When ‘Unconventional’ and ‘Unprecedented’ are Not

The tax sinkhole known as the United States military is projecting more development cost overruns in connection with the F-35 joint strike fighter.

Already the most expensive weapons program in history and years behind schedule, writing of approximately 35 million lines of computer code and other testing could cost an additional $5 billion on top of the already projected $50 billion to be spent for development alone, according to the Fort Worth Star-Telegram. Despite promises to the contrary, the estimated maintenance costs have also soared to some 250 percent than that of the plane the joint strike fighter is designed to replace.

By Justin Raimondo’s account, the plane was designed primarily to knock out Iranian tank forces following an American-endorsed invasion. Depending on your outlook, then it might be considered good news that the time schedule for deployment was recently pushed back an additional year for the Air Force and Navy versions and by as many as three years for the Marine version. Given that Israel will be the first foreign government to acquire this next-generation fighter, Raimondo’s belief has some merit.

In a Star-Telegram article earlier this year, the Defense Department acknowledged that the production estimate of $115.5 million for each plane, even after accounting for price inflation, was nearly twice the original estimate when the program began in 2002.

Chalmers Johnson and Tom Engelhardt call this practice “front loading.”

Front-loading is the practice of appropriating funds for a new weapons project based solely on assurances by its official sponsors about what it can do. This happens long before a prototype has been built or tested, and it invariably involves the quoting of unrealistically low unit costs for a sizable order. Assurances are always given that the system’s technical requirements will be simple or have already been met. Low-balling future costs, an intrinsic aspect of front-loading, is an old Defense Department trick, a governmental version of bait-and-switch.

Military contracts can hype promised results, offer rosy cost estimates, and profit from continuous modifications and repairs that are a consequence of the shortened testing schedule demanded by the military under political pressure to deliver a final product.

In their defense, Lockheed-Martin, the main contractor responsible for building the F-35, has said these estimates are much higher than the company’s own estimates.

Whatever the final price tag comes to be, the true opportunity costs of having to borrow money the government does not have will be exceedingly higher. The government plunders resources from honest people. If it doesn’t tax directly, the inflation tax strikes at the least advantaged among us. Even if we took a simple view and added up the government expenditure and calculated the the subsequent loan payments to finance the program expenses for 30 or more years, the total present-value cost in today’s dollars would likely be double. None of this factors in the higher costs for consumer goods, the higher interest rates for capital investments (and thus lower productivity), the resources and lives lost in conflicts, nor the positive effects of a division of labor with other so-called enemies nations that have a comparative trade advantage.

Ironically, Lockheed’s tagline for this program is “Unconventional. Unprecedented.” No, not at all, and that is part of the problem.

Image credit: World’s Saddest Man, with a Creative Commons license