Two Indicators: Economics of the defense industry

两个指标:国防工业经济

Planet Money

商务

2024-02-22

19 分钟
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The Department of Defense's proposed budget for 2024 is $842 billion. That is about 3.5% of the U.S.'s GDP. The military buys everything from pens and paper clips to fighter jets and submarines. But the market for military equipment is very different from the commercial market. On today's episode, we're bringing you two stories from The Indicator's series on defense spending that explore that market. As the U.S. continues to send weapons to Ukraine and Israel, we first look at why defense costs are getting so high. Then, we dive into whether bare-bones manufacturing styles are leaving the U.S. military in a bind. The original Indicator episodes were produced by Cooper Katz McKim with engineering from Maggie Luthar and James Willetts. It was fact-checked by Sierra Juarez and Angel Carreras. They were edited by Kate Concannon and Paddy Hirsch. Alex Goldmark is Planet Money's executive producer. Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney. Learn more about sponsor message choices: podcastchoices.com/adchoices NPR Privacy Policy

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  • This is planet money from NPR.

  • So there's this company called Transdigm.

  • It's in the business of selling spare parts for helicopters and planes.

  • And one of the parts they sell is this half inch piece of metal called a drive pin.

  • Several years ago, the military needed some of these drive pins and it contracted with Transdigm to buy some.

  • But then in 2019, Pentagon officials reviewed the deal and found Transdigm would charge a $4,361 for this one little drive pin that the Pentagon says should have cost only $46.

  • We reached out to Transtein for comment and they dispute the Pentagon's math.

  • They said the price they quoted at the time was fair for this relatively specialized part.

  • Still, for a half inch piece of metal, some might say that's kind of steep.

  • It doesn't seem right, does it?

  • So I guess the real question is how do you get from forty six dollars to four thousand, three hundred dollars, right.

  • That, by the way, was Phil McManus.

  • He wasn't involved in the transdigm deal, but he does know a thing or two about military spending because he used to work for the Defense Department negotiating deals with defense contractors.

  • Phil says this drive pin story is a particularly extreme example of the government overpaying for military equipment.

  • But it's far from the only one.

  • And this there's a problem.

  • If you overspend for what you do buy, you can buy less of what you need.

  • In a worst case scenario, that literally could mean some poor soldier, sailor or Airman doesn't come back.

  • Hello, and welcome to Planet Money.

  • I'm Darin woods.