Psst: wanna buy a Grand Bargain?

    By Flavius on Thu, 11/24/2011 - 12:46am |

    On NPR tonight, commentators were saying the $40 billion cut back in the Department of Defense's 2013 budget would require the planning to start soon. Wrong. It will  require immediate actions. Like cancelling contracts next month.

    To save $40 billion in 2013 the DOD has got to not buy things. Those not-bought things will be things that were supposed to have been built either under contracts already signed or ones in the late stages of procurement

    Procurement takes a long time  because of the need to do it competitively: announce the need, issue preliminary specs, adjust them to clarify industry's questions, issue request-for-proposals, review the submissions, invite the top contenders to submit best-and-finals, select the winner, negotiate a contract.

    Because of the length of that cycle, were the DOD to stop issuing requests for proposals next June, it would create zero contribution to 2013's required $40 billion savings. That $40 billion has to come from aborting projects either under contract today or well along in the procurement.

    To repeat: to save $40 billion in 2013 the DOD has to stop signing contracts today. And that will hurt.

    When Boehner and Obama have their next "let's shut down the Government" rain  dance, it won't repeat last summer's one sided fiasco. They will be talking in the context of a blizzard of DOD slow-down or stop orders and of congressmen's pleas to stop them.

    Fasten your seat belts.

    Comments

    So, you never answered my question. Is your view that Democrats should now be 100% behind protecting all military spending?


    by kgb999 on Fri, 11/25/2011 - 3:51am

    I do not see that message in this blog at all KGB.

    I think the point is that if 40 billion is taken out of the DOD budget, the contractors will start going nuts immediately and begin yelling at the repubs!


    by Richard Day on Fri, 11/25/2011 - 11:37am

    Money spent on defense procurements does create jobs.  Not in the most efficient way and,  IMO, in a way that is ultimately counter productive. But, canceling $40bn in procurements will have an immediate affect of costing jobs. It will be an anti-stimulus. People will suffer and people will scream.
     I very much doubt that the politicians will decide that the company that doesn't get to build another fifty million dollar jet fighter should instead be given a contract to build fifty million dollars worth of wind generators. They will instead hype the old saw of Democrats being soft on defense and unrealistic about the world. Concurrently there will be more hyping of serious threats we face and more push to bomb somebody, for Christ sakes. This campaign already has a high percentage of support.

     We are way deep in this MIC shit and couldn't start to get out of it during good times. It will be harder and filled with tangental risks to start getting out of it now, but we had better do it. Again, just my opinion.


    by A Guy Called LULU on Fri, 11/25/2011 - 12:25pm

    I also don't see that message, specifically, in this blog ... but what I don't see in this blog is anything to specifically indicate this is not the case either. Hence I posed a question rather than engage a position that may not be the one Flavius is advancing.

    Notice, in my comment I referenced an *earlier* question that Flavius has thus far refused to answer. This original question was posed in response to this comment on the Patty Murray thread this post is a follow-up to. Flav took the time to answer every other commenter on the thread ... well after I posted my question ... so, clearly, he's seen it. It is difficult to conclude anything other than Flavius would prefer not to be forthcoming about what he's really advocating here. Almost as if he is trying to avoid allowing those who may disagree to engage his position by refusing to be clear.

     


    by kgb999 on Fri, 11/25/2011 - 3:31pm

    I'd taken up enough space and decided to just provide some facts., But since you asked.......

    The DOD budget is a cancer, and  over the next decade  Panettta's existing cuts plus these additional ones aren't nearly enough to deal with the distortion of values of such an disproportionate and dangerous waste of assets.

    Counterintuitively there' s a danger that the first couple of years could be cut stupidly.  DOD new program procurement costs follow the 80% learning curve.If the first  Flavbird costs $100 million , the second costs 80M the fourth , 64, the eighth,, 49 , the 16th, 40 the 32nd , 32 , the 64th , 25. the 128th ,18, the 256 costs 15., the 512th, costs 12 . 

    If the object is to cut DOD costs in 2013,14,15 an easy target will be these start-up  programs: just build the first two planes that cost $180K and abort the plan to go down the curve to the point where they're down to $12M a copy . Or less.

    That's the wrong answer.

     Assuming we actually need a Flavbird because it's predecessor is running on fumes we'd be just setting ourselves up for the hockey stick effect a few years into the decade when we'll have no choice but to start at the top of the curve with Son of Flavbird.

    So if you read  think tank moans that we can't cut the DOD in the short run don't assume it's the usual special pleading. By accident this time it  might actually  make sense.

    The corollary is that if the DOD shrinks slowly in the near term it ought to go down like a stone in the well when the Flavbird costs $12M instead of  $100..

    If like me , you think the deficit hysteria is, hysterical but that we shouldn't plan to generate excessive deficit forever, DOD  cuts in the last half of the current decade is fine

    And that nessary  cut in the Defense industry employment  needn't exacerbate our current unemployment.

    Like St. Augustine, the DOD needs to become virtuous. But not yet..

      

     


    by Flavius on Fri, 11/25/2011 - 8:56pm

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