12 Outrageous Wastes of Taxpayers’ Money
Most have heard the saying that no one takes care of a rental car like they take care of their own. Why not floor the gas pedal or track sand into the car - the reasoning goes - if you’ll never see it again after this week? In many ways, this is a perfect analogy to government waste. No matter which party is in power, spending other people’s money rarely compels one to be as prudent as if they were spending their own. Combine this with the typical politician’s time horizon (the next election) and it’s easy to see why so many government projects and initiatives have been swallowed by waste over the years. Here are 12 of the most outrageous examples.
The “Big Dig”
No project is more synonymous with waste and fraud than the “Big Dig”, the not-so-affectionate nickname given to the rerouting of Boston’s chief highway (Interstate 93) into a 3.5 mile tunnel beneath the city. Originally estimated to cost $2.5 billion in 1985, the project devolved into the most expensive highway project in U.S. history, costing some $14.6 billion in state and federal tax dollars by 2006. Countless contractor changes and environmental obstacles later, Boston.com lamented in 2008 that the Big Dig’s crushing debt had “engulfed the state”, ballooning to $22 billion that will not be paid off in full until 2038 - at the earliest. This assumes no more hurdles for a project whose oversights have already killed a motorist and led a Massachusetts attorney general to demand $100 million in refunds to taxpayers as a result of “shoddy work.” (This last comment might qualify as the understatement of the century.)
The Superconducting Super Collider
In terms of sheer excitement and anticipation, the superconducting super collider beats out everything on this list. In essence, the project was a tunnel inside which scientists would rev up beams of subatomic particles to breakneck speed and crash them into each other. Foreseen as a way to simulate the conditions of the Big Bang and thereby “allow scientists to gain new insights into the very nature of matter”, the ambitious project was unable to get out of its own way, skyrocketing in allotted budget from $5 billion to over $12 billion on the basis of little more than speculation on what other uses (cancer and HIV cures among them) it might serve once it was actually built. After stalled progress, however, 1993’s blitz of budget cuts pulled the plug on the tunnel before it was even one third of the way built. After that, Neatorama reports that it was “used to store Styrofoam cups” before being sold to a private concern for “pennies on the dollar.”
The Vanishing $25 Billion
Many assume the government has extremely strict procedures for tracking the money entrusted to it by taxpayers. Believers in this view received a rude awakening in 2003, however, when it was reported that nearly $25 billion in government spending was totally unaccounted for. In typical fashion the mysterious disappearance of this mind-blowing sum was not publicly addressed. Rather,the only apparent record of the incident appears to be buried deep within the Treasury Department’s Financial Report of the United States Government of 2003, in a tiny section innocently entitled “Unreconciled Transactions Affecting the Change in Net Position.” (Perhaps more outrage would have ensued if the section were more bluntly titled “Spending Unaccounted For.”) Put in perspective, $25 billion is enough to fund the Department of Justice for a full calendar year.
Railhead
Like so many grand and visionary government projects, “Railhead” - an online terrorist database meant to disseminate information to counter terrorism analysts - was done in by cost overruns and mismanagement. Recalling comments from Representative Brad Miller, chairman of the House Science and Technology Committee’s Investigations and Oversight Subcommittee, CNet.com notes “”Potentially hundreds of millions of dollars have been wasted, delivery schedules have slipped, contractor employees have been laid off.” Miller further stated that the net result was a database that “had been crippled by technical flaws”, replaced by “a new system that if actually deployed will leave our country more vulnerable than the existing yet flawed system in operation today.” While technical flaws have recieved the brunt of the blame for Railhead’s demise, contractor fraud played no small part. ZD Net, for example, reports that $500 million originally earmarked for Railhead actually went toward rennovating one of Boeing’s own buildings!
The $725,000 Pizza Machine
One all too common consequence of spending other people’s money is failure to think ahead. A telling example can be found in San Jose, whose unified school district approved the purchase of a $725,000 pizza machine it claimed would “churn out 800 pizzas a day to sell on various campuses in the district.” In reality, the machine reportedly produced only 2,000 pizzas in two years due to frequent breakdowns, which works out to roughly $360 per pizza. (Caltax jokes that they hope the kids “got extra cheese and generous toppings.) What’s worse, the San Jose school district eventually took pizza off its menus completely when it realized there weren’t enough trucks to deliver pizza to different campuses, all of which had the same rigidly enforced lunch time. The machine is mostly retired at present, trotted out only on Fridays at various elementary schools for “pizza day.”
$90 Billion Spent on Flawed Programs
Much government waste comes not from specific failed projects, but the very way in which programs are designed. In reviewing “just a sample” of the federal budget during one year, the White House concluded that at least $90 billion was being burned on the altar of “programs that were deemed either ineffective, marginally adequate, or operating under a flawed purpose or design.” Unfortunately, just as few of us clean the rental car, it looks as though the opportunity to recover enough wasted money to fund three Justice Departments was largely ignored except for being mentioned in a few abstruse memos that the general public did not read.
Limestone Tourist Park
In their article “Governments Fund The Darndest Things”, Neatorama remembers Bedford, Indiana’s ill-fated attempt to capitalize on its long-standing status as Limestone capital of the world. Undeterred by the fact that few outside of geology really care about limestone, Bedford Chamber of Commerce member Merle Edington concocted the idea of building a Disney World-esque “theme park” around the city’s proud limestone heritage. The main attraction? A 95-foot-high replica of the Greek Pyramid of Cheops built 100% from local limestone. Perhaps fearing that this alone wouldn’t spur an exodus of vacationers to Bedford, Edington took out all the stops in planning a 800-foot-long replica of the Great Wall of China. About $700,000 was committed to this disaster of a project, which luckily never got as far as Edington wished when local politicians came to their senses. Today, Neatorama says, the abandoned site is “little more than a giant rock pile.”
$100 Million in Unused Flight Tickets
Some government waste stories are more excusable than others, but this one is tough to make many excuses for. In 2004, the St. Petersburg Times reported that the U.S. Department of Defense “spent an estimated $100-million in six years for airline tickets that were not used and failed to seek refunds” - even though the tickets they had purchased were completely refundable! Adding insult to injury the Pentagon then happily reimbursed at least $8 million employees who claimed to have purchased these unused tickets. Unsurprisingly, the reason that the unused ticket scandal (which spanned 1997-2003) took so long to be discovered is that the Defense Department relied on its employees to report unused tickets, which, of course, they did not.
Cross-Florida Barge Canal
Anointed the dubious honor of being one ofCNN’ s “largest, oddest, and most useless state projects”, the Cross-Florida Bridge Canal was a disappointment surpassed by few others. Originally envisioned as a way to connect the Atlantic Ocean with the Gulf of Mexico, the idea was picked up during the Great Depression, when politicians put unquestioning support behind anything that promised to “create jobs.” After being discussed and opposed by environmentalists from at least 1930-1965, the end result in 1991 was, as CNN calls it, “a $120 million partial scar across the middle of the state”, which was soon pronounced dead and converted into a greenway which, ironically, is now named after the very environmentalist who so adamantly opposed the Canal during the 1960’s.
Pentagon Credit Card Abuse
No recollection of outrageous government waste would be complete without mention of the U.S. Defense Department’s embarrassing credit card abuse. According to Fox News, some 36,000 DOD employees “had defaulted on $623 million in official travel expenses charged to the government cards” as of November 2001, and bad debts which had to be written off by banks were reported to have been “growing at the rate of $1 million per month.” Discovery of the eye-popping credit card abuse at the Defense Department triggered a flurry of Congressional hearings, especially amidst allegations that high-ranking officials were turning a blind eye to egrigious charges by personal associates and friends.
Medicare Buys Shoes For Amputees & Walkers For Paraplegics
Arguably the most inefficient and wasteful of all government initiatives is Medicare. Despite strong support from citizens across the spectrum of political opinion, the program has come under fire for several damning instances of waste and fraud. Perhaps the most outrageous surfaced in a 2008 MSNBC report, alleging “billions in questionable claims” including, amazingly, special diabetic shoes for amputees! Other claims included wheelchairs for sprained wrist victims and walkers for known paraplegics. Lest these be seen as merely anamolous incident, MSNBC goes on to explain that such waste (totalling over a billion dollars) was likely the result of Medicare paying out claims with “invalid diagnosis codes” such as “?”, “zzzzz.” One source was quoted as saying that “even smiley-face icons could have been accepted.”
The Teton Dam
It’s one thing when government waste simply involves money. When the cost extends to human lives, the matter takes on a much greater magnitude of seriousness. A case in point is the infamous Teton Dam debacle in Idaho. As CNN reports, the $100 million dam, built between 1972 and 1976, was intended to “provide irrigation, electricity, and (ironically) flood prevention for the thousands of people living in its 305-foot-tall shadow.” Small leaks began to appear in the dam following its completion, which were initially downplayed in the self-congratulatory glow typically accompanying completion of government projects. Before long though, the small cracks grew large enough to unleash 80 billion gallons of water that “eventually engulfed bulldozers and sent workmen fleeing in terror.” When all was said and done, 11 people had been killed, thousands of acres of land had been flooded and over $2 billion worth of damage had been caused by the epic dam failure.
I don’t think it’s as simple as “the people in Washington don’t care”, it’s really our system in general. There is no long term thinking in Washington because if someone makes a stand for something like, say, cutting down emissions to prevent future global warming, the people will vote him or her out of office because it may mean a few lost jobs or a few extra tax dollars spent today, and honestly, most people don’t look at the future. It doesn’t pay for a politician to try to really do what’s right or better in the long term. I think a lot of them really do probably come in to office with good intentions but once they get there the reality of office and being re-elected and all that comes in to play.
Comment by Jen — September 24, 2009 @ 6:44 pm
And yet Medicare is still more efficient and less wasteful than any private insurance company there is.
Maybe someone should make a list like this for the private sector. I can think of a few to start it off: Enron, Worldcom, AIG, …
Comment by Josh Trammel — September 24, 2009 @ 11:48 pm
Agreed in part. Although I don’t agree with Obama on a lot of things, one thing he said is perfect, and has been forgotten by us the people for a long time. It goes something like “we are the change that we seek.” For the most part, the electorate don’t want to help solve the problem, giving it all to politicians, and then complain about the job done when there’s no citizen oversight. If people cared enough, projects like this wouldn’t get off the ground because they’d be more aware of what was going on in their country. If people cared more, there would be more of a market for govt info and less of a market for “reality tv.”
Thanks for this article, but jeez, this kind of thing shouldn’t be on random (no offense) websites and occasionally maybe on the big news stations for like 5 seconds. If people, us, really cared, it’d be all over, meaning it’d be all over the news, and it’d be not happening, because we would have stood against the non- and mis-management of our resources.
Comment by J — September 25, 2009 @ 2:42 pm
“The Big Dive”
Comment by aj — September 26, 2009 @ 7:00 pm
Want an example which cost more money than any of these, killed more people, and had less benefits — arguably being a net negative?
The Iraq War. Cost is over a trillion last I checked. That’s a million million.
Comment by N — September 28, 2009 @ 5:32 pm
People who see this and complain that it shouldn’t happen just don’t understand the nature of government. This sort of thing has *always* happened with big centralised beurocracy, and is really a defining characteristic of such systems.
The only way to halt this sort of thing is to defund the federal government entirely. All income should stop at a local level with each 100,000 or so people having their own local government that provides the services they want.
Of course, certain things such as tertiary education works better when you have larger populations, but in these cases the local governments join together and are very precise about the funding that is allocated to these shared projects.
It really is pointless and quite ignorant to sit there and ‘tut tut’ about the idiots in washington wasting money. Compared to the waste and abuse that occurs in less-transparent systems like communist Russia, Iran, and China, we have a very efficient and honest government spending program.
Big government is bad, it cannot be anything else.
Comment by Neil — October 26, 2009 @ 12:44 am
If i ran ran my business this way I would surely be out of business. Many things have shown that private business abuses money too however. As a small business person we should all hope there is oversight on govt and business alike.
Comment by Ask the Kansas City Broker — October 26, 2009 @ 4:56 am
While I’m with you on Iraq, a trillion is a thousand million in the US. But look on the positive side : I’ve just reduced your national debt a thousand fold in the time it takes you to google it.
Comment by Chris — October 26, 2009 @ 5:44 am
“And yet Medicare is still more efficient and less wasteful than any private insurance company there is.”
Josh Trammel.
Please explain.
Does Medicare make a profit?
Say two people lose an arm due to a bear attack and they both go to the same doctor. If the doctor get paid by a private insurance for one guy and Medicare for the other, is he paid less from either?
Does the doctor perform better with either because of the insurance?
How do we compare private insurance to Medicare when private insurers are self sustaining while Medicare need more tax payers or higher taxes to grow?
Are you just looking at what you can get out of the system and not what it will cost you?
I’m not attacking Medicare, but please explain why you think it is more efficient.
Comment by X — October 26, 2009 @ 6:53 am
Ha - these will be DWARFED by the newly voted in Bullet train in California. 10 Billion in bonds approved that do NOT include any construction!!!!
I can see it now, every election “Why give up now California? You’ve already spent 10 Billion on the project!!!” then…
Why give up now California? You’ve already spent 20 Billion on the project!!!” then
Why give up now California? You’ve already spent 90 Billion on the project!!!”
then
Why give up now California? You’ve already spent 200 Billion on the project!!!”
Before the end of 2100 California will owe 1 Trillion dollars to a Bullet train that will have yet to lay one foot of track.
watch and see….
Comment by Keither — October 26, 2009 @ 7:53 am
@Josh Tremmel: Did you seriously say Medicare is more efficient than the private sector? As in the program with 100 billion in fraud every year (more than the entire size of any private insurance company)? As in the entity that has run red ink every year? As in the program that is TENS OF TRILLIONS of dollars in debt, and set to go bankrupt in 7 years?
As for Enron and Worldcom, when private entities fail, their shareholders and creditors eat the losses, not the taxpayer. And for AIG, the Democrat Congress and the big-gov’t Bush should have never bailed them out.
Comment by Vake — October 26, 2009 @ 8:20 am
“And yet Medicare is still more efficient and less wasteful than any private insurance company there is.
Maybe someone should make a list like this for the private sector. I can think of a few to start it off: Enron, Worldcom, AIG, …
-Big difference Josh. Guess what happens when a company in the private sector screws up, They are the ones who pay for the damages and if the misstake is big enough they dissapear from the market place. Now, guess who pays for the governments misstakes? We do, and who ever made the misstake is usually left in place to screw up again unless they are scapegoated. So bud there is a big difference.
Comment by jonathan — October 26, 2009 @ 9:04 am
Ok you put the Super Conducting Super Colider, something that would advance basic science (which leads to new unforseeable technologies not to mention advances our understanding of the world around us), just because it was going to cost 12 billion dollars, even though it was going to have over twice the energy of the LHC (which cost 4.6 billion btw) and you didn’t put the ISS on there which was supposed to only cost a few billion but has ballooned to over 100 billion dollars and has damn well near zero scientific and applied importance. Oh and here’s the best part, the ISS is going to be decommissioned only a few years after being completed. Sure it will help us build space stations faster in the future, but canceling the SSC delayed the discovery of new particles and physics by almost 20 years and had the potential of finding things the LHC won’t. I don’t get it, the same BS “potential discoveries” can be made argument was used to justify the ISS fudning but when you have something that will actually advance basic science on the fundamnetal nature of the universe that goes over the line? I guess building a cool space station is worth the 100 billion whereas understanding basic science isn’t worth 12.
Comment by Alex — October 26, 2009 @ 9:23 am
N,
Maybe you should check again before you cite incorrect information. The Iraq War and the War in Afghanistan and every war on Terrorism since 9/11 is below 900 billion.
And something tells me your vote went toward the President who passed 4 trillion in “stimulus” money.
Comment by john — October 26, 2009 @ 10:36 am
Whatever happened to the “War for oil”?
I’m still waiting for 25 cent oil.
Comment by X — October 26, 2009 @ 11:44 am
To Chris - A trillion IS a million-million. A BILLION is a thousand million. In the UK, a Billion is a million-million (our Trillion). You have them mixed up.
To N - Bush lucked out that the 2008 budget year ended in Sept. 2008, so all the ridiculous sums handed out since look like Obama’s fault to the naive. Bush’s deficit still hit 454 Billion between Sept. 2007 and Sept. 2008 according to the Congressional Budget Office (before TARP, etc., and NOT INCLUDING the cost of our wars in Iraq and Afghanistan!), breaking all records to that date. And remember, he entered office with the country running 3 straight years of surpluses (see CBO)! Overall, the national debt grew by just over 1 Trillion between Sept 2008 and 09 (CBO). And the 2009 deficit hit 1.4 — not 4.0 — trillion, again according to the CBO. Curiously nearly half of that can be pinned on the prior administration and their TARP program. At least Obama has tried to put limits on how the banks can spend it (read: NOT all for fat bonuses!). Maybe YOU should watch who you cite — of course, you didn’t cite anyone, did you? I’m guessing you pulled that 4 Trillion from somewhere where you lack exposure to natural Vitamin D. Oh and lest we forget — what happens when the economy tanks AND you spend trillions on foreign wars AND you give out huge tax breaks at the same time? That’s right! MASSIVE deficits for decades to come! Thanks, Dubya!
Comment by Erik — October 29, 2009 @ 11:12 pm
Josh Trammel wrote:
“And yet Medicare is still more efficient and less wasteful than any private insurance company there is.”
===
You might want to do a little fact checking before making such a claim. Medicare fraud is estimated up to $80 BILLION PER YEAR! The scary thing is that the government really doesn’t know the extent of the problem, which is not a good sign.
http://www.lasvegassun.com/news/2009/apr/15/dig-more-medicare-fraud/
As for Medicare efficiency, yes overhead is low. However, Medicare and Medicaid costs have both greatly exceeded original cost estimates and now are both running multi-TRILLION dollar structural deficits.
http://perotcharts.com/category/medicare-and-medicaid-charts/page/5/
Comment by Soquel by the Creek — October 30, 2009 @ 8:27 am
To Erik:
Here’s another chart that illustrates your point. When it comes to deficit spending, the Bush Administration was no winner either. He came into office with a surplus, hard won by the Clinton/Gingrich budget showdowns.
http://perotcharts.com/2009/02/projected-budget-deficit-congressional-budget-office-baseline-plus-stimulus-bill/
WARNING: The chart does not include the costs of Health Care Reform, Cap-and-Trade, any additional Stimulus Plans, or any unexpected costs due to Afghanistan or Iraq.
We all love to tweak President Bush over the financial disaster, but don’t forget that it was Congress had direct oversight responsibility for Fannie Mae and Feddie Mac. Their collapse due to subprime mortgages helped ignite the chaos.
Amazingly, the CBO originally forcast about a $1.4 TRILLION deficit, and the number came in about right. In a way, this was “good” news because interim estimates jumped to $1.8 TRILLION.
http://finance.yahoo.com/news/CBO-Budget-deficit-hit-record-apf-2477702318.html?x=0&.v=1
I don’t expect to see any significant improvements under the Obama Administration. Congressional overspending, some at the President’s request, is still rampant while tax revenues are down sharply.
http://www.huffingtonpost.com/2009/08/03/tax-revenues-post-biggest_n_250108.html
http://www.heritage.org/research/features/budgetChartbook/Federal-spending-growing-faster-than-federal-revenue.aspx
Comment by Soquel by the Creek — October 30, 2009 @ 8:54 am