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US and World Politics

How the U.S. Military Undermines the U.S. Economy (An Excerpt)

By David Rosen

Military spending for the period October 1, 2019, through September 30, 2020, is at $989 billion and covers the Department of Defense, veterans’ benefits, international military assistance, nuclear weapons spending and military intelligence.

A 2018 Congressional Research Service (CRS) report notes that the “intelligence community” consisted of 17 components and its influence “is significant.”

In fiscal year FY2017 alone, the aggregate amount (base and supplemental) of appropriated funds for national and military intelligence programs totaled $73.0 billion ($54.6 billion for the NIP [National Intelligence Program], and $18.4 billion for the MIP [Military Intelligence Program]). For FY2018, the aggregate amount of appropriations requested for national and military intelligence programs totaled $78.4 billion ($57.7 billion for the NIP and $20.7 billion for the MIP).

The CRS notes, “there are four defense NIP programs, eight non-defense NIP programs, and ten MIP programs. Six U.S. intelligence community (IC) components have both MIP and NIP funding sources.”

Perhaps more alarming, a 2017 New York Times story drew attention to the influence of this taxpayer-funded and highly profitable enterprise.  “Roughly ten percent of the $2.2 trillion in factory output in the United States goes into the production of weapons sold mainly to the Defense Department for use by the armed forces.”

Drawing upon data from the Bureau of Economic Analysis, the Times reminds readers that “public money flows to factory owners in many ways—often as a result of the frequent bidding by municipal governments to persuade a manufacturer to locate a factory in one community rather than another. …That outlay of taxpayer money is concentrated in eight sectors of manufacturing, including ammunition, aircraft, guided missiles, shipbuilding and armored vehicles.”  It states: “To put the matter graphically, factories in the United States churn out one rifle barrel for every nine auto fenders.”

The online journal, 24/7 Wall St. identifies the following top five military-funded corporations for 2017:

“Lockheed Martin—it received $50.7 billion of its total $51.05 billion revenue; it supplies military aircraft, missiles, drones, fire control systems, helicopters, ships and space systems.

“Boeing Co.—it received $23.36 billion of its total $93.39 billion revenue; it supplies the KC-46A tanker, the F/A-18 Super Hornet and Apache combat helicopter.

“General Dynamics Corp—it received $15.34 billion of its total $30.97 billion revenue; it supplies Abrams main battle tank and information systems and technology.

“Raytheon Company—it received $14.66 billion of its total $25.35 billion revenue; it supplies missile systems, radar, sensor and guidance systems as well as cybersecurity technology.

“Northrop Grumman Corp.—it received $11.19 billion of its total $25.80 billion revenue; it operates in three main divisions: aerospace systems, mission system and technology services and supplies control systems for the F/A 18 (as a partner with Boeing), the B-2 bomber and the A-10 Warthog.”

Insight into the top five intelligence-complex corporations is provided by financial data for 2017 from DataLab (with detailed breakdown per agency/function) and a 2016 analysis by The Nation:

“Leidos Holdings—total contacts for $1.68 billion with military and NSA fo Leidos Innovations Corp. and Leidos Management Systems; merged with Lockheed Martin’s Information Systems and Global Solutions division of, the global military giant.

“Booz Allen Hamilton—total contacts for $4.24 billion; it is partly owned by the Carlyle Group and Booz personnel ‘rapidly track high-value individuals’ targeted by the U.S. military in a system now ‘deployed, and fully operational in Afghanistan.’

“CSRA—total contacts for $1.4 billion; its CSRA Information Service unit has a $10.4 million contract with the Army and—following a merger between CSC (which develops and manages the NSA’s classified internal-communications system) and SRA International (involved in intelligence, surveillance, and reconnaissance has close ties to the Air Force.

“SAIC (Science Applications International Corporation)—total contacts for $3.6 billion with $906.5 million for the Army, $735.5 million for the Navy, $263.4 million for the Air Force, $94 million for the Defense Department and $547.8 million for Defense Logistics; recently acquired Scitor that manages satellites for the NSA and the National Geospatial-Intelligence Agency (NGA).

“CACI—total contacts for $670.5 million; with $508.3 for the Army, $116.2 million for the Navy and other funding under different corporate names (e.g., CACI Federal, CACI Information Systems, CACI NSS, etc.) and recently acquired two companies doing extensive work for the NSA and the CIA: National Security Solutions (bought from L-3 Communications) and Six3 Intelligence Solutions.”

David Rosen is the author of Sex, Sin and Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015). 

CounterPunch, October 4, 2019

https://www.counterpunch.org/2019/10/04/how-the-u-s-military-undermines-the-american-economy/