The High Price of the U.S. Military-Industrial-Congressional Complex

The High Price of the U.S. Military-Industrial-Congressional Complex

America simply cannot produce enough military hardware fast enough to match China. This must change.


During World War II, America churned out an incredible 297,000 aircraft. In that same conflict, the USS Essex aircraft carrier was ordered in February of 1940. Twenty-two additional Essex carriers were launched by December 1945. In other words, in a mere seventy months, twenty-two fleet carriers were launched. This is roughly equal to one Essex heavy fleet carrier sliding into the water every three and a half months. This does not count 122 escort carriers and nine light fleet carriers of the Independence class. In total, this amounts to 131 escort and light fleet carriers that hit the water in seventy months, for a total of 1.9 smaller aircraft carriers per month.

Fast-forward to modern times. The USS Gerald Ford aircraft carrier, America’s largest and most advanced such time, took from 2005 to 2017 to build. Relatedly, the United States cannot now build two stealthy Virginia-class submarines in a year.


Contrast this with the stock performance of two of our five prime defense contractors. Since 2000, Northrop Grumman and Lockheed Martin’s share prices have both surged more than 2,200 percent.

Since the end of the Cold War, the Pentagon has invested in technology that limits casualties but does not decrease the cost of manpower. It has spent heavily on expensive and scarce technologies for first-strike offensives, largely ignoring the effect of such expenditures on its ability to fund wars and secure supply chains. But now, the U.S.-China rivalry and federal spending/debt are forcing Congress to confront that it needs to reform the Pentagon and its force structure. The challenge is to deal with an away game whereby China can act quickly and has built up formidable capabilities in a short time frame.

Consider some of the following details.

The U.S. Department of Veterans Affairs has an annual budget request of $325 billion. This number is well above the entirely of China’s unreliable official, and higher Western, estimates of its annual defense budget. Nevertheless, these resources have allowed China to build the world’s largest standing navy and army, the world’s third-largest nuclear weapons stockpile, the world’s second-largest air force with 2,500 aircraft. In addition, there are 1,350 ballistic and cruise missiles aimed at Taiwan. And keep in mind that China keeps the vast majority of these assets at home, while America’s are spread around the world.

Given our budget issues and China’s lower-cost defense structure, America raising the defense/national security budget simply isn’t enough for feasible. What the United States needs is to urgently increase the productivity and effectiveness of our defense establishment. To achieve victory, a government must have both the economic power to finance conflicts and the political control to raise funds and mobilize its citizenry.

Quantity, Quality, Cost, Speed

The U.S.-China rivalry demands that America balance, quantity and quality as well as speed and cost. In writing for Foreign Affairs, Jacquelyn Schnieder recently highlighted how America is paying big bucks but getting the short end of the stick.

Whereas insurgents produced cheap improvised explosive devices, rocket-propelled grenades, and mortars, the United States launched $150,000 Hellfire missiles from $30 million remotely piloted drones, dropped $25,000 precision munitions from $75 million stealth aircraft and spent $45 billion on a phalanx of armored personnel carriers—linking all these systems with satellites at the cost of hundreds of millions to billions of dollars. And even as the number of U.S. military members shrank, the average cost per service member for the transformed elite all-volunteer force rose by more than 60 percent between 2000 and 2012.

The Pentagon’s sclerotic process for acquiring new technology, bureaucratic risk avoidance, and long lead times for “the next big thing” means that each technological improvement comes at a high cost. Consider the U.S. Navy’s Zumwalt-class destroyer program, for example. It promised thirty-two stealth destroyers with revolutionary advances in guns, propulsion, and networks. Instead, after spending over $22 billion, cost overruns forced the navy to cut the program to a mere three destroyers, all of which have serious maintenance problems. While no one meant to buy three destroyers for $22 billion, America ended up in a paradox: emerging technologies had made weapons so expensive that the benefit of better quality could not make up for the decline in quantity,

America needs to shift gears by following some of China’s lower-cost approaches, such as cheaper autonomous sensors, communications relays, munitions, and decoys. This will create confusion, slow conflict, and increase deterrence and the long-term costs to adversaries.

The Enduring Strategic Importance of the Eurasian Rimland

Simultaneously, China is tightening its grip on the Eurasian heartland, stretching from Asia through Russia into Eastern Europe. To counter China, the renowned Yale strategist Nicholas Spykman highlighted in 1942 the need to control the Eurasian rimland. He added, “Who controls the rimland, rules Eurasia; who rules Eurasia controls the destinies of the world.”

This requires that America, while helping Ukraine, focuses most of its resources on the rimland of Eurasia through sea and air power as well as intelligence capabilities. We need to remember that America has always been, and must remain, a powerful maritime and Pacific power.

Here is one idea that would lower shipbuilding costs, project hard power in the Pacific, and strengthen our alliance with treaty ally the Republic of the Philippines: follow up on the recent investment by private equity firm Cerberus in a shipyard in the Philippines near the South China Sea. Forming a consortium with the Philippines, America, Australia, Japan, and South Korea to scale up to a world-class, cost-competitive, shipbuilding services is a feasible yet effective option.

A foreign policy agenda that couples initiatives with regional allies, along with resources for the Pentagon with defense budget restructuring and reform, is a message that a clear majority of Americans will support enthusiastically.

Carl Delfeld is a senior fellow at the Hay Seward Economic Security Council, publisher of the Independent Republican, and was U.S. Representative to the Asian Development Bank. His latest book is Power Rivals: America and China’s Superpower Struggle.

Image: Unsplash.