The Cost Of America’s Global Leadership

It has been over six months since the Houthis, a Yemen-based Iranian-backed militia, began attempting to hold the world’s economy hostage by attacking civilian shipping in the Red Sea, a vital trade corridor between Europe and Asia. It was quickly recognized that the Houthis had to be stopped. The West responded with “Operation Prosperity Guardian,” a multilateral force to protect civilian shipping and attack Houthi aggressors.

Although oil prices stabilized, marine insurance rates returned to a higher equilibrium than before the start of hostilities, and input shortages that plagued manufacturers like Tesla, Volvo, and Suzuki were resolved, it does not appear that the Houthis (or their Iranian paymasters) have been contained. After a months-long, exhausting, and inconclusive running battle with the US Navy, the Houthis managed to sink a second cargo vessel in mid-June. Maritime shippers are suffering declining volumes of traffic and insurance markets are unlikely to be reassured by the presence of military assets.

This is not the inevitable difficulty of defending maritime shipping lanes. From 1987-1988, the US Navy defended almost a third of the world’s oil supplies from direct and sustained attack by Iran during the Iran-Iraq War as part of the so-called “Tanker War.” During 1988’s Operation Praying Mantis, the US Navy and Marine Corps crippled the Iranian Navy’s ability to interrupt civilian shipping by destroying numerous Iranian missile launchers and mine layers. The operation required a massive expenditure of munitions and the judicious use of air power but succeeded after only one day of combat.

In contrast with past victories, the story of failure in Yemen is not only a failure of execution or leadership but rather of long-term military procurement. If the U.S. naval forces assigned to Yemen did not have to ration their munitions usage, the world economy wouldn’t be held hostage by Iranian proxies. A mere 55 vital ship-launched Tomahawk missiles were produced in 2023. The first day of combat in Yemen saw the U.S. launch 80 Tomahawks. This problem isn’t limited to one platform – everything from torpedoes to small arms is being underproduced and is in tight supply.

Operations to support freedom of navigation in the global commons obviously cost billions of taxpayer dollars and will cost more. The U.S. military spent a minimum 1.6 billion dollars on combat operations in the Middle East, mostly Yemen, between October 2023 and February 2024. This figure does not count missiles, which the U.S. military had to have express ordered and pay more for, at a cost now soaring into the billions with no exact figures available, such that even the Pentagon is worried. If the U.S. had kept producing and stockpiling Tomahawks and other missiles such as MK 48s and MK 54s at 2007 levels, we would have far more missiles at a far lower price.

Most egregiously, even American airpower faces huge budgetary and supply bottlenecks. China and Russia are both busy standing up next-generation air fighter platforms to challenge U.S. air superiority. The controversial F-35 program, America’s purported answer to peer adversaries, was found by a Pentagon report to have serious problems, especially its Technology Refresh-3 upgrade. With only 30% of F-35s able to operate at full efficiency and perform all missions, U.S. air superiority is in question.

In response to a Forbes inquiry, Lockheed Martin’s spokesperson wrote: “TR-3 is a top priority for Lockheed Martin, and we remain focused on the implementation of the capabilities. We are encouraged by the solid TR-3 progress as we advance from prior software versions towards the combat-training capable configuration. Flight testing of this configuration is underway, and test results to date support our expected timeline of delivering the first TR-3 combat training-capable aircraft in the third quarter.”

America’s answer to Russia and China is the sixth generation Next-Generation Air Dominance Platform, projected to be rolled out by 2030 as the successor to the F-35, and also designed to replace the aging fleet of F-22 Raptors. Unfortunately, it faces uncertain future due to budgetary constraints. While the argument that the U.S. spends more on defense than other countries, America and its allies now face challenges in Europe, Asia, and the Middle East, yet the Congressional Budget Office projects a decline in the percentage of spending from today’s 2.9 percent to 2.5 percent of GDP by 2034.

The unnecessary shortages America is experiencing across its defense industrial base are unacceptable and avoidable. In every case, from Tomahawks to the endangered NGAD fighter, the same faulty logic of “penny wise pound foolish” prevails. A bureaucrat looking to “trim fat” cuts back on weapons orders today, and in the end, we pay far more to rush deliveries of desperately needed systems and ordnance.

While America’s 2023 National Defense Industrial Strategy presents a good framework to ameliorate some of these flaws, the US still seems determined to repeat mistakes made with the Tomahawk and other platforms such as the NGAD. The entire NGAD development program is set to cost 28.5 billion dollars from 2025-2029 and includes the delivery of 200 fighters. While this isn’t pocket change, it only represents less than 1% of likely defense expenditures over the course of 4 years, using the 2023 budget as a base.

1% of the defense budget for the NGAD, a platform that would integrate drones automatically accompanying and assisting a manned fighter using “loyal wingman” technology to counter China’s 6^th generation fighter program isn’t just a worthy investment; it’s a bargain – provided we develop the capacity to plan beyond a single financial quarter.

The United States is a global leader, and leadership demands upfront expenditures to maintain the global economic and political system that overwhelmingly benefits US national security and business interests. However challenging it is to maintain a robust defense industrial base, it is far more expensive to rush orders, import weaponry, and mitigate damage to the global economy resulting from security disruptions. If we flinch at the cost of global leadership, imagine how much we will flinch if China seizes Taiwan, Russia destroys Ukraine, or Iran fully dominates the Middle East and holds the world’s energy market captive.