Tuesday, January 16, 2007

Is it worth $57 Million for the hassle?

The International Herald Tribune has an article today regarding the sale of surplus US military goods. Normally I would applaud the US government looking at ways to save money or make money, but let's think about the cost versus the revenue.

Revenue:
$57 million fiscal year 2005 (iht.com)

Costs:
US soldiers killed or wounded by enemies using the surplus goods (couldn't find a number, but you have the cost of benefits to family, life insurance, medical bills, loss of a productive citizen and their future wages, impact on lives of people who know the person, etc.)

Cost of customs to actually investigate and track the shipments of the items sold

Cost of administering the surplus program

Conclusion:
I would bet that if you ran the profit and loss on this on, it would be cheaper to not run it. If our allies need the parts, then get ebay to setup a private auction and let them bid. Only ship to valid allies.

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