not provide 11 - 13 times more combat capability; the US intends to purchase far less than the approximately 1,600 F-35s necessary to replace the combat capabilities of the F-16 inventory. In this situation, one US dollar is purchasing a smaller rate of combat capability. When aggregated for the whole defense establishment, if this reduction in purchasing power is greater than 3%, then US economic capacity to purchase military power is shrinking. If the reduction is greater than 1%, then the ability of the defense budget to sustain US military power is also shrinking.

    Quote Originally Posted by Fuchs
    Watch the difference between "to hollow out" and "to shrink".
    See above to see why both are occurring.
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  3. #23
    Council Member Dayuhan's Avatar
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    Quote Originally Posted by AmericanPride View Post
    Read the document.
    I did. I see nothing providing real support to the assertion of unprecedented danger.

    I'm not sure anyone's speeches, and in particular speeches made by those representing institutions whose budget allocations depend on the perceptions of danger, are a good place to start assessing levels of threat.

    Quote Originally Posted by AmericanPride View Post
    This is not necessarily true. How many soldiers, aircraft, and ships has the US used in combating Al-Qaeda and the Taliban? There are X amount of soldiers on the ground, Y amount of aircraft providing tactical, logistical, intelligence, etc support, and Z amount of ships moving to and fro (at times with escort) moving supplies, combat aircraft, etc. Then there are overhead assets that enable communication, etc, with their operators also. Whether or not all of this is necessary for defeating a terrorist group (with or without WMD) is besides the point; it can and is being used for that purpose. Your objection is one of military effectiveness, which will be looked at when I investigate conflict resolution.
    To what extent are these assets being used top combat AQ - the terrorist group in the picture - and to what extent are they being used to try to establish a government in Afghanistan that will be acceptable to the US? These are two entirely different goals.

    If we assume that in order to avert these "unprecedented dangers" we need to run around deposing governments and installing new ones, then we might be pardoned for assuming that large expensive conventional forces are needed for the task. Those assumptions seems to me highly questionable. Again, the key to achieving goals is not only the amount of force you can apply, but the goals you select and the means you choose to try to achieve them. If we can't succeed in transforming Afghanistan into a Western-style liberal democracy it won't be because we couldn't apply enough force, it will be because we selected a goal we can't achieve and tried to pursue it by inappropriate means. If your hammer won't drive a screw, you don't need a bigger hammer.

    The question remains: what exactly are the threats that produce these "unprecedented dangers", and what exactly is needed to combat these threats? If we're talking about the threat of non-state actors, transnational criminals, terror groups, etc, I see no rational point in assessing our capacity by the number of ships and aircraft we can deploy. The number of F-35s or F-22s or carriers we buy may be proportional to our economic means, but I'm not convinced that it has any great impact on our capacity to counter these threats.

    Military spending in general is not only related to GDP and government revenue, but also to perceived levels of threat and the nature of perceived threats. If we're at war or faced with imminent threat, we're willing to spend a higher percentage of GDP on the military. If the perceived threat appears to be from conventional force, we'll be willing to spend more on conventional force. The threat of WMD-armed terrorists makes a poor justification for spending more on F-22s, for obvious reasons.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

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  4. #24
    Council Member AmericanPride's Avatar
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    Quote Originally Posted by Dayuhan
    I did. I see nothing providing real support to the assertion of unprecedented danger.
    Dempsey did not claim any new emergent threat existed. He claims that the "unprecedented danger" is the simultaneous diffusion of threats horizontally and the proliferation of threat capabilities vertically. The testimony of DNI Clapper agrees with Dempsey's assertion.

    Quote Originally Posted by Dayuhan
    I'm not sure anyone's speeches, and in particular speeches made by those representing institutions whose budget allocations depend on the perceptions of danger, are a good place to start assessing levels of threat.
    This criticism would be more relevant and substantial if it also recommended a better metric.

    Quote Originally Posted by Dayuhan
    The number of F-35s or F-22s or carriers we buy may be proportional to our economic means, but I'm not convinced that it has any great impact on our capacity to counter these threats.
    As I've stated before, I will look at conflict resolution after looking at economic capacity and military expenditures. The information I have gathered so far indicates that US military power is shrinking as is US capacity to support said military power. Though GDP growth outpaces defense appropriations growth, US purchasing power relative combat power is reducing. In order to maintain the same level of combat power over time, the US must spend an increasing amount of dollars. Without reform, we will either reduce our military capacity or catch up and surpass GDP growth with military expenditures (so far, my assessment is that we are reducing military power in order to (1) profit private defense interests and (2) protect other government programs from defense appropriations). Regardless of what threats we face and the most effective means in defeating them, this is the real problem.

    EDIT: Further, this problem exists before the costs incurred by the GWoT, which highlights the inefficiencies of the defense establishment. IMO, the GWoT should be a shot over the bow to the defense establishment and American public about the true costs of maintaining the status quo. In the US case, the armed forces have the double cost of maintaining, and then the operational costs of actually using it, which happen to exceed the costs of maintaining, even though we employed only a tiny fraction of combat power at any one time. This is the primary reason why we have abandoned the "two simultaneous major theater wars" idea; we can't afford the costs of maintaining our current force at levels necessary to fight them, and the current force levels cannot sustain two major regional wars. Activating the reserves is not a solution (even though that's historically the US strategy) because that only adds to the final cost. That's a major security dilemma which we avoided by simply abandoning the policy. I'm not confident that the Air-Sea Battle concept will provide any outlet for this problem if the failure of the "revolution of military affairs" (FCS, for example) is any indication.
    Last edited by AmericanPride; 04-30-2012 at 04:34 AM.
    When I am weaker than you, I ask you for freedom because that is according to your principles; when I am stronger than you, I take away your freedom because that is according to my principles. - Louis Veuillot

  5. #25
    Council Member Ken White's Avatar
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    Default Beware the GIGO factor...

    Quote Originally Posted by AmericanPride View Post
    As discussed in a previous post, in the case of the F-35 replacement of the F-16, this problem is evident. The F-35 is 11 - 13 times more expensive than the F-16 but does not provide 11 - 13 times more combat capability...
    You're comparing two aircraft of vastly different age, production status, capabilities and design parameters and for the older one you're using the cost of a stripped variant after years of production.

    A far more apt comparison would of the the F-16IN recently offered to India (but beat out thus far by the Dassault Rafale). That variant of the F-16 is perhaps the most capable and it still won't quite match the F-35 in many respects. Flyaway costs run about $111M for the F-16IN versus $197M for the F35A. That's a factor of only 1:1.7 -- call it two times more cost and then ask the question on combat capability...

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    Council Member Dayuhan's Avatar
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    Quote Originally Posted by AmericanPride View Post
    Dempsey did not claim any new emergent threat existed. He claims that the "unprecedented danger" is the simultaneous diffusion of threats horizontally and the proliferation of threat capabilities vertically. The testimony of DNI Clapper agrees with Dempsey's assertion.
    "The simultaneous diffusion of threats horizontally and the proliferation of threat capabilities vertically" seems almost intentionally vague.

    Quote Originally Posted by AmericanPride View Post
    This criticism would be more relevant and substantial if it also recommended a better metric.
    What about simply describing and assessing the specific perceived threats... who exactly are we afraid of, and what exactly are we afraid they will do? Would any such process support a claim that we live in a period of "unprecedented danger"?

    Quote Originally Posted by AmericanPride View Post
    The information I have gathered so far indicates that US military power is shrinking as is US capacity to support said military power. Though GDP growth outpaces defense appropriations growth, US purchasing power relative combat power is reducing.
    Do we need to look at the military power we have relative to what we had at any time in the past, or at what we have relative to what we need to deal with today's perceived threats and the threats that are expected to emerge? Maybe we no longer have the power to stop Soviet tanks from rolling through the Fulda Gap, but is that a power we still need?

    The challenge is not necessarily to maintain the same level and type of military power, but to maintain a level and type of military power suited to realistic assessments of the threat environment that we face. I expect that trying to quantify that and illustrate it with charts would be a frustrating process, but luckily I don't need to do it!
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

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    Council Member Fuchs's Avatar
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    IIRC inflation is being measured by assuming that predecessor and successor are the same thing. Technological progress is a different thing, measured differently. Comparing both properly is usually beyond the capabilities of the methods known to mankind so far.

    The only real military #1 status challenge is the PRC (and so far only regionally). This challenge is founded on industrial capabilities; the production during the last years prior to war can easily be much more important than legacy equipment. Think of China as an equivalent of the '1933' Soviet Union. Ships, aircraft, tanks and even guns produced during the 1920's were largely irrelevant by '41.

    Thus I'd compare

    * economical sustainability of the economy (excluding ecological and resource sustainability)
    * industrial capacity that's suitable for a war industry
    * dependence on unsecured resource imports
    * secured finished product or resource export capacity, currency and gold reserves, secured military goods import capacity (ability to import arms)
    * qualified personnel base beyond that (mechanical and electrical engineers mostly)
    * size and quality of the officer corps
    * size and quality of the senior noncommissioned officer corps
    * quantity of able-bodied personnel with basic (para)military training age group about 18-30 yrs old
    * political stability (ability to sustain war; remember Austria-Hungary and Russia in WW1)
    * quantity of able-bodied personnel without basic (para)military training about 18-30 yrs old
    * allied power of the same sorts

  8. #28
    Council Member AmericanPride's Avatar
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    Quote Originally Posted by Fuchs
    The only real military #1 status challenge is the PRC (and so far only regionally). This challenge is founded on industrial capabilities; the production during the last years prior to war can easily be much more important than legacy equipment. Think of China as an equivalent of the '1933' Soviet Union. Ships, aircraft, tanks and even guns produced during the 1920's were largely irrelevant by '41.
    I appreciate your analysis and I would argue that long-term security trends are currently in favor of PRC, not the US. While I am interested in your proposed metrics, I don't think there is much in the way of disagreement about current conditions. My primary interest is investigating if structural problems in the US economy is having a detrimental impact on US military power. I think the data so far illustrates that military power is declining; first, in a reduction of military capacity, and second, in a reduction of purchasing power of military capacity. My question is if this trend is at all related to the downward structural trends in the US economy?

    Quote Originally Posted by Dayuhan
    "The simultaneous diffusion of threats horizontally and the proliferation of threat capabilities vertically" seems almost intentionally vague.
    Quote Originally Posted by Dayuhan
    What about simply describing and assessing the specific perceived threats... who exactly are we afraid of, and what exactly are we afraid they will do? Would any such process support a claim that we live in a period of "unprecedented danger"?
    Quote Originally Posted by Dayuhan
    Do we need to look at the military power we have relative to what we had at any time in the past, or at what we have relative to what we need to deal with today's perceived threats and the threats that are expected to emerge? Maybe we no longer have the power to stop Soviet tanks from rolling through the Fulda Gap, but is that a power we still need?
    As I stated before, I am first looking at the economy and military capacity. Conflict resolution will be later. In the meantime, I recommend reading the Congressional testimony of DNI Clapper that I cited earlier if you are interested in a review of current and emerging threats. So far, the data suggests that independent of which threats exist, US military capacity now is less than in 1973, and the purchasing power for military capacity is also reduced. Again, this is the real security problem.

    Quote Originally Posted by Ken
    A far more apt comparison would of the the F-16IN recently offered to India (but beat out thus far by the Dassault Rafale). That variant of the F-16 is perhaps the most capable and it still won't quite match the F-35 in many respects. Flyaway costs run about $111M for the F-16IN versus $197M for the F35A. That's a factor of only 1:1.7 -- call it two times more cost and then ask the question on combat capability...
    The US does not operate the F-16IN so it is not useful in measuring US combat power. But I would like to note that this is an excellent example of inflating prices far along in the platform's history. William Hartung's book provides an excellent overview of Lockheed Martin's practices in this regard; and I think it's a fair representation of the acquisition process as a whole.
    When I am weaker than you, I ask you for freedom because that is according to your principles; when I am stronger than you, I take away your freedom because that is according to my principles. - Louis Veuillot

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    Council Member Dayuhan's Avatar
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    Quote Originally Posted by AmericanPride View Post
    So far, the data suggests that independent of which threats exist, US military capacity now is less than in 1973, and the purchasing power for military capacity is also reduced. Again, this is the real security problem.
    I don't see how you can determine "the real security problem" without assessing current capacity relative to current threat. Current capacity relative to 1973 capacity is irrelevant, the Cold War is over and the threat environment has changed. Once you decide that the analysis must be "independent of which threats exist" the analysis begins to float off on thin air, because any analysis of security is fundamentally dependent on which threats exist.

    I don't think anyone doubts that military power ultimately stems from economic power, and that as the US loses absolute economic superiority (that doesn't necessarily mean US decline, as others can also rise) it will necessarily lose absolute military superiority. That doesn't necessarily have unmanageable security implications, it just means we have to learn to manage the new security environment. Is absolute superiority to everyone, everywhere, all the time essential to our security?

    I don't think anyone doubts that reforms in US military procurement would be desirable; that's close to being self-evident. It would be interesting to know if any concrete, practical changes have been proposed...
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Council Member Ken White's Avatar
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    Default How emptor was my caveat...

    Quote Originally Posted by AmericanPride View Post
    The US does not operate the F-16IN so it is not useful in measuring US combat power.
    Nowhere did I imply that it was operated by us; that isn't the issue; combat capability or your combat 'power' are nominal owner independent issues, as is price. The issue at hand is your use of inappropriate and thus potentially invalid costs in comparing the costs of an F-16 of Block 30/32 or below with an F-35. Machts nichts to me, really, it's your study and I was simply pointing out a potential pitfall...
    But I would like to note that this is an excellent example of inflating prices far along in the platform's history...
    Is it price fixing or is it much added -- and more expensive -- capability? The F-16IN AN/APG 80 AESA Radar for example offers many improvements in capability and thus combat power (and some USAF F-15s C/Es are being retrofitted with a similar set as likely will be some F-16s) but it is an order of magnitude more expensive than the older mechanically scanned sets. Built in IRST (which the USAF used to foolishly reject), Current EW systems and helmet mounted cueing all available in the F-16IN are not only items designed into the F-35 but also far more expensive than the Boyd / Spinney / Wheeler beloved f-16A. Those gentlemen not withstanding, the USAF and most other purchasers of the F-16 have opted for far more capability than the A-model possessed. You get what you pay for. And one must pay for what one gets...
    William Hartung's book provides an excellent overview of Lockheed Martin's practices in this regard; and I think it's a fair representation of the acquisition process as a whole.
    We can disagree on that last item and I'll again point out that the Congress really like things the way they are; i.e. LM couldn't do what they're rightly or wrongly accused of without the assent -- even encouragement -- of Congress. Allow me to say that your choice of 'believable' sources is, er, interesting and they certainly generally are supportive of your views

  11. #31
    Council Member Ken White's Avatar
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    Default Excellent post.

    Quote Originally Posted by Dayuhan View Post
    I don't see how you can determine "the real security problem" without assessing current capacity relative to current threat... Is absolute superiority to everyone, everywhere, all the time essential to our security...I don't think anyone doubts that reforms in US military procurement would be desirable; that's close to being self-evident...
    Quite accurate, as well.

  12. #32
    Council Member Fuchs's Avatar
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    Two countries in today's world have a problem with the classic line that goes approx. like this:

    One countries' perfect security is all other countries' insecurity.

    One country seeks perfect security for itself only in its own region, the other has completely lost its mind.

  13. #33
    Council Member AmericanPride's Avatar
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    Quote Originally Posted by Dayuhan
    I don't see how you can determine "the real security problem" without assessing current capacity relative to current threat. Current capacity relative to 1973 capacity is irrelevant, the Cold War is over and the threat environment has changed. Once you decide that the analysis must be "independent of which threats exist" the analysis begins to float off on thin air, because any analysis of security is fundamentally dependent on which threats exist.
    As I have repeatedly stated, this has nothing to do with the first part of my analysis which, I stress again, is about measuring US military capacity. Yes, it is a major issue if US purchasing power is decreasing. In order to maintain the same level of military power, the US must increasingly spend more money. This decline is not related to the existence of other security threats or the development of other national military forces. The fact that other national powers may represent future threats only highlights the underlying economic problems that are reducing US military capacity. In other words, it is possible that US military is reducing relative both to US economic capacity and to foreign national threats (the former is what I have been discussing, the latter I have not looked at).

    Quote Originally Posted by Dayuhan
    I don't think anyone doubts that military power ultimately stems from economic power, and that as the US loses absolute economic superiority (that doesn't necessarily mean US decline, as others can also rise) it will necessarily lose absolute military superiority. That doesn't necessarily have unmanageable security implications, it just means we have to learn to manage the new security environment. Is absolute superiority to everyone, everywhere, all the time essential to our security?
    You mean relative "economic superiority" since US GDP growth is outpacing the growth of the DoD budget. Nor has my analysis even addressed this problem yet, which, again, I said I would investigate when I explore conflict resolution. Right now, the data indicates that US purchasing power is decreasing. This decrease is not dependent on the existence of any threat.

    Quote Originally Posted by Ken
    Allow me to say that your choice of 'believable' sources is, er, interesting and they certainly generally are supportive of your views
    My sources in this thread have been:
    - General Dempsey's speech
    - DNI Clapper's congressional testimony
    - Frank Spinney's congressional testimony
    - OPM's federal employment statistics
    - Naval History and Heritage Command (USN inventory)
    - Arsenal of Airpower: USAF Inventory
    - FY2010 DoD Green Book on national defense estimates
    - World Bank

    These are all primary sources so I doubt the substance of your objections about my sources. My conclusions are based on the numbers provided by these sources.
    When I am weaker than you, I ask you for freedom because that is according to your principles; when I am stronger than you, I take away your freedom because that is according to my principles. - Louis Veuillot

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    Council Member Fuchs's Avatar
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    Quote Originally Posted by AmericanPride View Post
    You mean relative "economic superiority" since US GDP growth is outpacing the growth of the DoD budget.
    That is a very, very recent development.
    The spending craze of the Bush Jr administration when the U.S. applied its classic strategy (of throwing resources at a problem till it drowns) looked very different.

    Last edited by Fuchs; 05-01-2012 at 12:35 AM.

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    Council Member Ken White's Avatar
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    Wink S'okay. Your study, your choices.

    Quote Originally Posted by AmericanPride View Post
    These are all primary sources so I doubt the substance of your objections about my sources. My conclusions are based on the numbers provided by these sources.
    I'm sure you do doubt, no surprise there. However, after listening to, reading and watching all those you cite and / or their predecessors, cohorts, sycophants and fellow travelers as a highly interested and even involved party for a great many years, I'm far more comfortable with my assessment of their questionable overall credibility on the matters at hand.

    Even OPM. As a former DAC and Civil Service retiree as well as a military retiree, they. IMO, are probably the most credible source you cite and they are far from being error or bias free. They, like most of the others, have to agree (or strongly disagree, individually and incumbent administration political party dependent) with each current administration no matter what they believe or think

    Question everything, not just things that annoy you. Agendas abound...

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    Council Member Dayuhan's Avatar
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    Quote Originally Posted by AmericanPride View Post
    As I have repeatedly stated, this has nothing to do with the first part of my analysis which, I stress again, is about measuring US military capacity.
    And as I have repeatedly stated, I see no point in measuring military capacity in ways that do not measure capacity against actual or realistically expected threats. The point is to have as much as you need, not as much as you once had. Maintaining or buying more capacity than needed is in itself an economic threat.

    To be frank, it looks a bit like you've selected study parameters that make the outcome a foregone conclusion: the desired end point seems to be that US capacity to purchase military power is declining, that this represents a great threat to our security, and that the economy, the military procurement system, and possibly a few other things are broken and need to be fixed.

    I'll be interested to see what repairs you recommend.

    Quote Originally Posted by Ken White View Post
    Question everything, not just things that annoy you. Agendas abound...
    Amen.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Council Member AmericanPride's Avatar
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    I thought I'd address some recent developments, given the inclusion of the 1% reduction in military pensions in the FY14 budget. SECDEF Hagel claims that reform of the military pay system is necessary because of runaway growth. Let's examine that claim.



    Here is the DoD TOA from FY48 to FY18. The budget categories are operations and maintenance (O&M), military personnel (milper), procurement (pro), and research and development (RDT&E). The other category includes retirement, military construction, and other miscellaneous expenditures. The two most evident trends: (1) the growth of O&M as a proportion of the DoD budget from 34% to 40% from FY48 to FY14; and (2) the shrinking of milper as a proportion from 45% in FY48 to 26% in FY14.

    As seen in previous posts, the number of active duty uniformed personnel has declined dramatically from a peak of over 3.5 million to a little over 1.5 million. Simultaneously, the dollars spent on military personnel, when adjusted for inflation, has remained relatively steady when controlled for the Vietnam War, Reagan’s military buildup, and the War on Terrorism. The DoD budget, when adjusted for inflation, up until several years ago was higher than at any time during the Cold War. As the TOA increased, must of the gains were captured by O&M while personnel costs remained relatively stable.

    Here is the O&M budget as a proportion of DoD TOA since FY48.



    The end of Vietnam, the Cold War, and the Iraq War have done little to slow the growth of O&M as a proportion of the DoD budget; in fact, it probably encouraged it. With every drawdown, it's personnel, not operations and maintenance, that are cut. But the gains made by O&M in the budget when the US enters a new conflict are not restored to pay and benefits. This has been true since 1965. The comparison is more stark when we look at the 3 year averages of O&M and military personnel expenditures.



    Nine of the last ten years have seen the lowest military personnel spending 3-year averages since FY48. In contrast nine of ten years of highest O&M expenditures were between FY02 and FY14. Are benefits being cut to protect the O&M budget? I think it's pretty clear, given that the other budget categories are relatively untouched. But is this necessarily a bad thing?

    I think in light of the data in the previous posts highlighting the increased service costs but decreased combat capacity, the answer is an unqualified "yes". It seems to me that before long we won't have anyone to operate or maintain the latest generations of warships, aircraft, and armored fighting vehicles because it's becoming increasingly expensive to actually operate and maintain them. And the equipment that is fielded won't be in sufficient number to address the wide array of threats that the services say we need them for.
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    Council Member Firn's Avatar
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    Just a quick comment from my point of view.

    1. Military power is a somewhat sketchy concept and depends on many variables, which have been already mentioned in this thread. It is of great importance to distinguish military power in the short term and the long term potential as well as it quality. For example the US had relative low military power in the years of the Great Depression but it's military potential was huge - in the long run. History gives us plenty of examples in which in the end the greater potential won, but also a great deal of cases in which it could not be brought to bear as the war was already lost.


    2. Economy, to pick up the area of greatest interest, is one of those variables it is interesting to take a look how it supports military power.

    GDP, GNP and PPP are in aggregation and per capita highly useful metrics but is obviously not a one to one measure of economic capabilites nor potential for war. For example a relative higher share of manufacturing tends to be positive, but financial (and military) strength can enable a state to outsource parts of it's production and secure it's ressources by trade if the military situation allows it. An highly productive agriculture, a highly productive manufacture and perhaps to a somewhat lesser degree service industry , if sustainable, allow to shift a relative large amount of the population into the military and to equip them with a high amount of physical and human capital as well as technology.

    The relative high investement into military power into the US and the dedicated industries should of course enable it in general to mobilize its long term potential if needed in a relative short time. It would be however highly interesting to analyse the overall ressources needed for it's war economy and to discover bottlenecks. Those could go from prime materials over specific industrial products to whole sectors. In our world of global supply chains it is no trivial task.

    Some interesting stuff:



    I guess the metric of Value-added tends to underweight China war economy potential due to the particular nature of the global value chain, which is obviously countered by an unknown degree by the size of the military-industrial complex of the USA and it's advantage in technology. Other then that it is important to put it into the context of what I wrote before, especially the ability to secure the ressources for all that manufacturing capability and it's built-up.
    Last edited by Firn; 01-06-2014 at 06:55 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

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    A highly interesting graphic from a big US study on health care, via The Incidental Economist.



    I was about to muse about it's implications on the GDP per capita, but it might be a good example on how an American way of war (against illness and age) can turn out to be highly inefficient.



    Just a reminder that ressources are very important but it matters also greatly how they are used. Throwing money at a problem does not always cut it.
    Last edited by Firn; 01-07-2014 at 10:42 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

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    Default Then, we have obesity



    Regards

    Mike

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