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Pentagon Lost Billions, Pennies At a Time
Hugh Pickens writes "MSNBC reports that in 1969, Walter T. Davey, an aeronautical engineer at North American Rockwell, discovered he was being overpaid by roughly 2 cents an hour, or one-third of 1 percent of his pay. Davey submitted the discovery to his superiors and suggested a simple fix. 'It was so simple to correct,' said Davey, a 79-year-old retired Air Force colonel, 'just change a few digits in the coding software.' The Project on Government Oversight, which reviewed Davey's findings last year, estimated the change could save taxpayers $270 million a year. Multiply by 40 years — the length of time since Davey made his discovery — and the figure grows to an astounding $10.8 billion. Legislators ignored Davey's letters, federal auditors deferred to Congress, and lobbyists 'descended on it and tore it into a piece of Swiss cheese' but legislators aren't eager to challenge the powerful defense lobby about a figure that's a relative pittance in the overall defense budget — even if it exceeds $100 million annually. 'A lot of people have taken advantage of the system to reap as much in taxpayer dollars as possible,' says Scott Amey, general counsel for the Project on Government Oversight. 'But when you're going up against the contractor lobby — whether you're an individual across the country or a public interest group or a government employee — it's a tough road.'"
he made $6.00 an hour, and he was complaining about being overpaid?
nice.
"Ok! Ok! I must have, I must have put a decimal point in the wrong place or something. Shit! I always do that. I always mess up some mundane detail."
http://www.imdb.com/title/tt0151804/
Sounds like the plot to Office Space but in reverse order.
Explicitly allowing military contractors to overcharge the taxpayer to deliver broken systems on no-bid contracts is the heart of True Capitalism(tm) and A-OK.
Making it easier for employees to enter into unions so they can negotiate better pay/benefits within the constraints of market competition is Pure Socialism(tm) and Must Be Stopped at all costs lest the USA degenerate into a communist backwater like Sweden.
Makes perfect sense!
In all likelihood, it will be our own military contractors, too politically powerful to reign in, who will eventually destroy our military effectiveness. We can spend as much as we like(and we already do) but, so long as our spending is a mixture of "what Raytheon feels like producing" and "the ultimate weapon against the forces of the evil empire rolling across Europe in alternate-1979" it won't do nearly as much good as we would like.
I wonder if this is how the Romans felt?
You can get the official consumer price index, from 1913 up to now here. $6 in 1969 would translate to approximately $36 today.
For older historical data, plus many other interesting historical data about prices and economic indicators, this site is very interesting.
This issue could be considered more of a scapegoat for the horrendous spending and poor budget management of the many poorly managed defense contracts over the last 40 years. Trust me, 10 Billion pales in comparison to what has been directly wasted. Also, 10 Billion dollars may seem a lot, but given its based around 40 years it cuts it down quite a bit.
Er, you mean force workers into Unions to control them using a open ballot system. Hmmmm, billions since 1969 vs trillions in his first 100 days. Defense vs. Wealth redistribution.... Hmmm.....
Me thinks people should be skeptical of your type...
You're the guy that thought up both the credit swaps and the bailout for Wallstreet right?
Without specifying your 'goods and services paid' your 45$ is worth exactly 1$ + Vapour.
Be careful of these numbers. The range of goods and services available today are different, and this makes comparisons hard to evaluate. In 1969 my father earned about $5/hour. To live in the same house today with the same living standard, with his kids attending the same sort of schools and going to the same sort of university, he would need to earn around $100. This feels about right because his grandchild, in the same kind of job (but where pay rates have increased in real terms) earns nearer to $200/hour. This is because overall living standards have changed upwards. So my feeling is that $120/hour is nearer the mark.
From scarped cliff or quarried stone she cries "A thousand types are gone, I care for nothing, no not one."
Contrary to popular belief, the main purpose of most government spending is simply to create new money. This allows subsequent credit expansion and "growth".
That theory starts to break down when the money your government is spending actually belongs to China...
ZuluPad, the wiki notepad on crack
This sounds like a "King of the Hill" episode, writ large.
"No, Peggy, you don't understand! They're OVERPAYING ME! I'm stealing from the government, I tell you what! And I can't get them to stop! It keeps me up at night, I tell you what!"
Forty years later: A Colonel shows up at Hank's door.
- "Mr Hill? We've responded to your letter, and it turns out you were right. We have been overpaying you all this time."
- (sighs.) "I always knew this day would come." (hold out his wrists) "I'll come along quietly."
- "No, no, Mr. Hill! You don't understand. We're implementing the fix you suggested. It'll save the government millions of dollars a year. We just wanted to thank you!"
- "Oh. Huh. Well, thank you sir. But in that case, can I at least give you back the money?"
- "I beg your pardon?"
- "Wait here." (Hank goes to his garage, wheels out a 50-gal drum on a hand truck.) "I've been putting the extra pennies in here since 1969, I tell you what. And now I'm ready to return it."
- (smiles) "No, you go ahead and keep that. We're cool." (leaves)
- "Alright! I can go to college now!"
- "Bobby, go to your room!"
- "I'm 45 years old! You can't make me go to my room!"
- "Now, mister!"
- "Aw.."
Prisencolinensinainciusol. Ol Rait!
You should study something about economics. Start here.
This guy doesn't work directly for the government. I'll assume its cost plus work that he's doing, so Rockwell charges his hours directly back to the government. However, they don't charge his hourly rate, they charge Rockwells hourly rate for his job position, which is more than his personal calculated take home (or Rockwell would be making no money on his work). So the real losers here would seemingly be Rockwell as they have to pay him out of their pool of money and the $0.02/hr would come out of their profits.
Employees don't have individual rates. It typically goes by job title/position, ie: assoc engineer time is worth $120/hr, senior is worth $200/hr (purely made up numbers, not sure on the actual rate or title names), etc.
If its not cost plus then this is even more confusing as Rockwell is working to a contract dollar value and any extra pay again would come out of their profits. The accounting doesn't make a whole lot of sense to me. Unless this is some special case in which the numbers of people it would affect would seem pretty small.
You laugh (derisively), but GP more or less describes "leverage", the excesses of which ended up necessitating the bailout.
There's nothing particularly wrong with creating credit through leverage (more credit creates more growth opportunities), as long as your risks can be managed properly. And if we're a society that's unwilling to tolerate capital-d Depressions now and then along with our growth, we have to accept a tight level of preventative regulation in our financial sector. Finance and government will always have a more intimate relationship than most private industries.
None of that money was backed by gold, so it actually never existed!
The American taxpayers' dollars are the single most fantastic pile of loot on the planet. It is so big that pilfering it is a full-time job for millions of people. It's like a horde of scavengers around a perpetually gushing cornucopia.
Defense contractors are not even the big time scavengers here. No, the real T-Rexes in this game are the Federal employee unions, believe it or not. A defense contract comes and goes, and is generally audited. A union benefit is forever.
Disclaimer: I have nothing personally against unions, contractors or T-Rexes.
Fantasy: http://ferrisfantasy.blogspot.com/
To better understand it, you should read the explanations in the backside of the chart. Awesome!
We blame the lobbists for their stance, and rightly so. We also have to blame the politicians, congress etc...if they actually stood for what is right and is common sense the lobbyists view wouldn't matter. But the politician is only about power for himself and getting re-elected. Since the lobbyist serves his personal agenda well, the lobbyist get a lot power from it simply by the politicians selfish motivations. So the politicians are equally to blame. They don't care about 100 million dollars that is taken from your paychecks.
I've always said English was my second language. Had Romeo and Juliet been written in C, I might have understood it.
How do you figure? If they sell a CD for $x and people agree to pay $x for it, then where's the problem? Who exactly are they ripping off?
Well it's not too hard to figure out. He agreed to work for $x an hour, but was getting $(x+0.02) instead. In other words, he was making more money than he was supposed to, "real work" or not.
It's pretty basic stuff, really.
Maybe not
Having worked in both for the government and for a private business I don't think the government does any worse at project management and accountability than any other company.
The Government just has to publically disclose all of its screw ups (eventually) and they become fodder for political campaigns, thus we are exposed to them over an over. Unlike private companies who tend to cover the tracks a bit more until it is totally too late (Enron and GM come to mind). But as far as sheer competence goes I don't think the government does any worse than any other company out there.
Of course that is only a limited data set, limited to my own experience (~10 years).
Actors:
Arnold Schwarzenegger's salary for The Terminator: $75,000
Arnold Schwarzenegger's salary for The Terminator 2: $15,000,000
Arnold Schwarzenegger's salary for The Terminator 3: $30,000,000 + 20% of the profits (about 117 million).
Arnold Schwarzenegger's salary as governor: $206,500 - which he waived cause he already earned over 230 mil. (that is without these 117 T3-millions) over his 30 years in the movies.
Indicating that he himself felt that he was being overpaid already.
Same guy, same role, 400 times the original pay.
Sure, sequels made a lot more money but still - $147,000,000 for a year's work? That is almost $17000 per hour - including being paid for sleeping, eating etc.
Singers:
Britney Spears makes about $737,000 per month. That comes out to about $1024 per hour. (Is that a kilobuck or megabuck?)
Again - getting paid for sleeping.
HOW is that not overpaid?
And let us not even start with football, baseball, soccer and other enthusiasts who are little more than overpaid manual labor.
Getting millions for kicking a ball around? Fuck that! That is not work.
That is why you never hear about a "job" or "work" or "assignment" of basketball.
What were the words they use? Aaah.. yes!
They PLAY a GAME.
The only group of professional actors/entertainers (IMHO) who are not being overpaid (and are actually underpaid) are porn actors and actresses.
Anyone who does not agree - you try "performing" in front of cameras for hours and then upload that online for all to see.
Mit der Dummheit kämpfen Götter selbst vergebens
Military contractors are not natural entities. They have evolved over the decades since WWI to be specialized in getting government military contracts, and away from actually producing at the lowest cost for the highest profit.
There's a joke about $700 hammers. But I've worked for some military contractors, and it's no joke. They're not so much overcharging the Pentagon, as they're probably just trying to recoup their costs. It might actually cost them $650 to produce that hammer. Seriously. And it's not just US military contractors. I've also worked for a couple non-US firms that were just as bad.
Don't blame me, I didn't vote for either of them!
An agreement is from 2 parties. You being willing to pay $1 is irrelevant unless someone else is willing to sell you the item for $1
That can't be it, because Obama had about the same amount-- and zero of it executive experience, to boot.
Gamingmuseum.com: Give your 3D accelerator a rest.
Yeah. Paying contractors to put up housing, cook, and do lots of other crap that low paid military personnel used to do may sound OK as a way to make sure that the number of trigger pullers is a high percentage, but it doesn't help reduce overall costs when the contractors have to fork over lots of cash to get people to work in a war zone. Not to mention the potential security breaches by contractors hiring locals. But it does give politicians cover for providing a low head count of military personnel being sent to a location or being killed while doing the job. The contractors get lumped in with the other civilian casualties.
the good ground has been paved over by suicidal maniacs