This post was originally published on November 12, 2012.

(The Strategist will return with new material on Monday January 6, 2014)

Andrew Davies’ graph of the week about the elderly USAF tactical fighter fleet raises several issues. But before that it is worthwhile looking at the big US Defense budget picture below. The two big peaks are the Reagan defence build-up and Global War on Terror (GWOT) 2001–2014. Most of the current USAF fighter fleet was acquired in the Reagan years leading to, as Andrew noted, a fleet that is steadily aging.

The graph suggests that it’s unlikely that the USAF will again build a Reagan-era size fighter force. Reagan cut taxes and increased spending. This led to bigger deficits, which in turn led to raising taxes and cutting spending in the elder Bush’s presidency and the Clinton years. This worked, the US Federal budget went into surplus. But today, with the ‘fiscal cliff’ looming, it seems that the US is once again moving towards raising taxes and cutting spending. As the graph indicates, the Obama administration plans to constrain defence spending over the next five years. US defense spending will still be roughly half the world total, but a big Reaganesque increase looks unlikely.

There’s no joy for the USAF in all this and the USAF fighter fleet will just continue to shrink and grow old. There are those who think that the size of the Cold War fleet is still appropriate. But most wars since the Berlin War fell (excepting the 1991 Desert Storm campaign) have used relatively few USAF fighters, as vital to mission success as they were. The Precision Guided Munition (PGM) revolution now means that fewer aircraft can do the work of the larger iron bomb fighter fleets of the Reagan era.

Moreover, in the last two decades the focus hasn’t been on building USAF fighters but improving the Intelligence, Surveillance and Reconnaissance (ISR) system to make best use of the PGM revolution. The demands of the GWOT have led to the USAF acquiring a large fleet of drones. The Predator/Reaper force is being built up so that it can provide 65 continuous (24/7) patrols worldwide, with an ability to surge to 85. This is a big investment. Today the USAF Chief believes his Service leads the world in ISR systems by a significant margin. Given the improved weapons and ISR, buying fewer fighters seems more reasonable.

And there’s also a sub-plot, with some holding that with the pivot to Asia and the great distances in the Pacific theatre, short-range fighters are of limited value, and at odds with the AirSea battle concept. Viewed this way, buying them simply imposes a high opportunity cost. Affordable long-range airpower is seen as the question, with unmanned strike aircraft the answer.

This is all to some degree making a virtue out of a vice. While the benefit side of the cost-benefit equation has been sustained, the cost side is out of control. The F-22 program’s cost ballooned and the F-35 Joint Strike Fighter isn’t doing well. Dubbed the plane that costs more than Australia, even the trade-journal Aviation Week and Space Technology—normally a strong supporter of the American defence-industry—has been harshly critical of the F-35 program. Even a Reaganesque-sized defence budget mightn’t be able to rebuild a large USAF fighter fleet.

There’s something seriously structurally wrong here. The post Cold-War American defence industry seems to have trouble-producing affordable fighters of the calibre of the 1970s F-15 and F-16. The head of the JSF program has publicly criticised Lockheed, the entry to operational service seems uncertain, and there is now talk of competing the JSF support package. The USAF’s sole new fighter, the F-22, has had an onboard oxygen system problem that has taken considerable time to fix. Has the technical capacity of the American defence industry declined that much?

As Andrew noted, the USN is in a better position after taking an often-criticised low-risk approach with the Super Hornet. While not as advanced as the F-22, the USN bought 349 Super Hornets in the 2001–2012 period, compared to USAF’s 179 F-22s, and for a lot less money. Numbers do count—try being in two places at once—and Navy aircrew seem to have no trouble breathing. In the 1960s, when the USAF’s Century Series fighters were seen as less useful for the real wars being fought, the USAF gritted its teeth and bought navy aircraft. This option exists today.

Regardless, the USAF fighter fleet is declining in scale and this decline seems unstoppable. The case isn’t being made for large fighter fleets in the modern era, US Defense budgets are declining, fighter costs are ballooning and the American defense industry seems to lack the zest and sheer technical capabilities it once had.

It’s not clear where this leaves us. Maybe the dominance of manned tactical fighter aircraft is slowly ending and innovative, affordable unmanned air vehicles from smaller, more agile defence companies will progressively take over during this and the next decade. Such systems will do things differently to manned aircraft but maybe that won’t matter.

If not so, the decline in USAF fighter numbers relative to others might be a real problem that we need to think about. Should America’s close allies be concerned by this evident decline in American military power? Is this a good future? And do we need to be thinking hard about what this means to our force structure and capabilities?

Peter Layton is undertaking a research PhD in grand strategy at UNSW, and has been an associate professor of national security strategy at the US National Defense University.  Graph courtesy of USgovernmentspending.com.