Why buy when you can lease for more money.

[Eric5273]

Those geniuses at the Pentagon are at it again.

Air Force Lease With Boeing Seen Adding Billions to Cost

"The report concluded that the leasing deal would cost $5.7 billion more than having the Air Force simply buy the planes outright."

 

[4AU4LIFE]

Link wants me to register for NY times. I don't think so, you can't trust what they write

 

[Soichiro]

Why did you post this? The purpose of ANY lease is to reduce current costs while increasing future costs. Amazingly enough the article you linked to has this quote:

"a lease arrangement would lower initial costs, pushing most of the expense into the future."

What's your point? Do you think anyone who leases anything is involved in a conspiracy? Maybe the US Government is actually the Taliban and is controlling the weather in an effort to increase air pollution while at the same time sending all unborn US males to Vietnam? I think you're on to something, but you must not overlook the (obvious) political influence of Canadian Eskimos in this scenario. Did you know that no Eskimos were killed in 9/11? VERY intersting I'd say.

Another thing - I've recently discovered bats in my home. Is this because the Air Force uses stealth technology, the moon landings were faked or the Roswell UFO's? Inquiring minds want to know.

 

[Eric5273]

Why did you post this? The purpose of ANY lease is to reduce current costs while increasing future costs.

Yes.....of course. This from the same brilliant people who somehow lost $2.3 trillion.

The point of that article was that this lease did not reduce any current costs and actually raised current and future costs. They actually spent more to lease the planes than if they had purchased them. If someone came in here and told you they leased a NSX for more than they could have purchased it for, you would probably tell them they are an idiot.

Perhaps they are not so stupid after all. Perhaps their goal is not to get the best buy they can on these planes, but to give as much tax money to Boeing as they can. The only other explanation is that they are idiots and should be fired -- they don't have the brain power to handle the accounting for a hot dog stand.

 

[ss_md]

Maybe - just maybe, they are doing like most consumers that lease. Trying to get more bang for less initial buck$. Leasing anything cost less initially to acquire than purchasing.

 

[Soichiro]

>>If someone came in here and told you they leased a NSX for more than they could have purchased it for, you would probably tell them they are an idiot.

Then EVERYONE who leases an NSX is an idiot, because LEASING COSTS MORE THAN PURCHASING. We all know that - again, what's your point? That our government is inefficient? We know that too - if you don't like it why not move somewhere like Liberia or Iran where they don't have the problem of expensive leases on 767's or NSX's.

 

[Eric5273]

Then EVERYONE who leases an NSX is an idiot, because LEASING COSTS MORE THAN PURCHASING. We all know that - again, what's your point?

It does? The total of my lease payments on my 2003 NSX is $29k. I think that is far less than it would cost to buy. Is there anyone here who's lease payments total more than $70k? If so, then I would venture to say they are an idiot.

The above article says the total lease payments for each of these planes is $161 million, as opposed to a purchase price of $131 million.

I think you are confusing this with leasing and then purchasing after the lease is over. The Air Force is not doing that......they are leasing them and then giving them back when the lease is over and leasing new planes again. The $161 million figure does not include a purchase option.

 

[Yellow Rose]

Soichiro-san.....keep in mind that E5273 also thinks that the world's oil reserves will dry up in fifty years; therefore, please do not anguish over the matter that his posts are "empty". Afterall, he has not been able to provide a conclusive report to my challenge to him in another thread about crude price jackings.

Eric - I think you have a "boner" with the gov't.....first you slam the oil industry then you slam the airline industry. What is your beef? You don't like our gov't? Fine, move your butt to a third world country and get back to us about the other country's standard of living. Think you can get an NSX in an impoverished country? Hardly.

Chill pill to everyone - you complain about gasoline prices, be thankful you have a car.....you complain about military costs, be thankful the armed forces will defend your rights to freedom.

Some people just don't get it, do they? Especially people that live in the state that suffered the most from 9-11.....New York.

Boxing gloves on, ready to give anyone a "what-for" on this topic!

 

[Eric5273]

I'm just pissed at all the crap that is going on.

I'm pissed that our government cannot balance their budget.

I'm pissed that taxes continue to go up while the services provided by the government continue to decrease, and yet I continue to read about waste and more waste in government.

I'm pissed that we live in a country whose foreign policy over the years has made it so that millions of people around the world hate us to the point of wanting to attack us and kill innocent civilians, even willing to commit suicide themselves to accomplish this.

And you mention 9/11 -- I'm pissed that the commission that the govenrment appointed to investigate this attack is now complaining that the same government will not allow them to see any of the files they need to do such an investigation.

Our government has been hijacked by a bunch of criminals and the sooner we recognize this, the sooner we can fix it. Moving to another country is certainly not the patriotic thing to do and it will accomplish nothing. This is my home, and I wish for things to get better here.

 

[Yellow Rose]

How Ironic

This is my home, and I wish for things to get better here.

You claim this to be your home, yet you are pissed about so many things that make this country what it is.....like free speech. In other countries, like the one we just invaded, had you voiced vehement opinions towards the Baath Party like you just did to our current administration, you would be but a blood spot in the country somewhere. Please pause and think next time you want to "slam" our gov't. Otherwise, I will drive to New York and bitch-slap you in a heartbeat. Unless you have spent time in other countries, you are not the least bit appreciative of what this great country provides us. Who's next in line?

 

[KGP]

I'm pissed that taxes continue to go up while the services provided by the government continue to decrease, and yet I continue to read about waste and more waste in government.

Uh...hello . Taxes went up? Gee, I missed that one. I thought they went down. Services provided by the government? Your unalienable rights don't provide your room, board and a certain standard of living, just the freedom to pursue them. Government waste would only increase if they provided more as you gripe about.

 

[nsxtasy]

Link wants me to register for NY times. I don't think so, you can't trust what they write

Nonsense. The New York Times has the best reputation in the news industry, even today, in spite of the recent flap about one of their reporters who has since left the newspaper. And if you are familiar with his story, you will know that the fabrications mostly concerned where the reporter was at the time that he was reporting, and not the content of his stories.

Originally posted by AndyVecsey
You don't like our gov't? Fine, move your butt to a third world country and get back to us about the other country's standard of living.

Sorry, Andy, but I think that your reaction is not the "American way" of dealing with someone who doesn't like our government's policy. What I would tell Eric is that if he doesn't like our government, work to influence it and change it. Vote for different candidates if you like, work on their election campaigns, donate money to them, and/or run for office. Write a letter to your representatives, at any level of government. If you can put together an argument worthy of changing opinions - either of those already serving, or of the voters to change those who serve - then you can make a difference. That's what democracy is all about - welcoming the diversity of opinions, not telling someone to leave if he doesn't agree with the opinions you or your government happen to hold.

While I don't agree with many of Eric's views, as IMO he seems to imagine implausible conspiracies in every news story he's ever seen (and what he claims as "facts" are often quite simply in error), he is welcome to do something about the problems he perceives, and does not deserve the "love it or leave it" harangue.

 

[nsxtasy]

Link wants me to register for NY times.

Here you go, 92NSX, straight from the New York Times of August 27, 2003:

Air Force Lease With Boeing Seen Adding Billions to Cost

Bob Gower of Boeing, left, led the House speaker, J. Dennis Hastert, right, and Representative Todd Tiahrt of Kansas, center, though a Boeing plant in Wichita that works on 767 air refueling tankers.

By LESLIE WAYNE

In harsh, but measured words, the nonpartisan Congressional Budget Office yesterday criticized a proposed $20 billion plan by the Air Force to lease 100 Boeing 767 air refueling tankers as being far more costly than expected and for failing to meet government rules on operating leases.

The report concluded that the leasing deal would cost $5.7 billion more than having the Air Force simply buy the planes outright. In addition, the office said the tanker leasing plan did not qualify as an operating lease and that the program's full costs should be reflected in the federal budget — something the Air Force has wanted to avoid.

The Air Force had hoped to gain support for the tanker program through a lease arrangement that would lower initial costs, pushing most of the expense into the future.

In its report, the budget office said that "rather than eliminating difficult budgetary decisions," the lease arrangement "merely postpones them." By doing so, the report said, the Air Force increases the program's cost by up to $5.7 billion over the life of the program, or $30 million a plane in current dollars.

"The C.B.O. has concluded that the transaction would essentially be a purchase of the tankers by the federal government, but at a cost greater than would be incurred under the normal appropriation and procurement process," the report said.

The report could not have come at a worse time for Boeing and the Air Force, which has argued that a lease is the only way the Air Force can replace aging aerial refueling tankers — some of which date to the Vietnam era — without having to cut other programs or compete with them for federal dollars. Next week in Washington, the Senate Armed Services Committee has scheduled hearings on the arrangement, which critics have argued acts as a bailout for Boeing at taxpayers' expense.

Boeing declined to comment on the report, referring all questions to the Air Force. In a statement, the Air Force said the report, "fails to recognize the critical and significant operational and maintenance advantages gained by obtaining a more capable aircraft five years earlier than by purchasing."

In addition, the Air Force said the 767 tanker lease arrangement had been approved by three of the four military budget committees and had also been included in the president's budget request.

Typically, the Pentagon buys equipment outright, putting the annual program costs in the federal budget. Leasing arrangements for military equipment, like the proposed Boeing-Air Force deal, are practically nonexistent. In addition, the General Accounting Office, an investigative arm of Congress, has taken issue with the deal, arguing that the current fleet of KC-135 aerial tankers can be updated at a cost far lower than acquiring a new fleet, regardless of whether the planes are leased or bought.

"This is a significant report," said Keith Ashdown, vice president for policy at Taxpayers for Common Sense, a nonprofit group that opposes the arrangement. "It basically says that the benefits to the Air Force of the lease arrangement are overblown. I think many more lawmakers are becoming uncomfortable with this deal."

The Congressional Budget Office report also pointed to Boeing's strong interest in this deal — without the Air Force order, Boeing would most likely have to close its 767 production line by 2011 in the face of sagging commercial orders. Also, Boeing has been barred from up to $1 billion in government rocket programs and its military programs are facing closer scrutiny after the company was found to be holding proprietary documents from Lockheed Martin.

In comparing the proposed lease to purchasing the planes, the budget office concluded that leasing the planes would cost $161 million for each plane compared with $131 million through purchase — lease planes have higher financing costs. Under the Air Force proposal, the financing of the leased planes would come through selling bonds to investors in the commercial markets.

Copyright 2003 The New York Times Company

 

[Yellow Rose]

Complainer or Do'er

While I don't agree with many of Eric's views, as IMO he seems to imagine implausible conspiracies in every news story he's ever seen (and what he claims as "facts" are often quite simply in error), he is welcome to do something about the problems he perceives, and does not deserve the "love it or leave it" harangue.

Respectfully, then he needs to say, "Hey everyone, I have done this this this and this, to correct the "flawed" ways of our gov't."

I gather from the tone of his post that he has not done this, yet is just whining about inevitable imperfections in our society.

Reminds me of what a manager told me many years ago....."Don't just simply complain to me what is wrong in the company, that I myself single-handedly cannot change. Instead, suggest a solution. Better yet, become proactive about the issue and get involved."

Carpe Diem.

 

[Eric5273]

Uh...hello . Taxes went up? Gee, I missed that one. I thought they went down. Services provided by the government? Your unalienable rights don't provide your room, board and a certain standard of living, just the freedom to pursue them. Government waste would only increase if they provided more as you gripe about.

Yes.....taxes keep going up. Property taxes, gasoline taxes, sales tax, etc. Some people (mostly the very wealthy) had a decrease in income tax, but I'm not one of those people. And don't tell me that those are local & state taxes, because the reason the state has been forced to increase them is because the Federal Government reduced aid to the states -- that's why just about every state government in the country is having huge defecit problems.

Here in NY, compared to 20 years ago, we pay much more in taxes and get much less in the forms of services. And yes, I do expect services. I expect the roads to be properly paved, I expect the schools to be sufficient enough to give kids an education, I expect the police department to have enough police officers to protect my community. Where I live, the quality of these services has dropped considerably in the last 20 years, while taxes continue to rise, and that is bullshit.

 

[Eric5273]

Sorry, Andy, but I think that your reaction is not the "American way" of dealing with someone who doesn't like our government's policy. What I would tell Eric is that if he doesn't like our government, work to influence it and change it. Vote for different candidates if you like, work on their election campaigns, donate money to them, and/or run for office. Write a letter to your representatives, at any level of government. If you can put together an argument worthy of changing opinions - either of those already serving, or of the voters to change those who serve - then you can make a difference. That's what democracy is all about - welcoming the diversity of opinions, not telling someone to leave if he doesn't agree with the opinions you or your government happen to hold.

Thank you. I'm sick of the whole "love it or leave it" attitude.

Respectfully, then he needs to say, "Hey everyone, I have done this this this and this, to correct the "flawed" ways of our gov't."

I gather from the tone of his post that he has not done this, yet is just whining about inevitable imperfections in our society.

As was stated above by nsxtasy, the best way to change things in a democracy is to spread information that can and may possibly change opinions. Over the last 5 years, I have been very involved with a couple organizations whose purpose is to serve as govenrment watchdog by researching declassified government documents through FOIA. Very simliar to organizations like Judicial Watch, but dealing with very specific subjects.

Unfortunately, with the rule changes to FOIA late in 2001, things have become substantially more difficult, but the internet has made it much easier to do research as well as spread information. Remember that almost all government scandals were originally uncovered by private researchers. There are always criminal elements within any government, and to turn your head the other way and dismiss them as "inevitable imperfections" is not the slightest bit patriotic.

Here is an article about 4 single mothers (widows) from NJ who have made a difference. This article was on the front page of the New York Observer last week:

Four 9/11 Moms Battle Bush

 

[KGP]

Yes.....taxes keep going up. Property taxes, gasoline taxes, sales tax, etc.

Guess I have not noticed that. Only thing I noticed was a jump in income tax because I moved up a bracket. Maybe I'm too busy focusing on my job (thus paying more to the government), and should pay more attention to what others like you aren't getting.

Maybe take nsxtasy's advice, run for a political office.

 

[KGP]

Over the last 5 years, I have been very involved with a couple organizations whose purpose is to serve as govenrment watchdog by researching declassified government documents through FOIA. Very simliar to organizations like Judicial Watch, but dealing with very specific subjects.

Interesting.
What specific subjects?
Who funds it?
What are the couple of organizations?

 

[Eric5273]

Interesting.
What specific subjects?
Who funds it?
What are the couple of organizations?

The one I was involved in a few years ago is called COPA (Coalition on Political Assasinations). They were involved in getting the government to release all the classified documents on the JFK Assasination and now they are trying to do the same with RFK and Martin Luther King Jr. They are not funded by anyone. The organization consists mostly of researchers and journalists who volunteer their time.

I was also involved with the local campaign in my county for Ralph Nader in 2000.

And I'm starting to become interested in an organization called "9/11 Citizens Watch" which is a citizens watchdog group for the government's 9/11 Commission. I know one of the people who is running this organization as he was a member of COPA.

 

[Tom Larkins]

August 27, 2003:



Typically, the Pentagon buys equipment outright, putting the annual program costs in the federal budget. Leasing arrangements for military equipment, like the proposed Boeing-Air Force deal, are practically nonexistent. In addition, the General Accounting Office, an investigative arm of Congress, has taken issue with the deal, arguing that the current fleet of KC-135 aerial tankers can be updated at a cost far lower than acquiring a new fleet, regardless of whether the planes are leased or bought.



Copyright 2003 The New York Times Company

I doubt you will find many people that disagree w/the fact that political crap has been going on for years in this country regardless of whom is running the show. I don't get frosted about this stuff b/c the country has stood fairly well even though we may not always agree on issues as a whole. Its ok to be pro-active as a Lib or Conservative, but going over the top is a turn-off.

The things that the article has failed to mention in this copy of the report is:

1)Does the GAO/CBO take into account or not the lease agreements provide training for AF personel to maintain this air craft and/or updates with new equipment being the 767 is a new aircraft and will need some trouble shooting no doubt. Its not dislosed in the article?

2)What is the operational life of the 767 in the AF fleet. Does it save money on the long run rather than updating the current KC-131 fleet.

3)The GAO, thats kind of a joke is it not. Congress investigating. In short this is just more political poker.

 

[Eric5273]

The things that the article has failed to mention in this copy of the report is:

1)Does the GAO/CBO take into account or not the lease agreements provide training for AF personel to maintain this air craft and/or updates with new equipment being the 767 is a new aircraft and will need some trouble shooting no doubt. Its not dislosed in the article?

2)What is the operational life of the 767 in the AF fleet. Does it save money on the long run rather than updating the current KC-131 fleet.

3)The GAO, thats kind of a joke is it not. Congress investigating. In short this is just more political poker.

First, I definately agree with #3. The GAO is like having the fox investigate who killed the chickens. I'm more likely to trust some of the citizen watchdog groups and what they have to say about this.

I think the main point of the article was not this argument about whether or not they need new planes -- I'll concede that the Air Force needs new planes on occasion. However, how come they leased when they could have purchased for less money? This would be like leasing an NSX for $100k -- it's nuts! The idea of leasing is that you pay less than buying, not more.

The fact that they did this convinces me that their goal is not to get the most for their dollar, but to pay Boeing as much as they can. The military hardware manufacturers like Boeing & Lockheed are big players in the political process -- they donate millions to campaigns on both sides (Republican & Democrat), so when things like this come up, politicians just look the other way and accept their recommendations -- this assures them to get a big donation next time they are up for re-election.

 

[nicholas421]

back to the topic

i'm missing something here.
i read the article and it appeared to me that someone definitely goofed with this lease deal. someone explain to me how leasing something for more than the purchase price is normal. why is everyone jumping on eric?

 

[Jimbo]

Why?

Perhaps they're on his case because they're tired of blanket, biased statements like...

Those geniuses at the Pentagon are at it again.

Obviously, for Eric, it's more than simply the merits of the NYT article.

 

[Eric5273]

Re: back to the topic

someone definitely goofed with this lease deal.

This was no goof by "someone" (one person)

Deals like this have contracts that are hundreds of pages long and involve dozens of people and are reviewed by large accounting offices and many lawyers. I'm sure this was quite intentional and was no mistake.

 

[Tom Larkins]

The things that the article has failed to mention in this copy of the report is:

1)Does the GAO/CBO take into account or not the lease agreements provide training for AF personel to maintain this air craft and/or updates with new equipment being the 767 is a new aircraft and will need some trouble shooting no doubt. Its not dislosed in the article?

2)What is the operational life of the 767 in the AF fleet. Does it save money on the long run rather than updating the current KC-131 fleet.

3)The GAO, thats kind of a joke is it not. Congress investigating. In short this is just more political poker.

Again, I pose these questions. We agree w/#3 but do we know the answer to the first two questions. I always try to look at things objectively and would like to give the Dept. of Defence a reasonable doubt. I know for a fact that many of these purchases for military often come w/private sector people. 30 millon extra per plane seems alot, however if these agreements feature Boeing personel/training/maint/etc. 30 mil over the actual aircraft cost with the above mentioned support is not unreasonable. I'm only asking b/c something isn't right with this info.