In reply to SV reX :
"In its accounting, the Pentagon used replacement cost to value the weapons aid, instead of the weaponry's value when it was purchased and depreciated, the senior defense officials said."
IE:
- a tank costs $10 million to replace today.
- a tank cost $3 million back in 1990, but depreciated to $1 million today.
If we give an ally 10 tanks considering their replacement value, we're at $100 million.
If we give an ally 10 tanks considering their depreciated value, we're only at $10 million.
Replacement value is only a consideration if we need to replace that equipment. If we're building a new version of the tank, and we'd never use the old version, why use replacement value as total amount of aid?
From a political standpoint, this allows to give a lot more aid for a much lower dollar amount.
But, that's not without issues either.
If we base our policy off what we percieve as cheap old equipment, we can give a lot of equipment to Ukraine for a low dollar amount. But what happens when we need to give them better, newer equipment that IS NOT surplus?
Suddenly you go from:
100 tanks, 1000 missles, 20 drones, 2mil rounds, 1000 shoulder fire missles, etc etc etc a proverbial Costco cart full of equipment for low low price of $6 billion.
Then the admin comes back and says, "we want to send 10 currently operational F16's to Ukraine. ""How much will that cost to replace?" "6bil" - "will those planes end the conflict?" "No"
"The Department of Defense's change in evaluating the costs of arms sent to Ukraine is a major mistake," U.S. Senator Roger Wicker, the top Republican on the Senate Armed Services Committee, said. "Its effect would be to underestimate future needs for our European allies. Our priority should be a Ukrainian victory over Putin. Unilaterally altering military aid calculations is an attempt at deception and undermines this goal.""
If you're a Representative with a lot of DoD contracts, you're likely getting some pressure from those manufacturers to value aid at replacement value because it will bookmark that value as a future amount of money that needs to be spent replacing that equipment.
But it's surplus. It's like the previous example of claiming an old unused car is worth $10k donated for a tax right off, but in reality, it's only worth $500. Then claiming to your wife that you should be able to spend $10k on a new car because that's what thought the old one was worth as a donated item.