“Of the total military spending in the world, the US spends half of that, and that’s an unsustainable number,” Erik Prince, founder and chairman of Xe, told CNBC Thursday.
“You’re going to have to turn to private sector efficiency initiatives if the US is going to be able to project power and help its friends,” –Erik Prince, June 24, 2010
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Thanks to Doug for sending me this. The numbers on this are staggering. I also think that Prince is absolutely right. If we plan on continuing the war effort, then efficiency initiatives in this war will be a necessity. Those efficiency initiatives come from competition and the innovation born from that competition in private industry. The money is running out and both government and private industry will be partnering on this to find a way.
With that said, this is another great reason for introducing methods of warfare that might be more cost effective. I talk about the concepts of incentivizing warfare here all the time.(letter of marque, privateering, bounty hunting, etc) I personally feel that if you want to combat an out of control industry of terror, drugs, or piracy, you need an organized and violent industry that profits from their demise.
I would also like to see an effort to make supplying the troops more cost effective. Do we have to fly or convoy fuel into Afghanistan, or can we figure out a way to either grow fuel or utilize some other energy source to power our vehicles? Do we have to ship in food, or could we grow food locally on military farms, or through co-operatives with local farmers? Do we have to use expensive jets and bombers, to provide close air support against an enemy that has no air force? Do we have to helicopter troops in, or can we drop them in by parachute? Little changes here and there, can do wonders for reducing that million dollar price tag per soldier, per year, in a country like Afghanistan.
Most of all, are we doing all we can to invigorate investment in Afghanistan? Could charter cities be set up in Afghanistan, as a way to invigorate progress in that country? How about focusing on infrastructure that supports this trillion dollars of mineral wealth? Are we creating an environment that is attractive to all investors, and not just China?
These are all just ideas to throw around, but I really think as the belt is tightened, you will see efficiency initiatives becoming more important to the military. They will still have a mission to accomplish, but it will be about doing more with less. And private industry will be right there with government and the military, coming up with the better/faster/smarter/cheaper solutions necessary to get us there. –Matt
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Joint Chiefs chairman reiterates security threat of high debt
By Roxana Tiron
06/24/10
Pentagon leaders, the military services and defense contractors must work together to cut bureaucratic bloat and unnecessary programs, the chairman of the Joint Chiefs of Staff said Thursday.
Adm. Mike Mullen also renewed his warning that the nation’s debt is the biggest threat to U.S. national security.
“I was shown the figures the other day by the comptroller of the Pentagon that said that the interest on our debt is $571 billion in 2012,” Mullen said at a breakfast hosted by The Hill. “That is, noticeably, about the size of the defense budget. It is not sustainable.”
Defense Secretary Robert Gates has initiated an effort to free up $100 billion over the next five years to maintain current fighting forces and to modernize weapons systems.
The goal is to find more savings within the defense budget without cutting the top-line number. The savings would be used on other Pentagon needs. Pentagon leaders are eyeing 2 to 3 percent real growth in the Pentagon’s budget for the areas that need it most: force structure and modernization.
Mullen acknowledged Pentagon leaders face the challenge of giving incentives to the military services and other Pentagon agencies to start slashing their budgets.
“One of the most difficult things to do in budget world here in town is incentivize, because too often it is ‘just give it away,’ ” Mullen said. “It can be done. It does not happen overnight, but over a period of about 18 months you can start to see the resources come back and then put them where you need them.
“It is a message to all of us,” Mullen added. “It’s a very important message to understand that the best way to get there is together, as opposed to everybody fighting each other. We all have to contribute here to make sure we are whole and well-prepared for the future.”
Under the Defense Department’s plan, two-thirds of the $100 billion cost savings spread out over the next five years will come from trimming overhead on a department-wide basis. That money will be directly transferred into the force structure and modernization accounts.
The rest of the cost savings would come from “developing efficiencies within those force structure and modernization accounts,” Deputy Defense Secretary William Lynn said earlier this month.
Lynn warned that in order to find $100 billion in savings, Pentagon leaders, working with the military services, will have to identify “lower-priority programs” that are not going to be part of future budgets.
The departments of the Army, Air Force and Navy, which also includes the Marine Corps, as well as the combatant commands are expected to report their savings proposals by July 31 as the Pentagon prepares its budget request for Congress.
The Pentagon’s initiative has met with support from several key figures in Congress. The chairman of the House Armed Services Committee, Rep. Ike Skelton (D-Mo.), indicated that he backs Gates’s spending reforms and is looking for ways his committee can find savings in the Pentagon’s budget to complement Gates’s effort.
Some in the Democratic Caucus, however, have said the Pentagon might need to cut its budget in order to take part in reducing the country’s debt.
House Majority Leader Steny Hoyer (D-Md.) put the once-sacrosanct defense budget on the chopping block this week, stating that Pentagon spending cannot be excluded from deficit-reduction talks. The defense budget makes up more than half of the country’s discretionary spending.
Rep. Norm Dicks (D-Wash.), a centrist who is the House’s top defense appropriator, believes his panel can reduce the Pentagon’s budget top line somewhat without affecting military readiness, according to Dicks’s chief of staff, George Behan.Story here.