Defense Budget

 Defense Budget

Foreign Aid

Republican Member of the House of Representatives from Tennessee, Tim Burchett, said he opposes funding Ukraine and other items in the bipartisan budget deal now directed into three lots for voting. I focus on him because he is typical of many.

Representative Burchett wasn’t talking today about his belief that the US Department of Defence is hiding information about UFOs. No, he believes that the Military Industrial Complex is driving the war in Ukraine. He is correct; much of the Ukraine and other defense funding is for weapon systems — aircraft, missiles, and ammunition made in America. That’s not bad because it means Americans are working.

The true problem is that America’s defense industry capability and capacity have diminished to a critical low level. A healthy defense industry advances technology that ultimately ends up in the private sector, such as the Internet. 

Instead of drudging up pat answers from the past, the House of Representatives must research and understand the actual competitive situation. There is plenty of research to share and to understand.

Here is what the National Institute of Standards and Technology says.

“What is the current state of manufacturing in the US?

The U.S. is ranked ninth in output per hour among 142 countries using data from the Conference Board. In 2021, Manufacturing total factor productivity was 3.4 % above its 2005 level. In 2021, durable goods was 8.7 % above its 2005 level. In 2021, nondurable goods was 1.2 % below its 2005 level.”

My former employer, PriceWaterhouseCoopers, sounds bullish.

“US manufacturing is undergoing tremendous transformation. As companies rebound from the global pandemic, they’re facing challenges on numerous fronts, including measuring and reducing greenhouse gas emissions footprints, enlisting and retaining talent, managing disruptions in supply chain, reinventing their business model, and protecting operations and customers from cybersecurity attacks — to name just a few. We believe that these trends will likely intensify in 2024 and that manufacturers of many stripes may need to increasingly adapt to compete.

Still, US manufacturing also seems on the cusp of a renaissance. The nation’s becoming a more viable and attractive location for onshoring and nearshoring by both US and foreign-inbounding manufacturers. Indeed, many manufacturers are rethinking their global supply chain footprints to make them more resilient and durable. Additionally, the sector is redoubling efforts to recalibrate business models, particularly through the adoption of digital technologies across the overall business from supply chains to operations to the customer experience.”