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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
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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.

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!

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.

Zippy
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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.

GTOlover
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Platinum
Re: Manufacturing is stimulation
GTOlover   7/3/2013 10:52:19 AM
Zippy,

While investing in infrastructure is a noble need for all citizen, the issue is the same political leaders get to decide which infrastructures get money. Even worse, they write rules into the spending bills so that only well connected cronies win the contracts. Politicians do not block the spending of our tax dollars, they just quible over which campaign donor wins the contracts. So how does wasting money on crony capitalistic infrastructure help citizens? Unless you happen to be one of ten people that has to cross a billion dollar bridge. I do not disagree with the need for this spending, I just do not think current political leaders are smart enough (or morally benevolent) to use the money for the citizens. They are all crooks!

Seems this is the same point we are making for military spending, it is bloated and inefficient. We love our military and cost be damned (so to speak).

Watashi
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Platinum
Re: Manufacturing is stimulation
Watashi   7/3/2013 10:54:24 AM
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Evidently you don't live in Virginia.  If you really want to spead a lot of money and have little to show for it; you give it to VDOT!

J. Williams
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Platinum
Re: Manufacturing is stimulation
J. Williams   7/3/2013 11:30:15 AM
Oh, they have lots to show for it all right.  The work on Virginia approaches to the new Wilson Bridge on the south side of the beltway was positively glacial in its progress.  They must have taken six years to 'finish' that portion. 

Then, they widened the beltway but just to be sure traffic would still be as bad, they now charge you for the privilege of driving on those two extra express lanes.  Just feels like a bald face money grab, gasoline taxes be damned.

Watashi
User Rank
Platinum
Re: Manufacturing is stimulation
Watashi   7/3/2013 11:52:54 AM
I would rather not have any 'stimulus' by the government. However, defense spending is defined as one of their constitutional duties, whereas the massive entitlement state is not.  If you eliminated entitlements from federal spending, we would probably not be having this conversation.

As for our military's preparation you are correct. We are the big dog on the block and are just trying to protect our lead. We could probably do with less, but with the social engineering that has killed our military capability on the personnel front; we need every technological advantage we can get!

And I'll somewhat agree with your last point - When you have cool toys; you want to use them! With a lack of moral and ethical leadership, which we suffer from, there is the danger of the arbitrary use of power.

Greg M. Jung
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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.

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
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.

Watashi
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Platinum
Another thing to consider
Watashi   7/3/2013 10:21:39 AM
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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.

phgphd
User Rank
Iron
Military spending or over spendng?
phgphd   7/3/2013 11:08:25 AM
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Military spending is good, but overspending is not.  The Democrats overspend on social programs, the Republicans overspend on military programs. That is why we are trillions in debt. Spending is good, but overspending is not good.

Paxton
User Rank
Iron
When you make arms you need to use them
Paxton   7/3/2013 12:52:00 PM
I have problems with making guns, bullets and bombs. Much of our growth is predicated on the military industrial complex. The problem with making these items is that you have to use them up to make more. This forces us into more involvement in war and supporting more wars.

I would rather see real growth in this country not based on arms. We need peace in the world and the proliferation of arms only supports war. It does not make us safer, even at home.

Guatemala has really suffered from the amount of guns dumped into the country by the US to combat the supposed guerilla insurection in the 1980s. the war ended in 1996 but all the arms left inthe country made it a much more lawless place, and it is still suffering.

GTOlover
User Rank
Platinum
Re: When you make arms you need to use them
GTOlover   7/3/2013 2:02:19 PM
Ah yes, the good old "beat your sword into a plow" utpoia. Go ahead. The barbarians of the world will then come and take your plow, your cow, and your life! Contrary to your belief, the reality is men are not peaceful creatures. Civil society only exists because we choose to organize and enforce rule of law. Take away the rule of law and you get the lawlessness you described. Doesn't matter how they are armed. History has abundant proof!

My second amendment rights are all the safety I need at home!

Paxton
User Rank
Iron
Re: When you make arms you need to use them
Paxton   7/3/2013 2:54:49 PM
I am not talking about second ammendment rights although I would like to see a lot more responsibility along with those rights.

Economic growth in our country is  based a lot on how many bombs, missiles and international arms and support systems we can make and sell.

And to make more one needs to use those arms and weapons up. This cycle fosters more war and is not healthy to our society and our planet.

Watashi
User Rank
Platinum
Re: When you make arms you need to use them
Watashi   7/6/2013 11:49:29 AM
Actually, you do not need to "use them up" to make more.  Everything has a lifecycle, and munitions are perishable.  They are just as easily used up in training as they are in real combat.

Our economic growth is not tied to the defense sector.  Defense is just a small slice of the pie.

Man has fought and killed his fellow man since the beginning of time.  The next war is not a question of if, but has always been a question of when.  If anyone needs to take some responsibility it is the peace activists and pacifists that unwittingly encourage war.  Being useful idiots, pushing the notion of a utopia where we all just get along encourages and emboldens bad actors in the world.  The lesson of Vietnam to the world was the importance of covert operation to destabilize a world power on the home front. 

To this day, weak politicians, the vast majority of which have NO qualifications to lead a military, fear what ignorant, yellow journalists may say.  Their weakness and ignorance drives them to interfere in military operations and prevents the military from quickly attaining the 'peace' that many claim to want.

56ml
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Iron
Beware the Military-Industrial Complex
56ml   7/3/2013 2:44:44 PM
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Zippy said it very well.  As General, Presidential Eisenhower saw the horrors of war.  No doubt that is why before he left his second term, he warned of the military-industrial complex.  It's well worth reading what he said.  By having less arms, we are in danger of having a balance of terror, which would unsettle a lot of Americans.  But is not being vastly superior a bad thing?  It would cause us to pause long and hard before getting into any armed dispute.  Instead we have draft evaders like President W and Dick Cheney who never personally engaged in combat thowing away precious lives just to show the world what "Shock and Awe" looks like.  How many of our young men and women's lives have been shattered by their misadventures?  Anyone who thinks being a great military power is so great can look back throughout history to see why seemingly dominant countries and empires flame out.  I found the decline of Sparta most intriguing.  They ran out of fighting men!

GTOlover
User Rank
Platinum
Re: Beware the Military-Industrial Complex
GTOlover   7/3/2013 3:00:34 PM
"Shock and Awe" that is continued with the current administration. But good of you to exclude that inconvientent truth!

56ml
User Rank
Iron
Re: Beware the Military-Industrial Complex
56ml   7/3/2013 4:10:27 PM
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Sorry you can't tell the difference between starting a war needlessly and trying to fix a mess that someone else had caused.  Looking back, we can say that Vietnam is another one of those that we should never have gotten into.  But Johnson actually fought in WWII.  Unfortunately he thought the new concept of Hueys ferrying troups would actually make a difference and do what the French could not.  That's the problem with getting new military capabilities.  The generals want to test them.  At least back then there was the fear of the Domino Theory.  Apparently President W just wanted to "spread democracy" into the Middle East.

Kurt
User Rank
Iron
Re: Beware the Military-Industrial Complex
Kurt   7/3/2013 4:25:52 PM
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Since WWII every president has been spreading democracy, poorly and costly.

56ml
User Rank
Iron
Re: Beware the Military-Industrial Complex
56ml   7/3/2013 5:00:51 PM
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I'm not too sure about spreading democracy.  After WWII, we "lost" Eastern Europe, China, North Korea, and nearly Greece to the Iron Curtain.  Then came Sputnik.  At least to most Americans back then, the world was caving in and we were just hanging on and trying not to lose more.  It was only after the Soviet Union collapsed that we became emboldened.

Kurt
User Rank
Iron
Re: Beware the Military-Industrial Complex
Kurt   7/3/2013 8:03:45 PM
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That's recent history.  We were in the Middle East, Asia (Korea), Africa, and South America in the 1950's, not to mention Southeast Asia in the 50's (Vietnam).  One of the Navy's official missions is naval presence, having a naval combatant within sight (probably radar and satellite now) of your shore makes the rascals hesitate.  Choosing when and where to extend our presence across the globe is a difficult decision by Congress and the administration.

Our Nobel prize winning president (for peace!) is no different in his zeal for nation building and leaving a legacy.  Isn't that what the 2nd term is all about?

GTOlover
User Rank
Platinum
Re: Beware the Military-Industrial Complex
GTOlover   7/3/2013 4:26:42 PM
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Same way president O wanted to "spread democracy" to Libya? I know, that is probably Bushes fault as well.

Watashi
User Rank
Platinum
Re: Beware the Military-Industrial Complex
Watashi   7/6/2013 12:05:39 PM
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I don't engage trolls, but it is funny how it chastises a President that flew jets for the military and ignores all the Dems that not only didn't serve the country, but actively worked against the military!

Kurt
User Rank
Iron
My Opinion
Kurt   7/3/2013 4:07:05 PM
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Great topics get lots of feedback.

DoD continues to generate alot of spinoff technologies.  Just like nature - one animal or plant comes up with a better mouse trap and then the mouse adapts with a way to evade it.  Apparently it's been going on for eons, I don't remember what day it started.  Humans haven't moved off that evolutionary path much. 

War among modern nations has become to costly in lives and material.  Having hundreds or thousands of friendlies (civilian or uniformed) die in one day is not acceptable as a cost of war anymore.  So unconventional warfare with State-to- non-State entities (supported by other states) has become the means of proselytizing your religion, democracy, authority, ...

All that being said, why do we spend so much on anti-terrorizm when >750,000 people die from being cared for in a hospital care.  If we did nothing to stop terrorism since 2001 would the that many people have died.  Probably not.  But it's not in human nature or the democratic government of this great republic to stand by and let someone give us a bloody nose. 

Our civilian congress needs to control and guide the military adequately and generally that is done with the checkbook (I'm a veteran).  Your congressman is the key, but few are brave and independent enough make a difference.

Kurt

bobjengr
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Platinum
Military Spending
bobjengr   7/5/2013 10:52:19 AM
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Richard, I certainly agree with your viewpoint but I would argue that when we discuss military spending we never talk about cutting waste, fraud and overspending.  I spent five years in the Air Force and saw first hand the remarkable misuse of resources.  There is absolutely no doubt that R&D efforts must continue for the US to remain on the cutting edge of weapon technology but buying  weapon systems we don't need simply to satisfy a congressman's desire to keep $$$$$$$ in his state is wrong.  We see this every year.  We are in the process of removing our presence from Afghanistan and yet we will leave millions of dollars in "hardware" that will remain unused and rusting.   We did the very same in Iraq.   (I won't even mention Viet Nam.)   The United States has uniformed military in 130 countries and 900 bases and installations on foreign soil.   We are going broke maintaining these installations and no one can tell me all are necessary to insure our national safety.  (OK—I'm off my soap box.)  Technology YES—waste and fraud—absolutely NOT.

Watashi
User Rank
Platinum
Re: Military Spending
Watashi   7/6/2013 11:59:16 AM
NO RATINGS
I agree - we should limit Congressional ability to define set-asides or influence procurment decisions.  Let the military do what is in the best interest of national defense and not in the interest of a senior member's district!

Of course it is easier said than done, as Congress must have a check on military expenditures.

richnass
User Rank
Blogger
Re: Military Spending
richnass   8/6/2013 4:19:22 PM
NO RATINGS
bobjengr, Thanks for the post. Clearly you are closer to it than I have ever been, so I respect your opinion. There's no question, in my mind at least, that smart spending on the military is a good thing, while waste generally only benefits very few.

I tried to keep this piece as un-political as possible, but (as I feared) it ended up in that direction by some of our readers.

I will say that I'm happy this discussion was kept at a very respectable level. I only got really flamed by one reader, who sent me a direct email rather than post his comments on-line for everyone to see.

Rich Nass

Charles Murray
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Blogger
Trade shows
Charles Murray   7/8/2013 7:44:04 PM
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Most of the exhibitors who I've recently talked to at trade shows agree with you, Rich. Traffic is picking up at the booths and most of them tend to see it as a positive sign for manufacturing.

Cabe Atwell
User Rank
Blogger
Re: Trade shows
Cabe Atwell   7/31/2013 7:11:59 PM
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There are pluses and minuses to every argument and the military budget allotted by Congress isn't the exception to this rule. I agree with Richard in that with an increased budget new technology is certainly produced. When the War on Terror began, most troops were outfitted with 80's-based gear and there were no drones. Now we have 4-tube NVGs (DevGru) and a plethora of UAVs to troll the friendly/unfriendly skies. Just look how far tech has come since the beginning of WW2. 



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