Knowns and wildcards will create challenges, opportunities for defense.

• Author: Farrell, Lawrence P., Jr.
• Position: President's Perspective

These are tough times for the nation, and for defense.

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The U.S. financial system is broken and the country is in dire fiscal shape.

The defense budget is under enormous pressure. The extent of future cuts is still unknown, so uncertainty abounds.

Much of the current circumstance is defined by existing problems. These can be assessed and analyzed. They are the "knowns." But unanticipated events can also affect national security, finances and defense. These are "wildcards."

We can posture more easily for the knowns. Wildcards are tougher. The best response to both knowns and wildcards is to develop robust and diverse capabilities. Robustness may be difficult to structure, but diversity has a robustness all of its own. One wonders what are the knowns and wildcards, and what do we do about them.

The list of knowns is rather long. Most serious observers of the security landscape will have come across them in one form or another. The most obvious is the descent of defense funding. Former Defense Secretary Robert Gates took $100 billion out of the budget to plow back into investment with no decrease in the top line. The president has announced $400 billion cuts from defense over the next 12 years, $100 billion of which comes from Gates' "efficiencies." The top line will come down. Unknown is where the cuts will fall.

Other challenges include overruns in weapons acquisitions, dealing with cyberthreats, energy security, the affordability of the all-volunteer force, and the rise of piracy, to name a few. The global nature of terrorism, technology diffusion, and nuclear proliferation, all add to the uncertainty about what the United States should prepare against. Finally there are demographics. The planet's population is predicted to go from 6.5 billion to 10 billion in the coming decades. Will there be enough resources, such as food and water, to sustain such growth?

Another big problem is the abysmal condition of the three engines of post World War II prosperity and growth: the United States, Europe and Japan. All three are in financial extremis. U.S. deficits grow unconstrained and debt piles up to dangerous levels. Interest on the U.S. debt, if not controlled, will begin to crowd out discretionary spending. European sovereign debt promises to crater a number of large European banks. And Japan has been in the financial doldrums for several years now-. These engines are overloaded and have slowed way down.

As the United States...