Defense spending and the declining 'bang' for the buck
Does the US really need to spend more money on an M1 tank that won't be a part of the next war?
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The maker of the M1 Abrams is General Dynamics. When the Pentagon announced that it would like to stop spending money on the M1, the company was justifiably upset. It had spent millions to buy key members of Congress. It expected to get a good return on its investment.
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Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning (dailyreckoning.com).
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For its part, the Pentagon thought it could save a little money by putting off refurbishment of the tanks for a few years. This would save $3 billion, admittedly chicken feed, but it would also give it time to redesign the beast for what it imagines might be future combat.
But lobbyists got on the case, apparently timing their campaign donations to correspond with key decision points. Lydia Mulvany reports on what happened next:
“After putting the tank money back in the budget then, both the House and Senate Armed Services Committees have authorized it again this year, allotting $181 million in the House and $91 million in the Senate. If the company and its supporters prevail, the Army will refurbish what Army chief of staff Ray Odierno described in a February hearing as “280 tanks that we simply do not need.”
Mr. Odiero says the M1 is a relic of an earlier age of warfare. It would have been great — maybe — at Kursk. But when the enemy has no tanks, it is merely an expensive — and vulnerable — pile of metal.
Said Mr. Odiero at a February hearing:
“We don’t believe we’ll ever see a straight conventional conflict again in the future,” he said.
Which is why the M1 is perfect. At least to the Law of Declining Marginal Utility.
It allows the military industry to spend billions while actually making itself less able to fight the wars of the future.
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