Navy Secretary Ray Mabus came to Mobile yesterday to help christen the Navy’s newest ship, the USNS Choctaw County. Named after Choctaw County’s in three different states, the ship is the latest churned out by defense contractor Austal at the Mobile shipyard. It is the second joint high speed vessel made in Mobile. Secretary Mabus was joined by 29 women he graduated with from Ackerman High School in Choctaw County, Mississippi, in 1966. Theresa Gilliam Pitts officially christened the ship.
The Navy needs all the firepower it can get at the moment. President Obama recently sent two ships to the coast of Libya after a consulate building was attacked there. Embassies across the region were under assault this past week after a film denigrating Islam was released on Youtube by an Egyptian American. The president has sent Marines to a few of the embassies to secure them.
Future orders from the Mobile shipyard could be in jeopardy thanks to looming defense cuts. Last year, Congress passed the Budget Control Act, which stipulated mandatory cuts to defense and discretionary spending if they could not come up with $1 trillion in deficit reduction. Congress failed, so a process called sequestration went into effect. Upwards of $50 billion will be taken out of the defense budget next year unless a new deal is struck.
President Obama has vowed not to let the cuts affect soldiers pay or benefits. Money for expensive projects like ships and jets is likely the first to be cut. This will probably affect Austal, who still has a contract to build more ships. If sequestration goes through, at least part of the contract will be canceled. The company has recently expanded operations in Mobile, and if that happens, there could be job losses.
While it is clear our defense budget has gotten a little out of control, cutting that spending is something of a double edged sword. It is good for the budget, but it can harm the economy. The military industrial complex has become a huge employer in the US thanks to companies like Austal. It is something economists have come to call “weaponized Keynesianism”. The downside to this type of spending is that the products created by it do not serve a direct economic benefit like infrastructure or education spending would. It is a problem Congress will have to hash it, likely in the lame duck session at the end of this year.