The Economics of Department of Defense Base Closures

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The Economics of Department of Defense Base Closures

In its most basic element, economist David Colander explains that economics examines how producers and consumers use scarce resources in an attempt to satisfy their unlimited wants (Colander, 2004). Over the past decade, and most recently with the announcement of the Efficient Facilities Initiative, the Department of Defense has forged ahead with a plan to complete multiple rounds of military base closures in order to conserve scarce Defense Department funds and resources. Despite the events of 9/11, which served to exacerbate the misalignment of resources, recent protests by 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 concepts 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).

United States Department of Defense

English: Defense Agencies of the United States Dep...

United States Department of Defense

In the 2001 briefing announcing this new initiative, Pete Aldridge, the Under Secretary of Defense, explained that force reductions and changes 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. Currently, the military is...