Pentagon defends tanker lease plan despite additional billions

Associated Press ^ | 09-23-03

[Brian S]

A widely criticized plan to lease 100 refueling tanker planes from the Boeing Co. should go forward even though it may end up costing billions of dollars more over the lifetimes of the planes, the Pentagon said in a letter released Tuesday.

[Truth666]

Could the reason be that the Pentagon foresees NO FUTURE ?

[jimkress]

A billion here, a billion there, pretty soon you're talking real money. Too bad the plotical pimps in Washington aren't forced to EARN the money they spend so freely.

[yatros from flatwater]

Linda and Tom Daschle feel enriched.

[68skylark]

The Congressional Budget Office has said taxpayers would end up spending at least $5.7 billion more to lease the planes than they would through a straight purchase.

This is the crux of the matter, and this sentence is extremely misleading.

Yeah, payments made over time may add up to more than the cost to buy an item today. But when the payments are discounted for the time-value of money, the lease deals can be a very good value for taxpayers. (Private businesses of all types, including airlines, typically lease expensive items or buy them through loans paid over time -- because it makes sense!) This is very simple business math -- which is probably why the AP doesn't understand.