Apr 13, 2022·edited Apr 13, 2022

I work in the humanitarian sector and at a previous job did a lot of software contracting with USAID projects. It was basically impossible to structure any of the contracts in a way that produced good software at a fair price – in fact, we often produced software that wasn't used, was overpriced, AND we somehow made a loss on it. It's no individual's fault in the contracting chain but the end result is basically insane.

We tried to get away from the cost-plus ('time and materials') model to just paying us a fixed price for a product, but that just led to constant back-and-forths on whether things really matched the requirements and what was a new feature request etc. etc. Ultimately cost-plus was safer for both sides, but it rarely resulted in good software. I work in the same field, but with a much better, non-government structure now. I think military contracting largely functions like USAID, and it's so difficult to fix how it works.

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Apr 13, 2022·edited Apr 13, 2022

I don’t particularly agree with this take because if you look at the Department of Defense’s budget justification books (which I do for a living now) you’ll see a fair amount of the defense budget (& future outlays) are dedicated to military salary, retirement, healthcare and not specifically defense related military construction. A fair portion of our defense budget has very little to do with lethality or competing with the PLA (assuming that we ignore European security, which I disagree with as well).

The point that procurement is wholly broken I 100% agree with. The Ford-class carrier is an okay example but a bigger example is the botched procurement of the Littoral Combat Ships (which are being retire well before their service life, some basically new) and the Zumwalt-class DDGs (only made 3 with guns that we couldn’t afford the ammo for). Another commenter mentioned the Navy should notionally be the lead service in directing the competition against the now larger People’s Liberation Army (Navy) but the US Navy is incapable of building or developing new ships for that competition because of decades of not investing in public & commercial shipyard infrastructure. Trying to reorient the Navy & to a lesser extent the Air Force will require more money and more than the nominal 4% defense increase from last year (2% if you take out the Ukraine supplemental funding).

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Apr 13, 2022·edited Apr 13, 2022

It's absolutely true that we need reforms to horrible gold-plated procurement programs that shoot for the moon and blow up halfway there (F-35, Ford, Zumwalt, LCS, etc). The Navy in particular has been the most egregious offender here in recent years, which is unfortunate, as they are arguably the most key branch against our primary threat (China). Thankfully, we seem to be making some progress in this direction. The B-21 appears to have been a remarkably well-run (by DoD standards) procurement program, and the AF has resolved not to repeat the F-35 mistake of trying to make one silver-bullet gold-plated program that will inevitably fall short at a massive price. The real question is whether USN can similarly sort itself out, as pretty much every recent Navy procurement program has been an absolute disaster, leaving the force woefully unprepared for conflict with China.

To the broader point, though, I do think we need to significantly increase defense spending, even though fundamentally reforming a broken procurement process to contain costs is also important. Like it or not, the US right now is the guarantor of global democratic values in an era where the #2 power (which itself continues hiking defense spending dramatically year-over-year) is a brutally repressive techno-dystopian state which would love to eradicate liberal democracy globally. Make no mistake, everything the PRC has done militarily for the past ~30 years is aimed directly at us, while we spent a couple decades tooling our military around counter-insurgency conflict. I think the current stat is that the PLAN floats something like 50% more new tonnage annually than the US Navy does. There's still a gap in existing tonnage, but that's gonna close quickly, and the PLAN is almost completely concentrated off the Chinese coast, while the USN is scattered around the world.

In the event that (god forbid) we do fight and lose a war with China, nobody will be looking back and saying "boy am I glad we scraped an extra $20B out of the FY 2023 budget". The best thing to do is to ensure that we retain enough of an edge that China doesn't take the swing in the first place.

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Generally a good post on a tough topic, but veers off a little at the end. My favorite analogy for helping people understand this topic, big picture, is grocery shopping.

If you heard someone complaining about how they spent too much (or not enough) on groceries, your first thought would probably be "well, for what?" Is this person a teetotaler vegetarian with plain tastes who lives out in the country with a substantial vegetable garden? In that case, $100/month might be more than enough for them to live a perfectly healthy life. But if they live in Manhattan and have 6 kids and have a weakness for fine wines and nice cuts of beef, they're going to spend well into the 4 figures a month at least, and that's just life.

So the fundamental questions are: what are we trying to do here? And are our resources, both in quantity and in how they're allocated, adequate to that task?

I think it's hard to see how the US' big picture strategy - deter Russia, and deter China, and oh yeah, Iran and North Korea too; and we need to fight terrorism; and also stop Somalian pirates if they come back; and.... - isn't underfunded. That's a lot of stuff to do across the whole planet! But there isn't likely a good way to pay for all that, as Matt says, and so adjusting our strategy is also important even as we try to get more bang for our buck in military procurement.

I do think this framework pushes back a little against Matt's argument later in the piece, though. The US actually does a decent job selling a lot of equipment to close allies - for all the justified complaints about the F-35, we're selling it to ~15 allied nations, and the final count will likely end up higher. (Canada is inching closer to being another) The reason we don't sell Ford class carriers to other countries isn't because they're expensive per se (though they are) it's because other countries do not have the same requirements to project power overseas that we do. Other countries are willing to go without carriers, or have much less capable carriers, because their interests aren't substantial enough to justify the costs - even if you cut the cost of a Ford class carrier by 75% or more, little Belgium just doesn't need one. That doesn't mean we don't, it means we have to look at our actual interests and capabilities.

The same applies to out strategic nuclear deterrent, which is also very expensive, and even our subs: a few key allies like the UK and now the Australians are involved in technology transfers, but given their location and threat sets, countries like Japan or South Korea just don't have a good reason to need nuclear powered subs. Advanced diesel/electric is just fine for their purposes. They don't need the increased cost and headache of dealing with nuclear when their subs don't need the improved range - their adversaries are fairly close!

So while "everyone else wants to buy this" is a decent heuristic for certain classes of weapons (which everyone needs) it's not necessarily applicable to all classes of weapons. It depends on what you have to do, which in turn is dependent on the size of your economy, your interests, your geographical position, your most likely threats, etc.

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Some interesting ideas here but I think a lot of this misses the fundamental problems and issues. Let's start from big picture to small:

1. Strategy - Fundamentally the primary roles of peacetime military forces are deterrence and preparing to fight future wars. The US, given our massive and global treaty commitments, needs a force structure that can accomplish this. There is obviously a lot of debate about how best to do that and each of those will come with a different price tag. So it's a mistake to talk about budget first. When any country is paying for a military, they are paying for specific military capabilities - and so the first order problem is determining what capabilities you want and/or need.

2. Budgeting and Procurement and reform - I think everyone realizes we get lower value per dollar spent than we should. This isn't just confined to military spending, but is a characteristic of most federal (and even state) spending. It costs us more to pave a mile of road, to teach a child, to provide healthcare and to provide military capability than most every other country.

So my view is that we should focus on getting more value instead of obsessing about topline budget numbers. And one way to get more value is by reforming our sclerotic federal bureaucracies. When basically every major project by any federal agency ends up mired in cost and time overruns and products that don't work, then that is a systemic problem. Even a signature high-profile program like Obamacare could not avoid sclerotic mismanagement. Addressing that problem, IMO, is critical to getting the military capabilities we need without throwing more money down the toilet.

Additionally, as I think Rabb and others mentions, we are overly-focused on technological superiority which has driven up costs and forced us to buy fewer platforms than we need. I think we ought to strip R&D from procurement - trying to invent new technologies in an acquisition contract is just bad.

3. Kill the myths - There are many myths that are frequently repeated as wisdom. The notion that aircraft carriers are no longer relevant is one highlighted in this post. Another is magical thinking about COTS solutions which has been around since I joined the military way back in the early 1990's.

On aircarft carriers, there are many significant capabilities that they provide that are simply not available anywhere else. The idea that their inability to safely operate next to the Chinese coast in a shooting war makes them obsolete is just ignorance. Nothing is invulnerable, war is not like the movies, and employment, tactics and supporting capabilities matter more than the strengths or weaknesses of any given platform. There is always going to be utility in having a mobile airfield - particularly in the Pacific where our fixed air bases would likely be destroyed or heavily damaged within the first minutes of a conflict with China. In other parts of the globe where the US doesn't have access to land-based airfields, carriers are the only game in town except for long-range bombers. Carriers are and will continue to be essential for maintain sea and air control and projecting power globally in ways no other platform can.

For COTS we've already wrung out most of the savings there. And one important factor for military hardware is ensuring the safety and reliability of components. That means you can't rely on foreign-based components for many critical systems. And since we've offshored many things to unreliable (from a national security standpoint) countries like China, you have to consider tradeoffs. Are you willing to source key components for our weapon's systems to China? Most are not because of the obvious risks.

So, as others have said, an adequate domestic industrial base that can support US military needs is important. Other countries understand this - we, apparently, do not.

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“The wars of the future will not be fought on the battlefield or at sea. They will be fought in space, or possibly on top of a very tall mountain. In either case, most of the actual fighting will be done by small robots. And as you go forth today remember always your duty is clear: To build and maintain those robots.“

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Apr 13, 2022·edited Apr 13, 2022

I mostly agreed with the general thrust of this piece, that we should get more value out of the defense spending that we already do. But I was disappointed to see Matt repeating the old myth that defense spending is somehow 'crowding out' social spending.

I like to say this a lot, but like- I invite everyone to just take a look at the US federal budget. (Sorry I couldn't find 2021). https://www.cbo.gov/publication/57170 The US spends more just on healthcare for the elderly than the entire, famous military budget. We spend 70% more on Medicaid & Medicare than the military- Social Security is close to double the military budget. Social Security, Medicare, and Medicaid together are like 3.5x it. That's not even getting into the fact that a massive chunk of the military budget is personnel spending- almost 10% of it is Tricare, which is just another healthcare program for veterans.

And the 'we spend more than x countries combined' is a non-sequitur, given that the US economy is larger than every European country combined. I've never seen anyone say 'the US spends too much on healthcare and should cut back- we spend more on healthcare than the next 10 countries combined'. It's just comparing apples and escalators.

To put it another way- in 2020 we spent 10.8% of the US budget on the military. Why is 11% too high, exactly?

All that financial dominance, being the world's reserve currency and so on, is intimately tied up in having the most powerful military. We'd see a huge run on Treasuries and the dollar if markets decided that China is more powerful than us- like, say, by invading Taiwan or Japan while we do nothing. From a fiscal POV, the military budget is a big multiplier. But to Matt's point that we could be using our spending much more efficiently (possibly on new weapons startups?), yes I agree

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I’m starting to wonder if we’ve fully recognized just how much of a paradigm-shift is happening because of the current success of the Ukrainian defense. We might be seeing the tank go the way of mounted cavalry, given how vulnerable they have proven to be to shoulder-fired missiles. And there are almost certainly other current pieces of equipment that may also prove to be just as antiquated if they get put to the test in the same way Russia’s tanks have over the last few weeks. 21st century war seems to be as different from how it was in the 20th century as 20th century war was in the 19th century.

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"Often, and in the case of the Space Launch System, NASA puts out a very detailed Request for Proposals saying exactly what it wants, and really only a tiny number of well-connected insider companies are positioned to adequately answer all the specifications of the RFP."

Yes, this is how the military does it too (at least in Afghanistan, where I have some experience with the process). The contracting officer knows what brand he wants, his budget is essentially unlimited, and he writes the RFP so that only his preferred firm can meet the specs.

There's massive space for corruption here but actually, corruption isn't necessary to produce cost overruns in this scenario. The root of the problem is that KOs have no cost control incentives at all.

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As someone who rights about defense procurement for a living (here's our report on practices through FY 2020 https://www.csis.org/analysis/defense-acquisition-trends-2021 ) this is an interesting if not unfamiliar argument. Many of the people advocating for greater budgets are also fans of OTA or buying commercial.

That said, I think there are some limits to the space analogy in some traditional arms production sectors in that space (and some other advanced tech including AI) has a mix of billionaires and companies eager to invest, even at risk of a loss. I think Matt would reject some of the core premises of the recent administration state of competition report (which has some influence from curse of bigness monopoly fear https://media.defense.gov/2022/Feb/15/2002939087/-1/-1/1/STATE-OF-COMPETITION-WITHIN-THE-DEFENSE-INDUSTRIAL-BASE.PDF?source=GovDelivery ) but I do think that it would be harder to get at the shrinking number of providers in many of the sectors discussed than it would be for space.

I think there's two big points this analysis doesn't include:

* Intellectual property and data rights. Lets say you spend a lot on a OTA for some new breakthrough system. Who is allowed to produce and do key sustainment or upgrade tasks? Just the original producer or is the government buying those rights.

* International cooperation. Protectionism is rampant in the defense sector for both good and bad reasons. Doing more with the community of allied democracies is a big Congressional lift and thus far President Biden's rhetoric has been more on the Buy America side. The U.S. would still be dominant in any plausible model, but that is one of the bruising areas of defense reform that requires both executive branch and legislative champions.

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I think that the discussion should be also on what the budget is for.

I don't know the US DOD budget but in Israel, where I am from, MOD is responsible for many activities that are practically civilian and should not be done by MOD, for example many of the operational work in the first months of COVID19.

The problem is that MOD is the only "capable" organization that can do many complicated things, but its only a result of years over years of drying the civilian ministries, so when the time comes, they cant perform as good as the MOD that gets huge budgets that they can spend in a very inefficient way, for example by using thousands of underpaid mandatory service soldiers that join every year for at least 2 years and mostly 3 years.

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The US Army never wants to do occupation and counterinsurgency. We keep doing them anyway. "Hope someone else handles the occupations" isn't good enough. To avoid occupation quagmires, we need a better plan than hope.

When America patrols against insurgents, like in Vietnam, it's deadly to us. Yet when we leave the locals to do it, like in Afghanistan, it's deadly to their country.

Is there a third way?

In the age of empires, the British used "sepoys". These were local troops, but trained by the British, and kept under British command. Because the troops were locals, they knew the language and didn't run up the British body count. Because the British commanded, the troops could be kept out of corrupt local deals to serve feuds or surrender to rebels.

The sepoys weren't magic. (See the Indian Mutiny, or stupid British strategies in Afghanistan.) But the sepoys were a lot better, person for person, than either locally commanded forces (feuds and corruption) or all-British forces (politically expensive and culturally ignorant).

But historically, sepoys go with colonialism and empire. I'd like to think today's America wouldn't end up with de facto colonies. Still, you'd get nervous if America started enlisting foreigners, under American command, to control occupied foreign lands.

Whether it's sepoys or something else, "hope we can avoid another insurgency" is an answer that keeps failing. We need a better one.

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Mr. Yglesias is too polite to call corruption by its name, but that is what is weakening the US military and robbing the taxpayers. When ex-Raytheon employees run the Defense Department and one procurement disaster follows another, there is no other explanation. One cannot fix a problem until it is acknowledged, so timid commentary like this article is a waste of time. The reason the defense budget keeps going up is that the arms makers own the Congress. We have a coin-operated government, and the arms makers are reaping an excellent return on their political investments.

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<i>Focus on the fact that most countries would rather ally with the United States</i>

Don’t worry, I’m sure that by 2028 the second Trump administration will have convinced them all of the need to quickly make other plans.

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How do you think that the US should not defend Europe from Russia but in the same paragraph argue for the expansion of NATO? Those are incompatible. If Russia attacks Poland we are obligated to come to their defense if they ask for it.

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Matt, you're 100% right about how inefficiently we spend our defense money. I'm a soldier in the army and we have an incredible amount of contracted produced equipment that either is completely useless for how we actually fight or is unreliable and breaks all the time. We stick it in a closet and only pull it out to inventory it. Once a colonel came to visit my unit and interviewed us about these new PFDs the army just fielded (basically fancy Samsung phones) and he asked people what they thought about them. A private raised his hand and said "well, sir, they're not waterproof and it rains all the time here." The colonel responded "damn we never even thought of that." We spend our defense money on a lot of dumb stuff.

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