Stephen Bryen | Senior Correspondent, Asia Times
The following is adapted from a lecture prepared for delivery at a Hillsdale College National Leadership Seminar in Kansas City, Missouri.
Defending America and America’s friends and allies is expensive. If you add up the price tag—not even including secret programs or the cost of U.S. intelligence—our current defense expenses stand at $875 billion per year. When you add the cost of intelligence, which is vast, the total cost of defense rises to about $1 trillion annually.
Despite these expenditures, the Ukraine War has exposed some dramatic inadequacies. We have learned that America’s arsenal as it stands today would be quickly depleted in any future sustained conflict. And we’ve learned that our allies are in far worse shape.
This raises the question of how we can spend so much on our national security but still have a military that seems so woefully underprepared for a major conflict. Consider, for instance, the remarkable fact that, unlike Israel, we have no national air defense system.
Historically speaking, the heyday of American defense production was during World War II. Vast civilian industries were converted to produce guns, artillery, tanks, and jeeps—and new plants were commissioned to build airplanes and ships.
In World War I, the U.S. sent 4.8 million soldiers directly or indirectly into the war, mainly in Europe. We also sent 1.325 million horses and mules to the battlefield, depleting America’s equine stock. The U.S. came into the fight with no tanks, and at war’s end we had no tanks. We had 45 commissioned transport ships and another 80 former Merchant Marine vessels.
By contrast, in World War II, we sent 16.8 million soldiers to fight in Europe, North Africa, and Asia—around four times more than in World War I. And we manufactured 2,751 Liberty ships in 18 shipyards, turning out three ships every two days.
Such a feat of production is inconceivable today. Building a cargo ship takes years, and most of the production takes place outside of the U.S. The availability of shipbuilding slots has been reduced, particularly in the most prolific shipbuilding nations. China’s delivery time now averages around three years, with tankers at 2.8 years and liquid natural gas vessels even longer. Dry bulk carriers ordered in 2024 are currently expected to be delivered in 3.6 years on average.
In World War II, the U.S. manufactured around 300,000 aircraft, including 63,715 fighters and fighter-bombers for the U.S. Army Air Force, Navy, and Marines. Today, the total number of fighter aircraft in the Air Force, Navy, and Marines is 2,531, about 25 times fewer.
Of course, we have new generations of weapons today that never existed before. These can be summarized under the name “precision guided munitions” or PGMs. Some PGMs are relatively inexpensive, but most of them require sophisticated electronics and multiple sensors. Many require support when in flight and guidance from satellites, most notably the Global Positioning System (GPS), which is run by the U.S. Air Force and costs over $2 billion per year to operate. All of these PGMs are time consuming to build, test, operate, and maintain.
A key lesson of the Ukraine War is that when we deploy certain types of PGMs, such as anti-tank missiles or man-portable air-defense systems like Stinger missiles, it takes years to manufacture new ones. We have also learned that the tooling needed to produce various types of PGMs no longer exists—indeed, in some cases entire factories have been dismantled. This means that if we want more PGMs, we will have to start from scratch.
Another weakness of our defense manufacturing capability is that we depend heavily on global supply chains. Specialized parts may be produced in the U.S., but sometimes they come from other countries, including China. When supply chains are disrupted or certain parts are no longer manufactured, defense production grinds to a halt. The U.S. must reverse this trend quickly if we are to remain dominant.
Consider the fact that most of the first person view (FPV) drones—drones controlled by a remote pilot using video cameras—that are being used on the battlefield in Ukraine and elsewhere are built with parts made primarily in China. This supply chain dependence is a direct result of the globalization of industry and the offshoring of America’s manufacturing—mostly to Asia and especially to China.
While U.S. law requires that more than 50 percent of each piece of defense hardware consist of American-made parts, that standard—already inadequate—runs up against the reality of the outsourcing of goods that are no longer made in America. The defense industry can only control the supplier network tangentially by trying to ensure that components meet military specifications (MILSPEC). Even then, there is a significant number of cheaters who produce substandard parts for expensive military platforms. In some cases, MILSPEC cannot be applied and only commercial parts can be purchased.
A further problem is presented by the fact that our defense industry largely depends on global companies whose priorities do not necessarily include producing parts for defense manufacturers. Both for economic and ideological reasons, the relationship between defense companies and their leading suppliers (usually high-tech companies) is often fraught. Some of these companies won’t even bid on government contracts, which they say are burdensome, impose onerous workforce and electronic security requirements, and are ultimately not profitable. In addition, many workers in high-tech industries will not participate in defense research for political reasons. As artificial intelligence, robotics, quantum computing, and other cutting-edge technologies are becoming increasingly important to the ability of the U.S. to maintain its warfighting edge, this problem grows ever more acute.
Then there is the problem of time. The lifespan of a fighter jet—from the design stage to retirement—can last as long as 50 years. Modern high-tech industries are designing, fielding, and retiring products in a much shorter time frame, and they have no interest in manufacturing products that they deem obsolete. Forty years ago, I asked Bob Noyes, a cofounder of Intel, to look at one of our strategic missile systems where we were encountering supply problems. He recommended that the government itself needed to produce the older (or “sunset”) technologies, because no one else would be willing to do it for us. The same problem persists today.
American defense companies essentially consist of three types: (1) the big four—Lockheed Martin, RTX (formerly Raytheon), Boeing, and General Dynamics—who dominate in terms of contract awards; (2) second-tier companies, some of which are innovative while others are just looking for a contract; and (3) the suppliers. The big four often buy up innovative companies, which sometimes leads to good results, at least for a while.
A complicating factor is that the competition to acquire new technology, such as artificial intelligence, is dominated by non-defense companies with deep pockets. While defense companies are sometimes chasing the same innovations, there are no assurances they will succeed when outbid by Google, Microsoft, Nvidia, or even offshore corporations. While the U.S. government helps defense companies by underwriting critical research and development, the Defense Department does not assist them with acquisitions of high-tech companies.
Almost all modern defense systems need complex software. For example, the F-35 stealth jet runs on more than eight million lines of code. As artificial intelligence capabilities increase in aerospace and defense, the amount of code will expand and new types of processors will be added to the F-35 and many other platforms, such as missiles, tracking systems, fire control systems, and intelligence gathering devices. New AI systems will make the kinds of decisions that are currently made by soldiers, pilots, and command centers and will have the ability to process information at astonishing speeds. This is an excellent opportunity to make the old equipment much better and more effective. One important question is whether our major defense companies will be able to recruit enough high-tech talent to do the job.
We are living in a time when autonomous systems are taking over parts of the battlefield, including in the Ukraine War. But we are not alone in fielding these autonomous AI-driven systems. China and Russia are making tremendous progress in this area. Consequently, our challenge is to upgrade our AI fighting systems rapidly. American defense companies are lagging behind their foreign competitors, and the help they need is unlikely to materialize internally. It is urgent that they team up with commercial AI developers, who should be encouraged to assist with national security priorities.
I worked in a multinational defense company, then the eighth largest in the world, with annual revenues of over $20 billion. But like almost all such companies in the U.S. and Europe, it was built through the acquisition of smaller firms that were combined to make one big corporation. The same is true of today’s big defense companies.
Typically, if a defense company is contracted by the government to produce a PGM, such as the Stinger missile, it will build a facility to do that. When the contract runs out, or there are no more significant exports, the special facility is shut down. This poses a serious problem if the U.S. urgently needs to surge production of that PGM.
One solution to this problem would be the construction of a single flexible facility that could produce a range of PGM products using the same labor force. In that case, restarting a production line could be done much more quickly and easily. This would require suppliers to agree to a consolidation plan to build their products in a common facility. In other words, we need a national security version of Elon Musk’s Gigafactory.
One of the key vulnerabilities of our defense and high-tech infrastructure is that the technology on which it relies is routinely stolen by foreign countries, especially China. In effect, we have two defense budgets: one for us and the other for our enemies. Despite various efforts to hinder or put a stop to this, cyber theft has become a huge business and is tremendously damaging to America’s national security. Until very recently, we have done virtually nothing about this cyber espionage. The thieves are almost never punished. All we do is complain while our enemies bleed us dry.
But cyber is only one area where our adversaries are actively working to damage us. They are using all the tools of espionage at their disposal in an effort to replicate our most advanced defense and commercial technologies. This relieves them of huge costs and speeds up their development schedule for new weapons such as ICBMs, submarines, advanced radars, and satellites.
We must take the steps necessary to protect our defense investments. If we don’t, we may one day find ourselves engaged in a conflict with an enemy who is much better prepared for the fight than we are.
An important thing we learned very early on in the Ukraine War was that the incredibly expensive tanks we gave to the Ukrainians were defenseless against very inexpensive FPV drones. A thoughtful national defense establishment would have drawn the conclusion from this that we should launch a crash project to develop an effective and inexpensive answer to drones. But no such project was launched. So when the Iranian-backed Houthis started firing drones at ships in the Red Sea, what was the U.S. response? For each $30,000 Iranian drone we shot down, we employed two $2 million missiles. A grade-schooler could do the math. That is not a sustainable defense policy.
Recently, by the way, forces on the ground in Ukraine have found that relatively inexpensive shotgun technology is proving more effective against drones than previously tried methods.
We need new thinking—something that doesn’t come naturally to large bureaucracies like the one in the Pentagon—about national defense. A guiding principle of that new thinking must be that the defense budget is not inexhaustible. We should remain hopeful that the new leadership in the Pentagon will shake things up.
