The White House has shattered the dreams (and dark side ambitions?) of millions of Star Wars fans around the world. Despite fervent calls from the general public, the Obama administration will not approve the building of the Death Star, and no trillion dollar coins will be minted either. While the White House refuses to heed the impossible requests of Star Wars fans, the U.S. government continues to pour hundreds of billions of dollars into a shiny new F-35 jet, but has so far failed to produce meaningful results. With the country being crushed by nearly 16 trillion dollars debt, many are beginning to question expensive military expenditures and projects such as the F-35.
Certainly the United States needs to maintain its military superiority. With China on the rise and Russia undergoing a resurgence, American military might can buffer against any expansionist efforts. And the global war on terror appears to be here to stay. Still, with massive deficits projected for years to come and an economy that is growing uncompetitive and leaving millions unemployed, one has to wonder if the U.S. can continue to field its lofty military ambitions.
Modern Day Asset Management
ValueWalk's Raul Panganiban interviews Ross Klein, CFA, and Vince Lorusso. Ross is founder and CIO at Changebridge Capital and Vince is Partner and Portfolio Manager at Changebridge Capital where they manage the CBLS, Changebridge Capital Long/ Short Equity ETF and CBSE, Changebridge Sustainable Equity ETF. The following transcript is computer generated and may contain some Read More
The F-35 is to be the center-piece of the next stage of the U.S. military. The F-35 is supposed to be the United State’s ultimate multi-role fighter. Global warfare is growing increasingly complex and a wider range of targets, including caves and nests of targets nestled in civilian urban areas. Militaries must now be more flexible as country vs. country warfare is all but unheard of. At least on paper the F-35 can help the U.S. military become more dynamic in war zones.
In theory the F-35 is supposed to be highly adaptable and capable of taking on a wide range of roles. The F-35 is far smaller than the United States premier air superiority fighter, the F-22a Raptor, itself the result of a huge research and development project. In theory the F-35 is far more stealthy and capable of striking more ground targets than the F-22a. The F-35 should prove to compliment the F-22a and increase the U.S. armed forces overall capabilities by allowing for a wider range of targets to be hit.
Still theory does not appear to be transitioning to reality and the F-35 has been plagued with problems in-spite of the 400 billion dollars spent on the project. The F-35’s controls and support systems are networked and have proven vulnerable to cyber attacks, as Navy hackers have successfully hacked into the jets control systems. While the military has been working to strengthen the system, there is a high risk that security flaws will exist no matter how much time and effort is spent. Many now believe that hackers from rival countries, such as China and Russia, could exploit these weaknesses.
Additionally Chinese hackers have stolen huge amounts of data on the jet system, including information that may compromise its advanced radar capabilities. After spending 400 billion dollars on the jet, the U.S. may lose its technological advantage as other national governments continue to hack information and may eventually be able to construct their own technologies based on U.S. research, which would result in dramatic cost reductions.
Also, there are legitimate reasons to question the need for such an advanced jet. The United States is well ahead of its peers in terms of both military technology and defense spending. Most analysts agree that the country with the second most powerful armed forces is Russian, whose military technology is based largely on 30 year old Soviet technology and has advanced little since the fall of the Soviet Union. China is gaining ground but is still years behind the United States and so far most of their ambitions seem to be regional, not global. With such a huge lead over rival militaries it’s fair to question whether the United States currently needs to upgrade its military at such a rapid rate.
Further, with international trade, the nuclear deterrent, and the rise of influential global institutions the possibility of a war between major powers, such as the United States and China, now seems remote. Most countries are simply too intertwined to wage war with one another. While a fighter as advanced as the F-35 would certainly be useful in a war against China, its benefits in wars against extremists groups, such as the Taliban and Al-Quida is questionable.
With massive deficits and the looming reality that the U.S. must cut spending, there are legitimate reasons to question huge expenditures to develop weapons such as the F-35. In a global economy economic might is proving to be just as influential (if not more so) than military might. The U.S. military could easily defeat the Chinese military in a straight fight and yet it is the Chinese who are rapidly expanding their influence through Africa, the Middle East, Asia, and the rest of the world, often at the cost of U.S. power. If the United States does not adapt to meet the political and economic threats posed by rising regional powers, their military superiority may prove to be mute.