Hereâ€™s an example of one of those things Iâ€™ve been saying forever and ever coming into the headlines.
The US Department of Defense will need an extra $42 billion in the next fiscal year to account for soaring inflation and rising procurement prices, according to the National Defense Industrial Association.
In a report released on Tuesday itâ€™s estimated that the Pentagon will experience a $110 billion loss of purchasing power because of record-high inflation.
It also warns that this development â€œcomes at a dangerous timeâ€ as the US faces challenges from China and still suffers from Covid-19 fallout, as well as supply chain and workforce issues. The crisis also overlaps with the ongoing Russian military campaign in Ukraine, a country Washington has been supplying with weapons and other aid.
â€œInflation is particularly disruptive to our national defense because the long budget and acquisition processes [the Pentagon] use prevents timely adjustments for inflation,â€ the report states.
If this deficit is not remedied, this will bring about â€œmaintenance backlogs, lower readiness ratings and delays in modernization effortsâ€ and various other programs, undermining the overall readiness of US forces.
To salvage the situation, the report recommends that Congress add at least $42 billion to the Fiscal Year 2023 Defense Budget to avoid losing buying power, provide inflationary relief to companies that hold long-term fixed price contracts with the Pentagon while adjusting all future contracts for rising prices.