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Why Defense Stocks Could get Crushed in Coming Years
Townhall.com ^ | November 5, 2011 | David Sterman

Posted on 11/05/2011 3:10:43 PM PDT by Kaslin

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1 posted on 11/05/2011 3:10:45 PM PDT by Kaslin
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To: Kaslin

but a rising number of deficit hawks in the Republican Party are willing to trim Department of Defense (DoD) spending as well.


Of course, the real way to cut the deficit is by cutting entitlements, but that will never happen with the bunch of spineless bastards in Congress. You cut ALL defense spending and still have a gaping deficit. Before this charade is over, that’s probably what will happen too.


2 posted on 11/05/2011 3:28:22 PM PDT by rbg81
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To: Kaslin

Cutting way back on the Defense budget is going to have a significant effect on the unemployment numbers. There are hundreds of thousands of people who work for defense contractors, especially in the metro areas of L.A., Boston, Washington D.C. and many others.


3 posted on 11/05/2011 3:43:10 PM PDT by Signalman
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To: Signalman
Cutting way back on the Defense budget is going to have a significant effect on the unemployment numbers. There are hundreds of thousands of people who work for defense contractors, especially in the metro areas of L.A., Boston, Washington D.C. and many others.

It'll dwarf the losses in the coming decades as China tries to beat out our contractors for foreign sales.
4 posted on 11/05/2011 4:01:34 PM PDT by af_vet_rr
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To: Kaslin

most dire.


5 posted on 11/05/2011 5:20:41 PM PDT by ken21
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Click The Pic

As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible: avoiding occasions of expence by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it; avoiding likewise the accumulation of debt, not only by shunning occasions of expence, but by vigorous exertions in time of Peace to discharge the Debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burthen which we ourselves ought to bear.

George Washington

6 posted on 11/05/2011 5:22:02 PM PDT by DJ MacWoW (America! The wolves are here! What will you do?)
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To: Kaslin
My employer is primarily focused on DoD. That is reflected in our stock price. It was around $18 in May 2009. Has dropped as far as $11.06 in recent months. Too much of my retirement money is/was tied up that way. I got hosed in a big way when Obama took office. Both of my contracts evaporated. Six months functionally unemployed with no contract work to fund my paycheck. Lots of vacation hours burned to stay afloat. I had to relocate myself to San Diego to keep earning a pay check. My family is still comfortably situated in our Idaho home. I own the house and the cost of living is much lower than San Diego. Ready to go home anytime I can land a contract to work from my home office again.
7 posted on 11/05/2011 5:53:38 PM PDT by Myrddin
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To: Signalman
Defense contractors tend to take home a better than average pay check. When they become unemployed, the businesses they were patronizing lose their patronage. The ripple effect will be significant.
8 posted on 11/05/2011 5:56:10 PM PDT by Myrddin
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To: rbg81

If Obama wants to cut defense spending, he has to stop starting new wars and pseudo-military efforts (support to Libya, to fight Lord’s Resistance Army in Uganda, VIPR teams in the U.S.).


9 posted on 11/05/2011 7:22:36 PM PDT by tbw2
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To: Myrddin

you could say the same thing about many government employees. Defense contractors eat up a huge amount of tax money.


10 posted on 11/05/2011 7:23:07 PM PDT by ChurtleDawg (voting only encourages them)
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To: Kaslin

“.....and it’s increasingly looking as if the automatic cuts will be the path.”


Wrong.

There will be NO automatic cuts.

Only cuts DISGUISED to look like automatic cuts.

Shameless political camouflage so all involved can shrug and claim, “There was nothing I could do.”

And the sickest news of all...

Government spending, government debt, and money printing will still go up EVERY year.


11 posted on 11/05/2011 8:26:09 PM PDT by zeestephen
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To: Kaslin

Of course, the best thing that our government could do, is to dramatically increase defense spending for essentials - in the near term.

Build vehicles; build bomb casings, build artillary; build all kinds of sub-assemblies. But, immediately shrink wrap all this stuff, without tires, batteries, munitions, advanced electronics, perishables. Stuff that would deteriorate or become obsolete in a distant future.

Give us a stockpile of ready weaponry for an unknown future war, with the basic guts of what will be needed.

Employment now; military savings later; with an immediate ability to rapidly mobilize troops for the future hotspots!


12 posted on 11/05/2011 9:39:38 PM PDT by Noob1999 (Loose Lips, Sink Ships)
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To: ChurtleDawg
you could say the same thing about many government employees. Defense contractors eat up a huge amount of tax money.

Without the defense contractors, you won't have any of the technology that gives our military the edge over our enemies. There are legions of government employees who could be dropped immediately with no impact on our ability to defend the country. Defense is about 18% of the total budget and is one of those items constitutionally authorized. The entitlement programs are the lion's share of the budget and unconstitutional.

13 posted on 11/06/2011 12:40:06 AM PDT by Myrddin
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To: Myrddin

how much is needed to defend the country and how much is waste? how many of those highly paid defense contractors actually necessary?


14 posted on 11/06/2011 11:58:45 AM PST by ChurtleDawg (voting only encourages them)
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To: ChurtleDawg
how much is needed to defend the country and how much is waste? how many of those highly paid defense contractors actually necessary?

Here's a clue...there are few government employees who can deliver what those contractors provide. Many of the contractors are getting old e.g. 50 to 70 years old. The skills they possess haven't been passed to a new generation to carry them on. Mostly for lack of budget. When the old guys die, so does the technology they provide. Want to build another SR71? Too bad. The ability died with the guys who did it. Do you want enemy aircraft bombing you or would you prefer to have air superiority so that doesn't happen? It's a choice you have to make years before you need it. If you guess wrong, you die.

15 posted on 11/06/2011 5:31:29 PM PST by Myrddin
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To: Myrddin
Well said.

If I recall correctly, the next generation destroyer (Zumwalt class) was to be constructed at either Bath Iron Works in Maine or Passcagoula in Mississippi.

Well, it turned out that whichever shipyard did not get the contract was likely to get out of the business of building big navy ships. Not enough business to keep going. These were the only two sites in the country that could do it, and one of them (either of them) was on the verge of losing the ability.

The US Navy split the work and gave some to each shipyard. But we are just that close to losing the ability to perform this work.

Similarly -- although the technology is not currently considered worthwhile -- I remember when the USS Iowa (battleship) had an accidental explosion in a main gun turret, it was found that we no longer had the ability to repair it. Couldn't be done, so the ship sailed with two of three main gun turrets operational. Subsequently, the Navy retired all battleships, so the loss is negligible, but nevertheless it tells the story.

It takes decades to get these skills back. We don't have decades. We won WWII in 3.5 years. We couldn't match that performance today.

16 posted on 11/06/2011 7:01:51 PM PST by ClearCase_guy (I won't vote for Romney. I won't vote for Perry.)
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To: Myrddin

who is gonna be bombing us? seriously. No country on earth has anything close to the technology to seriously challenge the USAF. Iran? North Korea?


17 posted on 11/06/2011 9:13:36 PM PST by ChurtleDawg (voting only encourages them)
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To: ChurtleDawg

Iran. Surface to surface missile launched from a ship off the east coast of the US. EMP or nuke. Pakistan has multiple subs with 12 nuke capable launch tubes. China has been selling nukes and missiles to Iran. Any technology that we wish to field for the military takes 10 to 20 years from concept to deployment. When you cut the defense funding, the people who are capable of doing the work have to find another line of work. Often you can’t get them back when someone finds money again. The technology is lost and costs more to recover if it can be recovered at all. Our enemies steal our technology. Clinton handed the Chinese ring gyro technology in exchange for campaign cash. That enabled them to put rockets into space and nukes on US soil. Toshiba compromised the propeller milling technology that makes our subs quiet. Now those Paki subs are less likely to be detected.


18 posted on 11/06/2011 10:33:22 PM PST by Myrddin
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To: Kaslin
We should shut down all bases in Western Europe and Taiwan.

Western Europe because, come on, in the line of fire before Germany is Poland.

Maybe move them to Poland? I don't know, but I do know Poland would be cheaper than Germany

Ditto for Taiwan -- and my reasoning for that is that the Taiwanese have bankrolled mainland china for more than a decade -- why should we defend them when they have sold themselve out?

I support keeping bases in Japan and S. Korea -- they are strong allies.

19 posted on 11/07/2011 12:39:59 AM PST by Cronos (http://www.freerepublic.com/focus/religion/2787101/posts?page=58#58)
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To: ClearCase_guy; Myrddin; ChurtleDawg
I'm not a defense professional and definitely not as educated as you two guys on military matters, but to express my opinion -- why do we need to spend on big ships and bombers that are/were targetted for enemy countries? Isn't it more like that the enemies would be terrorists/small guerrila attacks?

Spend more on technology for the infantry -- like for instance, why supersonic jets and not more Warthogs? Why not spend money on super-Kevlar or some such thing to keep the soldiers safe? Make more precision artillery or spend more on that

just my 2 c

20 posted on 11/07/2011 12:45:39 AM PST by Cronos (http://www.freerepublic.com/focus/religion/2787101/posts?page=58#58)
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