Northrop Grumman Corp CEO Ron Sugar predicted that U.S. defense spending would continue at a high rate regardless of the Economic hard times and large government expenditures to stimulate the economy. Sugar say that this "economic meltdown" can cause additional security threats and cause the U.S to be vulnerable to attacks.
"We're going to see more mischief, more ethnic tensions, more fights over resources." Says Sugar. The U.S has been burning through equipments and military spending because of the war in Iraq and Afghanistan, but Sugar does not see a slow down in arms purchases even when the U.S is looking to withdraw from Iraq. Northrop has been winning big contracts from the Pentagon and The company's strong revenue growth may allow it overtake Boeing Co. Sugar said. Sugar said his company generated about $11 billion annually, or a third of its overall revenues, from work on information technologies, and said sales in that sector looked likely to expand given mounting concerns about cybersecurity.
The issue of national security is defiantly an important one to Economic development and progress, but at the same time money spend on military will crowd out money going into to sector with higher returns. The nature of national security is that it is hard to predict the demand and access its utilities because one never knows when attacks can happen or the scale of a crises. So i think this leads to the classic dilemma of Guns or Butter.
(Side Note: I think its Ironic that person with such a sweet name as Sugar is one the Top Weapons Dealer, looking at the name I'd think he'll be selling popsicles.)
2 comments:
I have to agree that the spending on the military will continue to stay at a high level as long as we are at some type of war, in Iraq, Afghanistan or just the War on Terror. I don't think that it will hurt us either because we are still one of, if not the most powerful military in the world. Also with Russia increasing their spending on the military, it won't hurt to stay a head. Also with military orders, that means forms of employment. With unemployment on the rise, this can only help
But its hard to use a military for business purposes, but lets say the same money was spent on rail roads, business could then use the railroads to lower their transaction costs, and to build the railroad that will also need employment. So the rialroad would yield higher returns.
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