Tax Planning

How to Lose $21 Trillion

I sleep better at night knowing that ever-vigilant defense contractors and the politicians they’ve bought and paid for are making certain that America won’t be overrun by Communists, Islamic terrorists, or anyone else.

And I’m reassured by the fact that as an American taxpayer, I’m paying $435 for hammers and $640 for toilet seats. Sure, that’s more than I’d pay in a hardware store for these items. But we need to “support the troops.”

In the same vein, I’m thrilled that Lockheed-Martin shareholders paid CEO Marillyn Hewson more than $21 million in total compensation in 2018. Certainly, she deserves every penny given Lockheed’s contribution to keeping America safe from its enemies.

Take Lockheed’s F-35 combat jet, for instance. Yes, it’s the world’s most expensive weapons development program ever. US taxpayers are slated to shell out more than $1.5 trillion over its anticipated lifespan. And there are a few performance issues, such as the fact that the F-35 can’t take off from the Navy’s newest aircraft carriers. Or that they have a disconcerting habit of crashing. And that they can’t fight, hide from the enemy, or even eject the pilot in an emergency. But Lockheed has spent only 22 years developing the plane and $400 billion in taxpayer funds to date. I’m sure they’ll get it right eventually.

And it’s a cool-looking airplane, as you can see in this video. It must be worth the money.

I’m also impressed by the bookkeeping diligence of the Pentagon. Sure, there are occasional blips, such as the announcement by the Defense Department’s inspector general that in 2015, the Army, had made “unsupported journal voucher adjustments” to the tune $6.5 trillion. In many cases, the Army had no receipts or even invoices to support those expenditures. In others, the Army simply invented the adjustments out of thin air.

Indeed, follow-up analysis revealed that a total of $21 trillion in unsupported adjustments – a polite way of saying the money was lost, hidden or stolen – were reported between 1998 and 2015, primarily defense-related.  

You can imagine the reaction of the IRS if it discovered you had $21 trillion in income over the last 17 years that you didn’t report because you lost it. Or $21 trillion in write-offs that you couldn’t provide documentation for. But, of course, this is the Pentagon, and there’s a perfectly reasonable explanation. And even if there isn’t one, we can’t scrimp on defense, can we?

Moreover, the Pentagon has unique difficulties when it comes to keeping track of expenditures. More than 200,000 US military personnel are now stationed in more than 170 countries. That fact combined with the sheer scale of the Pentagon’s budget – $717 billion in 2018 alone – makes nailing down spending to the nearest trillion next to impossible.

For instance, in 2004, the Pentagon flew nearly $12 billion in shrink-wrapped $100 bills into Iraq. It then distributed the funds with almost no oversight – 363 tons of $100s in all. In 2011, Pentagon officials admitted they had no idea what happened to at least $6.6 billion of the cash.

With this stellar record of managerial expertise, imagine the pride I felt when I learned that the Trump Administration has asked Congress for $750 billion in funding for the Pentagon for fiscal year 2020. That doesn’t include $216 billion for the Department of Veterans Affairs, $69 billion for Homeland Security, the NSA and other intelligence agencies ($80 billion). Nor does it include the $156 billion in interest payments on the military’s share of the national debt.

One new component of the Pentagon budget is to create a Space Force that would oversee military space operations. I’m happy to say that private enterprise has stepped up to the plate to support the initiative. For instance, the COO of SpaceX, Elon Musk’s space exploration company, has announced that the company’s Falcon 9 rocket could be used to launch weapons “for the defense of the country.”

The thought of armed rockets orbiting above my head is tremendously reassuring. Especially since I’m certain the Pentagon will make them completely hacker-proof and impossible for our enemies to take over. Just like they’ve made America’s latest weapons systems like the F-35 so secure that a 2018 report from the General Accountability Office concluded that they could be “easily hacked” with “basic tools.”

This is the system that American taxpayers support with their tax dollars. And barring total economic collapse, it’s here to stay.

It’s not as if we weren’t warned. In 1961, President Dwight D. Eisenhower warned in his farewell address that a "military-industrial complex" was acquiring national influence that could cause a fundamental shift in the way the United States was governed.  He warned of "destroying from within that which you are trying to protect from without."

The military-industrial complex now dominates the US political system and economy. And it’s built a de facto American empire with troops stationed around the globe. The fall of the Soviet Union in 1989 created a brief opportunity for this complex to be dismantled. But instead, a new enemy was found: terrorism.

Yes, the weapons being developed are ineffective, easily hacked, and trillions of dollars over budget. But what politician will risk the loss of jobs in their district, however desirable the long-term outcome might be?  And what presidential candidate dares question the consensus view that curtailing civil liberties and the rule of law is an acceptable price to pay to fight terrorism?

Maybe it’s time to consider your “Plan B.”

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Like How to Go Offshore in 2022, for example. It tells the story of John and Kathy, a couple we helped from the heartland of America. You’ll learn how we helped them go offshore and protect their nestegg from ambulance chasers, government fiat and the decline of the US Dollar… and access a whole new world of opportunities not available in the US. Simply click the button below to register for this free program.

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