Brian White | August 24, 2020 | Maritime Law
Each year, about 40 percent of the federal government’s discretionary spending is used to purchase goods and services. The government contracts with various companies to purchase the goods and services it or the country requires. During the fiscal year 2018, the federal government spent more than $550 billion on contracts.
Just under two-thirds of that amount was spent by the Department of Defense. The DoD spent $358.3 billion in defense contracts during 2018. The most significant amount was spent on aircraft, combat ships, and landing vessels.
What is the Military-Industrial Complex?
The U.S. military-industrial complex is a network of institutions, companies, and individuals. These parties are involved in the production of military technologies and weapons. The military-industrial complex works to gain political support for continuing or increasing military spending by the federal government.
Even though President Dwight D. Eisenhower did not invent the phrase, he made it popular by using it in his Farewell Address in 1961. President Eisenhower warned of the “acquisition of unwarranted influence . . . by the military-industrial complex.” He spoke of how the increasing power of the military-industrial complex posed a threat to American democracy.
When wars ended, America would draw down its troops. Companies switched back to the production of civilian goods instead of military supplies.
However, after the end of the Korean War, the United States did not draw down its troops. Companies did not stop making weapons, military vehicles, and other military products. Instead, these companies increased the production of military weapons and invented new weapons to compete in the arms race with the Soviet Union.
The Military-Industrial Complex Continues Today
Today, the U.S. military-industrial complex is more extensive than ever before in the history of our country. The complex includes:
- The Department of Defense
- Private military contractors
- Members of Congress
- Other government agencies that contact for defense spending
Contractors who produce defense equipment like ships and planes make a lot of money from defense contracts. When this equipment isn’t in demand, they lose money. Therefore, these companies lobby Congress to continue ordering items even though the military equipment may not be needed.
The complex has grown in other ways. The government outsources a great deal of the health care for veterans and military personnel. National security departments outsource services for information technology. Private security firms were used during the wars in Afghanistan and Iraq, resulting in the privatization of military force.
Military spending is increasing, which is good for most components of the military-industrial complex. Many companies have numerous defense or military contracts with several federal agencies.
While many may be hesitant to defund defense, the idea is not to take money out of the pockets of soldiers, who already deal with hazards such as injury in basic training and poor medical compensation. The push to control the U.S. military-industrial complex is to ensure that the system is not being abused for the unjust enrichment of specific individuals or companies.
There are many forms of corporate welfare. Local and federal governments hand out bailouts, tax breaks, grants, and subsidies to large corporations. Most incidents of corporate welfare are promoted as helping create jobs, boost the economy, or save the economy.
Companies that make billions of dollars should not need corporate welfare at the taxpayer’s expense. How do corporations get corporate welfare? They spend millions of dollars on campaign contributions and lobbying efforts.
The Wall Street bailout of 2008 and the bailout of the auto industry are two well-known examples of corporate welfare. In other words, companies make billions of dollars and get tax breaks. Companies make huge mistakes and lose money, but the government absorbs their losses.
The military-industrial complex is also a recipient of corporate welfare. The Trump Administration increased military spending by billions of dollars. As the military budget increases, discretionary spending increases.
A larger defense budget subsidizes unnecessary military spending. With more money to spend, the federal government awards more contracts to huge corporations for military equipment that we do not need. Defense contractors are thrilled that they will receive larger and more lucrative defense contracts because of a larger defense budget.
Advantages and Disadvantages of Large-Scale Defense Spending
There are both disadvantages and advantages of high military spending.
Pros of Large-Scale Defense Spending
National security is at the top of the list of advantages of large-scale defense spending. Ensuring that we have the military equipment and personnel ready to respond to a national threat is crucial. Ongoing defense contracts provide for a stockpile of military equipment.
Building our military forces helps with peacekeeping efforts. Other countries are aware that we have a large military. We can dispatch that military force at a moment’s notice to assist with peacekeeping efforts throughout the world.
In addition to defending our country and our interests, large-scale military spending helps the economy. It increases jobs and spending across several industries.
Cons of Large-Scale Defense Spending
There are also several cons of large-scale defense spending. When numerous agencies have large sums of money to spend, they tend to hire more individuals. That creates the potential for several people performing the same services.
You also have inefficiency in order products. While we may need a stockpile of certain military assets, we may not need vast amounts of all products. Large-scale spending results in unnecessary overspending.
When there is more money than is needed, it can also cause poor organization and documentation. Agencies are not held accountable for overspending. They are also not scrutinized for awarding contracts to defense companies without obtaining competing bids or analyzing the bids for excess charges.
Another problem with large-scale spending is that it can result in obtaining faulty or defective equipment. Military equipment sometimes causes injury among both military personnel and civilians.
It can also promote unnecessary military action. Military action is also a common cause of maritime injury, and injured maritime workers have to rely on the Jones Act due to a lack of workers’ compensation
Examples of the Military-Industrial Complex at Work
We have discussed several military-industrial complex facts, such as the increasing use of discretionary spending to fund corporate welfare. It can be difficult to choose the worst military-industrial complex example to include in this article. Corporate welfare may be the worst.
However, a few examples of how the U.S. military-industrial complex abuses its power and wastes taxpayer money include:
- Defense contractor lobbying influencing lawmakers from states that have large corporations that receive billion-dollar defense contracts to vote for larger defense budgets
- The coverup of a report detailing $125 billion in bureaucratic waste
- Awarding $100 billion in defense contracts to just five companies in 2016
- The fact that defense spending does very little to create jobs in America
- No recordkeeping for $12 billion in cash sent to Iraq to aid in the transition effort
- Spending $10.4 million for paid patriotic displays at sports events
There are many more examples of wasteful spending by the federal government. Unfortunately, there is no clear answer to how to fix the problem.
We need defense spending to protect our troops and our country. Maybe some of the money should be spent on making sure that the people in charge of the money do not waste it.