Saturday, January 24, 2009

An example of everyday government spending.

The following is an a interesting anecdote taken from the back cover of a book called "Burning Money" by Joseph Peter Grace (ISBN 0025449303). Its a common example of bueracratic processes unfortunately.

"An actual case.
One day the U.S. Navy decided to buy a hammer, the kind you buy for $7 at the corner hardware store. To the $7 cost of the hammer, add:
  • $41 to order the hammer and figure out how to use it.
  • $93 to make sure the hammer worked.
  • $102 for "manufacturing overhead."
  • $37 to make sure there were spare parts for the hammer.
  • $3 for packing the hammer for shipment.
  • $90 for the contractor's "general administrative costs."
  • $56 for the finder's fee.
  • $7 for the "capital cost of money."
The U.S. Navy ended up buying a $7 hammer for $436, and who paid for it? You.

Makes one ponder why anyone would want to trust the government with other aspects of the economy, if they can't even handle a transaction as simple as this without spending wastefully on pork.

~David Morris~

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