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Lets All Work Together?

AS a first glimpse of what the level of mutuality and cooperation is going to be between President Obama’s Administration and the New Congress, the White House fired a shot over the bow by ordering the Pentagon to cut its budget. The cuts, according to a recent Wall Street Journal article will be about 78 billion dollars, 10% of the Pentagon’s yearly budget, by my calculations. By ordering such cuts, the White House is, in effect indicating to the new Congress, who has vowed to force the Federal Government to reign in spending, “You want cuts? We’ll give you cuts.” They are proceeding to take a scalpel to one of the sacred cows of the more conservative.
From a strategic standpoint, the move was probably a bad one, since President Obama really only has two such moves available to him with which to respond to fiscal conservatives: the one is cutting Pentagon spending, which probably should have been held in reserve until Congress had announced their cuts, and the second is the prescription pharmaceutical program initiated by George W. Bush. This ‘firing before the whites of their eyes even arrived and got a look at Washington,’ certainly enables the Congress to venture to take a scalpel to many other programs in Washington, with the ready answer of, “We are following your lead!”

From an economic standpoint, however, the move is potentially catastrophic. The military is a walking, breathing, daily, stimulus package: Soldiers send checks home; families buy food, clothing, and shelter with that money. The personnel cuts will hit 69,000 army and Marine Corps individuals. This arguably makes the hiring of several thousand temporary census workers in 2010, in hindsight, an exercise in futility. Even worse is the impact that will be felt amongst contractors. Defense contractors range from the Food corporations who provide MRI’s to the fabric companies that make clothing. This year has been one of the most outstanding years for agricultural equipment manufacturers, and aluminum companies are starting to be roused from the extended slumber (The rest of the market seemed to wake up about a year and a half earlier). The impact of the cuts on farms, farming equipment manufacturers, and consumers of aluminum like airplane manufacturers would almost certainly be negative. As if enough hasn’t been done to forestall an economic comeback, slashing military budgets which are largely spent on domestic suppliers will have a direct impact on even the Wall street companies that seemed to fair well during a bleak time period for domestic jobs, banking and housing.

There is one possibility, that is, in my opinion, even worse than the threat to the economic picture. It’s this: Over the past four years, the United States military has responded to an earthquake in Haiti, a tsunami in Southeast Asia, and a hurricane in the Gulf of Mexico. In each case, aircraft carriers, or other ships served as hospital and supply ships. Supplies, generators and makeshift shelters were flown in using helicopters launched from the decks of large navy vessels. These activities were coordinated activities that really could only have been accomplished by organizations with resources such as those possessed by the U.S. navy. These activities are not only the preferred and humane use for the military, but they also server to put a good face on the United States military abroad. That, too, will be threatened by defense cuts.

Copyright January 09, 2011 by John P. Schumake


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