I describe this as 'funny money'. The government is spending other people's money.
I imagine the government worker that signed off on this purchase worrying a lot more about a dollar increase in the local lunch special than millions spent on equipment.
It is also funny money because the marginal cost of producing one of these routers is more like $500, not $20k. It is just a transfer payment to the company, it isn't the same as if the government burned $20k worth of barrels of oil. Nothing near that amount in resources was actually wasted.
Not quite. Cisco will probably take this purchase as a signal to produce more unnecessarily large routers. Those people paid to make the unnecessary routers could have used their valuable skills elsewhere. They may convince more people to learn how to build unnecessary routers instead of something more valuable. It's waste all the way down.
Not exactly, unless you think those people will literally use their salaries from the activities you described to buy something and go out and burn it. It might be a mis-distribution, and it might spur misguided investment in an area, but it isn't all squandered to the tune of exactly $20,000 or anywhere close to that. The marginal cost is a much more accurate measure.
I imagine the government worker that signed off on this purchase worrying a lot more about a dollar increase in the local lunch special than millions spent on equipment.