What Is Waste?
I answered a press inquiry today regarding my signature on a letter to the President about controlling government spending and holding down the debt. (The letter was referenced Wednesday in a House committee as several other signers testified.) She wondered if it was purely on the basis of policy or political. She then asks whether my view included looking at defense spending. "There seem to be many areas to cut in the defense budget that wouldn't hurt national security, so why isn't that something Congress is taking on?" Here was my answer on that part.
I cannot tell you too much about defense as part of that solution. It makes little sense to me to work towards improving living standards if you cannot assure the safety of your country; I take the external threat of terrorism very seriously. On the other hand, I am sure you and I could find specific parts of the defense budget that we would agree is waste -- true anywhere else in the budget, for that matter. The questions are how much is waste in the defense budget, how hard would it be to find it, and which congresspersons would fight to the last ditch to save those programs (because where there's 'waste' there's almost always someone defending it as 'vital to national defense'.) I hope that with all the new freshmen in the Congress there are fewer defenders of waste, but that remains to be seen.
It's worth remembering that, at 4.7% of GDP (in 2010), defense as a share of our total resources is down from the 6% we spent during the Cold War. I'm not sure what the right number is, but it's at least plausible we are spending at the right level.
If she had wanted to, she could have looked up a recent AP story on a GAO audit that found loads of waste. We have them in state government too, perfectly fine reports by auditors we promise to listen to, and on whose recommendations we pledge to act. Until it crosses someone's district, or a relationship between a committee chair and a long-time civil servant whose experience has helped make the chair look really smart in hearings. Or, just sometimes, it turns out you needed that
You can get very cynical about this: About 20 years ago the Nobel-winning economist George Stigler wrote a paper titled "Law or Economics?" in which he concluded that political markets were so much like economic ones that whatever institutions of government survive the political process must be efficient. (Sorry, the link only gets you to a placeholder -- I can't find the paper online without a subscription.) You would be right to be depressed by the conclusion and I don't think it's true. But it's very insightful in being careful what I call waste.
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Comments :
Oct '10
Re: What Is Waste?
In truth, any threat to the funding of any agency is met with serious resistance. That is the nature of the beast. To effect any change would require a body of the elected that will not appear on the horizon for some time... What politician seeks any opportunity to reduce their base in the current state of affairs ?
It is all there to act upon, save when can we expect to see a Coalition of the Willing ?
Forgive the quote...
May '10
Re: What Is Waste?
Since the Government employs neither zero based budgeting nor metrics/hurdle rates for evaluating expenditures or projects, call me way out there sceptical re. Mr. Stigler's conclusion.
I begin with the presumption that Government does absolutely nothing efficiently. There is no department that does not have identifiable waste. For me the best starting place to eliminate the waste would be the Sen Coburn requested GAO report, coupled with cabinet departments & regulatory bodies that simply should not exist.
I am sure however that there are target rich environments throughout.
May '10
Re: What Is Waste?
Much of the "waste" in DoD- and it does exist- is not what we classically think of as waste.
Get past normal civil service operations that are common to all government, and DoD waste is a combination of :
1) procurement rules designed to ensure equal access and open acquisition practices (e.g., minimize Tammany Hall-type corruption)
2) Congressional pork-barreling to keep old programs in their districts alive or get new programs for their districts, and
3) policy decisions by military Services based on treadition or inter-Service rivalries rather than military need.
There are also inefficient programs that are wisely kept alive for industrial base reasons (e.g., conventional ammunition and missile production to ensure domestic capability for sophisticated weapons, spare parts, etc.)
For example, the Crusader self-propelled howitzer was mostly waste. Field artillery is fine for all-out massed forces war such as the battles of Verdun or Bulge, but for precision battles in the information age where collateral damage is the major issue, you don't need to have a new ground-up combat vehicle. It was an Army money decision essentially to ensure that they got their "fair share" of the procurement budget.