The IRS and Federal Contractors

Pentagon Contractors Owe $7.7 Billion in Unpaid Taxes - Thomas Williams, Truthout (via The Danger Room)

I distinctly remember a post by Matt Yglesias over the issue of federal contractors and the worst of both worlds aspect of the federal contracting system. The basic idea is that private companies can do a government job better and with a lower cost since the laws of free market economics come into play. However, what we have here is another instance where federal contractors are significantly insulated from the free market by the contracting system. So you end up with companies that, due to insufficient oversight and a lack of economic pressures, are slow in paying taxes, providing the requested products and generally mismanaging the whole damn thing. I still believe in the free market, although I don't hold to the ideal of the 'invisible hand' anymore than I hold to the idea that communism can work. But this system as is has left us with huge and growing debts while providing substandard services and products, or not providing them at all. What we need is reform of course, but how we can achieve true reform is a question I'm not able to answer at this time. The difficulty lies in the nature of the lobbying system and how legislation is passed.