Thoughts from Ebola

…in regards to what our elected betters have planned for the commissary system NEXT YEAR, especially considering the impact on members/families stationed overseas.

Nothing says thank you for your sacrifices and service like making service members spend more money, especially if they’re overseas. That’s right, as a reward to service members, within weeks of Memorial Day remembrance of our fallen, the Senate Armed Services Committee has decided to propose every service member spend more money for less return, in the name of “savings” that are minimal at best, at the behest of the Executive branch.

If you’re unfamiliar with the commissary and exchange systems, the US military maintains a series of stores on virtually every base, both in the continental United States and at bases overseas. These stores ensure that service members can get food at a rational price, which is handled by base commissaries. You can think of the base or post exchange, commonly called the BX or PX, as the base Walmart selling consumer goods. There’s a running joke that the only savings you can get in an AAFES, the Army/Air Force BX, is not going…which should give you some indication of what increasing removal of subsidies for shipping and further press for profit margin in the exchange system has already been doing. The sole benefit to the exchange is now the fact that it is tax free; it is almost invariably cheaper, even with overseas shipping, to order goods from Amazon, Home Depot, or Lowes.

What has Congress done? Well, the basic exchange and commissary system used to work like this: the government purchased, shipped and then sold goods at just above their net price to service members. Over the last fifty years or so, due to complaints from domestic and foreign businesses surrounding bases about being undercut and not getting “their fair share” of money from military members, the individuals on this same commission decided to get things changed so that there was a significant profit margin in these systems. This raised costs for service members, which in turn required increasing pay to make up for the deficit. The only benefit that remained at that point was not having to pay taxes, which quite often does not balance out. That’s important to remember, because every time we’ve adjusted this system, we’ve hosed service members for a few years and then wound up paying them more to compensate, because no one is going to willingly do 4 years, much less 20, while having their family live off of ramen noodles like starving college students.

What is Congress doing? There’s been a consistent and increasing push to privatize the commissary and exchange systems. Since they haven’t been able to pull this off, they’ve effectively aimed towards removing the primary stumbling blocks to the objective of privatization: the subsidies that pay for shipping goods. The effect of this is that service members outside the United States, Hawaii and Alaska included, will see prices for anything from fresh produce to dog food skyrocket. Fresh produce, sensitive electronics and other products requiring temperature control will quite likely simply stop being available.

This means that service members overseas could quite likely be looking forward to being dependent on local stores for access to goods, as they will be able to undercut base prices. Furthermore, this becomes an operational hazard if natural disaster or conventional conflict breaks out. For example, Guam, Okinawa and Japan see regular typhoons through most of the year and service members would be largely reliant on local markets to secure goods at a reasonable rate. The Senate committee would cut $322M/year from the budget by removing these subsidies, but will economically see more cost in having to adjust COLA and even basic pay to make up for the impacts to service members. In other words, the country will save nothing, destabilize its overseas operations reliability and effectively make the lives of service members hell for at least a few years. This also doesn’t simply affect active duty members, but also family members of the fallen, retirees and medical retirees that have earned their benefits through service.

Keep in mind, this is the same government that approves of spending $50,000/yr on investigating if sea monkeys’ churning water changes how the ocean flows. Happy Memorial Day.

Bean counters.

One Response to “Thoughts from Ebola”

1. Skyler says:

   May 26, 2015 at 8:58 pm

   As a navy brat and a former navy exchange employee, and current military reservist I think some change is LNG past due for the exchange system.

   There should be one purpose for the exchange system and that is to cater to those not able to access civilian stores easily. That is, overseas stores are very good to have, and small shops located on base near the barracks or regimental headquarters are good.

   But the existing system has the above but also has a commissary and large px that serve almost exclusively the retired community. Why? They’re retired. Go retire or get another job on top of retirement pay.

   But truth be told, it is these large stores that make the small ones possible. If they didn’t make money from the retirees, they wouldn’t be able to afford running those small shops that are critical to the young (or old) Marine stranded in a training area without a vehicle.

   The exchange system should serve as a warning to us of the danger of central planning. Even with the example of a quasi free market nearby, it is still difficult to manage a centrally planned store system. I think the set up they have now is pretty good. Sell those china figurines to the old retired folk, make a ton of money off them and support the ones still serving in austere locations.