So now that Obama has another 4 years....

Started Nov 8, 2012 | Discussions thread
dwalby
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Re: If we reduce defense spending
In reply to vadimraskin, Nov 8, 2012

vadimraskin wrote:

dwalby wrote:

vadimraskin wrote:


Just think about what can be done in USA with all the funding freed up from the military spending! Lack of guaranteed BIG bucks will force defense contractors to switch to civilian production and use their considerable amount of R&D potential to develop new technologies and new products that could make USA a leading tech nation in the world, expand export of high tech products and address trade deficit, create many more jobs in house (address unemployment problem).


I know it won’t happen because military and defense conglomerates are a major part of the national political machine but since you asked…

I think your parting shot is pretty accurate, but wanted to ask about the first paragraph above. If we turn off the military spending, doesn't that include defense contractors as well? Or are you suggesting keeping defense R&D funded, but cut back on bombs, tanks, etc. ? Also, what do you mean by "switch to civilian production", and production of what? Are you saying defense contractors would farm out their work to private companies? Please clarify.

Dwalby.

As in any business, lack of demand causes two things: company turns around and remakes itself and survives OR it goes under. It sounds hard but it is true. Defense contractors will have the same choice. I am not advocating for Government to "turn off" spending "on the dime", it will create another GM/Chrysler fiasco. No, gradual reduction with advanced warnings and guidance will ease the transition. I am SURE Boeing could switch some of its defense capacity to the civilian production and find a nice “niche" they could explore. I am sure many of defense contractor are already looking for them now that Obama is sure to remain in power. Never underestimate a power of business and its survival skills. The problem with defense industry that is has been spoiled by the Government keeping them well fed and cozy that they might lost some of these skills. I think they will find them when needed.

Government could and should be able to provide these guys with opportunities to invest in the civilian world such as "green energy" and next generation of the communication technology or medical field or hundreds of other fields that would benefit the whole country in a way that every $1 spent generates at least $1.5 in returns in a form of product and/or technology. Imagine what kind of secret technology they now possesses and could adapt to be used in the civilian world. (GPS comes to mind). Then these companies could be taxed, which is a nice addition to the budget.

OK, now a little dose of reality for you.  I happen to work in high tech, and spent about 15 years in defense work, and a little more than that in commercial.  We've reached a point in technology where everything is extremely specialized, the skills are not anywhere near as portable as you suggest.  The workers who have been developing high tech defense systems, have skills unique to those systems, not green energy.  If you want to convert them over, they're not going to be competitive with the people already working in those industries, so you're just going to be subsidizing their learning with government money anyway.  In the long run that may not be a bad thing, but Boeing isn't going to lose money going off in pursuit of things its already not an expert in, its a financial disaster that will not likely ever pay off.

Also, you give the gov't too much credit for having more 'secret technology' than the commercial world.  Its usually the other way around, commercial companies develop new technology faster than the government contracts do because there's more competition in the commercial world driving that to happen.  The government realized that years ago and often buys Commercial Off-the-Shelf (COTS) to reduce costs where possible.

I think what you're suggesting is theoretically possible on a minor scale, but its not going to be anything important in the long run.

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