Tuesday, February 17, 2009

Alliant wins $7M ‘green’ ammo contract (ATK) and "What's Missing in the Stimulus Bill?"

From Minneapolis/St. Paul Business Journal:

Alliant Lake City Small Caliber Ammunition Co., a division of Alliant Techsystems Inc., has received a $7.4 million contract as part of the U.S. Department of Defense's Green Bullet Program.

Under the deal, Alliant will modify the basic mechanical and electrical refurbishment to accommodate the “green” bullet design.

The company's Independence, Mo., plant will perform the work, which is expected to be completed by Aug. 31. The U.S. Army Sustainment Command in Rock Island, Ill., issued the contract.

Alliant Lake City received a $6 million order from the Department of Defense in October for M855 green ammunition....

And from Blogging Stocks:

The fiscal stimulus plan: Where is the missing element that solved the Great Depression?

...The most interesting element about the bill is what appears to be missing: a substantial amount of defense spending. Despite disagreements as to whether the Roosevelt infrastructure programs started the road to recovery or merely cushioned impact of the economic downturn of the 1930's, most agree that World War II with its incredible defense spending definitively ended the Great Depression.

Defense spending has a variety of benefits over other forms of fiscal stimulus in the bill:

  • It has a direct impact on economic activity in the United States. There is no need to start a trade war with protectionist language of "Buy American" in the bill to insure that jobs produced stay in the United States. Because of national security reasons, defense spending is by law restricted to be domestic in nature.
  • Defense spending can be spent much faster by government agencies under the control of the President than a trickle down approach of the other elements in this bill.
  • The bill would have attracted much more support from Republicans, who would find it very difficult to oppose spending which they have strongly advocated under President Bush.
  • Many economists believe that this bill is merely the first installment of a multi-trillion dollar fiscal stimulus effort that will be required. This will increases the chances of obtaining backing for such an effort

Some may claim that President Obama would have difficulty selling this to his Democratic base. However, one must remember that the President campaigned on a single anti-war issue, withdrawal from Iraq which is largely in process, and has not been anti-military. His base would have hard opposing the defense stimulus if the President made these points in addition to benefits listed above:...MORE

The first time I saw this idea was a WSJ Op-Ed from Martin Feldstein last December:

Defense Spending Would Be Great Stimulus

All three service branches are in need of upgrade and repair.....MORE
Here's the rebuttal via Economists View:

"Disagreeing With Martin Feldstein On Defense Spending"

Stan Collender rebuts Martin Feldstein's call to use increased defense spending as a stimulus measure:

Disagreeing With Martin Feldstein On Defense Spending, by Stan Collender [Creative Commons]: As I said about a month ago, its not always smart to disagree publicly with an economic icon, especially when he's Martin Feldstein. Nevertheless, a Feldstein article published on Christmas Eve in the Wall Street Journal is so wrong that it and he deserve to be called out....MORE