A Fiscal Crisis: The West Is on the Wrong Side of Cost Curve

An axis of aggressors has embarked on a new strategy to defeat the West: relentless attacks with inexpensive weapons, produced at scale, to provoke a global response. Western militaries, which cling to outdated and excessively expensive weapon systems and platforms (that take too long to develop and replenish, and regularly exceed their budgets), are being systematically bled dry.  

Advertisement

In simple financial terms, the West is on the wrong side of the cost curve. Imagine the defense industry as a normal business. In economics, a cost curve illustrates the relationship between production costs and quantity. Successful businesses achieve economies of scale, reducing costs through efficiency. But the West's defense enterprise is operating on the wrong side of this curve. Production costs are high, and output is low, pushing Western nations into diseconomies of scale.

The recent aerial attack on Israel and the war in Ukraine expose this vulnerability. Iran’s 300 plus airborne weapons that targeted Israel amounted to less than $200 million dollars whereas the Western response exceeds billions of dollars. In Ukraine, multi-million dollar weapons platforms are destroyed by uncrewed aircraft systems (UAS) that range from hundreds to thousands of dollars, and Russia’s prized Black Sea Fleet has been devastated by inexpensive maritime drones. Defense analysts estimate the cost ratio is easily 100:1.

Join the conversation as a VIP Member

Trending on HotAir Videos

Sponsored

Advertisement
Advertisement
Advertisement