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We could reduce government bureaucracy, but much of it is military/intel – and untouchable

31 August 2010

Summary:  We need less government waste and greater efficiency.  These are good and important objectives, but we must have realistic expectations about the potential gains.  Other than transfer payments (a separate problem) spending on the government machinery funds the military and intelligence agencies — with everything else an annex.

G. I. Wilson looks at the size of the government bureaucracy

Where are the streamlining and cost cutting efforts of the rest of the US government (USG) to be seen or found? See this article:  “Don’t just cut defense“, Jack Kelly, op-ed in Pittsburgh Post-Gazette, 29 August 2010 — “The Pentagon needs a trim, but there’s more fat elsewhere.”
We are witnessing state governments taking drastic budget measures but sadly we also witnessing the greed of unions who rather see states go under than contribute to their successful recovery.

If a department or agency cannot streamline their layers at the very top and reduce their budgets by 13%-21%  now they need to be eliminated. It must start at the top. Any department/agency that is allegedly too critical to be subjected to budget control measures AND streamlining the top of their bureaucratic pet rocks need to be immediately placed on the chopping block.

It is not a matter of being too big/fat to fail but a matter of being too big/fat to effectively function at a reasonable cost demonstrating a ROI even in government. Freddie and Fannie are illustrative USG examples of how failure at the highest levels is rewarded/reinforced at huge cost to the tax payer.

Why do we have a USG that steadfastly believes in rewarding and reinforcing failure ? It seems it pays well at the job to be a failure in government. Makes one think of the city government of Bell, CA as well where the city officials paid themselves exorbitant salaries while so many of their constituents are jobless.

So many USG agencies like DOD have way too much money and overhead to be effective, efficient, and able to do the job required not the one adapted for bureaucratic splendor.

POTUS and Congress need to ask every US government agency to respond in writing within 30 days what will they are doing to cut costs/streamline at the top of their food chains in order to give money back to the Treasury to go directly to reducing the debt and dampening the greed-need to raise taxes,, POTUS also needs to ask the same of every major union what the unions are doing to help states survive and control costs.

FM paints another perspective

W must have realistic expectations about possible savings.  A more efficient Federal government would provide many benefits, including saving money — but are probably a chimera.  First, our greatest heroes might find this beyond their ability.  Second, the savings from non-military reforms would be relatively small.

Let’s look at Federal government spending (excluding transfer payments).   It consists of the military plus a few other small agencies.  In that respect we’re structurally like the Soviet Union, although our military spending/gdp is far less than was the USSR’s.
 
For a great explanation see this presentation by the Douglas W. Elmendorf (Director of the Congressional Budget Office) on 17 May 2010.  The two graphics shown below tell the story. 

  • The 22% spent on “other” includes funding for the entire Federal government excluding DoD, plus some transfer payments (e.g., $8B in farm aid, government employee pensions).  “Other” also includes most of the $50B for intelligence (in Homeland Security) and $9 billion for DoE’s National Nuclear Security Administration. 
  • If the government (excluding military/intelligence and transfer payments) became more efficient so that its operating cost fell 10% over the next decade, it would reduce Federal Spending less than 2%

Shares of Federal Spending Projected for 2020, from CBO’s March 2010 Baseline Forecast:

The Federal Budget in 2020 with Tax Cuts Extended and AMT Indexed, from CBO’s March 2010 Forecast:

The Director goes to the heart of the problem:

“The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services. Changes of the magnitude required to make fiscal policy sustainable could have important economic and social effects — but they also provide an opportunity to address existing concerns about tax and spending policies. Given the time required to implement significant policy changes, determining those changes is an urgent task for policymakers.”

About Jack Kelly’s op-ed

Kelly is but one voice singing false praises about the military. Maintaining the trillion-dollar flow of cash to our military and intelligence agencies requires an elaborate facade, including lies about their efficiency and effectiveness.

Kelly says “Our military is, by far, the most efficient part of the federal government.”  He says this as though citing Scripture, needing no proof.  Numerous studies have shown this to be false, as DoD is one of the government’s most poorly administered agencies, as the Government Accountability Office says in every audit of the books.  From the first paragraph of the GAO report about the fiscal 2008 financial statements:

… three major impediments continued to prevent GAO from rendering an opinion on the federal government’s accrual basis consolidated financial statements:

(1)  serious financial management problems at the Department of Defense,
(2)  the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and
(3) the federal government’s ineffective process for preparing the consolidated financial statements.

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