Business Poli-Sci: Right Direction

Monday, December 21, 2009

Right Direction

Monopolies are illegal in the United States, yet government defense contracts establish one company to provide products or services to military. This establishes a monopoly for vehicles, communication and various technologies; therefore, creating a monopoly unable to supply demand; ergo, dictate price. Clinton sought to lower government costs by "cutting-out-the-fat." This was implemented by downsizing insurance claims by getting rid of proofreaders and placing responsibly for properly filing claims on doctors. Obama is furthering the concept of increasing quality while lowering prices by eliminating no-bid contracts.

The new law gained support from Congress; however, implementation may fall short of the desired effect. Perhaps the Supreme Court can override no-bid contracts, because of Antitrust Laws. One company providing an entire product or service is a monopoly. A police officer cannot issue a citation when their vehicle is below code. They cannot enforce the law while doing something illegal. Should the military be exempt?

A current issue on the White House homepage "Reform for Our Troops" by Jeese Lee addresses this issue. A main paragraph reads:

Last year, the Government Accountability Office, or the GAO, looked into 95 major defense projects and found cost overruns that totaled $295 billion. Wasteful spending comes from exotic requirements, lack of oversight, and indefensible no-bid contracts that don't make our troops or our country any safer. To put this in perspective, these cost overruns would have paid our troops' salaries and provided benefits for their families for more than a year.

Does it matter if military vehicles are made by Jeep? An armor cover F150, Stratus or Forester is as capable of taking a person from point A to point B. Quality clothing is provided by several companies, though the current uniforms are appealing. Food is available through multiple sources; including, local farmers. A free-market government could provide higher quality goods at a reasonable cost.

Allowing the military to purchase goods from foreign countries could be the next step. Currently oil is sent to the United States from the Middle East to be processed into gasoline and sent back to the Middle East. United States allies are as capable of following government standards and closer to the war. Troops receive gasoline faster and without burning additional gasoline for freight.

Opening military purchases to a free market makes sense. Though people believe Obama is ineffective the media is not reporting everything. This action will benefit many people and help balance the federal budget. Skeptical of how these issues will be implemented, Obama is vague when discussing various topics, the premise of the article is sturdy.

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