Opportunity cost illustrated

On a one year anniversary, a look back to (one of the reasons) why the National Guard’s post-Katrina rescue and recovery efforts were hampered.

From GAO, RESERVE FORCES (October 20, 2005) comes the following graph depicting Federal control of Army National Guard manpower — and by implication what manpower is available for other activities, including natural disaster preparedness:

Figure 1: Army National Guard Activity under Federal Command and Control from September 2001 through July 2005. From GAO, RESERVE FORCES: Army National Guard’s Role, Organization, and
Equipment Need to be Reexamined
, October 20, 2005, page 10.

The report continues, discussing equipment issues (pp. 12-13):

“Increasing equipment shortages among nondeployed Army National Guard
units illustrate the need for DOD to reexamine its equipping strategy and business model for the Army National Guard. The amount of essential warfighting equipment nondeployed National Guard units have on hand has continued to decrease since we last reported on the Army National Guard in 2004. Compounding the equipment shortages that have
developed because most Army National Guard units are still structured
with lesser amounts of equipment than they need to deploy, Army National Guard units have left more than 64,000 equipment items valued at over $1.2 billion in Iraq for use by follow-on forces; however, the Army has not developed replacement plans for this equipment as required by DOD policy. In addition, DOD has not determined the Army National Guard’s equipment requirements for homeland security missions, and some states are concerned about the Guard’s preparedness for future missions.


The Army National Guard began transferring people and equipment to
ready units deploying to Iraq and Afghanistan in the early days of the
Global War on Terrorism and the number of transfers has grown as
overseas operations have continued. In June 2004 the Army National
Guard had transferred more than 35,000 pieces of equipment to ready
for overseas operations. By July 2005, the number of equipment items
transferred among Army National Guard units had grown to more than
101,000 items. As a result of these transfers, the proportion of
nondeployed units that reported having the minimum amount of
equipment they would need to deploy16 dropped from 87 percent in October 2002 to 59 percent in May 2005. However, Army National Guard
officials estimated that when substitute items which may be incompatible with active forces, equipment undergoing maintenance, and equipment left overseas for follow-on forces are subtracted, nondeployed units had only about 34 percent of their essential warfighting equipment as of July 2005. Further, as of July 2005, the Army National Guard reported that it had less than 5 percent of the required amount or a quantity of fewer than 5 each of more than 220 critical items. Among these 220 high-demand items were generators, trucks, and radios, which could also be useful for domestic missions.[Emphasis added -- mdc]

A more recent GAO report evaluating the overall military response to Katrina is more specific:

“In addition, some National Guard responders were short of equipment. For example, one National Guard unit deployed to the area of operations with only 5 percent of its communications personnel and 50 percent of its communication equipment. As a result of these problems, military forces lacked good communication between headquarters units and troops on the ground. While subordinate military commanders are trained to complete their missions even when they do not have communications with their headquarters, this lack of communication made it difficult for senior military leaders to determine which missions had been completed, which were still ongoing, and what new missions may have surfaced.” (p. 26)

It is unclear to me that matters have improved since last year. In the context of the Army’s program of modularization, from CRS, “U.S. Army’s Modular Redesign: Issues for Congress,” Report RL32476, May 5, 2006.:

“Another issue concerns National Guard modulariztion. Some maintain that equipment shortages for Guard units converting to the modular structure could be even more pronounced than those of active duty units. The National Guard Bureau Director, Lieutenant General H. Steven Blum, reportedly stated that the Army National Guard was already “under-equipped” and “under-resourced” before the war — a condition some suggest is historical as Guard units traditionally have less and older equipment than their active duty counterparts.
This condition is further exacerbated by the fact that many Guard units have been required to leave their equipment in Iraq for other units, both Active and Guard, to use. In some instances, Guard units left all but their soldier’s individual equipment in Iraq, which has had a significant impact on those unit’s ability to train and also to
fulfil their state missions, such as disaster relief and homeland defense. Such extreme shortages might also have a significant impact on Guard units converting to modular brigade combat teams.”

From a narrow, fiscal perspective, this suggests to me that the currently estimated “burn rate” for operations in the Iraqi theater of operations of $8 billion per month is probably understated (see also this CRS report, p. 13). More broadly, these reports illustrate starkly the concept of opportunity costs.
For non-governmental discussion, see: [1], [2], [3], [4], [5], [6]. For another example of opportunity cost regarding the impact on naval shipbuilding plans, see here.

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5 thoughts on “Opportunity cost illustrated

  1. Dick

    Menzie, since your focus was on equipment needs of the National Guard is it possible to separate the state equipment needs for natural disasters versus federal equipment needs for federal command military engagement? It would seem that there are distinct differences in equipment needs for each of these roles.
    I have been unable to find the separation of responsibility for equipment provision between the state and the federal government. Is that available? Perhaps budgets.
    Finally, in natural disasters the primary need would seem to be manpower rather than equipment. What were the numbers for manpower available during Katrina and how was that manpower utilized by the Governor of LA?

  2. The Glittering Eye

    Catching my eye: morning A through Z

    Here’s what’s caught my eye this morning:
    Winds of Change has an interesting military assessment of the Israeli-Hezbollah hostilities.
    Armchair Generalist give an overall positive assessment to a report from the House Intelligence Commit…

  3. menzie chinn

    Dick: My limited understanding is that the Federal Government provides the funding for most of the equipment, and indeed a good portion of recurrent expenditures. I don’t have a breakdown of how the equipment and manpower needs break down between Federal and state.
    All I can do is provide this link to a recent article related to this issue, from the Washington Post.

  4. Dick

    Thanks Menzie. From my limited research it appears that a majority of the funding for the National Guard comes from the federal government. That does lead me to question if this is a proper role for the federal government. If the president federalizes the national guard then the federal government should adequately equip them, but if the national guard is working for the state and managed by the state then it seem that the state should fund them. It appears to be a typical federal tax grab by taxing citizens then taking a cut at the federal level before sending it back to the states.
    Why did Willie Sutton rob banks? Because that is where the money is. Why do crooks get into government?

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