I was in the Navy and the month before the end of every fiscal year was "see what kind of expensive shit we can find to buy because I need to use up my budget so I don't lose it next year" time. After that experience, it's hard for me to have faith in the institution of government as an agent of efficient allocation of capital.

You are quite delusional if you don't thnk this happens in the business world as well. It is an artifact of any large and centralized budgeting process. If your group goes over budget you are penalized, and if you are under budget you are not rewarded and are sometimes even penalized (for not delivering an accurate budget projection and tying up capital that could have been better used elsewhere, like those over-budget idiots two floors below... :) Using all of your allocated funds is the most rational decision to make in these situations, so you spend it on whatever you can.

I'm sure it does, but the difference is that companies have to deal with competition, while governments are effective monopolies. If I, as a customer, dislike the value I get for a product or service, I can switch. If as an investor, I don't like the returns, I can sell. But if I don't like the way the Navy is investing my tax dollars, what can I do? Yes, it can be changed, but I can't really do much about it as an individual. Over time, this situation conspires to create government waste because there's no accountability. There might be oversight, but the consequences of mismanagement and inefficiency isn't organizational death, the way it is (or should be) in the private sector.