If you've never seen the DOD contracts page [1] published daily, it's worth a look. The numbers, as you'd expect, are eye popping. The military industrial complex is chugging along nicely.
The DOD has to spend $2.3 billion dollars a day for every day of the year. That's $1.6 million per minute, 24 hours a day.
How can they possibly spend that much? The daily contracts page shows you a good chunk of it. And that's just for external expenses - not counting the costs of 1.4 million active service members and their infrastructure and equipment.
So, honestly? I'm not super surprised they might have issues keeping track of all that money.
What exactly was eye popping? I took a quick look, and while the numbers are large, I don't have a sense they are larger than they should be. The first for 15-Nov is a contract for roofing for the Army for $99MM. A number of firms are competing for that, and none of these firms sounds like "the military industrial complex". One is Roofing Resources from Pennsylvania. Its page states that it is "certified women-owned small business" [1]. Do you find anything nefarious with that?
From what I remember when I read up on this last time, the problem is mostly with the salary and pension system that has organically grown to some ridiculous complexity.
> awarded … for fielding of latticed mesh network to additional space surveillance setwork sites, implementing an unpriced change order definitization action
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.
Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.
In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.
Today, the solitary inventor, tinkering in his shop, has been over shadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.
The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.
Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.
It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system-ever aiming toward the supreme goals of our free society.
Pretty amazing that the military industrial complex was of sufficient importance to him that he used his farewell address to warn against it. And now it is just treated as an absolute necessity never to be scrutinized.
I often wonder if spending the money is the point - simply to say “The USA spends more than the next 10 countries combined” with no consideration for whether it is getting more value for the money. Like a startup, could other countries simply be getting significantly more value for their money and so the effective gap isn’t as large as the pure numbers suggest?
It comes to mind how the Pentagon running out of ammunition in recent years so to the Russian invasion of Ukraine and US donations.
Its just Natural. The World is much more complex and ever changing, than the chimp troupe has capacities to react to it all.
When you look at Nature do you start asking why do we "need" blue whales or redwood trees? No one "needs" them but they emerge anyhow.
We chimps (mysteriously) love to believe we are in control of nature and what emerges out of it. And time and again the universe takes a gigantic shit on that belief. See Theory of Bounded Rationality/Illusion of Control or read Jurassic Park.
Its also why we see monopolies emerge in every sector of the Economy inspite of all kinds of speech making, laws and govt depts to "control" things.
If you go look at the Annual Report of your favorite monopoly, you will find hundreds if not thousands of subsidiaries/factories/offices around the planet to manage their empire. No External Auditor visits each of those sites cause its just not possible within a reporting period. So every report has a large warning - hey man this our best guess about whats going on in the 10% of the sites we had time to visit - don't sue us.
Don't fall for the notion that people have perfect control over complex ever changing systems. It will just lead to misunderstandings and confusion.
It's absolutely necessary. And we do need to scrutinize it. It's unhealthy to have such deep consolidation and little competition.
Plus our shipbuilding hadn't been the best, and our shipbuilders basically depend on defense contracts to survive instead of building warships as side gigs. Definitely areas where we need to do improvement.
We also need production of shells to support Ukraine and our Europeans allies had been underspending for decades at this point.
> It comes to mind how the Pentagon running out of ammunition in recent years so to the Russian invasion of Ukraine and US donations.
This is due to differences in doctrine and force structure. The Ukrainian military burns artillery ammunition at a far higher rate than the US military ever would because the US military does not use a lot of artillery. You don’t need a lot of ammunition of a type you’ll never use much.
Spending money is the point, notice how defense contractors set up shop in key congressional districts, I believe that the US could maintain the same capabilities with a significant discount
I think Ukraine is a good value war for the US though, besides the issue of sending them outdated munitions, we get to cripple a geopolitical rival sacrificing other countries soldiers
> Pretty amazing that the military industrial complex was of sufficient importance to him that he used his farewell address to warn against it. And now it is just treated as an absolute necessity never to be scrutinized.
You completely misunderstand the purpose of the speech.
The speech is an acknowledgement that it was necessary due to the changing nature of warfare and geopolitics [0], but at the same time warning that it we should be vigilant about not allowing government to be captured by it.
The same way the banking or tech industries are important and necessary, but shouldn't be allowed to directly further their own interests by setting government policy, but with additional moral gravity given the nature of the military.
[0] this was an era where military weaponry was becoming sophisticated enough that you couldn't just e.g. convert civilian car factories to produce tanks anymore, and you wouldn't have time to do it either, because the ICBMs and long range bombers on the horizon removed the invulnerability of the US mainland. Sitting tight to build up a military over the course of multiple years as was the case during WWII was no longer an option, so combined with the threat of the Soviet Union it was obvious that the US would need to maintain a large standing military and the accompanying industries for the first time in it's history. It was a novel, necessary, and nonetheless dangerous development, and that's what he was trying to get across.
> It comes to mind how the Pentagon running out of ammunition in recent years so to the Russian invasion of Ukraine and US donations.
That’s because the munitions we spend most of our money in isn’t going to Ukraine. The stuff we would use against Russia would be wiping cities off the map from thousands of miles away. The things we gave Ukraine are intentionally limited in range and power to prevent it from escalating beyond a regional conflict (aka stuff that can’t strike important targets inside Russia).
The military industrial complex is a cesspit of squandered money, but it has not corrupted US research or society the way Eisenhower warned about. I guess "we must beware the rise of incompetent generals and defense contractors who will waste taxpayer money on sci-fi boondoggles" doesn't have the same ring.
The idea that the US goes to war primarily to satisfy Raytheon stockholders is almost as brainless as saying it's the Zionist lobby: why struggle with thinking about a complex problem when you can conjure a simple boogeyman?
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.
—-
A old soldier who was horrified at the cost of war, but keenly and sadly aware of the necessity of preparation and defense.
Ryan McBeth says existence of a "military industrial complex" is false and has not been true since 1993. I like how he notes Procter & Gamble makes more revenue than the top 5 defense contractors combined.
If Ryan McBeth defines MIC as just the defense companies, or its existence being conditioned on these companies having greater official revenues than Procter & Gamble, then he either misunderstands the concept, or he is (why?) trying to spread some weak argument for an idea that U.S. does not have an MIC, which is quite comical.
MIC is not just the defense companies, read the name again - it' the complex made of industry and the military. And Eisenhower's point in warning against it is not about revenue of the industry part, but about influence of the whole complex on major decisions.
In 1990's there was a short dip in funding, but since 2000's, its growth caught back on, and it's getting close to a trillion dollars a year. That much money chases a lot of constituency and a lot of power. Millions of people are dependent on it.
I didn’t watch the video but Lockheed Martin has 60 billion revenue per year from defense contracts, PG has 80 or so?
Northrop has 30 so these two are already over PG. Or am I missing something?
Yeah, but the government is in charge. After the cold war, there was an event known as the "last supper" which involves the government telling military contractors that the government thanks them for their service but they are no longer needed.
I would be more worried about Disney and Apple and their unwarranted influence.
Also the complexity isn't all tax breaks and loopholes. Much of it comes from the need to precisely specify things.
I remember several times when in my tax classes in law school looking at the history of complicated provisions and finding they started out as short and simple provisions whose meaning was obvious to anyone with common sense.
But then people would find ambiguities that could give them a favorable tax result. There would be a court fight over it, and eventually the provision would be change to be more precise. And so what had been short and simple because longer and more complicated.
I don't remember all the details (law school was 30+ years ago and afterwards I decided I'd rather go back to programming than become a lawyer), but I remember the overall gist of one example.
Some big company around the 1930s or so came up with a clever idea. Next time they were going to pay a dividend instead they did a fractional stock split, such as 1.01 to 1, immediately followed by a mandatory fraction buyback which resulted in each shareholder getting the amount of money they would have gotten if a dividend had been declared, and with no change in each shareholder's percentage ownership of the company unchanged. The company suggested that shareholders report that money as capital gains.
The IRS said it was really a dividend, and the IRS won that dispute. The tax code and/or regulations were updated to reflect that. But there are legitimate buybacks that really should get capital gains treatment, and so those updated rules had a bunch of clauses and steps to go through to apply them to any specific case.
Is this the only department with this record? It’s astonishing to me that the federal government will spend something like nine trillion this year. Where does it all go? I know we can get high level breakdowns but it just seems insanely inefficient and wasteful just looking at the overall figures.
FY2023 total spending ~6.2 trillion (it's a bit higher in FY2024, but not sure where you're getting 9 trillion from).
The largest buckets non defense buckets are social security (1.4 trillion), medicare+medicaid (~1.6 trillion), interest payments (~800 billion). Total DOD spending is like ~750 billion, and DHS is like ~100 billion. FY2023 deficit was roughly 1.7 trillion dollars
Social security and medicare together at like ~2.4 trillion dollars a year, and are supporting a population of roughly 55 million Americans (just grossly taking the 65+ age population). This works out to roughly 43k per year per 65+ adult. You can decide for yourself is this seems like the right way for the government to work.
Anyhow, I am certain there is a lot of waste, and a lot of different types of waste there.
But fundamentally, the US government is trying to do a lot of frankly difficult and gigantic tasks. The DoD is tasked with amongst other things, perpetuating American hegemony, which right now is kinda critical for the entire US government funding situation. The USG's ability to leverage USD status as the world's reserve currency to help fund expenditures is contingent on it being if not THE global hegemon, then at least amongst the world's top powers, and the hegemon (or uh... senior security partner) for a substantial fraction of the world's economy.
Clearly the military could spend less (every other nation does) but it would require changing foreign policy.
For example the navy exists as "force projection" - not coastal protection. Force protection is a foreign policy goal, not a "defense" goal.
The US military is not designed to fight on the US mainland, it's designed to fight on someone else's mainland.
Equally the medicaid budget could be way less. Other countries manage with less (for their entire population) but they dictate pricing, whereas in the US the suppliers dictate pricing. And they expect healthy profit margins at every point.
In general, the govt spends so much because the people charge so much. The govt has enormous negotiating muscle, but dares not flex it least they incur the wrath of "the free market".
Very narrowly defined the DoD spent ~$750 billion in 2023 (over 800 billion). This doesn't count over $300 billion in veteran's benefits. Nor does it count Department of Energy military nuclear expenditures, nor tens of billions of military/intelligence spending in non DoD departments. Then when we look at the $800 billiom interest on the debt, a chunk of that is for unpaid military spending from last year and the years before.
This idea that military spending is not a large chunk of the budget is only when one has a very, very narrow definition of military spending.
> Social security and medicare together at like ~2.4 trillion dollars a year, and are supporting a population of roughly 55 million Americans (just grossly taking the 65+ age population). This works out to roughly 43k per year per 65+ adult. You can decide for yourself is this seems like the right way for the government to work.
New City Herald
Rioters set fire to the entire city after the Mayor's new budget accidentally starved roughly 8.6 million disabled people and 6 million survivors of deceased retirees.
Steve Ballmer's USAFacts has a bunch of info on US Govt, including DoD budgets. It's a good start on data analysis of the US economy:
https://usafacts.org/
DOGE needs to talk to people like Paul Ryan. He spent decades trying to massively reform the US government and was one of the most knowledgable, skilled and well connected people to try. And he failed miserably.
Because ultimately politics is about getting votes. And there simply aren't any votes in making the US government more efficient or balancing the budget.
I bet you a beer Musk and Vivek will not be able to prune anything significant in 4 years, because a) neither has an understanding of how the money is spent b) actual cuts need to be approved by the same people who introduced the expenses in the first place c) they might not even stick around for 4 years.
a) Accounting is not that hard. Also you can't be seriously making the argument that one of the richest man in this world does not know how federal funds are spent...
b) I don't think that's true. And even if were to suppose that it were true then your accounting problem would be so easy to solve.
Key word here being employees. There is no historical precedent for what DOGE has set out to accomplish assuming DJT was actually being serious. Though I would be curious to know where you see them grabbing those said quick wins.
Readit News
The DOD has to spend $2.3 billion dollars a day for every day of the year. That's $1.6 million per minute, 24 hours a day.
How can they possibly spend that much? The daily contracts page shows you a good chunk of it. And that's just for external expenses - not counting the costs of 1.4 million active service members and their infrastructure and equipment.
So, honestly? I'm not super surprised they might have issues keeping track of all that money.
1. https://www.defense.gov/News/Contracts/
What exactly was eye popping? I took a quick look, and while the numbers are large, I don't have a sense they are larger than they should be. The first for 15-Nov is a contract for roofing for the Army for $99MM. A number of firms are competing for that, and none of these firms sounds like "the military industrial complex". One is Roofing Resources from Pennsylvania. Its page states that it is "certified women-owned small business" [1]. Do you find anything nefarious with that?
[1] https://teamrri.com/
Also, what "small business" is doing those kinds of numbers, especially in a single contract?
You should probably take more than a "quick look".
Deleted Comment
lol
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.
Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.
In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.
Today, the solitary inventor, tinkering in his shop, has been over shadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.
The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.
Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.
It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system-ever aiming toward the supreme goals of our free society.
https://www.archives.gov/milestone-documents/president-dwigh...
https://www.c-span.org/video/?15026-1/eisenhower-farewell-ad...
https://en.wikipedia.org/wiki/Dwight_D._Eisenhower%27s_farew...
https://www.youtube.com/watch?v=Gg-jvHynP9Y
I often wonder if spending the money is the point - simply to say “The USA spends more than the next 10 countries combined” with no consideration for whether it is getting more value for the money. Like a startup, could other countries simply be getting significantly more value for their money and so the effective gap isn’t as large as the pure numbers suggest?
It comes to mind how the Pentagon running out of ammunition in recent years so to the Russian invasion of Ukraine and US donations.
When you look at Nature do you start asking why do we "need" blue whales or redwood trees? No one "needs" them but they emerge anyhow.
We chimps (mysteriously) love to believe we are in control of nature and what emerges out of it. And time and again the universe takes a gigantic shit on that belief. See Theory of Bounded Rationality/Illusion of Control or read Jurassic Park.
Its also why we see monopolies emerge in every sector of the Economy inspite of all kinds of speech making, laws and govt depts to "control" things.
If you go look at the Annual Report of your favorite monopoly, you will find hundreds if not thousands of subsidiaries/factories/offices around the planet to manage their empire. No External Auditor visits each of those sites cause its just not possible within a reporting period. So every report has a large warning - hey man this our best guess about whats going on in the 10% of the sites we had time to visit - don't sue us.
Don't fall for the notion that people have perfect control over complex ever changing systems. It will just lead to misunderstandings and confusion.
Plus our shipbuilding hadn't been the best, and our shipbuilders basically depend on defense contracts to survive instead of building warships as side gigs. Definitely areas where we need to do improvement.
We also need production of shells to support Ukraine and our Europeans allies had been underspending for decades at this point.
This is due to differences in doctrine and force structure. The Ukrainian military burns artillery ammunition at a far higher rate than the US military ever would because the US military does not use a lot of artillery. You don’t need a lot of ammunition of a type you’ll never use much.
I think Ukraine is a good value war for the US though, besides the issue of sending them outdated munitions, we get to cripple a geopolitical rival sacrificing other countries soldiers
You completely misunderstand the purpose of the speech.
The speech is an acknowledgement that it was necessary due to the changing nature of warfare and geopolitics [0], but at the same time warning that it we should be vigilant about not allowing government to be captured by it.
The same way the banking or tech industries are important and necessary, but shouldn't be allowed to directly further their own interests by setting government policy, but with additional moral gravity given the nature of the military.
[0] this was an era where military weaponry was becoming sophisticated enough that you couldn't just e.g. convert civilian car factories to produce tanks anymore, and you wouldn't have time to do it either, because the ICBMs and long range bombers on the horizon removed the invulnerability of the US mainland. Sitting tight to build up a military over the course of multiple years as was the case during WWII was no longer an option, so combined with the threat of the Soviet Union it was obvious that the US would need to maintain a large standing military and the accompanying industries for the first time in it's history. It was a novel, necessary, and nonetheless dangerous development, and that's what he was trying to get across.
That’s because the munitions we spend most of our money in isn’t going to Ukraine. The stuff we would use against Russia would be wiping cities off the map from thousands of miles away. The things we gave Ukraine are intentionally limited in range and power to prevent it from escalating beyond a regional conflict (aka stuff that can’t strike important targets inside Russia).
I definitely don't see a lot of people pushing for the "never to be scrutinized" part.
The idea that the US goes to war primarily to satisfy Raytheon stockholders is almost as brainless as saying it's the Zionist lobby: why struggle with thinking about a complex problem when you can conjure a simple boogeyman?
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. —-
A old soldier who was horrified at the cost of war, but keenly and sadly aware of the necessity of preparation and defense.
https://youtu.be/C2gIId1dpDs?si=p3Ks7oueygVe3Tvb
MIC is not just the defense companies, read the name again - it' the complex made of industry and the military. And Eisenhower's point in warning against it is not about revenue of the industry part, but about influence of the whole complex on major decisions.
In 1990's there was a short dip in funding, but since 2000's, its growth caught back on, and it's getting close to a trillion dollars a year. That much money chases a lot of constituency and a lot of power. Millions of people are dependent on it.
I would be more worried about Disney and Apple and their unwarranted influence.
https://x.com/elonmusk/status/1857919131464478752
Of course it does. But every loophole and tax break comes with an influential constituency attached to it.
I remember several times when in my tax classes in law school looking at the history of complicated provisions and finding they started out as short and simple provisions whose meaning was obvious to anyone with common sense.
But then people would find ambiguities that could give them a favorable tax result. There would be a court fight over it, and eventually the provision would be change to be more precise. And so what had been short and simple because longer and more complicated.
I don't remember all the details (law school was 30+ years ago and afterwards I decided I'd rather go back to programming than become a lawyer), but I remember the overall gist of one example.
Some big company around the 1930s or so came up with a clever idea. Next time they were going to pay a dividend instead they did a fractional stock split, such as 1.01 to 1, immediately followed by a mandatory fraction buyback which resulted in each shareholder getting the amount of money they would have gotten if a dividend had been declared, and with no change in each shareholder's percentage ownership of the company unchanged. The company suggested that shareholders report that money as capital gains.
The IRS said it was really a dividend, and the IRS won that dispute. The tax code and/or regulations were updated to reflect that. But there are legitimate buybacks that really should get capital gains treatment, and so those updated rules had a bunch of clauses and steps to go through to apply them to any specific case.
I've seen it first hand.
Deleted Comment
https://youtu.be/50MusF365U0?si=e6oR6DaYZFaFRQiK
The largest buckets non defense buckets are social security (1.4 trillion), medicare+medicaid (~1.6 trillion), interest payments (~800 billion). Total DOD spending is like ~750 billion, and DHS is like ~100 billion. FY2023 deficit was roughly 1.7 trillion dollars
Social security and medicare together at like ~2.4 trillion dollars a year, and are supporting a population of roughly 55 million Americans (just grossly taking the 65+ age population). This works out to roughly 43k per year per 65+ adult. You can decide for yourself is this seems like the right way for the government to work.
Anyhow, I am certain there is a lot of waste, and a lot of different types of waste there.
But fundamentally, the US government is trying to do a lot of frankly difficult and gigantic tasks. The DoD is tasked with amongst other things, perpetuating American hegemony, which right now is kinda critical for the entire US government funding situation. The USG's ability to leverage USD status as the world's reserve currency to help fund expenditures is contingent on it being if not THE global hegemon, then at least amongst the world's top powers, and the hegemon (or uh... senior security partner) for a substantial fraction of the world's economy.
For example the navy exists as "force projection" - not coastal protection. Force protection is a foreign policy goal, not a "defense" goal.
The US military is not designed to fight on the US mainland, it's designed to fight on someone else's mainland.
Equally the medicaid budget could be way less. Other countries manage with less (for their entire population) but they dictate pricing, whereas in the US the suppliers dictate pricing. And they expect healthy profit margins at every point.
In general, the govt spends so much because the people charge so much. The govt has enormous negotiating muscle, but dares not flex it least they incur the wrath of "the free market".
This idea that military spending is not a large chunk of the budget is only when one has a very, very narrow definition of military spending.
New City Herald
Rioters set fire to the entire city after the Mayor's new budget accidentally starved roughly 8.6 million disabled people and 6 million survivors of deceased retirees.
Try File -> New City to start over.
Everything else is a lot smaller and a lot simpler.
Because ultimately politics is about getting votes. And there simply aren't any votes in making the US government more efficient or balancing the budget.
Stop the funding and see what breaks?
b) I don't think that's true. And even if were to suppose that it were true then your accounting problem would be so easy to solve.
c) Agreed. That outcome is more likely.