Having enormous amounts of money and no profit motive can often lead to fairly silly outcomes. Bruce Wayne dressed up like a bat and fought criminals, Scrooge McDuck spent most of his time doing the backstroke through his piles of gold, and Richie Rich’s family decided to carve their faces on a mountain a la Mount Rushmore. Alright, so all of those are happen to be cartoon characters, but the same formula still applies – exorbitant amounts of money + few accountability mechanisms = massive amounts of waste.
The federal government is perhaps the worst offender of this maxim. It doesn’t take much digging through their books to uncover massive amounts of waste, fraud, and duplication that is consuming billions of taxpayer dollars every year.
For instance, a recent Government Accountability Office report found that “[o]verlap and fragmentation among government programs or activities can be harbingers of unnecessary duplication. Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of taxpayer dollars annually and help agencies provide more efficient and effective services.”
Save money and improve services? Should be a no brainer. And yet nearly every time Sen. Coburn (R-OK) offers legislation do address the issue it is shot down in the Senate.
Another example is the huge amounts of “unobligated funds” just sitting around Washington waiting to be spent. According to the Office of Management and Budget, federal agencies ended Fiscal Year 2009 with $657 billion in unobligated funds, which is money that has not been spent and has not been set aside for any specific purpose. Congress is literally appropriating money faster than government agencies can spend it. Is it any wonder that our deficit is so enormous?
And now the Congressional Budget Office has issued a report showing that federal government employees are paid substantially more than the comparable private sector worker.
“For workers of all education levels, the cost of total compensation averaged about $52 per hour worked for federal employees, compared with about $45 per hour worked for employees in the private sector with certain similar observable characteristics,” CBO analysts said.
Assuming a 40-hour work week and 52 weeks of work that comes out to an annual pay difference of $14,560!
But that’s only half the equation. Not only are we earning less, but a chunk of the taxes coming out of our already lower salary is going to pay inflated wage costs in Washington!
All of these issues highlight the problems of a government that has grown too large. The benefits of economies of scale are outweighed by the enormous amount of manpower needed to police the enormity of the government. It’s just impossible to keep track of everything. And when that happens, things start to break down.
But whereas the private sector has the incentive to root out waste and inefficiency because it is motivated to maximize profits, the federal government has no similar incentive. Sure, they have to answer to voters, but if the government can’t keep track of its finances, can the average American expect to?
This problem is exacerbated because politicians are motivated by new, shiny objects to take home to voters. If given the option between creating a new “job training” program or hire another GAO employee to audit potentially wasteful programs, which do you think the average legislator would choose? Yea, we thought so.
And that’s why we must push for Washington to get smaller. The government will never operate in the same way as the private sector and it’s always going to have huge cash flow, so the only thing we can do is get it down to a workable size, one that allows for some modicum of transparency. If we can’t accomplish that, expect some cartoonish spending that would make even Scrooge McDuck blush.