The Military-Industrial Complex — Where Is The Money?

Bayard & Holmes

~ Jay Holmes

On January 17, 1961, US President Dwight D Eisenhower delivered his farewell speech. The retired five star general had served two presidential terms and was being replaced by his fellow military veteran, the newly elected John F. Kennedy.


President Dwight D. Eisenhower receives hydrogen bomb tests report from Lewis Strauss Image public domain.

President Dwight D. Eisenhower receives hydrogen bomb tests report from Lewis Strauss
Image public domain.


In that farewell address, Eisenhower warned, “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex.”

Left-wing radicals are always quick to oppose military spending, but Eisenhower could hardly be accused of being anything like a left-wing radical. At the peak of his long military career, he skillfully commanded the allied forces in Operation Torch, which was the 1943 Allied invasion of Northwest Africa, as well as the 1944 D-Day invasion of Normandy and the Western Offensive against Nazi Germany and the European Axis powers.

After WW2, Eisenhower served as US Army Chief of Staff and then as Supreme Commander of European Forces. Few Americans could claim to have anything close to Eisenhower’s military experience or expertise.

Eisenhower was no “dove.”

He took the threat of Soviet expansion seriously. As US President, he oversaw the conclusion of the war in Korea in 1953 and approved funding for fledgling US space and satellite programs. Eisenhower also approved expensive Navy projects, such as the nuclear submarine program and the construction of the nuclear carrier, the USS Enterprise. He presided over the growth of expensive jet aircraft in the young US Air Force, and he approved funding for expensive new air defense systems for the US Army.

In spite of the large military budgets that President Eisenhower approved, some military and defense industry leaders saw him as being too frugal. Conversely, Eisenhower and his supporters felt that increasing military budgets threatened the economic health of the US.

Fifty-five years later, the arguments over defense spending continue.

Unlike during Eisenhower’s time, the arguments are now conducted against a backdrop of a frightening budget deficit and an eighteen trillion dollar national debt. The consequences of all government spending have a serious impact on the quality of life for the average American and on national security.

In Eisenhower’s time, the real threat posed by the Soviet Union impacted defense spending. Today, the Soviet Union is gone, but US and European citizens are justifiably concerned by threats from various radical Islamic groups, the increasingly nuclear-equipped North Korean despot Kim, a rapidly growing communist Chinese military capability, and a resurgent and belligerent Russia.

At a glance, it might seem as though a stable status quo has been in effect in military budgets.

In some senses, similar dynamics have remained in force. In 1961, Eisenhower was unable to convince Western allies to commit to adequate defense spending. The allies seemed happy to let the US military and taxpayers carry more than their fair share of the responsibility for the defense of Western Civilization. In 2016, that dynamic continues. US President Obama listens to nations like France, Canada, and the UK proclaim their increased commitment to defeating Islamic radicals, but then he watches as they reduce their defense programs. Eisenhower would recognize his frustration in dealing with NATO partners.

We might be tempted to assume that US defense spending itself is proportionate to what it was in 1961. Let us make some comparisons.

In 1961, US military personnel were badly underpaid. In 2016 this remains true. In 1961, the US defense budget was close to 10% of GDP. Today it is below 5% of GDP. In terms of GDP, the defense budget seems reasonable enough. But let us compare some specific defense project costs.

In 1961, the new Enterprise class nuclear aircraft carrier cost $451 million to build. Due to the escalated cost of construction, the additional three carriers of that class were cancelled. Today the new Ford class nuclear aircraft carrier is, so far, costing the taxpayers $12.8 billion to build, with an additional $4.7 billion in research costs. If we compare the two ships in inflation adjusted costs, then in today’s dollars, the Enterprise would have cost $3.4 billion to build. Where did the other $9.4 billion go?

When the Enterprise was built, it included many state of the art features, but its air defense system had been scaled back to save money. The Gerald Ford class carrier includes state of the art equipment and features, but the overall economics of the two programs are completely out of scale.


USS Gerald Ford under construction in Newport News, VA. Image public domain.

USS Gerald Ford under construction in Newport News, VA.
Image public domain.


My question is simple. What national defense value are we receiving for the disproportionately high cost of the USS Gerald Ford?

We could make similar comparisons with nuclear submarine programs, but let us instead apply the scrutiny to a broader defense project, the F-35 fighter program. The F-35 was developed as a low cost alternative to the F-22 Raptor. So what does “low cost alternative” mean in the defense industry?

The F-22 cost a frightening $150 million per plane. No wonder we wanted a “low cost alternative.” The F-35, so far, cost between $100 million for the basic model and $104 million for the VSTOL version. I’m grateful that we decided to pursue a “low cost” fighter plane.

Let’s compare the F-35 to the infamously expensive Republic F-105D fighter. In 1960, the year before Eisenhower’s farewell speech, the outlandishly expensive F-105D cost $2.1 million each. In 1960, it was the state of the art fighter, and it incorporated many new technologies. It was plagued by cost overruns, and its development was every bit as contentious as the F-35 development has become. In 2016 dollars the F-105D cost $17 million apiece. As with the Gerald Ford Carrier, the cost of the F-35 has wildly outpaced inflation.


F-35 Joint Strike Fighter at Edwards Air Force Base Image public domain.

F-35 Joint Strike Fighter at Edwards Air Force Base
Image public domain.


What defense benefit are we getting for the additional $80 million per each F-35? Is the F-35 going to bring us more security today than the F-105D brought us in 1960? I don’t see it.

The defense industry would counter my concerns with comforting catch phrases. They tell us that it is “stealth,” and that it employs more “net centric ability” than previously imagined. For less than $100 my house is “net centric.” So how does the marvelous net centric ability account for the cost of the F-35? From my point of view, it doesn’t.

Defense contractor PR players would likely question my patriotism. Am I not aware of all the real threats in the world? Do I not want the best possible defense for my family’s safety? In fact, I am very much aware of the many threats to our national security, and I do want the best possible defense capabilities for our nation. That’s precisely why I question our $100+ million fighters and our $13 billion aircraft carriers.

Every dollar wasted or overpaid is a dollar that does not help our national defense. At the same time, high costs work to erode our national defense by damaging our economy.

The F-35 and the Ford Carrier are only two of many defense projects that beg closer scrutiny. These high cost programs are being funded at the same time the US Marine Corps is undergoing a 30,000-man reduction in force. The Pentagon and the White House tell us that we are more committed than ever to fighting the increasing terrorist threats, so how is it that we justify large cuts in our premier expeditionary force? The numbers just don’t add up. In some cases, they don’t come close to adding up.

President Eisenhower’s words are even more appropriate today than they were in 1961. Think twice before you quietly accept every extravagant defense expenditure. Let your congressmen know you are watching.

Buyer Beware!


6 comments on “The Military-Industrial Complex — Where Is The Money?

  1. OK, OK, maybe these aren’t entirely relevant questions I’m about to ask, given the theme of your article…but here they are anyway.

    Why does it make sense to ANYONE cognizant of the lessons of history to scale back on the air defense systems of an aircraft carrier? In WW2, we lost the USS Lexington at least in part because of inadequate air defense weapons. That might have been true of all carrier losses in 1942. Compare AAA weapons of the eight carriers launched before 1942, and then look at the massive proliferation of 20-mm, 40-mm and 5-inch AAA after that. It’s VERY expensive to lose a carrier, in more ways than one.

    As for the F-105, I’m not capable of being objective. It’s one of my favorite airplanes in more ways than one. I know a couple of Thud drivers, each of whom are fanatical in their love of the airplane. Perhaps it has nothing to do with the cost of the weapons system, or its intended purpose (low-level raids into the Warsaw Pact countries and the western portions of the USSR with nukes aboard). I understand that on the deck it was REALLY hard to catch an F-105, right up into the 1980s against F-15s and F-16s at Red Flag. Maybe it was one of those weapons that never earned its keep, and we’re lucky it didn’t.

    Flash forward to modern times. Speaking of air defense, what will the Gerald Ford and her older sisters do against Sunbeam cruise missiles and the new generation of hypersonic attack missiles? I loathe, hate and despise to say it — but maybe in the era of drones the era of the aircraft carrier and the era of manned combat aircraft is swiftly coming to a close.

    So what are we getting for our bucks? A lot of workers in the defense industry have jobs. That’s about all I can see.

    As for the USMC, who in their right minds cuts two divisions out of the finest light infantry on the planet?

    I don’t understand, but I’m only a lowly civilian.

    • Jay Holmes says:

      Hi Tom.

      “So what are we getting for our bucks? A lot of workers in the defense industry have jobs. That’s about all I can see.” Even at that many defense companies purchase electronic components (including critical chips) from communist China. I consider that practice to be treasonous.

      “As for the USMC, who in their right minds cuts two divisions out of the finest light infantry on the planet? ” Not me. The reduction of force in the Marine Corps is extremely foolish.

  2. Don Royster says:

    All this brings to mind that previous to World War II, the United States had a very small standing army. One wonders if we would have been better off if we had gone back in that direction after World War II. Being the world’s policemen doesn’t seem to be a job we do very well though we continue to take on that role.

    • Jay Holmes says:

      Hi Don. The idea is appealing to my normal American isolationist instincts but the Cold War prevented us from returning to 1940 military manpower numbers. Now the “war on terror”, or as I prefer to call it the “quasi-war on terror,” is driving a similar dynamic. At the same time, Putiboi is doing his best to return to the Cold War.

      With all that said, we need to be asking why our “allies” are doing so little to defend themselves in Europe. The German military in particular has become laughable. Their fighter pilots have themselves convinced that they are better than US or RAF pilots, but they ignore the fact that they could not launch more than 50 of their fighters tomorrow if they needed to. The state of maintenance and lack of upgrades has all but crippled the German military. And yet Merkel and her (diminishing) supporters are certain that they have the money to support millions of unidentifiable immigrants from Syria and beyond.

  3. Important reminder – not smart to just sit back and think people/companies will do what is right and fair.
    A real concern is the money being paid out and the quality and usefulness of the products turned out. A good thing to watch for anything whether it’s military or education.

    • Jay Holmes says:

      Hi Philosopher.

      “whether it’s military or education”. I have avoided diving into the topic of the gross inefficiencies of the USA’s educational industrial complex. Our readers can only tolerate so much depressing information at any given time.

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