One Nation Under Contract: The Outsourcing of American Power and the Future of Foreign Policy

It is hard to grasp the scale of his shadow government. The biggest federal contractor, Lockheed Martin, which spent $53 million on lobbying and $6 million on donations from 2000 to 2006, gets more federal money each year than the Department of Justice or Energy. Lockheed Martin sorts your mail, tallies up your taxes, cuts social security checks, counts people for the U.S. census, runs space flights, and monitors air traffic. Almost 80 percent of its revenues come directly from the U.S. government. And Lockheed is just one such beneficiary. The top five U.S. contractors-Lockheed Martin, Boeing, Northrop, General Dynamics, and Taytheon- reaped profits totaling 12.94 billion in 2005. For a sense of just how lucrative government contracts can be, consider that former Wall Street juggernaut Goldman Sachs at the height of its powers reported profits of $5.6 billion that same year.

Federal government reliance on contractors accelerated rapidly in the George W. Bush years. Contract spending more than doubled during President Bush's time in office, having grown from $201.3 billion in 2000 to $377.5 billion by 2005 alone, an 86 percent increase. In 2007, Washington spent $439.5 billion on contracts. By that time, the federal government was spending more than 40 cents of every discretionary dollar on contracts with private companies.