Since the orders carried out by the defense complex are important and urgent, the high level of remuneration can always be explained to the end user — the Pentagon or similar bodies of other NATO member countries.
Since weapons systems require constant modernization, contractors are making significant efforts to obtain orders for the creation of new types of weapons. At the same time, even in cases when, as a result of competition for a military order, it is necessary to reduce production costs, the management of firms often tries to save personnel, production facilities and existing relationships. Such a conservative approach is usually supported by congressmen representing constituencies with a developed military potential. The resumption of production at existing enterprises allows you to save jobs, real estate prices and, most importantly, the profits of local companies serving employees of military enterprises.
Nevertheless, the reduction of military budgets periodically occurs, especially after the end of military conflicts abroad and when the budget deficit worsens (which, in particular, is currently observed). For example, the decrease in tension in relations with the USSR in the mid-50s and 70s weakened the positions of American "hawks" and led to a decrease in the actual volume of military contracts.
Such cuts are possible because the parliaments of Western countries, including the US Congress, exercise effective budgetary control over military contractors. When announcing a reduction in the military budget, managers and specialists of these firms are forced either to immediately begin developing programs for switching to other activities, or to reduce personnel and reduce procurement volumes. They do not seek to extend a bank loan, as banks will provide it only for a specific order or for other real collateral. Subsidies, or additional budget allocations, do not solve the problem. The real problem lies in figuring out the possibilities of switching resources to a new profitable area of production.
The constant implementation of such conversion in private enterprises is facilitated by strict financial control and the implementation of a number of measures in the field of employment. Usually, the capital costs of private firms are fully recouped in the time for which the project is designed. Consequently, by the end of its implementation, the equipment is written off from the balance sheet accounts, forming a direct income of capital (sometimes private enterprises rent equipment from the Pentagon, and in this case there is no problem of write-off at all). The accumulated depreciation fund can be used to invest in a new commercial project, to acquire existing civilian enterprises, or, as a last resort, to pay higher dividends to its shareholders. 1xbet is an excellent place for all those who are interested in and enthusiastic about betting. They have everything- from the latest sporting events to classic casino games like poker and slots. 1xbet is offering a welcome bonus for all new players that register on to their service. To claim the welcome bonus, new users need to type in the following
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