USA Defence Budget Realities

Kevin Brooks wrote:



You want to debate the morality of weapons development, find somebody
else. The issue here was the impact of defense spending upon the GDP.


The point is complex but connected. lets say you use your bicycle to
deliver a load of bolt cutters to your local bicycle thieves and
therefore have to spend your income from delivering the boltcutters on a
better lock. you can work very hard but never live any better.

Vince

Vince Brannigan wrote:

:Ceesco wrote:
:The trick is to spend the minimum since every dollar you
:spend means less production in the future. The more we spend on the
:military, the less the GDP.
:
: What part of "spending as a percentage of GDP" do you clearly not get?
:
:What part of current verus future GDP did you not get? Every dollar
:spend on the military means a lwoer GDP in the future.

As does every dollar spent on consumer goods. Of course, that means
that all we should be producing is equipment to produce more equipment
to produce things, by your reasoning. How long do you think THAT can
sustain itself?

: Want to take a guess at Soviet GDP figures and the percentage spent on
: military applications?
:
:My sources tell me it approach 30 % but htat all analysis of Soviet GDP
:are complicated by the lack of a national accounts system/

In numbers it was lower than that, but once you take into account that
the highest quality portions of their economy were dedicated to
defense spending, the number you give is probably not far wrong.

--
"Millions for defense, but not one cent for tribute."
-- Charles Pinckney

Fred J. McCall wrote:
Vince Brannigan wrote:

:Ceesco wrote:
:The trick is to spend the minimum since every dollar you
:spend means less production in the future. The more we spend on the
:military, the less the GDP.
:
: What part of "spending as a percentage of GDP" do you clearly not get?
:
:What part of current verus future GDP did you not get? Every dollar
:spend on the military means a lwoer GDP in the future.

As does every dollar spent on consumer goods.

not on durable goods, nor on the facilties needed to produce ccosnnumer
goods and services. Its not a very complicated concept. The
relationship of wealth and consumption is the heart or economics

military productio9n is esentially "current consumption" either it
crowds out current civilain consumption (guns v butter) ro it crowds out
future consumption (investment verusus consumption


Vince



Of course, that means
that all we should be producing is equipment to produce more equipment
to produce things, by your reasoning. How long do you think THAT can
sustain itself?

: Want to take a guess at Soviet GDP figures and the percentage spent on
: military applications?
:
:My sources tell me it approach 30 % but htat all analysis of Soviet GDP
:are complicated by the lack of a national accounts system/

In numbers it was lower than that, but once you take into account that
the highest quality portions of their economy were dedicated to
defense spending, the number you give is probably not far wrong.

Vince Brannigan wrote in message ...
Kevin Brooks wrote:
Vince Brannigan wrote in message ...

Fred J. McCall wrote:


Steven James Forsberg wrote:

: And, to use a favorite tax argument, if the US economy grows then
:you can have a smaller percentage of the economy and still have growth in
:'real' terms. The diminishing of military budget in terms of percentage of
:GDP might represent the growth of the budget more than any kind of disarmament.

It might, but it doesn't.




The military budget is like buying bicycle locks instead of a better
bicycle. Military spenidng is un productive but a certian amount is
necessary. .


Unproductive? Seems to keep a lot of folks working,

you can keep folks "working" as prison guards, but it doesnt make crime
"productive" Producte work produces new goods, service and human
capital that supports future productivity. Now being 'unproductive"
does not in and of itself make an expenditure wrong. as adam smith
said the whole end of society is consumption, productivity is a means ot
an end.

GDP is the sum of products and *services*; those prison guards provide
a required service, and their contribution is indeed reflected in the
GDP.


and new products
rolling off the assembly lines, many of which are sold to other
customer nations, generating foreign income (which contributes to the
GDP, if you had not noticed).

Selling weapons overses is not unproductive in terms of the GDP.
howeverif it was a good busness decison, comapnies woudl fund the R& D
themselves. Tehy dont becsue it sint. it does reduce the loss but it
does nto turn it into a productive investment.

The major reason they don't is that they can't *afford* that kind of
capital investment--only governments can. And governements do so
because (a) they need the service, and (b) they realize they will
receive some degree of return on the investment in the long run.



The trick is to spend the minimum since every dollar you

spend means less production in the future. The more we spend on the
military, the less the GDP.


Not so fast. We spend X dollars developing weapons system Z, then we
sell 1000 of Z to nation Y--that means you *add* to the GDP.


Not on net.. you only add to the GDP if tge investment iws greater than
the opportunity cost. its liek borrowing money at 10 percent to ivest
at 5 percent. you dont get to count just the profit.

I would strongly suspect that the F-16, which has sold less than half
its total production to the USAF (the remainder going to foreign
sales), and then seen a significant number of its own early build
aircraft resold or leased to other nations, would likely come out on
the plus side, especially when the attendant services, rebuilds, and
modifications are included.


if weapons exports were a good business, comanies would and used to go
into the business. they are not a very good busness anymore. which is
why companies rely on start up purchases by government ot fund the
overhead cost.

They do so because the development costs are too high and thee risk
too great for any entity other than a government to be able to handle
it.


It has cost the USA over 10 Billion dollars in development costs for the
V-22. At the moment its as productive as a non working bicycle lock.
Even if it works it is unclear that the investment will ever be recoved
in any way shape or form.

Trust you to bring the Osprey into the mix. Are you prepared to bet
your life's savings that the civil version built by AB won't be a
moneymaker? And BTW, it has flown, and it does have firm orders on the
books.

Brooks



Vince

Kevin Brooks wrote:
Vince Brannigan wrote in message ...

Kevin Brooks wrote:



You want to debate the morality of weapons development, find somebody
else. The issue here was the impact of defense spending upon the GDP.


The point is complex but connected. lets say you use your bicycle to
deliver a load of bolt cutters to your local bicycle thieves and
therefore have to spend your income from delivering the boltcutters on a
better lock. you can work very hard but never live any better.

Vince


Stop wandering away from the argument at hand, which was not about
bikes or boltcutters, but about the GDP, which, contrary to your
claim, can be contributed to by defense expenditure. Defense
expenditure is what brought you this medium to debate the issue
within, for gosh sakes.

nonsense The same money spent in the civilian side is simply much more
productive. If command economies worked to increase productivity,
communism would work. The DOD is a command economy. Command economies
are very good ways to organize consumption of public goods. e.g.
national parks or the navy. There is simply no evidence that they are
equally effective at increasing productivity. As I pointed out the Arpa
program was simply a way of funneling money into a civilian research
infrastructure.

If military psendign was productive peopel would orgianze comapneis and
go into the business. its isnt, primarily becsue so much of the money
is inevitably spent on useless activites.

Anytine you take stored wealth and convert it into "something" you
technically increase the GDP by the expenditure. but unlesss the
expenditure creates somethign that produces a further streaem of goods
and services, it is merely consumption.


Vince



Vince

Kevin Brooks wrote:
Vince Brannigan wrote in message ...

Kevin Brooks wrote:

Vince Brannigan wrote in message ...


Fred J. McCall wrote:



Steven James Forsberg wrote:

: And, to use a favorite tax argument, if the US economy grows then
:you can have a smaller percentage of the economy and still have growth in
:'real' terms. The diminishing of military budget in terms of percentage of
:GDP might represent the growth of the budget more than any kind of disarmament.

It might, but it doesn't.




The military budget is like buying bicycle locks instead of a better
bicycle. Military spenidng is un productive but a certian amount is
necessary. .


Unproductive? Seems to keep a lot of folks working,

you can keep folks "working" as prison guards, but it doesnt make crime
"productive" Producte work produces new goods, service and human
capital that supports future productivity. Now being 'unproductive"
does not in and of itself make an expenditure wrong. as adam smith
said the whole end of society is consumption, productivity is a means ot
an end.


GDP is the sum of products and *services*; those prison guards provide
a required service, and their contribution is indeed reflected in the
GDP.

so is the value of owner occupied housing

OWNER OCCUPIED: A building or residence (especially a house) that
is occupied or lived in by those who have legal ownership. The direct
contrast to owner occupied is a rental unit. This term tends to surface
most often in the study of economics when calculating Gross Domestic
Product (GDP). In particular, the estimated rent on owner occupied
housing is calculated by the folks at the Bureau of Economic Analysis
and included in value of GDP.

http://www.amosweb.com/cgi-bin/gls_s...owner+occupied

there is a difference however between

1) the contribution of building a house (productive investment)

2) living in the house. (consumption of the stream of services
produced by the asset)

3) burning down the house and rebuilding it.

To use a famous example. If I throw a brick through a window and a
glazier repairs it for $200 that $200 goes into the GDP, but we are no
better off since we lost the "wealth" Throwing bricks through windows
is an unproductive act even though it increases the GDP

so some activities in the GDP are investment,(increae future GDP) some
are consumption ( no affect on future gdp) and some are stupid (reduce
future GDP)


Vince






Trust you to bring the Osprey into the mix. Are you prepared to bet
your life's savings that the civil version built by AB won't be a
moneymaker? And BTW, it has flown, and it does have firm orders on the
books.

12 billion in subsidized investment would normally produce a sure thing.
be my guest and invest in "osprey civil spin off" if you like

The maryland lottery is a better investment.

Vince

Vince Brannigan wrote in message ...
Kevin Brooks wrote:
Vince Brannigan wrote in message ...

Kevin Brooks wrote:

Vince Brannigan wrote in message ...


Fred J. McCall wrote:



Steven James Forsberg wrote:

: And, to use a favorite tax argument, if the US economy grows then
:you can have a smaller percentage of the economy and still have growth in
:'real' terms. The diminishing of military budget in terms of percentage of
:GDP might represent the growth of the budget more than any kind of disarmament.

It might, but it doesn't.




The military budget is like buying bicycle locks instead of a better
bicycle. Military spenidng is un productive but a certian amount is
necessary. .


Unproductive? Seems to keep a lot of folks working,

you can keep folks "working" as prison guards, but it doesnt make crime
"productive" Producte work produces new goods, service and human
capital that supports future productivity. Now being 'unproductive"
does not in and of itself make an expenditure wrong. as adam smith
said the whole end of society is consumption, productivity is a means ot
an end.


GDP is the sum of products and *services*; those prison guards provide
a required service, and their contribution is indeed reflected in the
GDP.

so is the value of owner occupied housing

No. Since we always have to remind Lawyers & pychologists
that Prison guards don't live in houses, they live in the Big House,
which don't even have backdoors, so they be occupied,
since they're on work release.





OWNER OCCUPIED: A building or residence (especially a house) that
is occupied or lived in by those who have legal ownership. The direct
contrast to owner occupied is a rental unit. This term tends to surface
most often in the study of economics when calculating Gross Domestic
Product (GDP). In particular, the estimated rent on owner occupied
housing is calculated by the folks at the Bureau of Economic Analysis
and included in value of GDP.

http://www.amosweb.com/cgi-bin/gls_s...owner+occupied

there is a difference however between

1) the contribution of building a house (productive investment)

2) living in the house. (consumption of the stream of services
produced by the asset)

3) burning down the house and rebuilding it.

To use a famous example. If I throw a brick through a window and a
glazier repairs it for $200 that $200 goes into the GDP, but we are no
better off since we lost the "wealth" Throwing bricks through windows
is an unproductive act even though it increases the GDP

Throwing bricks through the *right* window is
an enormously productive and profitable buisness.
But nobody ever expected anti-gun Lawyers,
to know anything about either glass, bullets,
or intelligence.

In message , Kevin
Brooks writes
Vince Brannigan wrote in message
...
Not on net.. you only add to the GDP if tge investment iws greater than
the opportunity cost. its liek borrowing money at 10 percent to ivest
at 5 percent. you dont get to count just the profit.

I would strongly suspect that the F-16, which has sold less than half
its total production to the USAF (the remainder going to foreign
sales), and then seen a significant number of its own early build
aircraft resold or leased to other nations, would likely come out on
the plus side, especially when the attendant services, rebuilds, and
modifications are included.

That's one example. How many F-101s, F-102s, F-105s or F-106s were
exported? (The Lightweight Fighter Mafia would claim that the USAF had
to be forced to buy F-16s at gunpoint, but then I disagree with them
too)

Also, the "export sale" argument is open to some argument. US FMS is a
killer in the export market, simply because the US is often willing to
effectively _pay_ customers to accept platforms (that will then be tied
to US suppliers for spares, support and reloads).

It has cost the USA over 10 Billion dollars in development costs for the
V-22. At the moment its as productive as a non working bicycle lock.
Even if it works it is unclear that the investment will ever be recoved
in any way shape or form.

Trust you to bring the Osprey into the mix. Are you prepared to bet
your life's savings that the civil version built by AB won't be a
moneymaker?

My own gut feeling is that it won't succeed in the US, and will be
marginal elsewhere.

What does it do in the civil sector that beats a helo for VTOL or a
puddlejumper for STOVL? When "real performance on a hot day" hits
payload needs, I'm not sure the Osprey delivers (to say nothing of
casual short-notice air travel over city centres... is that safe?)

And BTW, it has flown, and it does have firm orders on the
books.

Thirty years ago, so did Concorde. Everything worked technically, but
there was no market pull for mass production. There just aren't that
many people who will pay to halve their trans-Atlantic flight time, now
or then, to justify more than a few prototypes..

--
When you have to kill a man, it costs nothing to be polite.
W S Churchill

Paul J. Adam