As the Washington Post notes, the US government spends at least $890,000 each year to maintain about 13,000 empty bank accounts. In terms of why such bank accounts exist , the gist is this: when the government gives out a grant an account is opened to distribute the money. When the grant ends, the account goes to zero. However, unless the account is closed, the government still has to pay the fees to maintain the account.
It might be wondered why the accounts are not simply closed. The answer is that closing an account requires that the grant be audited within 180 days of the account closing. Interestingly, there is actually no penalty for missing the deadline.
While $890,000 is a drop in the vast ocean of government spending, each drop adds to that ocean. Also, there is the fact that this spending literally yields nothing. While people do dispute the value of various programs ranging from food stamps to bridges to nowhere, at least that spending is for something. This is money for nothing and hence should be recognized as wasteful by both parties.
There are no doubt many other such expenditures that produce nothing and benefit no one. It would seem to be rather obvious that Congress should begin cutting the budget by dealing with all these empty expenditures. After all, eliminating such spending would be pure savings at no cost and there would be no special interests to battle or political agendas to address. While such expenditures will probably be relatively small, they would also add up. Also, there is the fact that even such relatively small amounts of money are relatively big in other contexts, such as small programs that do generate a valuable public good.
As might be guessed, the main reason such expenditures are not addressed is that it is easier to do nothing than to do something. This is, obviously enough, a bad reason.
It is, however, worth considering whether or not the cost of doing nothing exceeds the cost of doing something. Since the accounts must be audited before being closed, it could be argued that the cost of the audit would exceed the savings of closing the account. Thus, while it costs to keep them open, this is saving money.
One obvious reply is that the rules could be changed. After all, if the accounts can be left open indefinitely without an audit, then it would seem cheaper to forgo the audit rule and just close them to save money. After all, if no audit will ever be done, there seems to be no sense in requiring an audit when doing so merely costs money and does not have any positive benefit.
Another obvious reply is that it seems likely that the cost of an audit would not exceed the cost of keeping an account open indefinitely. After all, those payments could continue until the government ends and that could be quite some time.
