Government Doesn’t Know Better Than the Private Sector

Year over year the fiscal disasters throughout the government make it painfully obvious it is too big and really doesn’t know better than the private sector.

November 19, 2018

By: Bobby Casey, Managing Director GWP

government doesn't know better than private sectorI think it’s remarkable how people can watch the blatant malfeasance of government manifest itself before their very eyes, and still call on government to fix it.

Before considering allowing government to continue controlling matters NOT designated to it, perhaps a brief look at how they handle their actual responsibilities is in order.

The Military

As you might recall, the Pentagon was set to undergo its first EVER audit this month. We wrote about it in January of this year, but it actually STARTED in December of 2017.

One year, 2,400 auditors, and $367 million later they failed. They expected to fail. And the failure is going to cost another estimated $551 million to fix!

The fact that they expected to fail says something right? That this department of the government has been dodging audits for decades, but expected to fail its first audit, means they knew they were being mismanaged.

To read the commentary from the Pentagon about this is quite amusing. Deputy Secretary of Defense, Patrick Shanahan had this to say:

  • We never thought we were going to pass an audit, everyone was betting against us that we wouldn’t even do the audit.”
    No kidding! Why would they even think otherwise since the DoD has been kicking this can down the road for over 20 years! That’s a solid bet.
  • It was an audit on a $2.7 trillion organization, so the fact that we did the audit is substantial.”     
    But honestly, are people meant to applaud this long overdue act of accountability? Almost sounds like Patrick is looking for a participation award or something. I mean, EVERY other federal agency has undergone an audit and they aren’t patting themselves on the back.
  • If I’m a taxpayer what I want to see is, ‘that’s great, you did the audit and you have all these findings – how long is it going to take for you to fix those?And then show me next year that it takes less to audit and you have fewer findings.”
    IF you’re a tax payer? He even knows as a government employee, you don’t pay taxes, you just work for a discount.I would think the taxpayer would want an explanation for all the money that’s unaccounted for. I would think the taxpayer would want to see an immediate plan to reduce the waste and mismanagement as well as an expected timeline for accomplishing all that needs fixing.My question is, when it was discovered that there was approximately $125 billion in bureaucratic WASTE in the DoD, what actions were taken to reel that in? What have you done in response to OTHER discoveries of malfeasance? When you asked for your 7 year deferment on your audit because “you were sooooo big”, what did you do in that time that had you expecting to still fail when you finally came due?

Details of the audit will be released soon, but for now, all this posturing indicates one major problem… a problem, that if fixed, would solve a lot of the other smaller issues: The DoD is too big! The excuses that punted this audit down the line over 20 years is exactly that: The DoD is too big for an audit.

The USPS

A regrettable service to delegate to the government. Lysander Spooner knew it and we know it today.

Spooner was no joke. His “American Letter Mail Company” ultimately went out of business due to the government bullying, but he also got them to come down from 12 cents per letter to 3 cents.

Yet here they are $4 Billion in the reda whopping 44 percent increase in losses from the previous year, despite the fact that the post office saw revenue increase by more than $1 billion at the same time”.

(Contrast that with $4.9 billion in net profits for UPS in 2017 or $4.57 billion in profits for FedEx in 2018.)

The USPS, true to government tradition, manages to realize a 1.5% increase in overall revenue and still suffer a greater loss than the year before.

The problem is their $13 billion in total debt, and their $100 billion in unfunded pension liabilities. In short, they have an outlay problem not an income problem. Letter and package delivery is still a very lucrative enterprise. Certainly FedEx, UPS, and DHL wouldn’t exist if it wasn’t. They also wouldn’t exist if they posted annual losses like the ones the USPS are posting.

Unlike the DoD, there is a slight possibility that the USPS could go private. Or at the very least quasi-private. By selling off the USPS entirely, the US government (aka the US taxpayer) would absorb the debts. But at the very least the USPS would stop hemorrhaging money.

The up side to that, is there would be freer and more open competition in the delivery industry. It could mean lower delivery costs, more efficient delivery, and competition even in letter delivery – which as it stands now: “You can ship a letter using a private courier like FedEx if it’s ‘extremely urgent’ or if the rate you pay to send it is at least six times the current price of USPS first class postage.”

Don’t think they’ll enforce that?

Equifax learned a terrifying lesson in 1993. Armed USPS inspectors raided the company’s Atlanta headquarters to determine whether or not the letters the company had been sending via FedEx were indeed ‘extremely urgent’ as required by the Private Express Statutes. The letters didn’t pass the test, and Equifax ended up having to pay a $30,000 fine.”

Either way, the government clearly isn’t fit to manage money. And yet somehow there are those who are eager to entrust this proven failure with healthcare? Education? Safety?

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