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The Economics Of Department Of Defense Base Closures

791 words - 3 pages

The Economics of Department of Defense Base ClosuresIn its most basic element, economist David Colander explains that economics considers how producers and consumers use scarce resources in an attempt to satisfy their unlimited wants (Colander, 2004). Throughout the past decade, and most recently with the announcement of the Efficient Facilities Initiative (EFI), the Defense Department has forged ahead with a plan to complete multiple rounds of military base closures in order to conserve scarce Department of Defense funds and resources. Despite the events of 9/11, which served to intensify the misalignment of resources, recent protests by former Presidential candidate John Kerry allege that base closings are driven "more by ideology than careful planning" (Cahlink, 2004). The misalignment of military force structures and stateside military infrastructure outlined in Aldridge's briefing, help to illustrate the macroeconomic principles of scarcity and supply and demand in a heavily regulated "market."The most recent effort, EFI, amends and improves upon the original Base Realignment and Closure (BRAC). In the 2001 briefing announcing this new initiative, Pete Aldridge, the Under Secretary of Defense, explained that force reductions and alterations in force structure led to the operation of "somewhere between 20 to 25 percent more infrastructure capacity than we need to meet our operational support and training needs of our forces" (Aldridge, 2001). The legislation subsequently approved by Congress and introduced in this briefing allows the Department of Defense to reduce infrastructure by closing, consolidating, or realigning bases and facilities in the United States (Aldridge, 2001). The Department of Defense's EFI and BRAC programs seek to better match facilities (supply) to force requirements for those facilities (demand).The changes outlined by the EFI and continuing BRAC plan represent essential steps in the transformation and modernization of the U.S. armed forces. At this time, the military is operating approximately 25% more infrastructure capacity than necessary to meet the operational support and training needs of American forces (Aldridge, 2001). Eliminating excess infrastructure capacity (excess supply) is just one part of the EFI's purpose. The EFI serves three primary purposes.First, the post-Cold War reduction in forces was not matched by similar reductions in facilities, creating a "tooth-to-tail" ratio imbalance. As a result of the imbalance, the Defense Department spends too much money on the tail (facilities) and not enough on the tooth (forces). In effect, demand for facilities has decreased while supply has remained largely unchanged....

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