Since the 1990s, the outsourcing of what were once considered to be public services has grown exponentially, while the size of the federal workforce has fallen significantly. The rationale for these deep reductions in the public sector is that private companies are more efficient. The privatizers claim that they can render the same services as civil servants for less, even after making a profit.
Pulitzer prize-winning journalist David Cay Johnston, author most recently of The Fine Print: How Big Companies Use “Plain English” to Rob You Blind, takes a skeptical look at these claims in an article for Newsweek…
The budget debate now consuming Washington often seems to come down to guns versus butter, or at least its contemporary manifestation, Reaper Drones versus food stamps.
What gets lost in the increasingly caustic rhetoric is just how inefficient the US government is when it spends, especially when it is outsourcing tasks to hugely profitable private companies.
Fortunately, the budget deal just worked out between the White House and Capitol Hill will prevent a government shutdown and all of its attendant global financial inconveniences. But it does nothing to curtail wasteful spending on companies that are among the nation’s richest and most powerful – from Booz Allen Hamilton, the $6 billion-a-year management-consulting firm, to Boeing, the defense contractor boasting $82 billion in worldwide sales.
In theory, these contractors are supposed to save taxpayer money, as efficient, bottom-line-oriented corporate behemoths. In reality, they end up costing twice as much as civil servants, according to research by Professor Paul C. Light of New York University and others has shown. Defense contractors like Boeing and Northrop Grumman cost almost three times as much.