Valuetainment - “Defense Contractors NEED War” - Trump Pushes $1.5T Military Budget

00:00:00.000 The Pentagon comes out and asks for a 42% year-over-year hike in their budget

00:00:04.180 with a $1.5 trillion defense budget that they're asking for 2026.

00:00:12.380 And this is a Barron story.

00:00:14.220 Let me read this to you, and then we can go there, Rob.

00:00:17.600 So eight big winners from Trump's historic $1.5 trillion defense request.

00:00:21.440 And, Tom, I'm going to come to you.

00:00:22.640 Rob, is that about this or no?

00:00:25.560 Yes, it's Kevin Hassett.

00:00:26.860 All right.

00:00:27.100 So on Friday, Trump unveiled the fiscal's 2027 budget of one and a half trillion dollars.

00:00:32.220 The one and a half trillion dollar number will be up 42 percent.

00:00:35.140 And it's a historic increase not since seen since the Korean War when the annual defense budget jumped from 14 billion in 1950 to 33 billion in 1951, almost a 48 billion in 1952.

00:00:49.560 The Navy is projected to see its ship budget more than double, $65.8 billion versus $27.2 billion, wrote Vertical Research Partner analyst Bob Stellard, also seen a big jump in the Space Force.

00:01:03.380 Its request of $71.2 billion represents 77% year-over-year increase.

00:01:09.520 That is relatively good news for shipbuilders, General Dynamics, and Huntington Ingalls Industries

00:01:16.560 and for space startups, including Rocket Lab, Firefly, Aerospace, and of course, privately held SpaceX.

00:01:22.780 Huntington stock gains 2.8% on Monday.

00:01:24.980 General Dynamics stock rose 0.7%.

00:01:26.860 Rocket Lab stock went up 0.1%, and Firefly shares went up 5.8%.

00:01:31.320 The Defense Department is also asking for 85 F-35 jets from Lockheed Martin up from 47 in fiscal year 2026.

00:01:40.040 The Army gets an increase in the armored multipurpose vehicle or AMPV made by Britain's BAE.

00:01:47.000 And, you know, last but not least, both of those stocks, L3 Harris Technologies and RTX,

00:01:52.960 have gained more than 65% over the last 12 months, leaving them trading for about 26 times estimated 2026 earnings.

00:01:59.540 Tom, your thoughts on this?

00:02:00.400 So there's two things going on in here. One is forward and the other is replenish.

00:02:08.020 On the forward side, they're taking the things that have worked. The F-35 is working.

00:02:13.240 We've just seen it work. And so they're like, we need more of what works.

00:02:16.960 And some of those F-35s are going to find their way to Saudis. Some of them are going to find their way to Israel.

00:02:22.580 There's a variety of places where we are going to have those and use them.

00:02:27.300 And that's, you know, almost doubling the 47 from the previous.

00:02:33.080 Then there's replenish.

00:02:34.580 We have been, every year the defense budget, you know, you buy bombs, you buy missiles, you don't use them.

00:02:41.000 You buy surface-to-air, SAM, surface-to-air missiles.

00:02:43.620 You buy air-to-air combat, you know, all of the things that are out there.

00:02:48.060 And now, guess what?

00:02:48.880 We've been using them up.

00:02:50.100 So there is a big, big, we got to, you know, we just had everybody over to Grandma's house.

00:02:55.260 We stayed there a week.

00:02:56.280 We had Thanksgiving.

00:02:57.300 And as we leave, we need to make a Costco trip because we've got to refill grandma's pantry because we've eaten everything in her pantry.

00:03:04.500 So we've got to replenish all the bombs and stock and missiles and things that we've used up, number one.

00:03:10.880 Number two, we're buying a bunch of stuff that works.

00:03:14.720 And number three, we're discovering just how valuable Space Force is, and so we are radically increasing what's been spent on that.

00:03:23.180 And lastly, war is really good for business if you're a defense contractor.

00:03:29.620 The sad thing about war is they're the soulless, faceless defense contractors see it as a test bed and they see it.

00:03:38.720 They want they want war. They want border skirmishes.

00:03:41.400 They want, you know, aircraft engagement with North Korea and China to just kind of test each other a little bit up there in the skies over the Sea of Japan. 0.84

00:03:53.460 They want that. And this gives them an ability to test things.

00:03:57.200 And so this is the price tag. This is the price tag of forward armament.

00:04:01.500 This is a price tag of adding Space Force.

00:04:03.860 This is also the price tag of refilling the pantry because we just used up all of our bombs.

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00:04:40.240 Conditions apply.

00:04:41.960 Okay, when I sell my business, I want the best tax and investment advice.

00:04:46.720 I want to help my kids, and I want to give back to the community.

00:04:49.860 Ooh, then it's the vacation of a lifetime.

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00:05:12.540 Colin.

00:05:13.960 Yeah, I mean, it seems like a big number.

00:05:18.800 I mean, in totality.

00:05:20.800 Do you support it?

00:05:21.400 Do you think this is a good thing we're doing to get tighter and get more fighters?

00:05:24.000 I don't know.

00:05:24.600 I mean, I'm not privy to, you know, the crazy thing to me,

00:05:28.800 these numbers are so big.

00:05:30.460 I mean, where does $1.5 trillion even go?

00:05:33.740 I do.

00:05:34.240 I like a lot of the aspects.

00:05:35.660 I mean, here's one thing.

00:05:37.300 In terms of long-term innovation, the U.S. military has actually been in, had an incredible multiplier effect on the U.S. economy in the long run.

00:05:46.860 So out of all of the places where we spend a lot of money, the military is one of these things where, you know, whether it's the Internet or, you know, things like the, just the knock-on effect of all of the different technologies that go into a lot of this.

00:05:59.360 I mean, you look at people like Palmer Luckey and people who are, you know, incredible innovators.

00:06:03.780 I mean, going to, you know, the whole Space Force thing, you know, people mocked that a few years ago.

00:06:08.520 But now, you know, controlling space and, you know, who's got the most satellites, who's got the ability to see the rest of the world.

00:06:15.560 That all of a sudden looks like the arguably the most important strategic, you know, economic and military viewpoint of anything.

00:06:24.780 So I don't know. There's a there's definitely there's a lot to like in here.

00:06:28.760 I think the problem with these humongous numbers is you go back to things like, you know, these these audits of like the Pentagon where they're like, you know, whoopsies, we lost a few hundred billion dollars and we just don't know where it went.

00:06:41.660 And it's like, how how the hell does that happen?

00:06:44.780 Brandon.

00:06:45.820 Yeah, of all the things in the world that there are to piss me off, this is probably number one, because it's like the biggest or second biggest line item in the defense budget, you know, after Medicare and Social Security.

00:06:58.360 And it's an objective fact that 25% of the existing $800 billion gets lit on fire, right?

00:07:03.900 It goes to nothing, just gets price gouged because we let these four defense contractors overcharge us

00:07:10.240 because it went from 200 in the 90s after the Cold War to just four or five of them today.

00:07:15.900 And when it comes to the defense contractors, they don't just want war.

00:07:19.180 They need war.

00:07:19.840 They would shrivel up and die without a war.

00:07:21.300 I'm of the belief that since World War II, we haven't had a necessary war.

00:07:24.880 We've had wars that they've lobbied for that they've fought hard for to get into, whether it's the Korean War, whether it's the Cold War, whether it's the war against terror, whether it's NATO against Russia when Russia wanted to be part of NATO.

00:07:39.100 All of those weren't necessary.

00:07:40.820 They were necessary for the beast that was created during World War II, the military-industrial complex.

00:07:45.240 Now, when it comes to this, I would cut it down to $500 billion, not increase to $1.5 trillion, make them get the most out of what they're using right now.

00:07:54.120 because they're not even spending the full $800 billion of it.

00:07:57.180 $300 billion of it's going to waste.

00:07:59.040 So, what, we're just going to make the number bigger

00:08:01.180 so that the number that's wasted gets bigger?

00:08:03.580 No, I'm not a fan of lighting money on fire,

00:08:06.660 especially when it's taxpayer money and we're running a deficit every year

00:08:08.900 and we're already at $40 trillion and we're just at $35 trillion.

00:08:12.060 Like, that's where affordability goes.

00:08:14.020 I think a lot of people, day-to-day regular people, would side with you.

00:08:18.040 And they would say, that makes sense.

00:08:20.180 Why are we doing it, right?

00:08:21.660 But I think the better question to ask, Brandon, to be honest with you, is the following.

00:08:27.220 I was in the military, and I would order parts for Humvees.

00:08:30.620 And I would go to my Sergeant Braxton, if he's around.

00:08:33.380 I haven't spoken to the guy for 20-some years.

00:08:35.000 I love Sergeant Braxton.

00:08:36.380 I would say, Sergeant Braxton, why is this lug nut, why is this ball joint, whatever, for the Hummer, $2,800?

00:08:47.000 This is really a $400 product.

00:08:49.640 Well, it's the government.

00:08:50.700 We always overpay.

00:08:51.400 That doesn't make any sense to me.

00:08:52.840 So this is why I was excited about Doge.

00:08:55.080 Yeah.

00:08:55.660 Because we were going to get to the bottom of this.

00:08:57.900 If you're running a business, you hire a new CEO,

00:08:59.940 first thing they're going to look at it and say,

00:09:00.920 let me renegotiate all the contracts.

00:09:02.680 Why are we spending so much money with this?

00:09:03.880 I'll never forget one of the things we did is we had a guy that would keep

00:09:06.640 buying memberships because he controlled the company credit card.

00:09:09.660 You would remember this guy.

00:09:10.880 He bought 900.

00:09:12.020 We were like, how many reoccurring things are we paying for?

00:09:14.620 900 things.

00:09:15.420 I said, what?

00:09:16.720 Yeah.

00:09:17.620 So this guy comes in and audits.

00:09:19.000 He's like, we don't need to pay 900 different things.

00:09:21.400 of memberships that we have.

00:09:23.180 So one by one by one, we don't need this, we don't need this,

00:09:25.040 we need this, we need that.

00:09:25.820 Okay, I think the bigger question here to ask is,

00:09:29.200 you have two case studies.

00:09:30.640 You have Russia and Ukraine, U.S., Israel, and Iran.

00:09:34.020 And we both, all of us around the world, saw what?

00:09:36.540 Became a very powerful tool.

00:09:38.560 Drones.

00:09:39.300 So I want to know what we're doing to change the strategy

00:09:43.900 of the future wars.

00:09:46.100 Whether it's going to be, if we go back and keep buying weapons

00:09:48.900 the way we bought for decades, okay, fine.

00:09:50.740 how much of it is going into the new warfare how much of it is the defense against cyber warfare

00:09:56.820 because people right now you know whenever when you're not when you're healthy guess what you

00:10:01.960 don't think about your health when you're healthy how do you eat when you're healthy bad whatever

00:10:07.060 you want to eat and then all of a sudden you have a heart attack and then all of a sudden you have

00:10:11.380 cancer all of a sudden you go to the doctor you're like whoa i remember one time i went to the doctor

00:10:15.580 the doctor's like you may have because i couldn't speak for six months i literally lost my voice

00:10:19.680 Tom will remember this.

00:10:20.600 This was how long it was, 15 years ago, 10 years ago, something like that, 13 years ago.

00:10:24.760 And I go to the same doctor that was Whitney Houston's doctor for your throat.

00:10:28.420 And they went in, they said, there's something there.

00:10:30.180 And it could be cancerous.

00:10:31.080 And I was going to a trip to Hawaii.

00:10:32.500 Monday, they said, we do the surgery.

00:10:34.140 They came and cut it.

00:10:35.500 When they cut it, it was Thanksgiving.

00:10:36.900 I couldn't speak to anybody on Thanksgiving.

00:10:38.320 If you're at Thanksgiving at my house, I'm texting you.

00:10:40.720 Wow. 0.99

00:10:40.920 So family people were talking shit to me. 1.00

00:10:42.640 And I'm like, the only way I can respond back was in text, right? 1.00

00:10:44.740 Yeah. So until you have experienced cyber warfare, you don't think about the importance of it until the system, the grid is taken out and we don't have power and it's in the cold and a cold front comes.

00:11:00.320 And you're like, wait a minute, the power of a heater you're not thinking about until the banking system is hit, until you look up in the sky and says, how the hell are there?

00:11:08.800 10 000 drones coming and you see things blowing up you're not going to be thinking about the

00:11:13.900 importance of this so i don't know i think there's a part of me that's like let's stay tight

00:11:18.100 there's another part of me that's like look man we got to make investments in future potential

00:11:23.520 warfare to protect us against crazy players especially after we just killed the top 50 most

00:11:29.040 powerful highest ranking people in a country that they're not ceasing to exist and they're

00:11:34.700 going to keep the power and you want me not to protect the military i don't know and then to go

00:11:39.740 to the other side of military industrial complex so you see all these stocks that they're going up

00:11:42.920 you're like hey man it's like a very good they're like hey another war no keep it going keep the

00:11:46.620 war going we're making money keep it going we need war we need war yeah i understand all the

00:11:50.860 arguments but i'm always gonna lean more on insurance preventative measures long term than

00:11:56.620 you know cheap being too cheap today i'm with you and i and i'm totally open to that you know like

00:12:01.180 for a long time i was of the mindset of like you know what fine we spend as much as the

00:12:04.680 remaining 10 mil um we spend as much as the next 10 militaries combined in the world okay fine

00:12:10.700 we're the we're the most uh safe country in the world fine sure we get taxed a lot to pay for

00:12:15.260 that fine okay but when you tell me that we're running out of military equipment to go against

00:12:20.340 a country that's much smaller than us when like we better have every single measure that we have

00:12:24.560 that we need in any possible situation we don't have that so how's that possible for the last 20

00:12:29.020 years we've been spending at that rate and we don't have everything we need well let me don't

00:12:31.900 which shows it wasn't spent well no you're and let me show you something let me show you something

00:12:35.560 that i think this is the tweet of the week rob i'm going to send you these both and i want you

00:12:40.160 to pull them up specifically pull up the other one that actually breaks down the numbers okay

00:12:45.140 you know nasa just recently the artemis 2 went into space okay and one tweet that's going viral

00:12:52.260 is this tweet by Gunter Eagleman.

00:12:56.020 He's got some interesting tweets that he puts out.

00:12:58.860 NASA Artemis II, $4 billion.

00:13:01.520 The California bullet train, $126 billion.

00:13:05.260 NASA Artemis II started planning in 2017.

00:13:08.140 The other one started in 96.

00:13:09.340 Passengers, four.

00:13:10.980 Passengers in California, zero.

00:13:12.660 Miles traveled, 695,000 miles traveled.

00:13:16.760 Miles traveled for the bullet train in California, zero.

00:13:21.660 And by the way, you know what's crazy?

00:13:23.080 As crazy as this is that people are making this comparison of how much it costs for NASA to do it versus the bullet train,

00:13:30.040 do you know what the numbers are if you look at what Elon does when he's got his launches?

00:13:33.960 We've done this before.

00:13:34.660 Yeah, compared to NASA and SpaceX.

00:13:37.100 Yeah, the Falcon 9 is $67 million per launch.

00:13:42.540 The space shuttle for NASA is $450 to $1.5 billion.

00:13:45.800 The Falcon Heavy that Musk does, $97 million per launch.

00:13:50.880 The one that they do is $4 billion.

00:13:52.620 And as crazy as this sounds, guess who was in Newsom's backyard for a couple decades?

00:13:58.900 Musk.

00:13:59.540 Guess who he could have gone to and say, hey, Musk, can I talk to you?

00:14:02.100 What's that?

00:14:03.320 Hey, man, we're spending $120-some billion on this.

00:14:06.380 It's like I got the money.

00:14:08.400 How the hell do we do this to make it cheaper instead of spending all the money that's not working?

00:14:13.540 Can you help me out?

00:14:14.500 No.

00:14:14.780 Instead, what does he do?

00:14:16.000 During COVID, it doesn't allow Tesla people to do their thing.

00:14:18.280 and he's like, screw you, I'm going to Austin.

00:14:21.940 It's these types of things that the American people see 0.94

00:14:24.800 and they see waste and say,

00:14:26.500 I don't want to give you a single penny for something like this.

00:14:29.060 I don't want to give you a single penny for this.

00:14:30.300 So I get the argument, but if they do it right.

00:14:33.540 It's like they don't have an ownership mentality.

00:14:35.000 They have like a pillaging mentality.

00:14:36.400 If everybody had a collective ownership mentality of America,

00:14:38.500 then they wouldn't pillage the country.

00:14:40.060 Many times when people think about Valuetainment,

00:14:41.880 all they think about is a podcast, but it's a lot more than that.

00:14:44.460 It's nine companies working together on an 11-acre campus.

00:14:48.560 If I was to give you a virtual tour here, you'll see the HR department hiring, talent acquisition.

00:14:53.560 We have full-stack developers that are working on Manac and hire metrics.

00:14:56.860 We have a full-fledged events team that puts together events with thousands of people.

00:15:00.900 We have a merch department designing the latest product.

00:15:03.560 We just launched EFLB Shoes, made in Italy.

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00:15:07.580 And if you go to the complete opposite side of the building, 50, 60 people making calls,

00:15:11.720 working for bed david consulting sales setters and then on the complete opposite side of the

00:15:16.220 campus there's a full-on production company with editors shooters creating content doing podcasts

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Valuetainment - April 12, 2026

“Defense Contractors NEED War” - Trump Pushes $1.5T Military Budget

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