Unspent Mandates
David Bernstein over at Volokh talks of an anecdote regarding earmarks. Basically a guy working for a defense contractor is hired to do nothing but spend money regardless of whether the product works or not. I have heard several stories like this over the years. Quite frankly, have done it to some degree with other funding sources. However, what David’s anecdote tells me is that this guy doesn’t have a clue how federal funding works, and David probably doesn’t either. It’s not complicated, but you have to look at it from the funding perspective, not the end-user. Here’s what happens.
When a “need” is generated, a lot of times it’s outside the scope of normal procedure. When this happens, it has to be added as a line item. It’s these line items that so many people generically refer to as “pork”. Now, the problem then becomes the burden of the person(s) who have to justify its existance. The way you do that in the federal arena is to spend money. If you spend NO money, then the justification for that line item no longer exists. However, contracting with the federal government can be quite SLOW. So, what happens is someone may decide something is needed right now, it will take a year at least to go through the budgeting process of Congress, and then IF the funding is received, could take another year to get it. In the meantime, the vendor is stuck HOPING this thing will get paid for for more than one year. Now, think of this way, someone tells you they want you to build them a very unqiue car. This car is so unique they will be the only one who will ever drive it. No one else would ever buy this car. However, they may not be able to pay you for it for two years, but they expect to see some progress on the car in the meantime. Do you build that car pronto and hope they’ll pay for it? Or, do you make pretty graphics and trinkets showing that person what this fabulous car will look like once they’ve paid for it. Sure, you’ve wasted money drawing pictures when you didn’t have to, but you kept the demand for that product alive. In the defense arena, those trinkets and stuff get a lot more expensive. But it’s the same process. Now, add to the fact the reverse financial process that is government. In the real world, a person makes something and tells the government how much it will cost for them to have it. In the federal world, they earmark X amount of money, and then wait for the receipts to come in to see how much it actually cost. Now, there’s just not too many people out there that if offered $1 million for their product, will turn that down and say that’s too much money for what I’ve done.
So, what you’ve got is a process that guarantees a lot of waste.
But, there’s another side to this story that neither David nor his anecdote consider. His acquaintance has a job and is contributing the local economy. His job makes sure others around him have jobs in the private sector. David’s anecdote IS the result of trickle-down economics. By the time the people he’s spending his money with are paying their taxes on his money, that money is making money for the feds. It’s how the government props up local economies during slow times, and slows down local economies when things get too economically hot.
So, this anecdote is simply an example of how one person fits into the the massive picture that is the federal economic policies. He really doesn’t need to feel so bad about his job now does he? If he could just make something that works right, he’d be the ideal anecdote of federal economic policy.
