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My Opinion on Increased Military Spending: It’s a Good Thing

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Rob Spiegel
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Blogger
Manufacturing is stimulation
Rob Spiegel   7/2/2013 8:50:25 AM
Interesting thoughts, Rich. I agree that manufacturing is an economic stimulant. History shows it was heavy military spending on WWII that finally lifted us out of the  Depression. Recent cutbacks in military and other federal spending -- while intended to cut the deficit -- seem to have created a drag on what would otherwise be a more robust recovery.

The good news is that offshore manufacturing is coming back. Plus, there seems to be evidence that manufacturing that would otherwise be aimed for Asia is staying home. There are a ton of reasons, many of which are outlined in the Design News article on medical manufacturing: http://www.designnews.com/author.asp?section_id=1386&doc_id=264831

According to  A.T. Kearney's 2013 Foreign Direct Investment Confidence Index (FDICI) released last week, the U.S. has passed China to become the world's largest manufacturer again. So manufacturing is on the rise in the U.S. in spite of military cutbacks.

 

Elizabeth M
User Rank
Blogger
Re: Manufacturing is stimulation
Elizabeth M   7/2/2013 10:13:21 AM
The military also is behind a lot of innovative R&D, so spending for the military may trickle down into areas that one might not think of. So I tend to agree with your sentiment, Rich.

Greg M. Jung
User Rank
Platinum
Effective Military Spending
Greg M. Jung   7/2/2013 12:41:42 PM
I believe that 'effective' military spending is a good thing.  I agree that inadequate military spending is bad for both our national security and for the manufacturing sector.  However, wasteful military spending is also harmful for the country as a whole.

I see where American companies and manufacturers now use lean, efficient techniques to reduce waste and compete.  Can the military also adopt some of these effective new techniques to be more competitive?  I'm not suggesting that we lose any 'muscle', I'm suggesting that wasteful spending be reduced to further improve the military's value to our national security and our economy.

Rev
User Rank
Silver
Re: Manufacturing is stimulation
Rev   7/2/2013 6:46:37 PM
Then again, all military spending comes out of your tax dollars, which you could alternately spend on swimming pools, new cars and personal electronics.  Admittedly, a lot of this stuff is manufactured in China.

There are all sorts of studies that claim that military spending is the least efficient form of job creation on a dollars per job basis.  

The USA, in the absense of an all-out arms race, has spent billions of dollars on stealth fighters, and has not done a particularly good job of providing armour to protects its troops in Afghanistan from IEDs and such.  I don't know which project would create more jobs.

The purpose of military spending should be to make the military more effective.  I think job creation is a dangerous and unneccessary distraction.

GTOlover
User Rank
Platinum
Re: Manufacturing is stimulation
GTOlover   7/3/2013 9:35:37 AM
Rev,

I do not disagree with your sentiment, but military spending is one of well defined mandates of the US constitution. The other functions of our government "safety" nets have to be "defined" by some interpretation of the "welfare clause". So if you are worried about our tax dollars, I would focus on the major spending items. How many jobs does the government "create" (unless it is a direct buearacrat that adds cost to overall goverment)? What the government is good at is dictating regulations that force private companies to hire people to ensure compliance.

Whereas, purchasing a F35 fighter means engineers design it, workers build it, and QA certifies it. These are real jobs!

However, that does not mean we should not also look to spend our tax dollars more wisely in military equipment, like troop protection!

Zippy
User Rank
Platinum
Re: Manufacturing is stimulation
Zippy   7/3/2013 9:46:29 AM
Rob, while all economic theory is debateable, there is increasing evidence that WWII spending is not responsible for ending the Great Depression.  Google WWII and depression for both scholarly articles and popular press (Forbes) articles on this topic.  We tend to overlook that during the course of the war while all that production was underway the US population was deprived of the usual benefits of it, and only benefitted at the conclusion of the war when the US was the only country left standing.

As other have pointed out, using tax dollars can a stimulus to growth, but if you want to go that way I think you would be beter off investing it in US infrastructure (research, highways and bridges, etc.) where the effort benefits the citizens.  Our current political leaders don't seem to want to go that way, however. 

On the functional side, I have yet to hear a good argument that our military is dangerously unprepared to defend the country, as we outspend any other country by very high multiples.  A greater danger appears to be that if you have a highly capable but underutilized military, you find reasons to use it.

Watashi
User Rank
Platinum
Spending doesn't necessarily mean manufacturing
Watashi   7/3/2013 9:50:27 AM
I agree with you in theory, but in practice I have witnessed billions go toward studies and design efforts that never went anywhere or benefited anyone. 

There are many reasons for the high price of defense articles.  Rigid specifications, reliability, redundancy are a few of the good reasons.  But there are bad ones as well such as unrealistic requirements, unrealistic schedules, and an acquisition system that nearly all defense insiders agree is horribly broken. 

When the military asks that you give them a capability that has never existed in the history of mankind, based on the theoretical conjecture of some think tank, and is willing to pay hundreds of millions to you for the effort; of course you take up the challenge.  But as we have seen with things like the Army's FCS program, the money gets spent and nothing gets produced.

It is not all the military's fault; ultimately Congress has to approve the project.  Back in the 90's people came to realize that Congress would not give very much money to S&T (Science and Technology) programs to do research.  Research doesn't always give you a tangible benefit in a defined timeframe the way acquisition does.  Many programs began to sell Congress on 'leap-ahead' technologies.  The theory was to go ahead and do the design for a new product with the prediction that research on the enabling technology would have a breakthrough in time for the manufacturing stage of the program. 

Basically, this enabled the services to spend the big acquisition money on directed research instead of begging for the scraps that a research effort would normally get.

BrainiacV
User Rank
Platinum
Re: Effective Military Spending
BrainiacV   7/3/2013 10:01:10 AM
Back when the Wall came down and everyone was talking about the Peace Dividend of the military being able to shead R&D engineers to civilian R&D, I was very sceptical.

It is a different mentality (in my opinion) when you are tasked to build some with cost as no object versus build it as cheaply as possible.

I have seen situations where throwing money at a problem made it go away.

Not that it is the prefered way to do development, but there are times it works, just to show that something can be done.  After that, you can do it cheaper.

Do any of us think semiconductors would be at their current level if it weren't for military spending?

My guess is that we'd just now be seeing the Intel 4004 instead of the Haswell if it weren't for military spending.

I'm not for developing weapons for weapons sake, but I think we need some sort of R&D path that is all about breaking down the barriers of "can it even be done?"

I think NASA was a great way to do it, but since interest in space plummeted after we landed on the moon and won the space race, you can always generate military funding by inciting fear.

Watashi
User Rank
Platinum
Another thing to consider
Watashi   7/3/2013 10:21:39 AM
NO RATINGS
Defense procurement will never get stopped completely.  Every stable nation must have a credible military to survive.  This is an immutable fact.

Right now we have real cuts to the defense budget.  As things slow down and programs start to get cancelled, the manufacturing base shrinks.  That is not necessarily a bad thing, in fact it needs to happen to get the federal government under control; but it must be done thoughtfully.  The cost of reopening closed production lines and expanding the base when defense inevitably ramps back up could well exceed the short term savings of closures.

An economist might have optimism, relying on the old 'guns and butter' analogy.  But manufacturing plants don't just switch over from making 'guns' to making 'butter'.  There are already many people out of work and there will be many more with a lot less money to spent on 'butter'.

What is really needed is a stable, long term budget for the federal government.  Politicians love the lack of budget and constant shuffle of money because they can manipulate the flow for their (or their supporter's) benefit.  A strict budget would add stability and give an opportunity for better planning not only to the defense sector, but to federal contractors as a whole.

Watashi
User Rank
Platinum
Re: Manufacturing is stimulation
Watashi   7/3/2013 10:48:01 AM
Part of the problem is the use of the military for missions it should not be doing. You don't need heavy armor to fight and win a dynamic battle, but you do need it to act as an expeditionary police force.  Speed and agility factor into survivability as much as armor.

The military should be a lean, mean fighting machine.  You call them when you want to kill people and break things.  They should not be patrolling streets enforcing law and order.  That makes them a target; slowing moving through the streets or standing at checkpoints.  Fighting a static war is the worst possible situation for any military.

The 'low-intensity' conflicts that we have engaged in since WWII are not a good use of our resources.  If an objective is that important to our national interests, ratchet up the intensity and do it right.  Kill the enemy until they surrender or cease to exist.  War is a dirty business, attempts to clean it up or reduce the mess only cost more lives.  If you are going to get dirty, just get in there, do it, and get it done.

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