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Please, No Tanks: Is Pentagon Spending on Autopilot?

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PentagonAccording to the semi-official U.S. National Debt Clock, America is now $15.5 trillion dollars in the red (and counting). How did we get here? In part, by putting government spending on autopilot -- automatic payments of interest on the debt and annual increases in Social Security payouts.

And this month we learn that we're making automatic purchases of military hardware that no one wants or needs.

Over in Washington, where most of America's money gets spent, there's a scandal brewing on Capitol Hill. Congress wants to pass an appropriations bill that would (among other things) spend $255 million to purchase 42 M1 Abrams main battle tanks. There are just a few problems with this plan.

First off, we don't really have any enemies to "point" the new tanks at. The Soviet Union is kaput. China, arguably too valuable a trading partner to fight a war with in the first place, also happens to be located on the wrong side of an ocean. As for the enemies we do want to point guns at, years of battling tank-less foes in Iraq and Afghanistan have taught the U.S. Army that oftentimes, a mix of Humvees, MRAPs, and Strykers is better suited to modern warfare.

Which brings us to the final and most crucial reason why we might not want to spend a quarter-billion dollars on a few dozen main battle tanks: The Pentagon doesn't even want them.

Turns out, the only reason Congress is even considering spending this money is to try to keep General Dynamics' (GD) tank factory in Lima, Ohio, open -- just in case we might need to build tanks in the future.

We don't, and we won't.

Giving It Away


The fact is, we've already got so much surplus "tankage" in the U.S. that last year we offered to give Greece 400 M1 Abrams tanks for free. (We did ask the Greeks to pay the shipping, however. Our generosity has its limits.)

As it turns out, this is standard operating procedure for the Pentagon. In 2010 the U.S. tried a similar fire sale on military equipment, offering to give Romania 24 slightly used F-16s -- also for the low, low price of zilch.

America's "buy, mothball, then give away" strategy works out well for defense contractors like Lockheed Martin (LMT) and General Dynamics. But it's probably not the best stewardship of taxpayer dollars.

Fool contributor Rich Smith holds no position in any company mentioned. The Motley Fool owns shares of General Dynamics and Lockheed Martin.

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Geof

Obama stimulus money is visible all over Texas - road construction/improvement, bridges, etc. Employs thousands. We'll take the 1/4 billion and re-hire teachers. I'll take 4000 teachers over 41 M-1s any day. The plant workers can come down here and prepare the next generation.

April 04 2012 at 10:55 PM Report abuse rate up rate down Reply
Sami S

I live in Lima Ohio and the General Dynamics tank plant is one of the only Industries left in our small town. It employes good engineers, skilled workers, and basically is a major part of the economy here. If you close it down, the country loses its best people involved with building the best tanks in the world. If you lose this capability and we get involved in another war where we need them, we are screwed. Also, I understand that they are looking long term to building other things there in the next decade that the general public does not know about. So the plant has to be kept open, both for the good of the country and the good of the Lima, Ohio area. I believe in putting our tax dollars to good use. This is much better than wasting the money on president Odumbo's two failure stimulus packages. Also, social security needs to be revamped; I would much rather put my money into other investments not controlled by the govt. If they flop, its on me, not the tax payer.

March 31 2012 at 2:51 PM Report abuse rate up rate down Reply
zt54

Now, the hippies run amuck again, They don't serve, stack up endless bills in handouts to their ilk, and spawn a few writers who do nothing but complain about defense. They make me sick.

In the meanwhile Obama spends billions and trillions where did it go? Nothing absoultely nothing solved with him as President. Vote him out this fall and save the country.

March 23 2012 at 8:14 AM Report abuse +1 rate up rate down Reply
orlandorrsr

Social security should not be discussed in this same breath. It is paid for by it's contributing participants not a hand out or, entitlement as some would have you believe, these selected words create a label of bad stigma. If you do not know what you are talking about please it would better serve to say nothing. Stay alert, educate yourself. Live and love within your mean!...?

March 23 2012 at 4:42 AM Report abuse rate up rate down Reply
JARED

you think thats bad go to a base DRMO there is so much waste,

March 23 2012 at 4:40 AM Report abuse rate up rate down Reply
Hello!

It's the fault of military culture and the way they do the budget. Soldiers and Sailors go through toilet paper, paper towels, paint, and other consumables like they are going out of style. In the Navy, paint is a necessity because of ship upkeep, but ship captains a lot of times have the crew paint for purely political reasons, or just because they want the ship to look brand new. Usually, the ships need a little, but repainting the entire ship only really needs to be done maybe once a year, or every other year. Then there is the problem that if a command goes too many quarters with extra money on the books, they will cut it that money. So the culture is to save all the money and use it sparingly till the end of the quarter, then spend it all, whether or not you need too. Or you end up with a command like the decommissioned USS John F. Kennedy. The Captain inherited a nightmare of a ship that was broken by fact that the ship was undergoing a massive renovation in a shipyard when Congress shut down the shipyard. So it was never renovated, only about half the equipment worked, and the Captain was under the assumption that he would lose a chance at Admiral if he reported it. He ended up losing it anyway for not reporting it.

March 23 2012 at 4:03 AM Report abuse rate up rate down Reply
Gumby

We wouldnt have to worry so much about the follies of our government budgets as long as we still have enough energy to power our economy along. As of lately, we are seriously hampered by rising costs of producing enough energy to keep our economy humming along. That was why we got into deeper debts and how important it is to keep our efficienceis up. There is still too many gas guzzlers running our economy into the ground everyday! Those gas guzzlers couldnt care any less about what is happening to our energy prices. even if our economy collapsed, they figure to be still Mad Maxes after all!

March 23 2012 at 3:31 AM Report abuse rate up rate down Reply
crossingsg

It is an error to lump the payments on the federal debt and the costs of the military-security-industrial complex with the payments to Social Security. Social Security has an income stream from payroll taxes, plus it has a Trust Fund of about $2.4 trillion that is owed hundreds of billions in interest each year. The military complex and the interest on the debt have zilch for incomes. The Pentagon has not had an audit in decades and doesn't want one. The Ryan budget just released does not go after military spending one bit. We have 80,000 soldiers in Germany for some reason, and about the same number in the Far East. We don't have the money to be the policeman of the world any more. President Obama wants a "balanced" approach to the reduction of the annual deficit. That is all about increased revenues and decreased spending, with reductions in waste, fraud and abuse. There would be no better place to start with those reductions fraud, waste and abuse than the Pentagon.

March 23 2012 at 2:51 AM Report abuse rate up rate down Reply
Leonard Thomas

The A-1 Abrams tank has a sad vunerability: it easily destroyed by explosions through the floor. To have over 400 of the tanks is rediculous, but to buy more is pathetic.

What's really cool is when Congress will not pay the national debt off, or even make a significant installment on the debt, $.62 from every $1 in the US budget goes to Afghanistan military costs.

What a country!

March 23 2012 at 2:50 AM Report abuse +1 rate up rate down Reply
1 reply to Leonard Thomas's comment
rich

I didn't know the Abrams tank was vulnerable? I thought we lost less than 5, and closer to 1~2 in the Iraq war. If a kill ration of 100+ to 1 is vulnerable than we should make more of them. I'm not gung ho but there is nothing more important to any american than a strong military which is the main purpose of our federal government. Without freedom and security you have nothing.

March 23 2012 at 2:22 PM Report abuse rate up rate down Reply
S.E.S. USA

Interesting timing for certain. While Lima, Ohio may be a good example, and a quarter billion here and there adds up; especially when we don't need the product. The ones we give away are rebuilt older models but still, Greece could take them and sell them for parts to repay their debt.

Timing is interesting because my company is being asked to resurrect products we sold to the Military when first going into Iraq. We haven't sold one in six years. There is some benefit to our Military to keep certain industries alive because just when you don't think you need it anymore, here comes a need.

March 22 2012 at 11:47 PM Report abuse +1 rate up rate down Reply