Thursday, October 10, 2013

Private Industry Can do Better

Among Libertarians, it's usually assumed that anything government can do, private industry can do better and for less money.  I'm sure there are exceptions, but Healthcare.gov isn't one of them.  The news has focused on people not being able to get on the site because it wasn't designed for more than a few tens of thousands of users at once (which is ludicrous, given the intended scope of this program).  What we haven't heard as much about is the price tag.

An opinion piece in DigitalTrends makes this painfully obvious.  Read it here:  We paid $634 million for the Obamacare sites and all we got was this lousy 404

Some choice snippets:
The exact cost to build Healthcare.gov, according to U.S. government records, appears to have been $634,320,919, which we paid to a company you probably never heard of: CGI Federal.  The company originally won the contract back in 2011, but at that time, the cost was expected to run “up to” $93.7 million – still a chunk of change, but nothing near where it apparently ended up.

Given the complicated nature of federal contracts, it’s difficult to make a direct comparison between the cost to develop Healthcare.gov and the amount of money spent building private online businesses. But for the sake of putting the monstrous amount of money into perspective, here are a few figures to chew on: Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $600 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.
If we're going to be socialists (and I don't think there's any going back now), then we need to make this clear to our government:  responsible socialism works a heck of a lot better than profligate socialism.  Paying $634 million for a site that can't handle more than a few tens of thousands of users is a joke.  Any taxpayer should be outraged.  Perhaps next time, Mr. Obama should give Mark Zuckerberg a call before signing any contracts.

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