At the turn of the 21st century, segments of the U.S. Navy met tightening budget expectations by reducing expenses for maintenance, reporting, and inspections. These actions initially saved millions of dollars in manpower costs. But with smaller crews, fewer inspections, and reduced oversight, the savings proved short-lived. Instead of saving costs, readiness suffered in the long term and required significant funding for increased manning and maintenance. The lesson here, for both the Navy and the defense industry, is to approach today’s inevitable budget cuts with one eye on saving costs now—and the other on the cuts’ potential impact.