They are betting that a key component of the US Military Industrial Complex survives long enough to pay back the interest or whatever profit tool the loans operate under. I'd take that bet.
But there's a reason to funnel that money besides padding pockets: the nominal reason (and not a bad one if you are not a full pacifist) is to retain development capability for the next time you actually do need a military aviation innovation burst. And arguably this wasn't really successful. Chances are that rebuilding capability from a hypothetical starved state would yield better results than restoring efficiency from the comically fattened state they got.
It’s military aid, not arms sales. There’s little incentive the resources be used efficiently. That way there can be more aid bills. It’s what people voted for I guess.
Much of those funds come with stipulations on how they must be spent; namely, on military hardware from US Defense manufacturers. So the aid ends up back in the US ultimately and effectively acts as a subsidy to the Defense industry.
Your conflating military aid with this contract. When we provide military aid, it's in the form of credit for purchases from approved U.S. countries, pending Congressional approval. This was a straight military equipment purchase.
Preventing the loss of manufacturing capability is one of the reasons for offering military aid to friendly countries. We give them money to buy weapons, but they are obligated to buy certain weapons systems with that money.
For example, the Saudi's really don't need all those M-1s they buy from us (with money we give them), but we offer the it keeps our production lines open and active.
It's a devious way of laundering military readiness expenses.
The money was mostly spent domestically, the US military wants domestic suppliers to minimize risks in an actual war. This means they is domestic manufacturing for everything from missiles to socks.
But there are tons of those missiles. Are they in danger of running out? There's gotta be a surplus of some ordnance that could be better spent as food. I know the budget doesn't really work that way, but it's pretty surreal how much money is consumed in a war. One bomb could put pay for a scholarship for a lot of those soldiers.
The money came from corporate debt which was on very favorable terms because of the government cash flow for military contracts. The other part came from investors who invested into Boeing because of growing stock prices due to military contracts.
I always thought the idea was that these things are loaned to local governments on the condition that they can use them until there is a need to send them back into combat..
It's also a geopolitical strategy. Even if that spending is rarely ever actualized in an armed conflict, the threat to do so still exists from the perspective of other countries. It's debatable how effective that is, but it's disingenuous to say it's just done for jobs or making contractors rich.
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