Kojo Quartey: Excessive government spending is a major problem
The debt ceiling is looming large and the debate continues. Remember in the 1990s, when there was news of the U.S. government’s excessive and extravagant spending on items such as $14,000 toilet seat lids, $1,280 cups, $426 hammers, $117 soap dish covers, $999 pliers? Well, the defense department has still not reigned in their spending several years later. While we as taxpayers are losing, somebody out there is benefitting from this extravagance. In 1986, Jack Smith in the Los Angeles Times wrote about “The Pentagon Catalog” (Workman), which describes and shows diagrams of numerous pieces of military hardware that authors Christopher Cerf and Henry Beard described as “ordinary products at extraordinary prices.” They claim, tongue-in-cheek, that their firm, Pentagon Products, can supply any of these items to anyone at the prices our military paid for them. Anyone who bought their paperback for $4.95 got a $2,043 nut free. The book lists $37 screws, a $285 screwdriver, $7,622 coffee maker, $387 flat washer, $469 wrench, $214 flashlight, $437 tape measure, $2,228 monkey wrench, $748 pliers, $74,165 aluminum ladder, and a $659 ashtray, among many other items.
This came to mind as I was watching the May 22, 2023, episode of "60 Minutes" which featured a segment on the amount of money the U.S. government pays those few companies that make and repair our armaments. It was entitled “Price Gouging.” Many of these companies have a virtual monopoly, and without them, our national defense is in dire straits. These companies are price gouging the government and taxpayers. It was described as “unconscionable” and “the Pentagon overpays for almost everything, … down to the nuts and bolts.” An item that costs $300 can easily cost $10,000 with our defense contractors. The defense contractors have been overcharging the Pentagon for years. These companies include Lockheed Martin, Boeing, Raytheon and others.
In the 1990s, 51 defense companies merged into five major companies, essentially creating an oligopoly (few powerful companies) acting as a monopoly (one major powerful company). The "60 Minutes" report, used words such as "extortion." They reported that a $25,000 shoulder-fired missile in 1991 now costs over $400,000 to replace. According to CNBC, the U.S. spends around $156 billion a year to maintain 800 military bases in 80 countries. Add to that, subsidies that go to huge agricultural conglomerates to simply overproduce. Our government is simply overspending.
As the politicians in Washington argue about what to do about the debt ceiling, one thing for sure is that government spending is out of control. Here’s a breakdown of government spending in 2022 from usafacts.org:
Federal spending decreased 12.4% in FY 2022 after remaining relatively flat in FY 2021.
The national debt hit $30.9 trillion last fiscal year. And is now almost $32 trillion.
Below is a budget function breakdown for 2023 from www.usaspending.gov:
Total Obligated amount is $4.6 Trillion as of March 31, 2023
National Defense: $835.3 billion (18.2%)
Medicare: $754.6 billion (16.4%)
Social Security: $710.2 billion (15.5%)
Health (Medicare and Medicaid): $548.0 billion (11.9%)
Income Security (Welfare, other): $471.8 billion (10.3%)
Net Interest: $394.9 billion (8.6%)
General Government: $276.6 billion (6%)
Veterans Benefits and Services: $154.4 billion (3.4%)
Education, Training, Employment, & Social Services: $$103.1 billion ($2.2%)
Commerce and Housing Credit: $93.6 billion (2%)
Transportation: $54.3 billion (1.2%)
Administration of Justice: $48.4 billion (1.1%)
Agriculture: $46.4 billion (1%)
Natural Resources and Environment: $41.4 billion (.9%)
Community and Regional Development: $36.1 billion (.8%)
As the debate about the debt ceiling rages on and endangers many and threatens to upturn our entire economy, we must realize that there is definitely significant overspending and much of it is due to poor oversight allowing for price gouging of taxpayers by big companies. So where should the cuts start? I know where, do you?
Kojo Quartey, Ph.D., is president of Monroe County Community College and an economist. He may be reached at kquartey@monroeccc.edu.
This article originally appeared on The Monroe News: Kojo Quartey: Excessive government spending is a major problem
