I work for a defense contractor, and am thus familiar with the dreaded “defense death spiral”.
The spiral begins when a program is originally funded to develop a new piece of military hardware with an initial run. Research and development costs are factored into this bid, which is eventually granted to a contractor.
Sometimes, though, for budgetary reasons, the number of units in the initial run will need to be trimmed. The solution in an ideal world would be to shift some of these units to the follow-on prodection runs, pay for them in another budgetary cycle and continue production so the military’s needs are met. In practice, though, this has not been happening.
What has been happening is that so-called congressional “watchdogs” will howl about the skyrocketing per-unit cost of the item in question, and demand that the military buy fewer of them. That raises the per unit cost still higher (remember, the item in question is now in production. That R&D money has already been spent). The watchdogs will break out their best bake-sale rhetoric and demand still further cuts in production.
The death spiral has begun, and the military will soon get too few units of too expensive gear.