How to Go $16.5 Trillion in Debt
A recent poll by the Pew organization showed that while those of us in Our Nation's Capital and the 2,375 people who watch cable chat shows are consumed by the looming sequester, the other 75% of Americans are just shrugging, sighing, and smiling knowingly that the world will go on after Friday.
The underlying issue about the size of the deficit (about $1 trillion for FY 2013) and the national debt (a touch under $16.6 trillion) is the way the government spends our money.
Not its money. Our money. Case in point.
I came across an article yesterday that talked about the government (money from the feds, being spent by a state) trying to bring broadband access to hills and hollers in West Virginia.
write for a coalition of about 300 companies and organizations called Broadband for America so I know a lot about this.
About 95 percent of American homes and businesses have access to broadband. The Federal government would like to get a broadband connection to that last five percent.
To that end they have come up with a program that allows states to get money to do just that - bring broadband to places that are not economically feasible for the major network providers.
In West Virginia there are many places that qualify as not being economically feasible, so the state applied for this Federal money (OUR money) to string some wires and make some connections and bibbidy-bobbidy-boo Internet for all.
Unfortunately for us the people in Charleston, WV who were doing the purchasing had not idea what they were doing.
SIDEBAR
When I lived in Marietta, Ohio 45750 just across the river from West Virginia we told West Virginia jokes. Here's one:
One night, a guy stood on the West Virginia bank of the Ohio River wanting to get across. Another guy, on the Ohio shore says he'll shine his flashlight and the Mountaineer can walk across to the Ohio side.
The West Virginian says, "You must think I'm dumb. I'll get half way across and you'll turn off that light."
END SIDEBAR
The people in the state government who were responsible for buying the necessary wires and whatnot to get everyone connected signed a contract with Cisco - the switch and router people - to provide the switches and routers necessary to do it.
Cisco sold the State of West Virginia some routers that cost up to $20,000 each. These routers were for mid- to high-capacity implementations.
According to an article in ArsTechnica.com, seven of these high-capacity, $20,000-a-copy routers, were installed in Clay, West Virginia; population 491. One for every 70 inhabitants.
Another $20,000 router was installed in the library of Marmet, West Virginia. The town of 1,500 citizens has a one-room library with a single internet connection. The library is open on Thursdays, Fridays, and Saturday.
All in all the State of West Virginia is the proud owner, according to reporter Nate Anderson, of some "1,164 Cisco model 3945 branch routers."
Total cost? $24 million dollars.
There is a growing chorus of anti-private industry types calling for the government - Federal, State, and Local - to take over the design, installation, and maintenance of broadband internet service.
No private company would have been duped into pouring $24 million into that kind of equipment. It would be like going to the hardware store for a shovel to plant a rose bush and coming home with a back hoe.
Cisco would not have dared try to oversell a corporate Internet Service Provider because that company would have thrown Cisco off its corporate books forever.
The Federal government, with the best of intentions, sent $24 million to the State of West Virginia and Cisco - turned the flashlight off halfway across the river.
Private companies are successful because they know what they need to know. Governments are not successful when they try to do what private companies do because governments do not know what they need to know.
Twenty four million dollars is a long way from $16.6 trillion but this is only one example of one small project in one relatively small state.
Do the math.
Rich Galen, columnist and frequent political advisor on FOX, CNN, CNBC & MSNBC. www.Mullings.com
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