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How the Government Spends YOUR Tax Dollars

Written By Geoffrey Pike

Posted December 15, 2015

taxwsteConservatives are often quick to criticize government boondoggles and certain forms of welfare. But these days – especially since September 11, 2001 – everything goes out the window when it comes to foreign policy.

It has almost reached a point where you can’t question anything the military or Defense Department does – including where money is spent – without being called unpatriotic or not supporting the troops.

Regardless of what you think of U.S. foreign policy – and let’s face it, much of it has little to do with national defense – it is incredibly naïve to think that the government can spend hundreds of billions of dollars annually and be efficient about it.

Whenever money is thrown around that doesn’t involve voluntary trade or contracts in a free market environment, then you can be guaranteed that there is going to be waste. You can also be fairly certain that it will lead to corruption and abuse of power.

One example of this appeared recently in a report that details how a task force set up, with the stated purpose of helping develop the economy in Afghanistan, spent $150 million over five years living in relative luxury.

Although it is rather difficult to live in luxury anywhere in Afghanistan, the Task Force for Business and Stability Operation (TFBSO) somehow managed to come close.

The task force was set up during the Bush administration and was originally led by Paul Brinkley in 2006. He later resigned in 2011 based on various allegations of wrongdoing. It was under Brinkley that the task force was set up in nice Afghan villas where they had tight security and Western luxuries including televisions, refrigerators, and DVD players. The employees also were well fed with meals offering choices of entrees and sides.

This may not sound like much luxury to those of us living in the West, but how did this task force manage to spend $150 million from 2010 to 2014 in Afghanistan of all places?

TFBSO was allocated $766 million to help the Afghan economy by rebuilding infrastructure, but about 20% of this was spent on the employees of the task force, which generally numbered fewer than 10. How do you spend in the range of $30 million per year to accommodate 10 or fewer people?

Free Money Corrupts

We have heard about the military-industrial complex going back to the end of the Eisenhower administration. But this shows it doesn’t really matter if it is a multi-billion dollar company trying to get government contracts or a small government task force. If money is involved, there will be corruption and massive waste.

We know – or should know – the major cost in human life when there is war. And for those who do survive, their lives are generally turned upside down.

But this story has little to do with the Afghan people or their economy. Even if this money had been spent as it was supposed to be spent on building infrastructure (not to house the employees, as it could have been done cheaply on military bases), it still would not have been spent efficiently.

Only the market can properly allocate resources in accordance with consumer demand. This holds true anywhere, including Afghanistan.

The U.S. government can build a road, repair a bridge, build some new buildings to house people, or whatever. But they don’t know what the Afghan people want or need the most. Only an open and free market can determine this and allocate capital efficiently.

Of course, this is a major waste for U.S. taxpayers who have to fund this bureaucracy. The Pentagon manages to lose billions of dollars. We don’t know where any of this goes. But some conservatives are ready to just hand over a blank check at any time to support our troops and to stop terrorism.

This nonsense really has to stop for so many reasons. Unfortunately, the way it will stop is simply because the U.S. government will run out of other people’s money.

While we might say that the U.S. government has an unlimited supply of funds, this is not really true. The funds are certainly huge when you are talking trillions of dollars, but there is still a limit.

The government is limited in how much it can get away with taxing. Even the Federal Reserve is limited in its money creation and buying of U.S. government debt in the sense that it can’t go too crazy or it faces hyperinflation.

With the size of the national debt and the massive unfunded liabilities for Medicare and Social Security, there will be choices to make down the road. If it is between cutting the budget of the Defense Department or reducing Social Security checks, I think we know which way the American people will go. It will no longer be unpatriotic to question any funds allocated to “defense” or the military.

This isn’t the ideal way to stop unnecessary militarism and incredibly wasteful spending overseas. But a bankrupted government may just do the trick.