Simple solutions to deficits are simply wrong
By
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To the editor:
Quoting H.L. Mencken, "For every complex problem, there is an answer that is clear, simple and wrong."
There is no better example of that profound truth than the idea that simply cutting the size of government is the solution to deficit spending.
The last time we had a democratic president and a republican controlled congress there was a race to see who could cut the size of the federal government the most. The Clinton administration with its plan to reinvent government and republicans eager to gut government to benefit their true constituency, and the losers were our children and grandchildren who will pay the bill accrued.
A primary target for downsizing back then was the defense department's acquisitions workforce with the biggest blow coming from the republican congress that in 1996 ordered a 25% cutback in the defense acquisitions workforce before the year 2000, just in time for the department to be overwhelmed by demands created by the 9-11 attack and the wars in Afghanistan and Iraq.
Not only was there an increased demand for weapon systems but the systems were becoming more and more technologically complex, thus requiring more and better educated personnel in a department that had its workforce cut from 460,000 to 230,000. When experienced people with degrees and expertise were needed to manage contracts, the department was manned largely by people with only high school degrees. The result was dependance on contractors and cost overruns for systems increasing from 6% to 25% with an added cost of $290 billion. A prime example of weak contract management was the Coast Guard's mismanagement of $24 billion acquired to refurbish an aging fleet. With its acquisitions department totally eliminated, the agency seized on the simple solution of having Northrop Grumman and Lockheed manage their own contracting. The result was large new ships with design flaws that cost several hundred million to correct.
Another agency that took a hit was the Department of Materials management that regulates and oversees offshore drilling. Faced with serious workforce cutbacks the agency was expected to oversee a tenfold increase in the number of offshore rigs. The inspectors themselves complained of being woefully undertrained to manage new high end drilling technology and of having to rely more and more on oil companies to police themselves. The estimated direct cost of the Gulf oil spill that could have been prevented with adequate supervision is over 100 billion dollars with estimates several times that for eventual total cost.
I could site numerous examples of the costs accrued as a result of decreased government involvement but all of them together would not add up to nearly that of collapse of financial community that has cost trillions of dollars and about ten million American jobs. Early in the Bush years, SEC Chairman William Donaldson understood that his agency was understaffed to oversee ever increasing volumes of ever more complicated financial activity and fought hard for additional personnel but at the same time financial firms were being deregulated, limits on how much debt major firms could take on were eased freeing up hundreds of billions to invest in exotic financial instruments and the Glass-Steagall Act that required the separation of commercial and investment banks was repealed. After it was repealed, one-stop-shops were allowed to supplement their regular deposit and lending businesses with all the bells and whistles of Wall Street – helping to lead them into too-big-to-fail territory. The result was a financial collapse that could have been prevented with proper government oversight and continuation of regulations designed to prevent such a tragedy.
With irrefutable proof that simple meat ax cutting government spending is totally wrong abundantly available, why is everyone continuing to buy into the idea? Just the opposite of what Ronald Reagan said, in the present crisis Government is the solution, not the problem.
Sincerely,
Charles Leach
Lynchburg[[In-content Ad]]
Quoting H.L. Mencken, "For every complex problem, there is an answer that is clear, simple and wrong."
There is no better example of that profound truth than the idea that simply cutting the size of government is the solution to deficit spending.
The last time we had a democratic president and a republican controlled congress there was a race to see who could cut the size of the federal government the most. The Clinton administration with its plan to reinvent government and republicans eager to gut government to benefit their true constituency, and the losers were our children and grandchildren who will pay the bill accrued.
A primary target for downsizing back then was the defense department's acquisitions workforce with the biggest blow coming from the republican congress that in 1996 ordered a 25% cutback in the defense acquisitions workforce before the year 2000, just in time for the department to be overwhelmed by demands created by the 9-11 attack and the wars in Afghanistan and Iraq.
Not only was there an increased demand for weapon systems but the systems were becoming more and more technologically complex, thus requiring more and better educated personnel in a department that had its workforce cut from 460,000 to 230,000. When experienced people with degrees and expertise were needed to manage contracts, the department was manned largely by people with only high school degrees. The result was dependance on contractors and cost overruns for systems increasing from 6% to 25% with an added cost of $290 billion. A prime example of weak contract management was the Coast Guard's mismanagement of $24 billion acquired to refurbish an aging fleet. With its acquisitions department totally eliminated, the agency seized on the simple solution of having Northrop Grumman and Lockheed manage their own contracting. The result was large new ships with design flaws that cost several hundred million to correct.
Another agency that took a hit was the Department of Materials management that regulates and oversees offshore drilling. Faced with serious workforce cutbacks the agency was expected to oversee a tenfold increase in the number of offshore rigs. The inspectors themselves complained of being woefully undertrained to manage new high end drilling technology and of having to rely more and more on oil companies to police themselves. The estimated direct cost of the Gulf oil spill that could have been prevented with adequate supervision is over 100 billion dollars with estimates several times that for eventual total cost.
I could site numerous examples of the costs accrued as a result of decreased government involvement but all of them together would not add up to nearly that of collapse of financial community that has cost trillions of dollars and about ten million American jobs. Early in the Bush years, SEC Chairman William Donaldson understood that his agency was understaffed to oversee ever increasing volumes of ever more complicated financial activity and fought hard for additional personnel but at the same time financial firms were being deregulated, limits on how much debt major firms could take on were eased freeing up hundreds of billions to invest in exotic financial instruments and the Glass-Steagall Act that required the separation of commercial and investment banks was repealed. After it was repealed, one-stop-shops were allowed to supplement their regular deposit and lending businesses with all the bells and whistles of Wall Street – helping to lead them into too-big-to-fail territory. The result was a financial collapse that could have been prevented with proper government oversight and continuation of regulations designed to prevent such a tragedy.
With irrefutable proof that simple meat ax cutting government spending is totally wrong abundantly available, why is everyone continuing to buy into the idea? Just the opposite of what Ronald Reagan said, in the present crisis Government is the solution, not the problem.
Sincerely,
Charles Leach
Lynchburg[[In-content Ad]]