Is Government Inefficient?

A former Obama official says government should learn from business, but is private industry really more efficient?

Former Obama undersecretary of defense for policy Michèle Flournoy says that government needs to get more efficient:

While the federal government has a dedicated workforce that provides a number of essential functions and services to taxpayers, no one would argue that it is a model of efficiency or effectiveness. Indeed, many federal agencies and their core business practices were designed in the 1950s and 1960s. Even agencies that have gone through periods of reinvention remain years behind the private sector in terms of performance and efficiency.

In the past decade, the most competitive and successful U.S. companies have fundamentally transformed how they do business. They have adopted new strategies to cope with a more complex, dynamic and uncertain environment. Many have gone through a process of “delayering” to streamline and empower their organizations. They have leveraged new information technologies to enhance performance, agility and competitiveness while reducing cost. And they have made strategic investments in human capital and talent management to improve performance and foster the next generation of leaders.

While some federal agencies have made good-faith attempts to become more efficient, most still carry the dead weight of unnecessary overhead, outmoded business processes, infrastructure that is no longer aligned to their mission, and underperforming organizational structures.

Bernard Finel calls “bullshit”:

 Anyone who has worked in government does indeed know that there are a lot of inefficiencies. There is a lot of waste and generalized stupidity. But guess what? There is even more of that in the private sector. The notion that the private sector is more efficient generally is simply not empirically supportable.

Whether the issue is health care or, say, private vs. public prisons, there is just no compelling evidence that the private sector is more generally efficient. You’d think it would be. After all, the profit motive ought to generate more efficiency, but the reality is that while corporate management has a fiduciary responsibility to shareholders or owners in principle, in practice management is just as concerned with maximizing its own rewards.

Business justify all sorts of things on “efficiency” grounds. Business class travel and corporate jets supposedly allow managers to be more rested and work on the go and so on, but really it is about comfort and prestige, not efficiency. Lavish retreats supposedly promotes better communication and teamwork, but really is mostly about getting a paid vacation. Expensive office space and furnishings are supposed to reassure clients and set a tone of quality, but really just make more enjoyable places to work. And, of course, outsized salaries for CEOs and other senior managers are supposed to be about attracting top talent, and yet are often divorced from any objective measure of performance.

He’s right, of course, that government often performs quite well while keeping salaries and benefits relatively low.

But Flournoy isn’t saying that the private sector is more efficient at everything; she’s saying government is doing certain things badly and could learn from best practices in the private sector. And, surely, that’s true in many cases.

Let’s look at her specific complaints:

many federal agencies and their core business practices were designed in the 1950s and 1960s

Partly because they’re so large and partly because of the defining nature of bureaucracy, government agencies are slow to adapt. Indeed, they’re often legally constrained from adaptation. Our intelligence community is still largely stuck in 1950s stovepipes, the post-9/11 reforms notwithstanding. And, while the Defense Department is constantly transforming, its overarching organizational structure hasn’t been reformed since 1949.

By contrast,

 the most competitive and successful U.S. companies . . .  have gone through a process of “delayering” to streamline and empower their organizations.

The military chain of command remains what it was in 1949. Indeed, we’ve added layers of bureaucracy and have generally upsized command structures, with more four-stars than you can shake a stick at.

They have leveraged new information technologies to enhance performance, agility and competitiveness while reducing cost.

In fairness, government has done this, too. But, for all sorts of reasons, they’re typically way behind business in terms of state-of-the art.

And they have made strategic investments in human capital and talent management to improve performance and foster the next generation of leaders.

I’m a little skeptical of the degree to which this is true. And, at least in the military and intelligence sector, we’ve long made a strategic investment in professional education and training. (Indeed, Finel teaches at the National War College, the crown jewel of this system.) On the other hand, the byzantine civil service personnel system serves to promote existing employees up through the chain rather than to recruit the best available talent. And there’s a wait your turn mentality to the promotion system to a degree that doesn’t exist in the private sector.

While some federal agencies have made good-faith attempts to become more efficient, most still carry the dead weight of unnecessary overhead, outmoded business processes, infrastructure that is no longer aligned to their mission, and underperforming organizational structures.

Again, I’m sure that many private companies do the same thing. Change is hard and expensive. But change is harder in government bureaucracies.

My doctoral dissertation, which I started nearly two decades ago, focused on this very topic. Then, like now, the Defense Department was facing steep budget cuts following a long period of wartime growth. When I started my research, my intent was to write about what the post-Cold War structure should look like. Within a few weeks, though, I discovered that there actually wasn’t much debate about that. The real question, it turned out, was Why aren’t we going to do what every expert thinks we need to do?

In the final paragraphs, Flournoy talks about “rice bowls,” entrenched interest groups with powerful connections in the Pentagon or the Hill, and parochialism. Those are all important. What’s probably even more crucial, though, is that, during times of massive cuts, organizations seek to preserve their core assets even at the expense of known short-term needs.

In the 1990s, the Army knew that it needed more language, civil affairs, special operations, military police, and other skills needed for what it was then calling MOOTWA (military operations other than war). The post-Desert Storm reconstruction mission in Iraqi Kurdistan and the warlord chasing debacle in Somalia were underway and peace enforcement missions in Bosnia and elsewhere were plainly on the horizon and even more plainly unsuited for a tank heavy Cold War force. But the Army was much more concerned being unprepared for a major land war that it couldn’t see than making do with sub-optimal forces for the quasi-wars on its plate. We were several years into counterinsurgency operations in Iraq before real transformation began and by then it was too late—and quite possibly too much. (And we still don’t have the linguists and MPs we need.)

It’s true that many companies in the private sector do a lousy job of changing, too. But they tend to go out of business after a while. That doesn’t happen very often in the government.

FILED UNDER: Bureaucracy, Military Affairs, US Politics
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. At a fundamental level the question is apples to oranges, because private sector productivity is based pm a dollar value of output per worker. In the government sector we want certain tasks performed, and often we don’t want output increased. It’s not really a win if the Center for Disease Control treats more epidemics. Similarly, more wars per soldier ….

    Generally we should be looking at ways to improve government operations by criteria unique to the domain. We won’t always be able to find private or profit driven comparisons.

    We should also watch out for perverse incentives in “privatization.”

    Why are we the only modern nation not to have free on-line tax filing?

    Employment and business profit, and not in a good sense.

  2. Robert Bell says:

    Nice article. I think another way to look at the question is to distinguish ownership structure from competition structure. In regulated monopolies things aren’t particularly efficient, e.g. here:

    http://marginalrevolution.com/marginalrevolution/2012/08/have-the-french-shown-that-water-privatization-is-dead.html

    In contrast in the rare case where government provided services compete directly, competition enhances efficiency:

    http://www.nber.org/papers/w14176

    Similarly when government competes with business, both get more efficient:
    http://worthwhile.typepad.com/worthwhile_canadian_initi/2012/06/competition-matters-not-ownership.html

  3. Rob in CT says:

    I see nothing wrong with calling for federal agencies to join the 21st century. It’s not just “efficiency” per se. I caught that “designed in the 50s/60s and stayed there” bit too. That’s what jumps out.

    I work in a very bureacratic department within a naturally bureacratic part of the private sector (insurance). My wife works in IT. Sometimes, when she talks about the changes we’re mulling, I’m flabbergasted that we didn’t make said changes 10 years ago. Other times, I see changes made simple for the sake of making changes (hired a new department head, so I guess it’s time for musical chairs!). And we’re a very successful company.

    So my personal experience makes me a lot less inclined to reflexively assume that government is especially outdated & inefficient.

    But there are good reasons to expect that, on balance, it will be behind the curve:

    It’s true that many companies in the private sector do a lousy job of changing, too. But they tend to go out of business after a while. That doesn’t happen very often in the government.

    Yes. That. So by all means push and prod for modernization.

  4. grumpy realist says:

    Government will always need to be more inefficient fhan the private sector, because it has to take care of the dregs, the incompetents, and the insane, while the private sector can just drop them like a hot potato. The government, willy-nilly, ends up as being the provider of last resort of a mess of services because nobody else can be bothered to do it or it’s economically inefficient. Witness the Postal Service. If the US Postal Service could shrink its footprint to cover only the routes that were economically efficient we could cut out a huge chunk of rural America. Or the US Postal Service could in fact charge enough to cover delivery to rural America. You want to live on a farm out in the middle of nowhere, fine. But you’ll have to pay $100 per item to cover the actual costs of getting the stuff delivered to you. A business would do this and simply cut off postal service to those too poor or too far away. The US Postal service can’t. Which is why it is “inefficient” by comparison to FedEx….

    You can’t win in government. If you put in sufficient tracking to make certain not a penny in wasted, you end up with a very expensive overhead that everyone bitches about. If you get rid of the regulations, then don’t act surprised when you get corruption and theft all over the place.

    I really wish more Americans would understand this.

  5. Rafer Janders says:

    Having just spent three hours of my life I’ll never get back dealing with Bank of America, I rather resist the notion that private business is inherently efficient….

  6. george says:

    Well, you have to admit that some of the stuff bought for the military is an extremely inefficient way of doing finance. Maybe that’s the part of the government (the military) that he’s talking about? The war in Iraq for instance was a huge waste of money.

  7. rudderpedals says:

    Finel puts a finger on the disconnect between shareholder and management interests. Starting in the 80s law and the courts pretty much eliminated shareholder derivative lawsuits. That unshackled management from the most effective way the owners of the company policed management.

  8. LC says:

    Having worked in IT in both “big” government and “big” business, I don’t believe that one is more efficient than the other but that the areas of inefficiency vary, and it is much easier to cover them up in business.

    Procurement:
    Government agencies are enmeshed in rules designed to prevent waste, fraud and abuse and to promote various political objectives (“buy American”, “build a factory in my district if you want govt. business”). Thus the endless paperwork and multiple levels of approval required to do anything. Nobody wants to be hauled before a Congressional committee and accused of wasting the taxpayers’ money. The often hideously expensive Defense procurements are, I think, generally the result of gaming the system. To avoid buying the cheapest product on the market (which may or may not be the best), one develops procurement specifications so detailed that only one company can meet them.

    Private business is not without such rules but, generally, managers have much more flexibility when it comes to purchases and, absent truly obvious fraud, businesses are more willing to accept a certain level of “waste, fraud and abuse” on the reasonable grounds that trying to wipe it all out is useless and counterproductive.

    Probity counts more in government than efficiency.

    Employee Turnover:
    In government, employee turnover (in my experience) is much lower. The advantage is that there is a lot of historical memory, knowledge about how to work the system, and, most helpful, knowledge about who to contact when one needs help or advice. It may be hard to fire incompetent people, but you learn who they are and how to work around them.

    In business, employee turnover is much higher due to layoffs, acquisitions, and the management objective of giving “up-and-comers” experience in as many parts of the company as possible. And every management change, at every level, means starting over from scratch. The new management brings in its own people without regard to the experience or value of existing personnel. Each new manager assumes that his or her predecessor was, at best, behind the times or, at worst, hopelessly incompetent. The result: endless shifts in software and hardware acquisitions. If even 50% of those changes resulted in greater productivity or efficiency, I’d be surprised. Every acquisition of another company meant a horrific process of integrating vastly different computer systems. (I believe I’ve read at least a few studies showing that relatively few company acquisitions result in a long-term measurable increase in company value.)

    I lost track of the number of times we cycled through IT fads for outsourcing (originally called time-sharing) to insourcing to outsourcing to insourcing. Part of this was driven by market changes, part by the very expensive but respected consulting firms, part by mgt. changes. Because of employee turnover, institutional memory (“we tried that before and it failed for the following reasons”) is lost. The employees one could depend on for help or advice on technical matters get replaced by others who may be just as smart but who require at least a year or two to come up to speed. Avoiding the incompetent becomes harder because one must spend so much time figuring out who is good and who is bad.

    Finally, we place different demands on government agencies than we do on businesses and we assess performance differently. It is much easier to hide oodles of inefficiency in business than in government because the only business measure that counts is profitability – and there is no way to prove that a company cold be x% more profitable if there were less inefficiency. It is harder to measure government productivity because the only two criteria are qualitative performance vs. expenditures.

  9. Rafer Janders says:

    It’s true that many companies in the private sector do a lousy job of changing, too. But they tend to

    go out of business after a while. That doesn’t happen very often in the government.

    Because it’s an apples and oranges comparison. Companies go out of business because they compete with each other, and consumers have a choice. But government doesn’t compete — who would the US government compete with, anyway? Do we want multiple competing sewer departments? Fire departments? Police departments? Armies?

    And if efficiency is the goal, let’s not forget that competition is, itself, inherently wasteful and inefficient. Competition involves its actors in constant positional jockeying that quite often only serves to enhance their positions relative to each other, without enhancing the good of the system as a whole. Competition produces a lot of wasted effort and dead ends (witness all those companies that go out of business, which is the ultimate in inefficiency).

  10. Rafer Janders says:

    And, while the Defense Department is constantly transforming, its overarching organizational structure hasn’t been reformed since 1949.

    And…so? Should it be? Does the overaching organization structure actually need to be reformed, or would it be change for the sake of change? Would changing the structure necessarily make things better? Do we know that in advance?

  11. Drew says:

    Someone cited apples and oranges. If big business is inefficient, the capital providers suffer. If big government is inefficient taxpayers suffer. Thats a huge difference.

    Furthermore, as a small business owner of perhaps 50 companies over the years, the notion that government is as efficient is just an absurdity. Really, Bernard is nuts.

  12. Gromitt Gunn says:

    In my (state) agency, the biggest source of inefficient operations comes from two sources: statutory / administrative law requirements and IT inefficiencies.

  13. grumpy realist says:

    @Drew: But why is it nuts? It’s easy to see how you can streamline a small business–this is traditionally why start-ups are good. But once you get to a certain size or need to deal with a certain fixed population what you can’t get rid of, you’re going to become more inefficient.

    A government cannot really be compared to a business because it does completely different things. We could go back to a privatized army: they’re called mercenaries. Historically, mercenaries have had the distressing habit of switching sides when they were bought off….

  14. al-Ameda says:

    it always makes me laugh when people say that they want government to be run like a business.

    No they don’t, not when it comes to decision making they do not.

    The public definitely does not want government making decisions and acting on them immediately or expeditiously the way a private company often does, particularly when it comes to land use decisions. The public definitely wants numerous public hearings, often an opportunity vet the proposed project endlessly and if necessary obstruct the project until the government or applicant gives up.

  15. anjin-san says:

    The Fortune 500 companies I have worked for are chock full of people doing what an entrepreneur buddy of mine calls “playing hide and seek”.

    They hide in their cubicles every day and emerge every two weeks to seek their paychecks…

  16. Rafer Janders says:

    @Drew:

    Furthermore, as a small business owner of perhaps 50 companies over the years, the notion that government is as efficient is just an absurdity.

    50 companies? That’s incredibly inefficient. All that wasted time and effort duplicating start-up time and expenses, payroll, HR, consumer relations, etc. 50 times over. What a waste.

  17. Scott says:

    This is such a massive subject (just like Government) that it is difficult on where to start. But a few thoughts:

    Federal procurement is hamstringed by a lot of rules many of which is designed to promote fairness among the competition not necessarily the best price. Also, there are a lot of socio-economic goals for small business, minority-owned small business, veteran-owned small business etc. (Side note: do the “you didn’t build this” critics support eliminating those rules and the Small Business Administration?)

    I see the problem everyday and the problem is risk-averse leadership with a lot of competing agendas. I give you Exhibit one: Michelle Flourney. She was in a position of authority; what did she do?

    The appropriation and authorization process imposed by Congress guarantees failure. Different catagories (we call them colors) of money, each with their own lifespan and rules and congressional fiefdoms. Juggling the financials takes up a lot of peoples time and is grossly inefficient.

  18. Scott says:

    @Drew: I would agree with you that a small business is more efficient; but as business get larger, the organization gets just as ponderous as the government. I think it is a size issue rather than private vs public.

  19. Dave Schuler says:

    It’s the size not whether it’s public or private. The inefficiency at Fortune 50 companies defies description.

  20. john personna says:

    I worked at a large medical company. Someone said “this is a very important issue, let’s meet next month to discuss it.” I was the only one staring around in amazement. Of course, I’d just come from a ~50 person engineering company.

  21. JKB says:

    Sure, everyone can find private sector businesses as inefficient as government. It is a function of bureaucracy which many very large organizations also suffer from. It is also a function of regulation. Something my be more efficient but either management or the government has prohibited the action by regulation.

    But there is another problem with the comparison. Ignoring the government regulatory take over of private business operations in the last 40 years, government works on a prior authorization scheme, i.e., nothing is allowed unless authorized. Whereas, private business is set up on a prior prohibition scheme, i.e., all is allowed unless prohibited. The bureaucrats trying to make business work like government with prior approvals not withstanding, private business can pursue new methods and processes.

    Government however, is limited by authorizing legislation and regulations. For government to become more efficient, you often have to revisit the base legislation, Presidential directives and regulations. This is not something most in government, politician or bureaucrat, are comfortable with since it puts empires at risk. Not to mention, it is near impossible in the short-term to get rid of the old guard who will try to re-impose the old ways even after changes have been made. In the private sector, the old guard, C-level and just below, are often sent packing when they become an impediment. Add to that the tendency in government of workers to not know the fundamentals of how things work but just do it as they were taught 30 years ago and how they taught those who followed them.

  22. Tsar Nicholas says:

    Obviously with rare and notorious exceptions the private sector is far more efficient than the government sector. I mean, come on, let’s not all smoke from the statist crack pipe.

    That aside, this entire discussion is missing the 16 trillion dollar elephant in the room. The problem with the federal government is that it spends too much public money. You know, taxpaper money. Your dollars. Mine. Your kids’ money. Etc. Public money doesn’t grow on trees. In the long run if you spend too much taxpayer money inevitably you end up whining like a Weimar or suffering like a Spainard, if you catch my drift. Hell, I wouldn’t give a rat’s ass if the government remained inefficient, so long as its inefficiencies were encapsulated into a much smaller entity that spent a lot fewer taxpayer dollars.

  23. JKB says:

    Here is an example of regulatory induced inefficiency. This one is government imposing on the private gasoline market but such foolishness is prevalent inside agencies as well.

    Now, how hard do you think it would be to reopen the gasoline formulations with a goal of throwing out the additives superseded by emission efficient vehicles and arriving at say 3 formulations for use across the country so that supply could move to cover shortages?

    The role of regulators in fuel formulation has become increasingly complex. The American Petroleum Institute today counts 17 different kinds of gasoline mandated across the country. This mandated fragmentation means that if a pipeline break cuts supplies in Phoenix, fuel from Tucson cannot be used to relieve the supply disruption because the two adjacent cities must use different blends under EPA rules.
    To shift fuel supplies between these neighboring cities requires the EPA to waive all the obstructing regulatory requirements. Gaining permission takes precious time and money. Not surprisingly, one result is increased price volatility.

  24. KariQ says:

    Agree with those who say the two are simply different. I’ve worked for both and there was a near obsessive interest in cost saving when I worked for the government and almost no interest in private industry. The efforts to save money weren’t always successful, and all too often it was a short-term gain but cost more in the long-term.

    One of the reasons those short-term cost savings, was a refusal to spend the money needed to upgrade technology, especially computer systems. Governmental agencies are still using outdated computer systems even though they have made plans to update them because they simply can’t get the funding from their superiors. No one doubts that it’s needed, but it’s easy to say no and point to it as a “savings” even though the long term savings would far outweigh the single year expenditure. This is one thing that didn’t happen nearly as often in private industry; they are usually more willing to spend the money to get the newer equipment.

  25. john personna says:

    @JKB:

    You understand that there are state EPAs, right?

    You might not know that they may require cleaner fuel in congested cities, while being less stringent in rural areas. You might get them to connect agree on fewer grades, but it would take the federal government overpowering states to force it down to three.

  26. john personna says:

    BTW, batch blending gasoline is about as hard as getting your color of paint at Home Depot. The computers do it.

  27. Rafer Janders says:

    Whereas, private business is set up on a prior prohibition scheme, i.e., all is allowed unless prohibited.

    That’s…simply not true.

  28. sam says:

    Is anything more inefficient that the weekly departmental meeting? I mean, Jesus, send me a memo, I got work to do.

  29. Gromitt Gunn says:

    @KariQ: The desktop computers that my division has have video cards installed that support dual monitors. Now that we strictly use PDFs and web portals for reviewing financial statements and other filings – in the name of being paperless, i.e. more efficient and transparant – as opposed to paper statements, we really need dual monitors to work efficiently.

    We don’t have money in the budget for dual monitors. Last year we had to pick between a Reduction In Force and zeroing out our discretionary IT budget for the current two-year budget. Some of us asked if we could bring in old monitors from home in order to have a dual monitor set up. Bear in mind that our computers have video cards that can support dual monitors – so this is literally no cost to the Agency.

    Denied. Flat out. Basically because either every gets nice things or no one gets nice things.

    So… .what happens? People end up printing out the financial statement PDFs so that they can work efficiently. And then throwing them into (hopefully) the recycling bin. And then the next person that needs to work using that PDF prints it out. etc.

    Yeah.

  30. al-Ameda says:

    @sam: Oh my god, is there anything ( other than money) that modern program managers love more than multiple weekly meetings? I believe that they all come out of MBA programs with the idea that constant communication, and documentation of that communication, is a necessary management function – a priority. It’s very bureaucratic, often very CYA, and much of it could be handled in smaller meetings with those directly affected.

    It is quite often as inefficient as government.

  31. @Drew: Tell you what, buddy, show me solid empirical evidence — not just your half-assed, “my experience tells me” BS — but actual systematic evidence, and I’ll be happy to retract. But you can’t because it doesn’t exist. Despite all the happy claims of 10, 20, 30% savings from privatization of government services, there is simply no evidence that the private sector is more efficient at providing like services than the government.

    The private sector seems efficient, sometimes, b/c it gets to pick and choose where it plays. It is simply not, inherently, more efficient.

  32. anjin-san says:

    @ Bernard Finel

    You obviously don’t realize that Drew is a great man & you are an insect compared to him…

  33. Gromitt Gunn says:

    If private industry is always more efficient, then why do private companies need a 14% increase versus standard Medicare on per member per month rates to run Medicare Advantage? And why do said companies still sometimes fail in spite of having $1.14 to provide the exact same level service for ever $1.00 that Medicare gets?

  34. An Interested Party says:

    Really, Bernard is nuts.

    That is rather amusing coming from some anonymous bozo who likes to go around bragging about all of his alleged business expertise…

    Hell, I wouldn’t give a rat’s ass if the government remained inefficient, so long as its inefficiencies were encapsulated into a much smaller entity that spent a lot fewer taxpayer dollars.

    Following in the footsteps of another loon who suggested a drowning in a bathtub…

  35. You know, I found this a much more important story:

    Big Income Losses for Those Near Retirement

    And this one too!

    Americans struggle to feed their families

    We can talk about “waste, fraud, and abuse” but we should be up-front that it’s been oversold, and probably not where the hard problems reside.

  36. JKB says:

    @Rafer Janders: That’s…simply not true.

    You are going to need to justify that statement.

    So you are asserting that private enterprise can only do those things for which the government has given prior authorization? Did the government prior authorize the automobile, television, radio, plastics, personal computer, Twitter, Google, iPhone, etc?

  37. Dave Schuler says:

    @An Interested Party:

    That is rather amusing coming from some anonymous bozo who likes to go around bragging about all of his alleged business expertise…

    I think you can take Drew at face value, AIP. I’ve done a bit of research and I’m pretty confident that he is who he says he is.

  38. @Dave Schuler: Oh, I personally take him precisely at face value… a guy who is quick to demean and insult, but who interestingly enough never seems to pony up actual evidence to support his views other that his own personal experiences. Whatever.

  39. Console says:

    Flournoy’s argument is sort of a half assed one. She isn’t really talking about private businesses being better at providing government services. She’s talking about private businesses having practices that the government could adopt. It’s like she just go back from some management consultant seminar. There’s a reason she doesn’t give a single example of any sort of efficiency reform we could make. Managers like Flournoy are the problem, public or private.

  40. Scott says:

    @Bernard Finel: The Government can achieve savings by privatization; however, if you did below the surface, you’ll find that the savings come not from better management or advanced processes but rather through old fashioned lower salaries. Except for the owners, of course.

  41. Robert in SF says:

    Perhaps (likely) I am not up to speed on the sequestration cuts coming soon, but I wonder at this statement:

    Then, like now, the Defense Department was facing steep budget cuts following a long period of wartime growth.

    If I read the news rights, the DOD’s proposed budget for 2013 is $525.4 billion for the year.
    $500 billion over 10 years is $50 billion a year, or about 10%?

    That’s steep? I have worked in businesses that faced steep cuts in the budget, and it was way more than 10%….

    So are we considering a 10% budget cut to be drastic, steep, risky?
    When we are ~$16 trillion in debt?

    Is there an article about the whole budget impact and the cuts coming down, sort of a primer that anyone can recommend that’s comprehensive and not one-sided?

  42. Rafer Janders says:

    @JKB:

    You are going to need to justify that statement.

    You are going to have to learn to read better.

  43. michael reynolds says:

    Thanks to the efficiency of private industry I can send a letter from California to New York and have it arrive in 24 hours for just 40 times more than the government-created USPS will do it in three days.

    Of course if it’s a package that impressive private industry advantage basically disappears.

    Ah, the magic of private industry. Thanks to private industry my wife was recently able to fly from California to Virginia in just 48 hours. (No, really. Two days. Nope: not bad weather.) My sister got all the way from San Diego to Seattle in a mere 24 hours. Thanks to private efficiencies I was hosed by ATT for six months of overseas phone service I had canceled.

    On the other hand, the IRS and I worked out some stuff over the phone. One call. All done. And updating my license? In and out of DMV in 20 minutes. I have yet to get out of a Staples or Office Depot without some kind of screw-up at the register. There’s my local Safeway which I swear to God has managed to run out of milk. All milk. I live in the Bay Area, not Crapheel Nebraska.

    Best Buy, they’re private, right? Would you like the extended warranty on that bottle of water? Wouldja, wouldja, wouldja?

    Let’s see: robbed by CitiBank who jacked up my rates without exactly telling me, baffled by Xfinity which owns the world’s most retarded technology, ripped off by Amex which has made an art form of obstructing efforts to cash in points, had my personal data compromised by, oh, hell, too many incompetent corporations to count a this point. (Sony is the personal bitch of a bunch of kids calling themselves Anonymous.) There’s Audi with their electronics, CVS which insists that I’m still on the East Coast and likes to ping my cell phone at 4 AM to tell me I could come in and get me some more Zocor. Wake up and get some Zocor!

    What we have here is confirmation bias. People have been brainwashed to believe that private industry is efficient. Bullsh!t. Have you ever had a burger from a Burger King that wasn’t a hockey puck? Ever? Even once? Aren’t they private industry? How’s your car dealership? Your cell phone carrier? Your plumber? My local Chevron station can’t calibrate their pumps to actually fill my tank without the vapor uptake popping fifteen times. I asked my bank to walk me through their own damned payroll service and they couldn’t do it. You know what they could do? Harass me to open accounts I don’t need. Hertz gets about 70% of my #1 Gold Reservations up on the board and miss about 30%. As for American, United and Delta, they can all drop dead.

    I can count on one hand the corporations that have actually efficiently delivered the goods and services they claimed they would deliver: Apple, Chubb Insurance, Virgin America, Costco and . . . and yeah, that’s it. I have a spare finger left over.

  44. Rick DeMent says:

    UPS is pretty good … and they are unionized 🙂

  45. Barry says:

    @Rafer Janders: “Having just spent three hours of my life I’ll never get back dealing with Bank of America, I rather resist the notion that private business is inherently efficient…. ”

    Actually, it was. They probably had you spending 90-odd % of that time on hold, which cost them nothing. They might have you classified in a category where if you went elsewhere (after being ripped off), that was good for them. They undoubtedly took the attitudes that (a) their screw-ups were your problems and (b) charge you first, and credit you later, if and only if you complained enough.

    It was highly efficient, and quite predatory.

  46. Rafer Janders says:

    @Barry:

    No, actually, 90% of my time was spent talking to real human beings. Multiple real human beings, none of whom were able to fix my problem, which was partly due to them and partly due to BOA’s antiquated computer systems (for example, all customers who opened an account in California are on a different system than the rest of the country — even if you only opened it in California and haven’t lived there in over ten years). I’m high net worth, so they like my business, they’re just not very good at conducting it.

  47. Rafer Janders says:

    @Barry:

    This actually leads into a good point, though, about what “efficiency” really means. No doubt BOA tries to be efficient for its own benefit — but what’s efficient for BOA is often to the detriment of its own customers.

    But when people claim that they want to government to operate as efficiently as a business, they don’t really understand that that’s what they’re asking for — that the efficiency gains may come at the expense of the citizens. What people really want from the the government is for it to be efficient to the benefit of its users, to the benefit of its citizens. But that’s not how businesses become efficient.

  48. Liberty60 says:

    @grumpy realist:

    We can look at actual empirical evidence:

    USPS is unionized, government-controlled;
    UPS is unionized, private;
    FedEx is nonunion, private;

    Yet all three are amazingly competitive, offering the same services. Efficiency doesn’t seem to be driven by union vs. nonunion, or govt vs. private;

    If we allowed the private carriers to perform first class mail delivery, but stipulated that they provide universal coverage to every address in America, would they outperform USPS?

    The evidence on parcel service doesn’t suggest they would.

  49. anjin-san says:

    Delta

    The lowest circle in hell…

  50. grumpy realist says:

    @Liberty60: Also remember that USPS takes care of The Last Mile for a lot of those so-called “private” services.

    I’d love to see what FedEx and UPS would charge if they had to in fact land the package at the final address for ALL of their final destinations.