Tag Archives: waste

The US Healthcare System Is Hemorrhaging: It is Bleeding Close to $1 TRILLION a Year, by Dagny Taggart

Perhaps someday we’ll find the solution for efficient, affordable health care and health insurance: let a free market provide them. Until then, we’re stuck with the current monstrosity. From Dagny Taggart at theorganicprepper.com:

The Affordable Care Act continues to be anything but affordable.

In fact, the healthcare system in the US is in terrible financial shape.

A new study has revealed that waste and needless spending in America’s healthcare system could amount to almost $1 trillion each year. This exceeds the total US military expenditures in 2019 – the world’s largest defense budget – and as much as all of Medicare and Medicaid combined.

This news should not shock anyone.

If you are one of the hundreds of thousands of Americans who are in serious debt due to medical expenses, you are likely not surprised by the new study’s findings. As we recently reported, 66.5 percent of all bankruptcies in the US are tied to medical issues, either because of high costs for care or time out of work. An estimated 530,000 families turn to bankruptcy each year because of medical issues and bills.

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The Pentagon Fails Audit – $21 Trillion in Transactions Could Not Be Traced, Documented, or Explained, by Michael Krieger

What do you do with a department that can’t account for $21 trillion it spent? Increase its budget, of course, which is exactly what President Trump and Congress did this past year. From Michael Krieger at libertyblitzkrieg.com:

WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

– From Major General Smedley Butler’s War is a Racket

The following story’s been on my radar for a while, but it wasn’t until I read the fictional-sounding article published in The Nation yesterday that I finally turned my focus on the issue.

To give you a sense of what’s going on when it comes to the unimaginable levels of waste, secrecy and probable fraud occurring at the U.S. Department of Defense, check out the first couple of paragraphs from this must read article:

On November 15, Ernst & Young and other private firms that were hired to audit the Pentagon announced that they could not complete the job. Congress had ordered an independent audit of the Department of Defense, the government’s largest single cost center—the Pentagon receives two of every three federal tax dollars collected—after the Pentagon failed for decades to audit itself. The firms concluded, however, that the DoD’s financial records were riddled with so many bookkeeping deficiencies, irregularities, and errors that a reliable audit was simply impossible.

Deputy Secretary of Defense Patrick Shanahan tried to put the best face on things, telling reporters, “We failed the audit, but we never expected to pass it.” Shanahan suggested that the DoD should get credit for attempting an audit, saying, “It was an audit on a $2.7 trillion organization, so the fact that we did the audit is substantial.” The truth, though, is that the DoD was dragged kicking and screaming to this audit by bipartisan frustration in Congress, and the result, had this been a major corporation, likely would have been a crashed stock.

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The Living Reality of Military-Economic Fascism, by Robert Higgs

An in-depth study of the military-industrial racket by Robert Higgs at mises.org:

“The business of buying weapons that takes place in the Pentagon is a corrupt business — ethically and morally corrupt from top to bottom. The process is dominated by advocacy, with few, if any, checks and balances. Most people in power like this system of doing business and do not want it changed.” – Colonel James G. Burton (1993, 232)

In countries such as the United States, whose economies are commonly, though inaccurately, described as “capitalist” or “free-market,” war and preparation for war systematically corrupt both parties to the state-private transactions by which the government obtains the bulk of its military goods and services.

On one side, business interests seek to bend the state’s decisions in their favor by corrupting official decision-makers with outright and de facto bribes. The former include cash, gifts in kind, loans, entertainment, transportation, lodging, prostitutes’ services, inside information about personal investment opportunities, overly generous speaking fees, and promises of future employment or “consulting” patronage for officials or their family members, whereas the latter include campaign contributions (sometimes legal, sometimes illegal), sponsorship of political fund-raising events, and donations to charities or other causes favored by the relevant government officials.

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Nothing Exceeds Like Excess, by Jeff Thomas

There’s no way the US government gets a dollar’s worth of defense per dollar spent. From Jeff Thomas from internationalman.com:

Nothing Exceeds Like Excess

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.

—Ernest Hemingway

Military spending is the second largest item in the US federal budget after Social Security. It has a habit of increasing significantly each year, and the proposed 2019 defense budget is $886 billion (roughly double what it was in 2003).

US military spending exceeds the total of the next ten largest countries combined. Although the US government acknowledges 682 military bases in 63 countries, that number may be over 1,000 (if all military installations are included), in 156 countries. Total military personnel is estimated at over 1.4 million.

The reader could be forgiven if he felt that a US military base was rather unnecessary in, say, Djibouti or the Bahamas, yet the US Congress will not allow the closure of any military bases. (The Bi-partisan Budget Act of 2013 blocked future military base closings under the argument that they’re all essential for “national security.”) And Congress has a vested interest in keeping all bases open and consuming as much in tax dollars as possible (more on that later).

Of course, those bases need to be kept well-stocked with small arms, tanks, missiles and aircraft. Yet, in spite of the admittedly incredible number of US military bases across the globe, the additional stockpile of weaponry is so great that the government has difficulty finding places to put it all.

One storage location is pictured in the photo above—Davis-Monthan Air Force Base in Tucson, Arizona. In spite of the size of the photo, it shows only a portion of the aircraft located there. (And bear in mind, such aircraft often cost over $100 million each.)

If asked, the military states that, although these aircraft are in dead storage and many have never seen any use whatever, they might possibly be called up for service, “if needed.” Of course, if they’re needed, they’re unlikely to be of use if located in Arizona. And, in addition, they may not be useful for warfare, as war technology has moved on since the days when such aircraft designs were suitable.

To continue reading: Nothing Exceeds Like Excess

The Scandal of Pentagon Spending, Your Tax Dollars Support Troops of Defense Contractor CEOs, by William Hurting

Nothing regular readers of SLL don’t already know, but the grisly details are infuriating. From William D. Hartung at tomdispatch.com:

Here’s a question for you: How do you spell boondoggle?

The answer (in case you didn’t already know): P-e-n-t-a-g-o-n.

Hawks on Capitol Hill and in the U.S. military routinely justify increases in the Defense Department’s already munificent budget by arguing that yet more money is needed to “support the troops.”  If you’re already nodding in agreement, let me explain just where a huge chunk of the Pentagon budget — hundreds of billions of dollars — really goes.  Keep in mind that it’s your money we’re talking about.

The answer couldn’t be more straightforward: it goes directly to private corporations and much of it is then wasted on useless overhead, fat executive salaries, and startling (yet commonplace) cost overruns on weapons systems and other military hardware that, in the end, won’t even perform as promised.  Too often the result isweapons that aren’t needed at prices we can’t afford.  If anyone truly wanted to help the troops, loosening the corporate grip on the Pentagon budget would be an excellent place to start.

The numbers are staggering.  In fiscal year 2016, the Pentagon issued $304 billionin contract awards to corporations — nearly half of the department’s $600 billion-plus budget for that year.  And keep in mind that not all contractors are created equal. According to the Federal Procurement Data System’s top 100 contractors report for 2016, the biggest beneficiaries by a country mile were Lockheed Martin ($36.2 billion), Boeing ($24.3 billion), Raytheon ($12.8 billion), General Dynamics ($12.7 billion), and Northrop Grumman ($10.7 billion). Together, these five firms gobbled up nearly $100 billion of your tax dollars, about one-third of all the Pentagon’s contract awards in 2016.

And remember: the Pentagon buys more than just weapons.  Health care companies like Humana ($3.6 billion), United Health Group ($2.9 billion), and Health Net ($2.6 billion) cash in as well, and they’re joined by, among others, pharmaceutical companies like McKesson ($2.7 billion) and universities deeply involved in military-industrial complex research like MIT ($1 billion) and Johns Hopkins ($902 million).

The real question is: How much of this money actually promotes the defense of the country and how much is essentially a subsidy to weapons makers and other corporations more focused on their bottom lines than giving the taxpayers value for their money?

To continue reading: The Scandal of Pentagon Spending, Your Tax Dollars Support Troops of Defense Contractor CEOs

Where Is That Wasteful Government Spending? by Lawrence Wittner

Although the military can’t audit itself and wastes trillions, its budget is virtually sacrosanct. From Lawrence Wittner at antiwar.com:

In early September 2016, Donald Trump announced his plan for a vast expansion of the U.S. military, including 90,000 new soldiers for the Army, nearly 75 new ships for the Navy, and dozens of new fighter aircraft for the Air Force. Although the cost of this increase would be substantial – about $90 billion per year – it would be covered, the GOP presidential candidate said, by cutting wasteful government spending.

But where, exactly, is the waste? In fiscal 2015, the federal government engaged in $1.1 trillion of discretionary spending, but relatively small amounts went for things like education (6 percent), veterans’ benefits (6 percent), energy and the environment (4 percent), and transportation (2 percent). The biggest item, by far, in the US budget was military spending: roughly $600 billion (54 percent). If military spending were increased to $690 billion and other areas were cut to fund this increase, the military would receive roughly 63 percent of the US government’s discretionary spending.

Well, you might say, maybe it’s worth it. After all, the armed forces defend the United States from enemy attack. But, in fact, the US government already has far more powerful military forces than any other country. China, the world’s #2 military power, spends only about a third of what the United States does on the military. Russia spends about a ninth. There are, of course, occasional terrorist attacks within American borders. But the vast and expensive US military machine – in the form of missiles, fighter planes, battleships, and bombers – is simply not effective against this kind of danger.

Furthermore, the US Department of Defense certainly leads the way in wasteful behavior. As William Hartung, the director of the Arms and Security Project of the Center for International Policy, points out, “the military waste machine is running full speed ahead.” There are the helicopter gears worth $500 each purchased by the Army at $8,000 each, the $2.7 billion spent “on an air surveillance balloon that doesn’t work,” and “the accumulation of billions of dollars’ worth of weapons components that will never be used.” Private companies like Halliburton profited handsomely from Pentagon contracts for their projects in Afghanistan, such as “a multimillion-dollar ‘highway to nowhere,’” a $43 million gas station in nowhere, a $25 million ‘state of the art’ headquarters for the US military in Helmand Province . . . that no one ever used, and the payment of actual salaries to countless thousands of no ones aptly labeled ‘ghost soldiers.’ ” Last year, Pro Publica created an interactive graphic revealing $17 billion in wasteful US spending uncovered by the US Special Inspector General for Afghan Reconstruction.

Not surprisingly, as Hartung reports, the Pentagon functions without an auditing system. Although, a quarter century ago, Congress mandated that the Pentagon audit itself, it has never managed to do so. Thus, the Defense Department doesn’t know how much equipment it has purchased, how much it has been overcharged, or how many contractors it employs. The Project on Government Oversight maintains that the Pentagon has spent about $6 billion thus far on “fixing” its audit problem. But it has done so, Hartung notes, “with no solution in sight.”

To continue reading: Where Is That Wasteful Government Spending?