by Chris Marcus, Miles Franklin:
In 1945 a P-51 aircraft cost $50,984, according to Wikipedia. The cost of the pilot’s helmet —estimated—was about $225, or about 0.45% of the cost of the aircraft.
Times have changed.
In early 2018 the cost estimate for the latest F-35 U.S. aircraft is $85 – $95,000,000. The cost estimates for the helmet vary, but quotes range from $200,000 to $400,000. We’ll use $400,000 cost, or about 0.45% of the cost of the aircraft.
Yes, we know. The F-35 is a more advanced aircraft than the P-51, so it should be more expensive. Is it 1,800 times more advanced? Of course not!
Things cost more. Consumer price inflation plus military cost inflation increase prices. Total U.S. spending for the military has increased over 5% each year for decades. That $225 helmet in 1945 would cost about $8,000 today at 5% increase per year. However, it would cost $400,000 today at an increase of 10.8% per year.
WHAT DID WE LEARN?
Flight helmet costs have increased more rapidly than overall military expenses. High-tech helmets are expensive!
Weapon systems, such as the F-35, are also expensive, often measured in trillions of dollars, and become more complex each year.
That complexity increases both acquisition costs and annual maintenance costs.
Military expenses increase rapidly. More expensive new systems replace obsolete systems. Personnel and pension costs rise. The military spending “machine” sucks in close to a $trillion each year, depending on who is counting.
Reports indicate the F-35 is not performing as expected. Read “No money for F-35”. But the military will throw more dollars at it, and they will fix the problems. Budget deficits will increase.
Military expenditures and military budget increases are essentially guaranteed. Congresspersons understand that military budgets are “sacred.” Who can argue with “defense” and “preparedness” and “safety and security?” Hence spending has increased over 5% per year for decades while tax revenues have increased more slowly. The result has been larger budget deficits.
Budget deficits necessitate borrowing and debt. Deficits increase and the national debt doubles every 8 to 9 years. In 2018 the national debt is over $21 trillion. Fast forward to 2034-2036 and the national debt will be four times higher – say over $80 trillion – or larger if interest rates climb.
From Charles Hugh Smith:
“Ultimately, all doomed ruling elites face the same problem: there isn’t enough money to fund their take and fuel the vast machinery of power.”
“The politics of the U.S. boils down to one sustained pretense: politicians win votes by promising to fix problems that are the direct result of our bloated, corrupt, unsustainable Status Quo, yet they fund their campaigns by promising insiders and self-serving elites that they won’t touch their Status Quo gravy trains, power and privilege.”
At some future time sanity must return or we become Venezuela!
Military expenses are not the issue; they are an example. We could also focus on farm subsidies, Medicare costs, Supplemental Nutrition (SNAP or food stamps), Agency budgets, pensions, governmental employee raises and many more.
THE REAL ISSUE IS DEBT!
Spend more than your income and you go into debt. That’s how the official national debt passed $21 trillion dollars and unfunded liabilities for future pensions and entitlements are five to ten times higher. Debt is a massive and ever-increasing problem, like heroin to an addict.
From John Mauldin: Debt Clock Ticking
“If debt were a drug, we would demand it be outlawed.”
A solution for the United States: Balance the Federal budget, eliminate debt, use honest money backed by gold, remove fractional reserve banking, and dismantle central banks. These suggestions are “Dead on Arrival” in Washington D.C.
Since we can agree that none of the above will occur without a horrific crash, each individual must protect savings and retirement funds.