Gauging The Direct And Indirect Costs Of Deployment

Ashton B. Carter has identified three ways of comparing the relative costs of offense and defense:^[12]   

The Council on Economic Priorities (CEP) adds a fourth: a net cost assessment that includes complications caused by a Soviet deployment of defenses.^[13]    (Thus, for example, a Soviet defense of strategic forces and

C³ could require a costly U.S. offensive response that must be added to the cost of a U.S. defense, insofar as the United States believes it advisable to maintain an offensive threat to those elements of the Soviet military forces.)

Although these formulas are useful, they do not preclude significant disagreements over cost estimates. Carter contends that fuel, in the form of chemical reactants necessary to pump chemical battle lasers, would require a full shuttle load to be orbited—a cost that, in comparison to Soviet cost per warhead intercepted, would not be favorable to the defense. SDIO analysts dispute this estimate, which they believe overstates the required weapon ranges and the power needed to fire a lethal beam at each target. Launch costs are potentially critical in view of the assumed weight of the battle stations to be orbited. In estimating costs, much would depend on the characteristics of the systems. If the Soviets elected to deploy missiles with less accuracy in order to threaten cities, costs would go down.^[14]   

As Carter also points out, the offense can "stress" the defense by putting all its missiles in one region and increasing their number. Because of the need to provide continuous coverage, the defense is compelled to greatly increase—by as much as two or three times—the number of satellites needed to assure a successful rate of interception in the boost phase. Everything depends on assumptions made about the number of intercepts the battle satellites could perform in a given time and the time available during boost and post-boost phases. Countermeasures could also stress the defense, for example, by decreasing its effectiveness and increasing the weight that would have to be put in orbit.^[15]   

Is SDI affordable? As the CEP study points out, in an economy producing more than $3 trillion worth of goods and services each year, a $32 billion six-year research program "is not likely to bankrupt our nation." But there is a significant opportunity cost to be paid, as the study also notes. Money invested in SDI is money that could be invested elsewhere, or, if unspent, would reduce the budget deficit. The costs could be significant for the balance of the economy, especially because of the possible effects on the distribution of technical employment in military and civil industries. Although the supply of engineers is affected by rising and falling demand in other defense and nondefense sectors, the supply of physicists is relatively fixed in the medium term. Efforts to draw physicists into work on directed-energy weapons, for example, would create shortages and reduce the effectiveness of R & D efforts elsewhere. Some of the slack might be taken up by encouraging immigration,

as higher U.S. salaries and better research opportunities attract qualified scientists from other countries. In general, the recession of the early 1980s cooled demand for qualified scientists and engineers, but the renewed growth in the economy took up this slack. Higher salaries in industry have already affected Ph.D. programs in the natural sciences. In 1971, 3,498 new Ph.D.s were awarded in the natural sciences. In 1981 the number was 2,528. An increasing percentage of Ph.D.s is being earned by foreign students (51.5 percent by 1981 compared to 29.8 percent in 1971). In the fall of 1980 universities reported that 10 percent of their faculty positions were vacant. While undergraduate enrollments in engineering increased by 66 percent from 1969–70 to 1981–82, faculty increased just 11 percent. Teaching loads were increased and schools were unable to offer courses in some areas. More of the actual teaching load has fallen on teaching assistants and part-time faculty.^[16]   

The deep recession that began in 1981 mitigated the problem. Companies found it easier to recruit qualified personnel, and starting salaries fell back. In examining the cost of SDI deployment, the question for the future is what will happen if economic growth persists and accelerates and funding for SDI draws qualified researchers away from other employment. A study prepared for the NSF indicated that between 1982 and 1987, new entrants and immigrants would match or exceed the demand created by economic growth and attrition in all but three of the twenty-one occupational groups of engineers and scientists: computer specialists, aeronautical/astronautical engineers, and electrical/electronic engineers. If demand is high in both the civil and military economy, demand for computer specialists would exceed supply by 30 percent—or 138,200 people. But if demand is low, the problem would be much less serious. The most likely difficulties will be found in certain sectors, such as aerospace, where demand in both military and civil programs is expected to be high.^[17]   

To gauge how many engineers, scientists, and technicians the SDI would absorb, if funding met original projections, the CEP team constructed a rough mathematical estimate, based on assumed yearly outlays for SDI, which were converted into production per industry. Then the average number of jobs per billion dollars of RDT & E expenditure was computed for each industry, on the assumption that SDI will require the same levels of production as the average in military RDT & E, which the CEP study admits is a questionable assumption, in view of the fact that SDI involves technological exploration rather than full-scale

development. The result is likely to underestimate the number of scientists, engineers, and technologists (SETs) required. The CEP study estimates that in 1984 the SDI required about 4,800 SETs, a figure that would have risen to 18,400 if projected spending over the next five years had materialized. Although SDI would remain only a small fraction of overall national and DOD demand, SDI could have used about 5 percent of the total SET personnel employed by the Pentagon and roughly 0.5 percent of the national total. The CEP estimated that between 1984 and 1987 the DOD would require roughly a third of all new engineers, of whom SDI would account for about 12 percent. SDI's impact would be particularly acute in the areas in which its work is concentrated: computer professionals and aeronautical/astronautical engineers.^[18]   

By comparison, as the study points out, the Apollo program took up 13.5 percent of national funding for R & D, and NASA as a whole accounted for about 21 percent of total national R & D. SDI could take up 5.1 percent of total R & D by 1990. In marginal terms, however, SDI is already as significant as Apollo. Apollo received 40 percent of new R & D funding in 1965 and 20.8 percent in 1966. If SDI had met its projections, it might have used roughly 34.6 percent of new R & D funds during 1986. Even though the federal government encouraged university students to become space scientists and layoffs owing to defense cuts provided a pool of qualified people, by 1966 there were indications, nevertheless, of a severe shortage of scientists and engineers; the unemployment rate for engineers fell to 0.7 percent. As a result, R & D labor costs grew rapidly, and basic industries, forced to compete with aerospace and electronics industry salaries, found R & D investments less attractive. Similarly, increased demand for skilled manpower in the SDI could draw away skilled personnel from other fields, imposing higher costs on industries also requiring those specialties. The CEP study estimated that at the projected level the SDI could require 4 percent of all new engineers between 1984 and 1987 and that the DOD would likely take up a third of all engineers, with SDI requiring more than 12 percent of the total.^[19]