I don't think they're losing it. I think the screwy numbers are mostly an artifact of the kinds of arcane accounting practices you see at the Pentagon.
Some of it is understandable when they're running an immense bureaucracy, with huge multi-year programs, but having to deal with year-by-year appropriations coming from Congress. It's been even worse the last decade as Congress wasn't passing budgets but instead funding everything via CRs.
Most of the discrepancies seem to be shifting money from annual to long-term accounts, and back, which makes the real picture very opaque but not necessarily corrupt.
"...does not contend that all of this $21 trillion was secret or misused funding. And indeed, the plugs are found on both the positive and the negative sides of the ledger, thus potentially netting each other out. But the Pentagon’s bookkeeping is so obtuse, Skidmore and Fitts added, that it is impossible to trace the actual sources and destinations of the $21 trillion."
As correct as you may be, (a) “the accounting system is messed up” cannot be accepted as an excuse, a raionale or a reason to just ignore the discrepancies, however (b) I think there is some intention - on the part of some - that the actual DOD spending NOT be fully transparent - if it is to Congress it is to the world.
The PROBLEM is that all the good reasons for that leaves tons of gateways for corruption as well.