The Defence Budget [superthread]

[PuckChaser]

I wonder if the article comparing our defense budget to that of the second world war takes inflation into account. I haven't studied information, but I find it hard to believe that we are spending the same money (in today's dollars) or as a GDP percentage.

Theres no way it does. We were in total war mode in 1945 and any extra money was being put into the war effort.

 

[Journeyman]

It a fairly simple concept IMO. If we want to participate in international military operations (most Canadians do) we have to pay for it.

But that begs the question, do "most Canadians" equate our participation in "international military operations" as combat in South-West Asia.....or some mythical blue beret-wearing UN sun-tanning mission?

I suspect that the absence of critical thinking causes 'SPF 35' to trump 'F-35' in the minds of most Canadians.

 

[George Wallace]

I wonder if the authors of these studies really looked at costs over the past seventy years?  A guestimation of what some of those costs may look like this:


12 oz bottle/can of Coke:

    1940 = $  .05
    2011 = $ 1.00

Draft Beer:

    1940 = $  .05 for 2 X 12 oz glass
    2011 = $ 6.50 for 1 X 10 oz glass


Of course we are spending more on Defence.

 

[Edward Campbell]

Here is a simple graph, courtesy of InflationData.com

As you can see inflation compounds, just like compound interest, and we have seen deflation, too - look at 1920 to 1940.

What is interesting is the two rates of change: 1940 to 1970 (which, had it been sustained, would have trended out to about 750% by 2010) and 1970 to the present (which shows a remarkably consistent trend). 

 

[infantryian]

That graph does cut off at the right side, here is a similar graph from the same source.

This is inflation per decade, but does not register cumulatively
http://inflationdata.com/Inflation/Inflation/DecadeInflation.asp

 

[MarkOttawa]

Guess who's taking the 2011 budget hits?

DND to shoulder almost one-third of spending restraint
http://www.ctv.ca/CTVNews/Canada/20110322/dnd-federal-budget-restraint-110322/

The Defence Department may not be heading back into the old decade of budget darkness, but it could be in for a time of twilight.

The military will make it home from the war in Afghanistan just in time to take a lead role in the battle against the federal deficit.

Figures released in Finance Minister Jim Flaherty’s budget on Tuesday show he’s relying on the Defence Department to rein in spending sharply.

He expects Defence to account for up to 26 per cent of the federal government’s anticipated $2 billion in spending cuts next year.
That figure jumps to 35 per cent in both 2013 and 2014 — or $1 billion a year…

Government supplementary estimates tabled earlier suggest that reduced overseas operations will save Defence as much as $300 million a year starting in 2012, although it’s not clear how much of that is attributable to the changed Afghan mission.

The government announced in the 2010 budget that the military would contribute to the deficit fight, but the numbers have become more stark.

[Douglas] Porter [deputy chief economist at Bank of Montreal] said there’s a certain volatility in the defence projections because, as the Libyan crisis has demonstrated, no one can predict how and when the military will be deployed…

Budget documents call the restraint measures at Defence “a key element” of the plan to wipe the anticipated $29.6 billion deficit for 2011-12 off the books.

Starting next year, there will be cuts to “redundant and outdated equipment” and to the procurement system, which is already short of program officers, will be streamlined.

The department has struggled with big-ticket purchases — such as new supply ships [see here for more
http://www.cdfai.org/the3dsblog/?p=136]
- partly because of a lack of planning staff.

Full details from the budget documents themselves--those details on the impact on DND are pretty well buried:
http://www.cdfai.org/the3dsblog/?p=152

Mark
Ottawa

 

[Haletown]

wonder if that includes the $30 Billion Iggy and Jack say we shouldn't spend on new Fighters . . .  because that money is allocated from current department allocations.

 

[ReneeClaude]

Now I am not much into politics and have a long way to go to understand, but I don't think that the defense is the best place to cut for any Country, I mean, it doesn't really matter if you have free health care, great social programs and what have you, if you can't protect your Citizens... Just my  :2c:

 

[kratz]

My 9er just reminded me that there will most likely be a delay in seeing the annual economic adjustment to our pay due to the election. For the same reason, we will probably not hear of any potential changes to PLD until after the election as well. Essentially everything related to all those items are in a delayed holding pattern  until the fall, most likely.

 

[Fergie]

Hello all,

I managed to find two studies (one of them the actual one cited from the article) that will probably clear the air on the "how is this measured" question.

http://www.ploughshares.ca/libraries/WorkingPapers/wp031.pdf
(a similar study of post-war spending until 2001 with the same author contributing)

http://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2011/03/Canadian%20Military%20Spending%202010.pdf
(the study cited in the article)

Summary:

1) The measurement of defence budgets is done via "Real dollars" with base years in 2001 (the first study) and 2010 (the study from the article).  This is about as accurate you can get at effectively comparing dollars/value across time.  Just like all forms of economic measurement it can't capture everything 100%, e.g. production practices becoming more efficient over time due to technology, but in terms of measuring a defence budget on the whole it's fairly accurate.

2) The article headline skews the actual results of the study... we're not spending more today than we did during WWII, but rather since 1946-47... Obviously a significant difference.

The studies are interesting reads (and not too lengthy) and may provide some interesting surprises, but all in all it's obviously bias against increasing defence expenditures.  Hope this was helpful,

-Fergie

 

[linkinarmy]

Hey I have a quick question here. How is it that the Spanish Armed Forces have a defence budget relatively similar to our own but have over double the man power, More aircraft, equipment, vessels, etc.

Just curious

 

[dapaterson]

Given the amount that DND habitually underspends, a reduction of $500M stil elaves money on the table unspent.

And re: Spain:  I suspect they still have universal conscription, which saves a lot of money on your personnel budget.  As well, our pay scales compare favourably with any army in the world.

 

[linkinarmy]

Ok makes sense. I thought about the pay thing too. It had me wondering though because there a modern professional military that spends around the same as Canada.

 

[Journeyman]

But I'll leave you with a philosophical question linkinarmy....

Of what utility is having a military of "over double the man power, more aircraft, equipment, vessels..." if you withdraw it all from multinational operations and have them all hunkered down at home, where their conventional warfighting skills contribute nothing?

 

[linkinarmy]

Its useless but look at countries like Russia and China with huge militaries that do nothing out side there borders. Im not saying we should have a military of that size. Just wondered how Spain could afford all those capabilities with a budget similar to ours.

 

[Edward Campbell]

Its useless but look at countries like Russia and China with huge militaries that do nothing out side there borders. Im not saying we should have a military of that size. Just wondered how Spain could afford all those capabilities with a budget similar to ours.

Every sensible country maintains just enough military power to meet their national vital interests, at home and abroad.

The Chinese armed forces (the People's Liberation Army), for example, has been drastically reduced in size over the past 25 years and, simultaneously, has made equally dramatic improvements in quality and professionalism. There is a lesser (perceived) need for internal security and a slowly increasing need to employ expeditionary forces - including on baby-blue beret type UN missions.

Canada tries to maintain just enough military power, at the lowest possible cost, to buy us 'seats' at various international tables.

Some countries, Spain is probably one, Russia is likely another, but Canada and e.g. Australia are not amongst them, still perceive domestic threats that appear to require large standing armies, at home.

 

[MrsAlex]

I really liked those Ignatieff'S words you posted (way up there ^). They reflect something I've thought for a while, and tried to explain to people around me. Most people who think CF budget should be cut down argue that we should use diplomacy instead of military to solve international problems. But an healthy army is a major diplomatic tool. It always has been so. I just think the population in general don't understand how important for Canada is its army and how much it costs to keep it not just barely functional but really efficient and competent.

 

[FoverF]

Some countries... but Canada and e.g. Australia are not amongst them, still perceive domestic threats that appear to require large standing armies, at home.

Perhaps. But Australia still manages to operate amphibs, attack helicopters, AWACS, and significant submarine forces, as examples of useful and expensive capabilities which we lack. They also have 2 large flat-deck vessels in the pipeline, and already have a Hornet replacement program in place, with Super Hornets already delivered, and spots secured in the F-35 production line. Each one of these things is, in my opinion, pretty significant.

They do all this while maintaining otherwise comparable naval, ground, and air forces to Canada, and with essentially the same budget.

While not a complete picture by any means, it seems to me like they are getting a significantly bigger bang for their buck.

 

[GAP]

MacKay faces job cuts at DND – and an eager rookie nipping at his heels
JANE TABER OTTAWA— Globe and Mail  Thursday, May 26, 2011
Article Link

The anticipated slash and burn of the public service by the newly-minted Conservative majority government could be starting at the Department of National Defence. Reports Thursday morning say 2,100 jobs will be cut over the next three years.

This as Defence Minister Peter MacKay attempts to defend what many see as his diminished role. In the cabinet swearing-in last week, Prime Minister Stephen Harper appointed Julian Fantino, the former top cop in Ontario, as Mr. MacKay’s Associate Minister in charge of procurement, which comes with a huge budget that is between 14 and 16 per cent of the department’s $22-billion total.
More on link

 

[aesop081]

and already have a Hornet replacement program in place, with Super Hornets already delivered, 

The Super Hornet in RAAF service is not a replacement for the "legacy Hornet". It is an interim measure to bridge the gap between the retirement of the F-111 and the (much delayed) arrival of the F-35. In other words, the Super Hornet is an temporary F-111 replacement.