How does America make money

US Defense Industry: Big Money with War

"The wars and the fear of new attacks are the engine of our economy". Record sales of $ 1,000 billion, 5.7 million employees.

Washington. Usually these are numbers that companies like to announce loudly. But the four US companies that announced their balance sheet figures last week did it almost ashamed. Because Northrop Grumman, General Dynamics, Lockheed Martin and Raytheon earn their money primarily from the suffering of other people: from the wars in Iraq and Afghanistan. And they do not earn badly from them.

Northrop was able to increase sales in defense and information technology in the first two quarters of 2007 by 15 percent; General Dynamics, manufacturer of tanks and military vehicles, has so far recorded a profit increase of 23 percent, Lockheed Martin (fighter jets, warships, missiles) by as much as 34 percent (the company increased its sales forecast for 2007 to 41.75 billion dollars).


Record budget for the military

The arms industry in the USA is flourishing and thriving like it has not since the iciest days of the Cold War. Not only because of the wars in Iraq and Afghanistan that have cost the US $ 742 billion to wage so far. But because of the general willingness to donate by the US administration when it comes to protecting the homeland after the attacks of September 11, 2001 and supporting allies.

Defense minister Robert Gates and foreign minister Condoleezza Rice have now announced that the armaments aid for the US-friendly countries on the Persian Gulf has broken all records: $ 60 billion will go to Israel, Egypt, Saudi Arabia and other allies. This means that the US defense industry is working to capacity for years. By comparison, in 2005 the United States exported arms worth just 11 billion dollars, 45 percent of global armaments sales.

You don't save at home either. The defense budget reached a new record high in 2007: The US is spending $ 533 billion on its military this year - almost half of global military spending. "If you add what other departments spend on security and defense, such as the Department of Homeland Security or the Department of Energy, you get $ 987 billion," explains Robert Higgs, an employee at the "Independent Institute" think tank.

Almost a trillion dollars a year keep the American economy going and secure millions of jobs. The Ministry of Defense alone employs 2.1 million people. Another 3.6 million people work in the armaments sector. A total of 3.8 percent of all employees in the USA work in the defense industry.


Eisenhower's warning

That means enormous political power. When US President Dwight Eisenhower warned against the influence of the arms industry in his farewell speech in 1961, he originally wanted to speak of the “military-industrial-parliamentary complex”. But the congressmen protested, so Eisenhower deleted the addition "parliamentary" again.

It is precisely the US Congress that is most closely linked to the arms industry and keeps the military machine running. Because the companies have their operations all over the United States and across many constituencies. If military spending is cut or a research program is discontinued, it means layoffs and unemployed. No senator or member of the House of Representatives wants to have to explain at home before an election why thousands of people are left without a job.

The development of the “V-22-Osprey”, an aircraft that takes off and lands like a helicopter, shows the consequences of this interdependence. The development was budgeted for 1986 with two billion dollars. But the program got out of hand, with costs exploding to $ 25 billion in 1988. The development was accompanied by a number of problems.

In 1989, the then Secretary of Defense and now US Vice President, Dick Cheney, wanted to overturn the "Osprey" program. But the Congress did not want to hear about it: the MPs made sure that there was still a budget for it. This September - 21 years after the official start of the project and after 30 deaths during test flights - the US Marines are finally supposed to officially take over the Osprey.


Million donations for politicians

The arms industry reciprocates politically in an appropriate way. In 2006 the companies donated 16.5 million dollars to politicians and parties. Ten million dollars went to Republicans and six million to Democrats. The tobacco industry donated just $ 3.5 million; $ 19 million went to Congressmen from the oil industry.

"The wars and the fear of new attacks are the engine of our economy," says Winslow Wheeler of the "Center for Defense Information" in Washington. The US could not afford peace at all.

("Die Presse", print edition, August 6, 2007)