A Billion Here, A Billion There, Pretty Soon It’s Real Money

Army Scraps $39 Billion Helicopter. Which is most amazing?

  1. The Army spent $6.9 billion and didn't get a single helicopter.
  2. We have to pay $2 billion more just to cancel the program.
  3. This is the tip of an iceberg of crummy military procurement.

When I was in law school, I got very interested in military procurement. There are clearly enormous savings waiting to happen, but they are mostly blocked for a toxic combination of political factors. Gary Hart actually tried to do something about this in his finest hour when he was a Senator, as did Barry Goldwater. Senator Grassley occasionally makes a noble attempt. But mostly people have given up fighting the system, because it rolls right over you.

It's always odd how the loudest defenders of capitalism defend a Soviet-style state planning approach1 to buying weapons. But it's been going on so long now that no one notices.

1 Update. On reflection this is unfair. Had the Soviets ever cancelled a weapon system, I doubt they would have paid the folks who wasted $7 billion another $2 billion to soften the blow.

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4 Responses to A Billion Here, A Billion There, Pretty Soon It’s Real Money

  1. Brett Bellmore says:

    Try to get your security deposit back sometime, after breaking your lease without due notice. The original contract probably provided for cancelation penalties, I’m guessing. The amazing thing is they actually had the sense to kiss sunk costs goodbye, and cancel the program.

  2. Michael says:

    Oh, absolutely it’s in the contract. The question is *why* it’s in the contract….

  3. Don’t forget to account for the 2,000 jobs that will be lost as a result of the cancelation.

  4. Andrew Lazarus says:

    I always found it interesting that the socialist state put the designer’s name on the aircraft, e.g. Tupolev, Ilyushin. (MiG is an acronym of two surnames that I’m too lazy to Google up.) Other than that, I’d never associated Communist work habits with personal responsibility. Maybe if we made our aircraft designers do the same, we would get better results. I mean, “Today the Pentagon cancelled the Froomkin-Lazarus helicopter, saying it doesn’t work”, that’s a motivational tool!

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