Collectivism and the GAO Report

Around 400 B.C., a worried Athenian comic named Aristophanes wrote:

I’ll tell you what I think about the way
This city treats her soundest men today:
By a coincidence more sad than funny,
It’s very like the way we treat our money.

America is there now. We opine on the man-child phenomenon and watch the Lost Boys of my generation fall out of their prams. Why do they spend their checks on games and toys? Because at 25 on a Saturday, there’s no difference in paying off debt at 45 and at 45 and one month; because our leaders define them as children and have created legal incentives for their parents to keep them nested. It’s unclear what came first: the devaluation of currency or the societal notion of what it means to grow up.

We’ve forgotten the nature of value. That’s what struck me the most about the new report from the Government Accountability Office (GAO). Throughout the federal government, the story is the same everywhere. We have bloated, ineffective, incompetent, overlapping, and counterproductive bureaucracies. They are tasked with either vague or impractically vast responsibilities — or both — and therefore assume undue authority, confiscating and wasting billions of dollars. The left hand, of course, doesn’t know what the right hand is doing, insofar as both hands are in someone’s pocket. The report has already been publicized, but the minutia is remarkable.

Let’s take transportation. Many disabled and elderly Americans are unable to bring themselves to the doctor’s office or to the market. So the federal government has some 80 programs for the task. The GAO “could not determine the total amount spent” because the federal agencies “often do not separately track transportation costs.” (Not keeping track of costs is a common theme throughout the report.) Nevertheless, the cost for 23 of these programs in 2009 was $1.7 billion. At that rate, we can infer that the total cost for all 80 agencies is around $5.5 billion.

That’s a lot of money to bring people to the grocery store. By a conservative estimate, that would cost every American about $15 per year. For that price, perhaps a private company would deliver groceries directly to the clients’ doorsteps? The precedent set here is not “love thy neighbor.” Love thy neighbor would mean driving the elderly to the market — or charitably paying for a taxi service to do so. No, our contemporary social mores have it that we steal $15 from one neighbor to pay for the transportation of another. The hidden collectivism in bureaucracy makes us unwitting crooks to each other.

But suppose we aren’t that cynical. Suppose we all happily agreed to chip in for the transportation of the disabled and elderly.  Suppose we even considered this the proper responsibility of government; not the local or state government, but the federal government. Suppose we accepted the strange premise that people in Washington, D.C., ought to oversee from Point A to Point B the daily movements of people in Washington state. Would it be unreasonable to grant this responsibility to one federal agency, or maybe two — but not 80? As it stands now, the Department of Labor has nine agencies on the job. The Department of Housing and Urban Development has 11 agencies doing it. The Department of Health and Human Services has 30 agencies doing it. And on and on.

Then there’s economic development, a topic most people would concede falls under the jurisdiction of government. The GAO report examined 80 programs in four federal departments. The cost for these programs in 2010 amounted to $6.5 billion, which is approximately $22 for every American. About half of that money goes to swing-sets and seesaws in “communities,” one of those tired words that means less than it once did. The other half goes to “entrepreneurial efforts.” Unfortunately, the Department of Commerce — which oversees eight of these programs — “continues to rely on a potentially incomplete set of variables and self-reported data to assess the effectiveness of its grants,” which may “lead to inaccurate claims about program results.” The GAO told this to the Commerce Department back in 1999. It took the Commerce people until 2005 to send out an internal memo.

The Office of Rural Development oversees 31 programs but has “yet to implement the Inspector General’s 2003 recommendation related to ensuring that data exist to measure the accomplishments of one of its largest rural business programs.” And the Department of Housing and Urban Development “does not track long-term performance outcome measures … because the agency continues to lack a reporting mechanism to capture how program funds are used.” See how it all makes sense? We can’t possibly expect anyone to account for a few billion dollars without one of those all-capturing “reporting mechanisms.” Someone might have to spend a weekend on Microsoft Excel.

The economic “program’s impact and effectiveness in neighborhoods [is] unknown.”  After four years in and around Newark, New Jersey, I can speak a bit to the program’s effectiveness and its impact on a neighborhood. (And I wouldn’t even charge the taxpayers for the honor of hearing my opinion they didn’t ask for.)

The GAO findings are consistent and depressing. “Federal approach to surface transportation is fragmented, lacks clear goals, and is not accountable for results.” “Efforts to meet water needs… have resulted in an administrative burden, redundant activities, and an overall ineffective use of resources.” The Defense Department “wastes billions of dollars through poorly structured incentives.” “Food safety system has caused inconsistent oversight, ineffective coordination, and inefficient use of resources.”

There are 15 federal agencies that administer 30 food laws. That means each agency can only handle two laws. The report found 82 different programs focused on improving the quality of teachers and 56 overlapping programs to help Americans better understand personal budgeting. On the health care front, Medicare is wasting $48 billion, which is like adding an additional six months to the annual Afghanistan tab. So hypothetically, even if we were so fortunate as to be in peacetime, we would still be paying for about a half-year’s worth of war. Such waste is not merely hidden, but institutionalized.

When the national debt tops $14 trillion, when the purchasing power of the dollar has declined 94%, when all of our entitlement programs are racing towards insolvency, when our monthly deficits are almost double our old annual deficits, then we are dealing with something larger than a case of bureaucratitis. The GAO report exposed the nature of American collectivism. It is done behind the politician’s curtain, in the appendixes of contracts nobody reads, comprised of legalese nobody understands.