The 30 AUG edition of The Economist has an outstanding article that demands your attention, “Defence spending in a time of austerity.”

It is a wide-ranging article, but it is the graph on the right and another couple of points that grabbed my attention.

What I like about the graph on the right is that it focuses on just major combatants. Yes, numbers are not everything – but when you consider the concentration vs. dilution of power when it comes to the waters off China, the numbers look even more interesting. When you fold in they tyranny of distance – you add a bit more flavor. Yes, there is a quality vs. quantity argument as well – but the historian understands the Tiger vs. Sherman argument. Follow the trends to 2030 and ponder some more.

Speaking of China, from the article;

Is the constraint on military spending evidence of a general decline of the West? Critics of Mr Gates argue that he is hollowing out the armed forces and accepting a diminished position for America in the world. In a seminal book of 1987, “The Rise and Fall of the Great Powers”, Paul Kennedy of Yale University popularised the notion that a country’s military power flows from its economic strength; the global pecking order is determined as much by economic performance in peacetime as by martial abilities in wartime. By this measure, China’s economic strength should give the West cause for concern. China is also fast building up its naval power …

Our debt growth is unsustainable and a decrease in our defense budgets will be an unavoidable result of our fiscal irresponsibility. Where is China in this?

Well, when you consider our trade deficit and national debt – don’t blame the dragon for getting fat when we sell our children to feed it.

China is now the largest holder of U.S. debt. It’s also the largest exporter and within the next five to seven years, it’s expected to surpass the U.S. as the largest manufacturer in the world.

How much interest are we already paying on our debt?

The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit.

“That’s one year’s worth of defense budget,” he said,

America, you should keep your eye on the Chinese Fleet. No so much that it may be a threat down the road – but just for the reason that you’re paying for much of it.

So, solutions? The macro issues of run-away deficit spending and trade imbalances are beyond the ability of the Navy to do anything about. What can the Navy do about this challenge of a shrinking American Fleet? For starters – go after per-unit costs – something we have been horrible at. We need to fix it though, as shipbuilding budgets are not going to grow in real dollars – indeed, expect a decrease. The cause of our per-unit cost problem is well understood; cue the LCS video.

Few would disagree with another of Mr Augustine’s laws, that “the last 10% of performance generates one-third of the cost and two-thirds of the problems.” Moreover, the quest for the best is often allied to a “conspiracy of optimism”, whereby bureaucrats and contractors underestimate the likely cost of weapons, wittingly or unwittingly. Once approved, military projects are hard to kill.

Such are the ingredients for a spiral of cost and delay: technological stumbles hold up development; delay raises costs; governments postpone work further to avoid busting yearly budgets, incurring greater long-term costs. With time, technology becomes outdated, so weapons must be redesigned, giving the top brass a chance to tinker endlessly with requirements. In the end, governments cut the size of the purchase, so driving up unit costs further.

We could do with a little more good and a little less perfect.

Hope is not a plan, but hope that our elected representatives get our financial house in order – for without it a military cannot be effective. After hope – then act develop a culture of accountability and not obsequiousness.

We did not get here by accident. Real people made real decisions that put us here.




Posted by CDRSalamander in Maritime Security, Navy
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  • Derrick

    Thank you for posting these facts. I never knew China had built 150 major naval combatants. By major combatant, I assume that means a ship size of at least Frigate/134m/440ft length?

    Would arming all ships/subs in the Pacific with tactical nuclear weapons be a sufficient deterrent? I thought the aircraft carrier there, the USS George Washington, was already equipped with tactical nuclear weapons?

    If tactical nuclear weapons are a political problem, perhaps the next generation warships can be built with more automation and less crew? That should make the per unit cost cheaper…

    Regardless, I thought the air wing of that George Washington carrier was enough to destroy over 200 targets a day? That’s more than the total number of major combatants China has…at least according to that chart.

    As for dealing with the national debt and deficit, I’m sure many will love this suggestion: raise taxes. I don’t see any other way out. Personally, I would suggest at the minimum an US federal sales tax of 7%. Sales taxes worked in reducing Canada’s deficit…

  • Matt Yankee

    Excellent post…the shermans vs. tigers argument is dead on. The size of the debt is beyond what we can raise taxes to make up. This is a crisis. What is a carrier for? Like Derrick says killing 200 targets a day could be one way to answer that besides the “presence” purpose. I think we need to start a program which would put the UAV program into hyper drive. I think we could build thousands of UAVs and we already have the millions of kids who grew up playing video games that could reduce the learning curve. What if we put a fleet of 10,000 predators in the sky with the range to make it to Mongolia with two weapons? How many carriers is that worth…and I’m sure could double or triple the payload.

    We have bitten the poison apple and used the German philosophy of quality over quantity and now we are right back where we started with having to do the job with less. We must learn to treat our treasure more like our blood because they have the same effect when you run out of either.

    Can the US navy literally fix the debt? Call me crazy but if we used our military to take over a ME oil field worth 1 trillion or at least made a deal with one of them to keep the price of oil fixed at 50.00 this would help significantly in trade deficit therefore debt. We are still capable of delivering real power to anywhere on the globe right now…

    DO NOT RAISE TAXES…businesses will offset something else in order to stay profitable and would either fire someone or not invest in someone else to make the difference…further snowballing the decline. CUT SPENDING…our security and the world’s security frankly are more important that social security or medicare…which are socialist programs and which represent the bulk of our problem. Leave the defense budget the hell alone.

  • RADM (Ret) Ben Wachendorf

    Not only is Chine growing their naval forces while virtually everyone else is shrinking, but they are also leaping generations of technology. Examples include Type 4B Kilos (very capable, quiet, modern, Russian diesel sub) replacing WWII vintage technology Chinese subs. Similar examples in surface fleet. On the air side, Su/Mig jets with thrust vector nozzles, etc. replacing 1950/60 vintage first generation jets. On the missile side, mobile DF-31 with MIRV and high accuracy replacing CSS-4′s which must be fueled prior to launch and very poor accuracy.

  • Derrick

    Ironically, a good example of a capitalist country with no social programs is China. Despite being run by a “Communist” party, it is rampant capitalism: no unions, no social security, no medicare, no welfare. You don’t work, you don’t get paid. Doesn’t matter if you lost your limbs on the job or not; it’s your responsibility to take care of yourself. Walk along the streets of China and you see a lot of homeless elderly beggers or crippled beggars. Go visit the rural villages in China and you will see rampant poverty.

    Socialist programs like social security and medicare do help keep the standard of living as it is in North America. Notice only rich countries like those in western Europe and North America can afford them?

    Well…that was way off topic…

  • Derrick

    As for China and other emerging military powers modernizing their militaries and developing blue water naval capabilities…that’s why I am in favor of arming “conventional” forces with tactical nuclear weapons as a deterrent…

  • Matt Yankee

    How about getting rid of the six party talks, only negotiating with China and implementing ultimatum for China to get rid of North Korean nukes or watch the ROK and Taiwan receive nukes. I think it would be better to have our allies armed than to only have weapons on a few ships. AND the next time the North shoots we shoot back…the decades of being led around by our ears from one provocation to the next while they enrich, must stop.

  • Old Air Force Sarge

    How about we stop out-sourcing jobs to other countries? How about the unions throttle back their demands? How about we get the MBAs and other bean-counter types away from their d**n spreadsheets and see what it’s like to be human? How about we start rewarding people who want to work and are willing to work hard? The USA has so many problems right now it’s mind-boggling. As a defence contractor I can give you any number of reasons while all of this hardware and software costs so much. Most of them have to do with the government not being able to make up it’s mind as to what they want and contractors lying through their teeth to get the big contract. National will and national pride seem to be nearly non-existent if you believe the MSM. And many on the left would have us be ashamed to show that anyway. (Don’t snigger people on the right, many of them just care about their bottom line!) We need real Americans to stand up and fix this inefficient swamp of bureaucracy and bean-counting in Washington DC (and most of the states as well!) It may not be the Chinese who finish us off, it may be ourselves!

  • Matt Yankee

    I work for a small contractor is South Texas and I see everyday where the problem is. Too many lawyers trying to play gotchya. We wait for MONTHS for building permits because the city is scared of issuing something that is not exactly 100% legally acceptable. The engineer who has worked here for over 50 yrs used to get a permit the same day he asked for it. The building code is even called “INTERNATIONAL Building Code”.

    As far as the bean counters, as much as I dislike paperwork I must say we obviously didn’t count the beans we had to spend and that is much of the problem. Just do it, is the motto of the federal govt. and they have heaped so much red tape on the private sector we are even told where to place the toilet paper dispenser on the wall for restrooms. Contracting (small commercial) is completely snowed over with bureacratic requirements. Our town would NEVER have been built to anywhere near the size it has under these conditions.

    Over 500,000 God fearing, patriots went to DC last weekend and not a single arrest among them. These people are our only hope.

  • Derrick

    Why would the Chinese want to finish us off? We are giving all our jobs to them. LOL That’s why I think certain work items (ie technology ones) should be illegal to outsource…

  • Derrick

    Some interesting facts regarding how your taxes are being spent:

    http://en.wikipedia.org/wiki/United_States_federal_budget

  • Chuck Hill

    They have a point, but the chart is clearly misleading because one carrier counts the same as a WWII technology destroyer with a few cruise missiles in place of the torpedo tubes.

    It’s not clear what they are counting. Weren’t we close to a 600 ship navy at one point?

    If this were a plot of tonnage the US graph would look a lot flatter, and the Chinese a lot smaller.

  • Byron

    Sure it’s misleading. First, take all the Perry FF-used to be-G off the boards, they’re barely better at offense than that bloated pig the LCS. Then take away the amphibs. They’re great for putting Marines on or over the beach, but don’t bring anything to a knife fight; in fact, they soak up other ships for protection. Basically, you got the 12 carriers (soon to be much less) you have the Burkes and the Tico’s (who are getting long in the tooth and starting to cost serious money on overhauls. China on the other hand is building their navy NEW. The BEST offensive weapon we have is the SSN.There we have a big advantage. What does all that mean? Better pray those ICBM missiles don’t knock out the carriers the first day or the US Navy is screwed a lot worse than they were at Pearl Harbor.

    Think I’ll start expanding my selections in Chinese food….

  • Derrick

    In my opinion, if China were to fire ICBM’s then the US would retaliate with nuclear weaponry.

    I think I’ll still place my bets on the US navy/military…

  • UltimaRatioReg

    “I think I’ll still place my bets on the US navy/military”

    Point being, Derrick, Vegas would once have had us as prohibitive favorites. Do we wait to get our act together until the odds are 6:5 and pick ‘em?

  • Claude Berube

    Troubling times ahead for the Navy due to the debt, domestic entitlement spending, etc. I had a couple of graphs and discussed this in an article at Small Wars Journal last year: http://smallwarsjournal.com/blog/journal/docs-temp/222-berube.pdf

  • Derrick

    To me, the blog article posted by CDRSalamander suggests that a shortage of money is the real threat to the US navy’s superiority over the world’s oceans. So when the question about do we wait to get our act together was raised, was it referring to the budget shortfall, or to one of the comments? If so, I did suggest a realistic, albeit unpopular, way to help get the US federal deficit in check: raise taxes.

  • UltimaRatioReg

    Derrick,

    Methinks this is NOT the suggestion of Salamander’s post here or elsewhere. On the contrary, he discusses often the wastage and mismanagement of the nation’s treasure in the building of a Navy to maintain our dominance on and under the world’s oceans.

    Getting the Federal deficit in check has relatively little to do with military spending. Social spending outpaces DoD budget by more than three to one. And the cost of the 2009 stimulus is greater than the cost of the entire Iraq war. All eight and a half years of it.

    http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Little-known-fact-Obamas-failed-stimulus-program-cost-more-than-the-Iraq

  • Matt Yankee

    Isn’t that something…after listening to all of the noise about the cost of the War and in the matter of 18 months Obama has spent more than the entire 9 yrs of war. The attempt to manipulate the numbers and place blame on the private sector instead of the social programs and corrupt politicians is shameful. It reminds me of Hugo Chavez…I saw speech of his where he called out Churches for being on the side of the rich capitalists…it’s in the playbook of socialists to cause a crisis and then blame the problem on the capitalists. Just like trying to blame our problems on CEOs and private banks. Profit is not evil it is necesary in any business or else it cannot survive because more money is going out then coming in. Unlike the fed. govt. where more money goes out than comes in but that is OK for some reason…???

  • YN2(SW) H. Lucien Gauthier III

    China is building such a large Navy because of their geography. To their west, they are surrounded by terrain that is all but impregnable to armies. From their coast is how china interacts with the world. They are a maritime Nation now, just like the US used to be… Until we decided to stop viewing ourselves as such.

    China in essence is an Asian island-Nation, just like Japan. Until we realize that the only threat the US poses (in the real world, the cyber domain is something wholly different) to China militarily is the USN/USMC Combat team, our defense strategy will not change.

    I also think that the US harping on the artificial devaluation of the Yuan is getting tiresome and loosing it’s ability to affect change.

    I don’t blame money as the problem in the US-China, rather that is a symptom. The problem is the piss poor state strategic thinking at the mid and high levels of decision making in government. China views war as being something less than physical/kinetic combat, the US does not. In times past, one would say that the US has lost its competitive spirit. This holds true in an economic, diplomatic, industrial and realpolitik sense.

    I know a lot of you guys disagree rather vehemently with me about it. But, SECSTATE Clinton has the demeanor that we need to compete again. We need more like her. She’s not a hawk, but she is ruthless.

  • Derrick

    As for managing shipbuilding costs, I have no idea. Perhaps the US navy could consider non-unionized workers for the job?

  • Derrick

    How much of shipbuilding can be automated?

  • Retired Now

    Shipbuilding costs can be lowered, and at the same time increasing quality, by building more ships ! Don’t fund 1 DDG per year, or 1 NSC Cutter every other year ! Fund 3 or 4 every year and let the yard (or yards) get into some sort of series production mode. Time, quality, costs all improve if you don’t give a 12 or 18 month gap between constructing warships.

    Common sense needed, not some more huge STUDY and THESIS, etc. Just get the few remaining yards consistantly busy.

    Abraham Lincoln used to say that if he wanted something done, he would task a busy person. He also said that if he had more time, he would have written (you) a shorter letter ! Think what Abe could do to our present day Pentagon with all its Powerpoint and contractor-provided non-sense.

  • http://cdrsalamander.blogspot.com CDR Salamander

    Lucien,
    I will say this about the SECSTATE – you will never see her bow to a 90deg angle to anyone. That is not a minor thing in a world often ruled by keeping face, brute force and the expectation that a leader has the character to use it.

    Mrs. Clinton Ruthless? Fair, perhaps – or at least she wouldn’t mind if some people have that perception.

  • YN2(SW) H. Lucien Gauthier III

    Perhaps ‘ruthless’ wasn’t the exact word I should have used, Sir. It’s close to the impression I wished to give. But, not quite accurate enough. Whatever the word, she has given a backbone to State that I cannot remember them having in my lifetime.

    However, Mr. Augustine’s law, with the last 10% causing the greatest increase in cost and challenges; I’ve heard this before, but, I’ve never seen it spelled out to quantify what constitutes that 10%. I am sure it can be a number of different things, but to date I’ve not seen a study to attempt to apply this ‘law’ to shipbuilding. Is this to say that a 1% increase in performance across the entire platform can combine to be that 10% increase in performance? Is it specific to each system, as in saying that a 10% increase in the range of the air search radar will cause grave technical and financial challenges? Can you cheat this ‘law’ and purposely stop at a 7% increase in performance of a system, there by having the best of both worlds–is Mr. Augustine’s law a true metric by which we can measure the cost/benefit of future iterations of systems?

    I’ve been reading about Apple and Steven Jobs for comparisons to ship design. It’s said that Apple and Jobs first create a vision and then seek to build that vision. Rather than combine capabilities and attempt to combine them in a single product. The end result is their products like Mac Pro (the sickest workstation on the planet… can you say 8 processing cores and 16 discrete threads with 32GB of RAM!!!) and the iPhone. Not everything they produce is the ‘perfect thing’ as the iPod and iPhone were at their advent. But, their simplicity, elegance and functionality albeit at a premium is not copied anywhere else in the industry, and is a model for ship design I wish we used.

    Which brings me back to the state of strategic thinking in the US. With all of our defense universities, all of our publications the multitude of information and volume of smart people, we cannot think a single coherent strategic thought. We have no vision for the world, we have no vision of what we want our Navy like and to be capable of (outside of social agendas completely unrelated to war fighting), we have no idea what the end of wars we fight today will be like. There is no vision of a world better than it is today. If you don’t know where you are going, you will never get there. In this instance, those that wonder are, in fact, lost.

  • Chuck Hill

    Vision is another way of saying goals. Its hard to know how to get there if you don’t know where you are going.

  • Derrick

    How are the requirements for each naval combatant type generated? Perhaps if the requirements were changed, things could be cheaper.

  • Chuck Hill

    An important step is a “concept of operation.”

    As I understand it, there was not one for the LCS.

  • Retired Now

    Chuck, here’s some CONOPS for you:

    http://www.lmlcsteam.com/?page_id=88

    Note that many such “conops” are scattered all around this web site, which must be located down in New Jersey at Moorestown LMCO site.

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