If you think Loren Thompson is a bad defense analyst, wait 'til you see what kind of financial planner he is!

Desperate times call for desperate measures, and you can tell times are desperate when you see a whole bunch of folks in DC talking about making dramatic cuts to the federal budget. There seems to be a sort of informal competition going on to see who can recommend the deepest, fastest, most un-implementable and politically unsustainable austerity measures. The panel commissioned by the president hasn't even voted on a final report yet, but everyone's already complaining about the direction suggested by the so-called chairman's mark. Jan Schakowsky, who is on the commission, has her own plan. And then there's the Rivlin-Domenici plan, issued by the Bipartisan Policy Center. All have undertaken the necessary work of figuring out how to bring national expenditures more closely in line with national revenues (balance them completely? Let's be serious!), and each of the proposals has now met with the totally inevitable response: Of COURSE we have to cut things, but you can't cut THAT!

It's fair to say that defense spending -- representing as it does more than half of the discretionary federal budget and approximately 20% of total outlays -- will not escape scrutiny. The Simpson-Bowles recommendations, for example, slash defense to the tune of $100 billion. Sarah Palin and Buck McKeon may disagree (and so too does the SECDEF), but most serious advocates of fiscal restraint recognize that any approach to budget-balancing that refuses to consider defense cuts is simply a waste of time. Several dozen national security experts made precisely this point last week, signing a letter to the fiscal commission's co-chairs (pdf) that argues that "the defense budget can bear significant reduction without compromising our essential security."

Granting defense a special dispensation puts at risk the entire deficit reduction effort. Defense spending today constitutes over 55 percent of discretionary spending and 23 percent of the federal budget. An exemption for defense not only undermines the broader call for fiscal responsibility, but also makes overall budget restraint much harder as a practical economic and political matter.

But defense spending has its own huge and powerful constituency, so it's fair to say that the defense cuts recommended by the various commissions and proposals are no less controversial than those recommendations related to Social Security, Medicare, and other entitlements.

This is probably going to come as a shock to you, but Loren Thompson is "not here to defend the current level of defense spending." He sees which way the wind is blowing, just like the rest of us.

When the current decade began, the United States accounted for about a third of global economic output and a third of global military spending.

Today, it accounts for a quarter of global economic output and nearly half of global military spending.

Obviously, the growing gap between these two measures of U.S. power is unsustainable: five percent of the world's population cannot continue funding 50 percent of military outlays while only generating 25 percent of economic output.

Of COURSE we have to cut things...

However, what I want to do in my remarks is explain the consequences of some of the weapons cuts that are being proposed.

...but you can't cut THAT!

Thompson, who is a paid consultant for the defense industry, has a stake in preserving high-dollar materiel programs at the cost of personnel or operations accounts. So you'll have to forgive my yawn when I see him making a speech to the CATO Institute -- as libertarians, already predisposed to any proposal that would limit or even prevent altogether ill-advised, adventurist operations and close expensive bases abroad -- built on the premise that while defense cuts may be necessary, they certainly shouldn't come at the cost of expensive, underperforming, behind-schedule weapon systems. But that yawn turned into a painful guffaw (it sounded like this: LOLOLOLOLOLOL) when I saw Thompson's hilarious rationale, which can be boiled down to these three fundamentals:

1. SUNK COSTS!
2. Not only are you cutting a weapon system, but you're cutting ALL THE THINGS THAT WEAPON SYSTEM CAN DO!
3. Now you're going to have to spend a bunch of money building and buying something else to do all the things that you can't do because you cut the old system!

Here's how he actually phrased it in his remarks at CATO, just so you don't think I'm misrepresenting:

But there are consequences to killing weapons that tend to be overlooked in budget-cutting exercises...

-- First, you squander the money that has been spent to date on the programs.
-- Second, you deprive warfighters of capabilities the weapons would have delivered.
-- Third, you have to compensate for the lost capabilities by purchasing something else.

When these realities are factored into plans for terminating this or that weapon, the budgetary and human costs of cutting sometimes end up dwarfing any projected savings.

Thompson uses the rest of the speech to give details about four specific programs that could face the chopping block -- the Expeditionary Fighting Vehicle, the Osprey, the Joint Tactical Radio System, and the Virginia-class attack submarine -- while coming back to his three fundamentals, but the whole thing mostly relies on an appeal that wasn't outlined in his introduction: the vague but pointed threat that U.S. servicemen will almost certainly die if we fail to continue funding these programs. Want some examples? I knew you did!

On EFV, Thompson charitably grants that the program "is in the cross-hairs of just about every deficit-reduction panel proposing weapons cuts... with good reason, because EFV's [sic] cost over $10 million each and have suffered reliability problems in testing." But he goes on to say that EFV brings "much more speed, range, firepower, and protection" than the AAAVs that currently comprise the Marine Corps' amphibious tractor fleet. "The Marines have been waiting decades to replace their aged vehicles," Thompson said, "and during that time they have become sitting ducks for precision-guided munitions." He's mostly right about this, but the next sentence is total nonsense:

The Expeditionary Fighting Vehicle would solve almost all the problems with the current amphibs, turning the sea from an obstacle into a maneuver space and enabling Marines to come ashore at the places where they are least likely to incur casualties.

Um, no. EFV would similarly be a "sitting duck for PGMs," and nothing about the system's design or manufacture will prevent that. The Navy-Marine Corps team's future littoral power-projection concept won't be based on a Mach 1, stealth amphibious tractor that can survive hits from land-based precision-guided missiles or direct counterfire against coastal defenses from 100 miles away; even if it was, the EFV doesn't offer these capabilities. The new vehicle is undoubtedly a step forward from the aging AAV, but it's not a game-changer -- it does exactly nothing to "[turn] the sea from an obstacle into a maneuver space," and the act of "enabling Marines to come ashore at the places where they are least likely to incur casualties" is far more likely to be accomplished through the development of evolved theater entry and littoral maneuver concepts than by a materiel magic bullet. On top of all that, the EFV is too expensive, doesn't offer significantly more protection than the AAV in a modern threat environment dominated by IEDs (don't ask me, ask the GAO! [pdf]), and doesn't actually meet the space and weight specifications that are a requirement of the system! Yes, AAAVs are old, and yes, we almost certainly need to maintain the capability to get Marines from ship to shore. But to suggest that EFV is the only way to do this, or the best way to do this, or that cancelling the program is tantamount to "wasting the lives of many Marines because they had to go to shore in deathtraps" is just ludicrously disingenuous. The amphib fleet can be sustained until such time as a new, more affordable solution can be found, and the reality of our complete and total disinterest in replicating a Tarawa-style forcible entry/opposed landing means that we're not actually ceding any plausible amphibious landing capability as a result.

I'm not going to spend a whole bunch of time picking apart the specifics of Thompson's other arguments, but suffice it to say that for the most part they're similarly specious, tendentious, and either misinformed or insincere.

"[W]hen you see a budget panel suggest killing" the programs he highlighted, Thompson said, "it's a reasonable conclusion that they either don't understand the program or they don't understand the nation's global security requirements." One might easily say the same thing about Loren Thompson: he doesn't understand the failings of the programs that he uncritically justifies, and he doesn't understand that his conception of the nation's global security requirements is neither universal nor uncontroversial. Not all previously appropriated money has been well-spent, and some of it must be written off as a waste. Not all "capabilities" that ought to have been delivered by ongoing programs or fielded systems constitute real "requirements," and some of them can be undercapitalized or abandoned altogether without grave risk to our national security. (We'll leave aside for a second the reality that many of these weapon systems DO NOT effectively deliver the capability they're meant to, and that those that DO deliver capability often fail to do so within the cost and schedule parameters the government has deemed appropriate.) And finally, those systems that are abandoned will not always need to be replaced; as the nation reconsiders the difference between what can be done and what must be done, it's fair to assume we'll give different answers to the question of what can be bought versus what must be bought.

Secretary Gates may criticize the Simpson-Bowles recommendations as an exercise in "math, not strategy," and he's right. But he's at least interested in engaging in a review of systems and programs in line with strategy so as to develop a budget that is sane, justifiable, and efficient. If you're in Loren Thompson's camp, you have to accept the argument that the government has made no bad decisions, has wasted no money or effort, has a bulletproof rationale for each and every acquisition decision it has ever made, and has correlated those acquisition and procurement decisions to an overall strategic concept that most effectively advances and protects American security interests in a rapidly changing and unpredictable threat environment. I don't have that kind of faith. Then again, my livelihood doesn't depend on it.