Well...this is a triple-edged sword of reform right here. Hurting monopsony is never a good thing, because those companies employ a bunch of people. Of course, they could always redistribute their manpower to ramp up production on what the government does want, but that is an imperfect solution. On the plus side, it is good that they are making significant defense budget cuts, as trimming the budget in a time like this is probably for the best, and it will give Obama more money to work with (I don't like what he's doing with a lot of the money he is using, but it is better for him to have enough money to actually roll things out than to have him half-ass programs that will need to be fixed later). On the in-between side, there is a danger to halting our technical defense advancement (if the shit does end up hitting the fan, we don't want to get blown away just by virtue of inferior technology).
So, overall, I suppose I would have to lean towards this being a bad plan. The jobs protected by the government defense monopsony are pretty damn important, and the people working for them aren't really going to be helped by any government jobs that the money from these cuts could potentially create. Being behind on military technology is never good. The superpowers staying about equal in technology is pretty important for global stability, and we don't want to get behind (especially considering the power of China). The benefits don't seem to justify the potential costs.
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