Defense contractors have generated $ 7.35 trillion since 9/11
Like many human tragedies, September 11 was great news for defense contractors. Over the past 20 years, they’ve generated an impressive $ 7.35 trillion in revenue, according to a Defense News database. The overwhelming majority of this money came from the Pentagon.
Why is this important: Gone are the days when most of the defense budget was spent directly on soldiers. Since September 11, the war has been “modernized”, which means that it is being fought with extremely expensive weapons bought from very profitable private companies.
Go back: When the New York stock market finally reopened on September 17, still surrounded by ash from the smoking Twin Towers, the S&P 500 fell 5% from its closing level on September 10 – then continued to decline over the following days. . .
- the largest American defense contractor, Lockheed Martin, did not follow suit. Instead, its share rose 15% on 9/17, to $ 43.95 per share. Today it is trading at $ 349.
- In numbers : In 2000, Lockheed Martin’s defense revenues were $ 18 billion, or about 71% of its total revenues. By 2020, its defense revenue had climbed to $ 63 billion, or 96% of the company’s total revenue.
Be smart: Private sector spending growth is unlikely to stop anytime soon. “What you are seeing is primarily funding for R&D and the purchase of weapons,” says Todd Harrison, defense budget analyst at the Center for Strategic and International Studies.
- “The size of the army is actually pretty much the same as before 9/11, ”Harrison told Axios – and, he adds,“ we still have the same modernization needs ”.