As the U.S. economy’s growth continues to disappoint, various folks are calling for an increase in government spending. If U.S. businesses aren’t expanding then government should step in and do the spending and hiring itself. In the classical economic analysis of this process (see Keynesian economics) there is no adjustment made for the fact that government spending might not be as efficient as private business spending.

As the owner of a very small Boston-based helicopter charter company, I spent one morning this week with a very bright and experienced FAA safety inspector who drove out to my house in his government-issued car to inspect our records. This helicopter charter operator is licensed in the special “single pilot 135” category, which generally means that the owner is the pilot and nobody else can fly paying customers. The FAA inspector, however, was working from a checklist that applies to all 135 operators. We went through a bunch of questions relating to how familiar was I with the procedures for hiring additional pilots and making sure that I had checked with their previous employers to find out if they’d ever failed a drug test. The FAA inspector also looked at my monthly duty time records to make sure that I hadn’t flown more than 1400 hours in the preceding 12 months (FAR 135.67). No Boston helicopter charter company with a single helicopter has ever flown more than about 50 hours per year, but we went through page after page of reports showing either 0 hours flown or 0.5 hours flown. Finally, the FAA inspector looked at my random drug testing program to make sure that everything was in place. I’m subject to the same drug testing requirements as United Airlines. I am the drug testing coordinator for our company, so I am responsible for scheduling drug tests and surprising employees when it is their turn to be tested. As it happens, I’m also the only “safety-sensitive employee” subject to drug testing, so basically I’m responsible for periodically surprising myself with a random drug test. As a supervisor, I need to take training so that I can recognize when an employee is on drugs. But I’m also the only employee, so really this is training so that I can figure out if I myself am on drugs. As an employee, I need to take a second training course so that I learn about all of the ways that my employer might surprise me with a random drug test and find out about drug use. But I’m also the employer so really I’m learning about how I might trap myself.

Given the costs of this guy’s salary, pension, government-issued car, supervisor, and office space, I estimate that the records inspection cost the U.S. taxpayer $500. Just a handful of these inspections, therefore, would have paid for an online system that would eliminate the need for inspectors to drive around to folks’ hangars and houses.

Five minutes after the FAA inspector left, I received a phone call. “I’m from the FAA and we’d like to schedule an audit of your drug testing program.” I remarked that a fully qualified FAA inspector was barely out of the driveway and had just gone through every document that I had on the subject. “He was from the FSDO (Flight Standards District Office)? That’s a completely different department. We’re going to send two inspectors up from Atlanta next month.” Why two? “We always send them in pairs.” What did they want? “We’re going to fax you a detailed list of all of the information that we need and you should immediately contact your drug testing provider (Lexis/Nexis) to tell them that you’re being audited. There is a bunch of information that you can get only from them. As soon as you get the fax, you should re-fax it to Lexis/Nexis.” I said that I didn’t have a fax machine, so he promised to send the information via U.S. mail. It could not be emailed.

As we also deal with some separate FAA maintenance regulators, I think it is fairly likely that we will meet with more FAA employees this year than with paying charter customers (most of the business is sightseeing or flight instruction; those activities are regulated separately and by different FAA employees; we have a separate drug-testing program for the sightseeing operation).

The FAA performs a valuable service in conducting checkrides with charter pilots and looking at maintenance records, though what they do has considerable overlap with our insurance company, which employs its own check airmen. But the paperwork inspection and drug testing program audits (this is our second) are done at a cost that would bankrupt any private enterprise that was subject to competition. My interactions with other government agencies have been much more limited, but I don’t see why they would be different, on average, than the FAA. If so, government stimulus money is not a substitute for private spending because the government spends money in ways that no private business or individual would choose to spend money.

[Update: This posting read out loud in Congress by a U.S. Air Force veteran.]