I don't own a television, but when I travel I get my dose of boob-tube popular culture and the 24-hour news cycle. This week I was amused to hear the shrill voices on multiple news channels registering surprise and indignation that Obamacare is costing more than expected.
How can this be a surprise to anyone … especially people in the news business? Forget the details of the awful bill. Just look at the history of government programs.
Chris Edwards of the Cato Institute cited several examples of cost estimates versus reality in government projects: Boston's "Big Dig" tunnel project was supposed to cost $2.6 billion in 1985, but by 2005 had cost $14.6 billion. The hiring of airport security screeners was supposed to cost $104 million, but four years later had reached $741 million, and the airport security upgrades ballooned from $1 billion to $3 billion dollars.
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As someone said (not Everette Dirksen but often attributed to him), "A billion here, a billion there and pretty soon we are talking about real money."
For its part, medicine is already a leader in the arena of wishful economic thinking. When enacted in 1965 for the "Great Society," government "experts" projected Medicare costs to rise to 9 billion by 1990. The actual cost? 67 billion. That's not even close in horseshoes. In 1987, the Medicaid hospital subsidy was projected to cost $100 million, but by 1992 costs were $11 billion – with a "b" – per year. That's an order-of-magnitude error. Last year, the Arizona Medicaid program was given roughly $650 million in federal and state matching funds, and spent roughly $550 million on services by doctors and hospitals. The hundred-million difference is a mystery to taxpayers, but probably not to some administrators. Medicaid is a huge slush fund to the bureaucrats who run it.
It's possible but not easy to find a few programs that came in at or under cost – but they are trivial compared to the obvious and daily misunderstanding of costs displayed by our government "experts." In fact, perhaps the biggest waste is the cost of the experts themselves. We could just as well make predictions with a dartboard of numbers, some in the millions and some in the billions, because obviously they are interchangeable in the minds of government officials. How can the "experts" always be this far wrong and keep their jobs?
The answer to that is the answer to why government is always over budget: OPM – other people's money.
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The old saying goes as follows, "When I am buying something for myself, I worry about cost and quality. When I am buying it for you, I worry about cost but not quality. And when I am buying it for you with OPM, I don't care about cost or quality."
And, as reality imitates art, in a stunning trifecta, government is not only wildly wasteful of money, but damaging to the economy and incompetent at producing anything of quality.
Where to start? The Department of Education – skyrocketing costs, poorly educated students; Housing and Urban Development produced slums in an attempt to upgrade slums, sucking up billions in the process; the Department of Energy has spent $105 billion (projected to be $63 billion, of course) to clean up high-level nuclear waste, yet has not solved the problem. Yucca Mountain is defunded, and today, expanding amounts of nuclear waste sit in short-term suboptimal storage around the country. Even defense has suffered. The F35 was supposed to be a $65-million aircraft that would have entered operations in 2005 and was promoted as a cost-effective replacement of multiple aircraft. It is just now coming on line, costing at least twice what was projected. In fact, in a recent study of government military procurement, considering 64 programs, the average cost overrun was 18 percent, the max overrun 109 percent. In dollars this ranged from $36 million on average to $493 million dollars. One of the worst bits of waste, in my opinion, is the boondoggle with Lockheed Martin to produce a new presidential helicopter. The program initially called for about $6 billion, but now carries at least an $11.2-billion price tag. For what? We have a fleet of combat helicopters from which to choose HMX1 birds. We can easily modify a combat helo in existence. How can this be justified except as a private interest program? Oh, and by the way – offshore manufacturers are competing for this contract. Really? We can't build the president's helicopter in our own country?
And to the Congress whose oversight has brought you this history of stunning failure we now have turned over our health care. And the news pundits are surprised that it costs more than the experts projected? This is why I got rid of our TV years ago. Like some Mr. Bean movies, the stupidity is just too painful to watch. And at least Mr. Bean is supposed to be funny.