Department of Defense Comptroller Robert F. Hale gave a talk recently that underlines a key problem troubling not only our national defense, but explaining why the economy has been so bad for so long. The problem is the uncertainty being created by the government itself.
The problem comes from a a nation that is divided. As Mr. Hale's remarks demonstrate, the inability of Congress to pass a budget -- he is too kind to point out that this is Congress' most basic responsibility -- have put DOD in a worse position than if the Congress had simply cut its budget. Instead, Congress cut the budget and then set up a possible future budget cut called sequestration. Sequestration has been looming as a possible, but not a certain, problem for a long time now. In the most recent deal to avoid the 'fiscal cliff,' though, Congress just put off a decision on sequestration a little while longer.
Anyone who has ever been on a military staff knows that you can plan around a bad decision from On High, but you can't plan around indecision. You can kick around some options, but until a decision is made you can't write orders. Until the New Year nobody knew whether the budget for this year was going to be X, or X minus 45 billion dollars. Nobody knew for sure just where that hacksaw would fall. Today, nobody still knows. They just know they'll have two months less to plan for it.
It's not just DOD, or the defense industry that is connected to DOD decisions. It's true for the broader economy as well. The reason the recovery is so slow is that people who have capital aren't making investments that would spur job growth. Why? Because anyone pondering an investment faces uncertain costs. Between Obamacare coming online, massive regulatory changes being put forward by an activist administration, and Congressional malfeasance on the budget, no potential businessman has any idea what his costs will be next year, two years out, five or ten years out.
Of course they won't invest in this environment -- they'd be fools to invest when they can't even estimate what their costs will be. Our government is making it impossible.
Politicians should accept that the American people returned a divided government in almost the same form as before the election. Neither side has the right to push its agenda in this environment. What we do need to do is provide some stability to military planners and those who are planning potential investments in America. Government lacks the power to fix the problems that face us, but it sure is managing to make them a lot worse.