It's much easier to quote Milton Friedman and wave your hands, though.

True, but you're not taking into account the government budgeting model. Organizations in government budgets' are based on last year's budget. If the OU spends last year's budget or more, their budget is increased (because they account for inflation). If they spend less, their budget is decreased. In other words, there is a built in incentive to spend money, and anyone can find ways to justify spending money "to improve their OU". GAOs merely verify the paperwork is in order.

Don't misunderstand me. This isn't an argument against government; it's an argument against this budgeting model. There has to be a way they to structure private sector budgeting efficiency into public organizations.

Large corporations stuff from this problem too, with middle managers maxing their budgets out on mousepads or whatever to make sure their departments budget doesn't get cut. Its just that their better at hiding it.

It's a very pervasive problem; I'm sure whoever figures out a finance structure that minimizes it without breaking anything else will win a novel prize