Boeing, United Technologies, Lockheed Martin, Raytheon, Northup Grumman and others all have factories in full capacity. Trump is proposing a 9.4 percent increase in defense spending which amounts to an additional $54 billion. Insiders point this bump to be correlated to cuts in the Pentagon back in 2011. We have all read the countless statistics of America’s military spending and how it outshines the rest of the world by magnitudes. The focus on military strength could remind historians of Ashikaga Japan, which led to domestic issues. To make up for the increased spending, Trump has proposed to cut down on other “non-essential” government spending with a focus on entitlements. The question in budgets is always about allocation and within the largest subsection of the budget that is military spending how it is allocated will be important. Spending into the military reaches the economy wide and deep increasing sales of basic materials that include steel, employment of industrial and other engineers, researchers, logisticians, and more. Now is a time with such a great influx of money to watch out for rent-seekers or as Franklin D. Roosevelt would warn us from his State of the Union address in 1941, “beware of that small group of selfish men who would clip the wings of the American eagle in order to feather their own nests.” Costs should be managed and not be run out of control and competition amongst industries should be supported and lobbying to consolidate market share should be ignored from regulators. The results from a change in spending however will be hard to observe as some cost-savers cannot particularly be measured easily. The European Reassurance Initiative has voiced their concerns repeatedly over Russian aggression and are strategizing for a deterrence policy. A bigger military with a focus on protected communication, long range missile capabilities, and submarines can in theory deter an enemy from aggression. Hot spots for the U.S. globally are in the South China Sea, Eastern Europe, and the Middle East especially around the Mediterranean Sea.
China has the world’s second largest military and after posting military budget increases in the double digits they plan to increase their budget for the upcoming year by 7 percent. This number can be translated in a number of ways, and the hard part is knowing the true motives. One reason may be that as their spending increased the percentage growth is going to flat line and another may be that they are allocating more into private industries especially for other military capabilities such as cyber warfare which would explain their recent interest in supporting semiconductor companies and reasserting their control over Taiwan that produces high-tech equipment.
The U.S. currently has the most advanced technology, capability, aircraft carrier, fighter jets, heavy bombers, unmanned aircrafts, and more. Using them in a battlefield is another question as well as justifying the spending along with the other needs of the nation. ‘Mad Dog’ Mattis is confident looking forward.