by guest poster Gary Farber.
How much is $50 billion?
That's how much the president proposes we spend:
[...] It calls for a quick infusion of $50 billion in government spending that White House officials said could spur job growth as early as next year — if Congress approves. [...] Central to the plan is the president’s call for an “infrastructure bank,” which would be run by the government but would pool tax dollars with private investment, the White House says. [...] Specifically, the president wants to rebuild 150,000 miles of road, lay and maintain 4,000 miles of rail track, restore 150 miles of runways and advance a next-generation air-traffic control system.
[...]
The White House did not offer a price tag for the full measure or say how many jobs it would create. If Congress simply reauthorized the expired transportation bill and accounted for inflation, the new measure would cost about $350 billion over the next six years. But Mr. Obama wants to “frontload” the new bill with an additional $50 billion in initial investment to generate jobs, and vowed it would be “fully paid for.” The White House is proposing to offset the $50 billion by eliminating tax breaks and subsidies for the oil and gas industry.
After months of campaigning on the theme that the president’s $787 billion stimulus package was wasteful, Republicans sought Monday to tag the new plan with the stimulus label. The Republican National Committee called it “stimulus déjà vu,” and Representative Eric Cantor of Virginia, the House Republican whip, characterized it as “yet another government stimulus effort.”
Which sounds good to me, if not to you, but we can all agree that we don't want to "waste" money.
Even before the announcement Monday, Republicans were expressing caution.
“It’s important to keep in mind that increased spending — no matter the method of delivery — is not free,” said Representative Pat Tiberi, an Ohio Republican who is on a Ways and Means subcommittee that held hearings on the bank this year. He warned that “federally guaranteed borrowing and lending could place taxpayers on the hook should the proposed bank fail.”
Such concern might have come earlier:
- The Department of Defense is unable to account for the use of $8.7 billion of the $9.1 billion it spent on reconstruction in Iraq.
- Source: Special Inspector General for Iraq Reconstruction (PDF).
You can't trust the Democrats not to waste money:
An audit recently conducted by the Special Inspector General for Iraq Reconstruction (SIGIR)has found that the Pentagon cannot account for 96 percent of the $9.1 billion it has been receiving since 2004 to rebuild the war-torn nation, a state of affairs that the report blames on poor internal controls within the Department of Defense (DoD) that left the money vulnerable to “inappropriate uses and undetected loss.”
The audit specifically concerns the Development Fund for Iraq (DFI), an income source separate from the, so far, $53 billion appropriated by Congress for the same purpose. Established in 2003, the fund is made up of Iraqi petroleum revenues, frozen Iraqi assets and leftover monies from the now defunct Oil for Food program, meaning that, despite being used by the U.S. government, it technically belongs to Iraq.
According to the special inspector general’s report, government agencies handling money that doesn’t belong to the federal government are required by the Treasury Department to establish special Deposit Fund Accounts, a “key financial management tool” that allows for the maintenance of accountability and oversight. By the time the DoD comptroller even got around to establishing guidance for these accounts, six months had already passed and, even with the instructions for how to set up these accounts now released, only one branch actually managed to do so: Army Central Command (ARCENT).
How much worse could it be?
[...] While the goal of the audit, to determine whether DoD organizations adequately accounted for the funds they received from the DFI, had been achieved, said the report, it had been significantly hampered by the fact that many DoD organizations maintained few or no records of their use of the Iraqi funding. Even when records were maintained, not all of them were complete. Further, said the report, auditors were unable to locate personnel with knowledge of DFI activities between 2003 and 2005, when the largest part of contracting activities from the fund occurred. This led to situations where the Pentagon was unable to explain how vast sums of money were actually spent.
“For example, DoD could not provide documentation to substantiate how it spent $2.6 billion,” said the report.
Yes, they couldn't even find people who had a clue as to what the Development Fund for Iraq was doing during its most active years.
Of course, that's just the DFI money.
Auditors are currently about halfway finished with another, much larger audit of the more than $50 billion worth of reconstruction funds. Much like this audit, that investigation, though not yet complete, has already discovered numerous instances of waste, fraud and abuse that include duplicate payments, cash payments to fictitious contractors, pay-to-play bribes and simple “pilfering of cash.”
Yep, it's much worse.
A special multi-agency task force has been using complex data mining techniques to examine more than $50 billion that various military and civilian organizations have been spent, supposedly, to aid the reconstruct of war torn Iraq. The task force is about halfway done with its investigation, having sifted through about $28 billion already.
Through its investigation, the task force, Special Inspector General for Iraq Reconstruction, has already discovered schemes such as duplicate payments, cash payments to fictitious contractors, pay-to-play bribes and simple “pilfering of cash.” These have added up to hundreds of millions of dollars lost to wide scale corruption and theft.
This could be an extremely conservative estimate. An Iraqi official in 2008 told the Senate Democratic Policy Committee that some $13 billion worth of reconstruction funds have been lost to corruption. Auditors found that many projects that had already been paid for were simply not implemented and that, in Iraq, “nobody cares” about investigating these cases.
Imagine if the Bush administration and Republican Congress hadn't let these tens of billions disappear behind the Iraqi couch cushions like this.
But that's the past, you say?
How about Afghanistan?
After five years of investigations and 250,000 pages of audits, Stuart W. Bowen Jr. wishes he could say that the $50 billion cost of the U.S. reconstruction effort in Iraq was money accounted for and well spent.
"But that's just not happened," Bowen said.
Instead, the largest single-country relief and reconstruction project in U.S. history -- most of it done by private U.S. contractors -- was full of wasted funds, fraud and a lack of accountability under what Bowen, the congressionally mandated special inspector general for Iraq reconstruction, calls an "ad hoc-racy" of lax or nonexistent government planning and supervision.
And despite the Iraq experience, he said, the United States is making many of the same mistakes again in Afghanistan, where U.S. reconstruction expenditures stand at more than $30 billion and counting.
"It's too late to do the structural part and make it quickly applicable to Afghanistan," Bowen said in an interview last week. None of the substantive changes in oversight, contracting and reconstruction planning or personnel assignments that Congress, auditors and outside experts proposed as the Iraq debacle unfolded has been implemented in Afghanistan.
I know it's crazy, but what if we spent that money on infrastructure in America, paying American workers to build things we use? Where could we spend $50 billion?
Where could we have spent one trillion dollars?
by guest poster Gary Farber.
It's nice to have one's suspicions confirmed.
I guess.
When do we start talking about consequences (criminal or Congressional investigations, etc)?
Posted by: Model 62 | September 07, 2010 at 01:24 PM
There's a cliche on project management; you can do fast, cheap, and right. And you get to pick any two. The U.S. got the negative hat trick on Iraqi reconstruction, it was unconscionably slow, it was outrageously expensive (due to corruption and outsourcing the construction), and what did get built is not even close to right.
Posted by: TJ | September 07, 2010 at 01:31 PM
Silly Gary, don't you know that military spending isn't actual spending? It's freedom.
Now, domestic spending that isn't helping bankers, THAT is spending.
Posted by: Thoreau | September 07, 2010 at 01:49 PM
Note that the link above about "$53 billion" appropriate by Congress for Iraqi reconstruction is broken. It's within the article I quoted, so I'm not fixing it there, but you can read plenty about that $53 billion here.
Posted by: Gary Farber | September 07, 2010 at 02:43 PM
US wasted billions in rebuilding Iraq.
Report: U.S. Wasted Billions in Rebuilding Iraq.
Posted by: Gary Farber | September 07, 2010 at 02:49 PM
It's like a reconstruction plan inspired by "Three Kings".
Posted by: russell | September 07, 2010 at 03:01 PM
It's like a reconstruction plan inspired by "Three Kings".
SPOILER ALERT (SO SEE THE MOVIE ALREADY):
Only without a bunch of Iraqis being rescued at the end.
Posted by: Hogan | September 07, 2010 at 03:18 PM
Just from this story:
And there are some specific examples gone into.Posted by: Gary Farber | September 07, 2010 at 04:01 PM
Speaking of Three Kings, Russell, have you followed what David O. Russell's current picture is?
Posted by: Gary Farber | September 07, 2010 at 04:17 PM
Meanwhile, Paul Krugman comments on the Obama transportation measure:
Posted by: Gary Farber | September 07, 2010 at 04:36 PM
And fortunately, the U.S. taxpayer won't be paying for any of the same mistakes in Afghanistan.
Posted by: Gary Farber | September 07, 2010 at 04:43 PM
But think how much more negative reactions to the course of the wars in Iraq and Afghanistan would have been if Congress had actually attempted to set taxes (or cut other spending) to pay for them. Oh, the horror!
Posted by: Cynic45 | September 07, 2010 at 07:02 PM
Another leftist.
Posted by: Gary Farber | September 07, 2010 at 09:25 PM
Leftists everywhere!
There's a whole lot more of Chuck Hagel there.Posted by: Gary Farber | September 07, 2010 at 09:55 PM
Speaking of Three Kings, Russell, have you followed what David O. Russell's current picture is?
Gary's link makes me think of a simple and effective cost-cutting measure for the DoD.
What we need is a zombie army. They work cheap, they don't need much in the way of support (just some fresh brains now and then) and there is a vast and self-replenishing population of dead people to draw on.
It's the army that sustains itself, anywhere and anytime.
We could have zombie border guards, too. That would keep those sneaky illegals on their toes.
Just keep them outside our own borders. Posse commitatus and all of that.
Posted by: russell | September 08, 2010 at 09:08 AM
The only tiny flaw I see in your plan, Russell, is the army we need to guard the zombie army.
Posted by: Gary Farber | September 08, 2010 at 09:22 AM
And no one will go to jail for this. No one important, anyway. Awesome.
Posted by: Rob in CT | September 08, 2010 at 09:43 AM
I didn't spend a lot of time on Gary's links, but it looks like the wastage was in the 5-10 billion neighborhood. Is that right? Does someone have a quick and authoritative link that shows a different number?
Posted by: McKinneyTexas | September 08, 2010 at 09:45 AM
If I'm reading Gary's post right, as high as $13 billion in Iraq alone. Plus an unknown % of the $30 billion spent in Afganistan.
Posted by: Rob in CT | September 08, 2010 at 10:12 AM
Of course, if you think the entire Iraq War/occupation/ongoing mission of whatever was a waste (and believe that Afganistan should have been a far more limited operation), this is simply a few drops in the bucket.
It still pisses me off.
Posted by: Rob in CT | September 08, 2010 at 10:14 AM
McKT: If you're talking about the original $9 billion, "wastage" is too kind--we don't know enough to know whether it was wasted, evaporated, or got stolen. It just disappeared.
Posted by: Hogan | September 08, 2010 at 10:31 AM
Interesting, and not entirely unrelated:
There's a video of a speech at the link which is interesting to watch or just listen to.
Posted by: Slartibartfast | September 08, 2010 at 10:42 AM
Thanks, Slarti. The gov't that wastes 13 billion in Iraq is the same gov't that wastes money by the billion here at home. Yet, we would fund the one uncritically.
Posted by: McKinneyTexas | September 08, 2010 at 11:00 AM
?
Seems to me that people criticize governmental waste constantly. Even liberals, in my experience (though less so than their conservative counterparts). There seems to be a massive blindspot when it comes to military adventures.
If the government is corrupt & inefficient at home, it stands to reason that it would make a mess of things abroad as well. If true, one would expect people to be very reluctant to take over other people's countries. And yet...
But the real point is that the Iraq war itself was a massive waste/mistake/awful policy. That the reconstruction (the only part I thought might do any good) was wasted is just an added irritation.
Posted by: Rob in CT | September 08, 2010 at 11:10 AM
Slarti, I really wonder how the federal government compares to large private organizations in terms of computer wastage.
My wife has just started a grad school program. She has had to waste days of her time because the university has really really bad IT. She has 8 different accounts using four different usernames. We both went to a school that did IT right so we had no idea that apparently (based on recent conversations with friends), almost all universities screw up their IT/administration to a degree that boggles the mind.
Posted by: Turbulence | September 08, 2010 at 11:11 AM
Judging by someone's comments on EVERY GODDARNED THREAD TODAY, that someone must have just paid his quarterly self-employment tax or something.
Posted by: Phil | September 08, 2010 at 11:16 AM
My wife is an IT project manager. She recently took over a project that was a mess. They recently had to increase the budget by about 50% for that project. It's a pretty damned important one that should have been under plenty of scrutiny. Yet all sorts of things were missed, swept under the rug, etc. It's taken her months to figure out all the things that are screwy, and it'll take her more months to fix them.
The people most responsible for the mess moved on (one left first and then brought the other over). They will suffer no consequences whatsoever.
Hmm, that sounds familiar.
Posted by: Rob in CT | September 08, 2010 at 11:17 AM
Judging by someone's comments on EVERY GODDARNED THREAD TODAY, that someone must have just paid his quarterly self-employment tax or something.
No, my fricking state franchise taxes--cleaned me out, as a matter of fact, but that's part of it. Actually, I have a bit of free time and haven't dropped by in a couple of days.
Posted by: McKinneyTexas | September 08, 2010 at 12:02 PM
Haha! Me =
[img]http://www.theargonath.cc/pictures/tttcardshd/eyeofbaraddur.jpg[/img]
Posted by: Phil | September 08, 2010 at 12:04 PM
Instead of attempted/failed image joke, should've gone with "Texas? More like TAXAS, am I right?"
Posted by: Phil | September 08, 2010 at 12:21 PM
Better hook into that all-seeing eye while you still can.
Posted by: Hogan | September 08, 2010 at 12:31 PM
Well, at least the dragon tank has historical precursors. Look at some renaissance designs. and Germany might have build tanks in the 1000-1500 t range, had the project not been stopped by Speer. The war could have been far shorter, had the German industry been converted to building these.
Posted by: Hartmut | September 09, 2010 at 05:08 AM
Tangentially related:
I suspect there's not much history to show that The Center Cannot Hold, but there's some.
Posted by: Slartibartfast | September 09, 2010 at 11:48 AM
Hopefully unrelated, one of the wierdest true headlines I'd ever seen (swiped from one of my Facebook friends):
Giant hay bale kills former ELO cellist
Tragic, needless to say.
Posted by: Slartibartfast | September 09, 2010 at 12:00 PM
The only tiny flaw I see in your plan, Russell, is the army we need to guard the zombie army.
Details.
Also, from my experience, large and/or complex IT projects go south on a fairly regular basis pretty much anywhere they're attempted. Public sector / private sector, same-same.
It's hard to do large and/or complicated things. Not impossible, just hard.
Posted by: russell | September 09, 2010 at 01:06 PM
Spencer Ackerman: Who’s Really Responsible For Afghan Corruption? You:
Posted by: Gary Farber | September 10, 2010 at 04:36 PM