Paul Krugman, in his editorial Hired Gun Fetish, tries to explain the use of private contractors, such as Blackwater, in Iraq as a “vast experiment concocted by mad political scientists.” Mr. Krugman quotes Machiavelli, gives examples of private security contractor’s misconduct in Iraq, and suggests this is all some grand scheme by the Bush administration to enrich cronies. He is wrong.
The reason contractors are used opposed to military personnel is simple: contracts are much less expensive. The reason they are less expensive: health care.
The cost of military healthcare has risen from $19 billion in 2001 to $39 billion today. By 2015 it is expected that healthcare costs will account for 12 percent of military spending. This increase is largely because of enhanced benefits for retirees and their families. It is estimated that by 2009, 75 percent of military healthcare spending,
“will be spent on the cost of paying for retiree health care, and just 20 to 25 percent will be spent on active duty service members and their families.”
The increased costs have been noted by Defense officials, who have,
“complained for several years about growth in personnel costs, particularly for health care and retiree and survivor entitlements. With military associations and veteran groups lobbying lawmakers hard and effectively to fulfill long-standing promises or to eliminate benefit inequities, Congress continues to enact improvements.”
While it may be intriguing to speculate about shadow governments, mercenaries, and rampant cronyism, the reality is much simpler. Contractors are paid a flat fee, the government does not have to provide their families with healthcare, and contractors do not continue to be paid after they retire.