Somebody got some ‘splainin’ to do.

The WSJ reports $100 billion in defense cuts–about 90 percent in the years beyond FY12 for the purpose of getting the budget under better control.

Concurrently, $50 billion of current year non-defense spending is proposed.

Is it me?

Regarding the proposed cuts to the defense industry, a dilemma remains excess global capacity. That’s why Airbus is considering the USAF tanker deal anew.  But excess capacity almost by definitional means consolidation can (or should) be pursued in order to achieve greater efficiencies.

Then, consolidation leads to a loss of competition.  A loss of competition leads to higher costs.  That’s what happened with EELV, where dreamy assumptions melted in the face of global reality (that is, global reality versus global warming).

The traditional take is for governments, U.S. included, to subsidize industry.

Using the automotive industry, consider the relatively recent cash for clunkers and the GM and Chrysler bailouts.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s