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Government Waste: Homeland "Security" and Insecurity   (December 29, 2006)


Frequent contributor Aaron K. submitted telling anecdotal evidence of the massive waste of government funds (recall that some $400 billion is borrowed annually in your name) in the name of "homeland security."

But at the same time, Aaron points out, "homeland insecurity" in the form of poverty and crime are rising.
The trillions borrowed and thrown away on fundamentally worthless "security" measures require interest payments forever; as tax receipts collapse in the "downturn of 2007," making those gargantuan payments will mean cutting some of the fat from Federal spending. One man's fat is another man's bone, and entrenched interests will fight to the last to protect their own gravy-train of Federal spending. Hang the future generations, I need my new Mercedes E350 now!

Here's Aaron's report:

1. On government spending largesse:

It's not just in Iraq; the entire homeland security buildup is a massive orgy of waste, at home as well as abroad (and I mean besides even the obvious "insecurity" the residents of New Orleans received in 2005).

Here's an anecdote. A buddy of mine is an engineer in the DC metro area. He typically (always, actually) ends up working for a company that is doing, or largely does, or exclusively does government contracting (frankly there isn't much else left in technology, and you'll see why below).

At his current company, he recently semi-accidentally found out a little bit of financial info which is very illuminating. He found out because he had to play the go-between for a government contractor and his company, which took on the role of sub(sub-sub-sub-...?)contractor.

The "company" he interacted consisted of... two guys. These two guys had an entire floor of an office building in Tyson's Corner, VA (a major tech center in Northern VA). This "company" was, nominally, a government contractor, doing military and security stuff. Their only actual asset was connections to military and government officials.

With this asset, they would farm the actual work out to other companies, like my friend's.

They skimmed, shall we say, *more* than their share of profits off the top:

- Amount this "contractor" charged the government per hour: $250
- Amount my friend's company in turn billed them per hour: $150
- Approximate amount my friend was paid of this, per hour: $30


This implies the fraction of government money going to the "actual work" here was around 12%.

I have many friends in technology who invariably work for the extended military industrial complex, and most have similiar stories. You can also add to the numeric largesse the incompetence of much of the "talent" rapidly and sloppily hired on to fill the various roles in this vast extension of government, and rarely cleaned out due to low or no accountability.

When you think about it, this situation is obvious: you can't grow the government more than 30% in four years, and take on more than $4 trillion of new Federal debt ($2 trillion at minimum tied to the security buildup) and spend most of that money /wisely/. No way. Ain't possible. Especially when they aren't even /trying/ for oversight and accountability.

2. On "crime extends beyond the inner city."

I'm sure the prediction will turn out to be on-target. I've also predicted an urban core/suburban reversal, in many respects. But I'm quite sure about this one because the data is already coming in. We've apparently just passed the threshold where there is

now more poverty in the suburbs than in the urban core:

And violent crime is on the way back up:

I quote:

"Robbery, which criminologists consider an important indicator of crime trends, was up nearly 10 percent -- and its rise was nationwide, with no region seeing less than a 5.8 percent increase."

The author mentions economic good times as a factor in the 90s crime drop, but doesn't put two and two together regarding the current rise. Elsewhere, recently (don't remember where) I saw a discussion of the pattern that robbery and other property crimes are a leading indicator of recession.

Here is a commentary of mine on general trend: autodogmatic.com
Thank you, Aaron, for these reports. A carefully-constructed but completely bogus "security" masks the enormous insecurity facing non-wealthy Americans. But as I have stated here earlier, all cons fall apart at some point: Enron, option backdating, etc. The Big Con is staggering into 2007 intact--the stock market is hitting new highs weekly--but 2007 might yet turn out to be the year of reckoning which has been pushed under the rug for so many years.


For more on this subject and a wide array of other topics, please visit my weblog.

                                                           


copyright © 2006 Charles Hugh Smith. All rights reserved in all media.

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