Hundreds of Ways to Screw the Taxpayer

Our federal government is a clanking, soulless monster completely out of control. Good people like Senator Tom Coburn are looking to tame the beast.

Duplication of effort alone accounts for hundreds of billions in waste annually, according to the WSJ article, Billions in Bloat Uncovered in Beltway.

"The U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development."

OK, I can see food safety laws. I could even perhaps understand the government fostering economic development...  If I saw any evidence anyone in the federal government understood basic economics!  Given the current state of things, I’d say letting the federal government do “economic development” is kinda like allowing Freddie Kruger to perform heart surgery. The Homeless? The federal government has no mandate whatsoever to address that. It’s not in the constitution. Defund it.

The report says there are 18 federal programs that spent a combined $62.5 billion in 2008 on food and nutrition assistance, but little is known about the effectiveness of 11 of these programs because they haven't been well studied.

There is also nothing in the US Constitution that authorizes the federal government to take money from taxpayers and use it to hand out food to people. This is a function more rightly done at the local level, and better and more efficiently done by private charities. What does a DC apparatchik know about poverty in Denver or Detroit? Do they even care about the people they hand this stuff out to? Do they care if bums and welfare cheats are receiving benefits?

This is why faceless, mechanistic charity does not work, and in fact is not charity. There is no connection and no feedback loop.  The givers become callous cogs in a self-serving machine, turning the the entitled recipients into faceless, thankless wards of the state.


Here's More Wasteful Duplication...

"The agency found 82 federal programs to improve teacher quality…"

That clearly has failed—End it!

"80 to help disadvantaged people with transportation…"

Could you imagine President Washington and Congressman Adams handing out horses to those who have none?

"47 for job training and employment…"

That’s what schools and community colleges are for

"… and 56 to help people understand finances"

Government obviously does not understand finances. How in the hell does it expect others to do so? This is madness!

Many of my blogger buddies are probably tired of my Air Force budget cut stories from the Clinton 90’s, but they are apropos. He slashed the DoD budget, and to be fair to him, Bush the Elder started it. DoD ended up being the only department that took real, no kidding cuts, as opposed to others who just had their rate of increase slashed. Bottom line: It forced us to get rid of the dead wood and drop inefficient practices. We came out a leaner, meaner fighting force in the end.

Every corner of federal, state and municipal budgets should be slashed so they can experience the same beneficial process.

The Next Bubble

Detroit:  The city liberalism destroyed

Are Cities and States Too Big to Fail?  We're about to find out

The socialists of all parties in the federal government created the housing bubble and the ensuing, inevitable crash, by encouraging lenders to abandon prudent, time testing lending practices. Low interest rates ushered in an era of easy money, and Freddie and Fannie backed everything mortgage companies could shovel their way, regardless of the stench.

Wall Street gambled and the taxpayer lost
Dirty Hank and his gang of pirates blew a hole in the side of the US Treasury and made it all good. Wall Street is back to record profits and bonuses, while working people despair of ever again finding a job, and the big banks are still too big to fail. 

Muni-Bombs
Blissfully ignorant and unencumbered by any capacity to learn from experience, the federal government has turned on the money spigot to our fiscally incontinent states and cities. It’s stimulus, dontcha know. See how stimulated everybody is and how the job market is booming?

Since 2000 the total outstanding state and municipal bond debt,adjusted for inflation, has soared from $1.5 trillion to $2.8trillion (see chart). The recession didn’t slow the spending. (Reason)

So the drunks are teetering on the brink of the train platform with a high speed locomotive bearing down, and good ol' Uncle Sam hands them another bottle of hooch...

The Build America Bonds program, part of the American Recoveryand Reinvestment Act of 2009, was aimed at subsidizing bonds forinfrastructure projects. Under this program, the TreasuryDepartment pays 35 percent of bond interest to the issuinggovernment. 

If a state or local government issued a bond at a highrate to make it appealing to investors—10 percent, say—the Treasurywould make a 3.5 percent direct payment to the issuer. [...] It’sno surprise that, starting in 2008, states and cities increasedtheir debt dramatically, while investors enabled thisoverspending. (Reason)

Our federal government encouraged irresponsible state and local government to be even more irresponsible by backing their bonds and even paying part of the interest collected by investors.  All funded by We The Taxpayer, and money borrowed from China.

This wouldn't be so bad if cities were using this federal largess to pay down debt and put themselves on sound fiscal footing, but they are doing just the opposite.  In his informative article, State Budget Bunk, Steven Malanga catalogs the cheap tricks that are putting cities and states deeper in hock.

Write your elected officials and preemptively tell them "NO" to any state or city bailouts.  Tell them these failed states and cities must file for bankruptcy like other financially irresponsible people are forced to do.
 
Further Reading:

Muni bond Prices Drop

State Budget Bunk

Progressives of All Parties are Destroying America

The progressives of all parties who hijacked the federal bureaucracy have just about destroyed us. Sure, they started with good intentions, but we’re now morally, intellectually and financially bankrupt.

WASHINGTON—The federal budget deficit will reach a record of nearly $1.5 trillion in 2011 due to the weak economy, higher spending and fresh tax cuts, congressional budget analysts said, in a stark warning that will drive the growing battle over government spending and taxation.

As a percentage of the nation's economic output, the 9.8% deficit would be the second-largest since World War II, behind only the 10% level in 2009.

"This report is a reflection of the gross mismanagement of our nation's finances," said Rep. Tom Price (R., Ga.). "It should make every American think twice about the latest calls by the president to increase spending at a time when Washington can clearly not afford to pay its bills." . (WSJ – Deficit)

We’ve spent ourselves to the brink of bankruptcy, but most sickening of all is that we have nothing to show for it.

Social Security is going broke…

New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.

This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. (El Lay Times)

Obamacare will not save any money, and no, you can’t keep your coverage…

WASHINGTON (AP) — Two of the central promises of President Barack Obama's health care overhaul law are unlikely to be fulfilled, Medicare's independent economic expert told Congress on Wednesday.

The landmark legislation probably won't hold costs down, and it won't let everybody keep their current health insurance if they like it, Chief Actuary Richard Foster told the House Budget Committee. (AP – Medicare Official Doubts)

Meanwhile, HHS is handing out Obamacare waivers, 733 and counting …

Over at HUD, they’re having a party with our money and creating failure, which justifies requests for even more taxpayer funds…

Even by Washington standards, $26 billion is a lot of money.

That’s the amount spent by taxpayers annually to provide housing for needy Americans. But there’s significant evidence that some of the monies have been poorly spent for years.

A joint investigation by ABC News and the Center for Public Integrity found that the Department of Housing and Urban Development has struggled to combat theft, corruption, and mismanagement in the more than 3,000 public housing agencies nationwide it funds, and particularly inside the172 that HUD considers the most troubled. (Public Housing – Private Frustration)

Now who want to stand up and deny that the progressive house of cards is collapsing?

Good Reads for a Saturday

I'm working overtime when I should be up in the mountains skiing or out on the plains hunting. Can't complain, beats the heck out of being unemployed...

Here are some good reads for a Saturday:

Victor Davis Hanson really slams sheriff Dupnik, asking why he blames everyone but himself, since evidence now shows his office had various run-ins with the killer but apparently had a standing catch and release policy.

More disturbing still, if Dupnik were right that a pre-existing conservative climate of hate-engendered politics was not only pervasive in Tucson, but also might prompt an unstable person to kill, why had he not dispatched at least one of his 500 officers to patrol the open-air public event sponsored by Congresswoman Gabrielle Giffords?

Hard to argue with that logic. Here’s more…

Dupnik is a good example of an increasingly common bad habit of local politicians to resort to cosmic sermonizing when more mundane challenges go unaddressed.

New York City Mayor Michael Bloomberg was a past master of lecturing about the cosmic while sometimes ignoring the more concrete. Governing the boroughs of an often-chaotic New York City is nearly impossible. Pontificating on the evils of smoking, fatty foods and supposed anti-Muslim bigotry was not only far easier but had established the mayor as a national figure of sensitivity and caring, praised for his progressive declarations by supporters of everything from global warming to abortion.

But Bloomberg's carefully constructed philosopher's image was finally shattered by the December 2010 blizzard and his own asleep-at-the-wheel reaction. An incompetent municipal response to record snowfalls barricaded millions in their borough houses and apartments, amid lurid rumors of deliberate union-sponsored slowdowns by Bloomberg's city crews. (VDH - Global Sermonizing)

Hanson moves on to California in much the same vein. Elected officials should stop “cosmic sermonizing,” shut up and do what the taxpayers are paying them to do.

John Hood has written piece in National Affairs entitled, The States in Crisis, in which he presents the cold hard facts, complete with charts. It is the best presentation I’ve seen so far that explains what’s going on with state budgets.

He starts off with the scary tidbit that state government employed various budget tricks back in the good times, and the recession has now hastened the calamitous reckoning that inevitably follows such chicanery.

Could bankruptcy be in some states' futures?  Sounds scary, but not nearly as scary as them picking our pockets and carrying on as if nothing needs to change. 

Who has done more damage to America? Washington DC or Wall Street?

I know, it's a tough question...

Bernie Madoff's son committed sideways a few weeks back, spurring John Robbins ask the question, Who's Done More Damage, Bernard Madoff or Alan Greenspan? 

I think mine is the more relevant question.

The anger at Madoff is misplaced. He's a piker compared to the federal government. After all, the multi-trillion dollar progressive ponzi schemes cooked up in DC dwarf Madoff’s mere 50 billion dollar one. And people voluntarily turned money over to Bernie.

The progressive ponzi scheme was crafted with confiscated money and the flim flam was kept afloat by Federal Reserve currency manipulation, stealing from workers and savers by a constant devaluation of the dollars we earn. This drove savers into the arms of Wall Street because we needed to invest in securities just to stay ahead of inflation.

Bernie Madoff just proves the old adage:  "If anybody besides the federal government tried that, they'd go to jail!"  Bernie's mistake was stealing without a government license. 

Democrats Running Scared--American are wise to their scams

From Lefty website Slate...

Be Afraid. Very Afraid
Alan Simpson and Erskine Bowles try to scare America into doing something about the deficit

“Wonkish, crotchety, and mostly bald, the co-chairs of President Obama's National Commission on Fiscal Responsibility and Reform want you to care about the deficit the way cable television wants you to care about pedophiles.”(Slate – Be Afraid. Be Very Afraid)

The Slate headline mocks those ringing alarm bells over the national debt, but in a true example of liberal projection, it really sums up their own fears. Americans may actually support taking the punch bowl away this time...

This latest flurry of panels and commission reports is getting serious attention, and they are bipartisan. Alice Rivlin and Erskine Bowles are Clinton Democrats.  Liberals are scared.

Progressive schemes fail without other people's money

Look for more sniveling, snarking commentary like this from the left. Take away their access to other people’s money, and their positive rights agenda collapses.  They can no longer buy votes by confiscating our money and bribing people with it.

A free-market, free-people agenda as envisioned by the founders costs nothing.  Negative rights are natural, God-given, and therefore free.

Government Bubble

The end of the Clinton era saw the bursting of the dot com bubble. Rampant speculation drove tech stock prices to unsustainable levels, and what went up came crashing back down.

We just witnessed the housing bubble's big bang, with resulting downsizing of irresponsible lifestyles. There is talk of bulldozing entire vacant neighborhoods in some failed cities like Detroit.




Big Government Bubbles
Unfortunately, government gamblers who are incapable of learning anything continue to pump hot air into the increasingly unstable big government bubble.  President Obama, fresh from blowing trillions, brazenly says we are borrowing too much money from China, we're broke, and the irresponsible spending must stop. Oh, and he also wants to fund windmills and free health care for everybody.

California is Exhibit A
Paul Krugman can always be relied upon for liberal doses of economic advice.  Like practically all liberals, he stubbornly pins California's fiscal disaster to proposition 13, the conservative ballot measure that capped property taxes.

William Voegeli exposes Krugman's gross ignorance:

Property-tax revenues in the state have increased from $4.9 billion to $47 billion in the 30 years since Proposition 13. Adjust those figures for inflation and population growth, and property-tax revenues in California were 87 percent higher in 2009 than they were in 1979, chiefly because of rising property values.

Heedless of facts, Krugman goes a step further, predicting the same disaster for the US for the same reason: Those angry, stingy conservatives are blocking "responsible" tax increases that would pay for all this spending.

For Statist Progressives like Krugman, it's always too little taxation; never too much spending.

We all want something for nothing and the politicians are too cowardly to tell us no, so we end up with more government than we can afford.

China and the US are in a Mexican standoff: We can't stop irresponsible borrowing, they can't stop irresponsible lending, and the negative synergy has us on a mutual downward spiral.

Why doesn't it occur to anyone to downsize our overleveraged government?

Saturday Reading

Saturday readership is always low here at Western Hero, so it's a good time for me to do a "link dump."  I bookmark interesting stuff intending to blog about it, but alas, there just isn't enough time...

Build your walls with cannon balls
Intellectual Ammo, the tab at the top of this blog, contains a treasure trove of original thinking on timeless issues.  No opinion pieces, just authoritative government data and think tanks.  If you enjoy shooting it out with libs and converting the undecided, go get your ammo!

US sovereign debt is reaching scary levels, with no apparent way down.  Here's just one reason why:  Obama and the Pelosicrats' spending is locked in forever...

A good percentage of the structural increase in the deficit is because last year’s “stimulus” was not stimulus in the traditional sense. Rather than a one-time injection of spending to replace a cyclical reduction in private demand, the vast majority of the stimulus has been a permanent increase in the base level of government spending — including spending on federal jobs. (NY Times)

Here's a good Bloomberg article on Debt and Taxes
The writer plays it down the middle, weighing the advantages and disadvantages of letting the Bush tax cuts expire.  Good analysis of our fiscal position and what our options are.




What is Populism?
The left hates the tea party because it has taken on a populist tone, and populism is supposed to be their gig.   Henry Olson at American Enterprise Institute has written an excellent history of Populism in America, Populism, American Style

Finally, Peggy Noonan writes, America is at risk of boiling over.

California: Greece on the Pacific

Liberal love to blame Republican-backed Prop 13 for destroying California's tax base.  It's the number one talking point used to defend the failed liberal experiment known as California.

Only New York collects more taxes per capita than California
William Voegeli explains just how wrong these liberals are in his excellent article, Don't Blame Prop 13. 

Property-tax revenues in the state have increased from $4.9 billion to $47 billion in the 30 years since Proposition 13. Adjust those figures for inflation and population growth, and property-tax revenues in California were 87 percent higher in 2009 than they were in 1979, chiefly because of rising property values.

Census Bureau data show that California ranked tenth in the nation in 2007 in terms of per-capita receipts from all state and local taxes (property, income, sales, and excise taxes) paid by individuals and corporations.

Per-capita receipts from individual and corporate income taxes were 64 percent higher in California than they were in the rest of the country: $1,764 in California, $1,077 elsewhere. All told, California’s governments received $4,731 per resident from all taxes, 14 percent more than the $4,160 average outside California.

The problem isn't too little taxes, it's too much spending.  If taxation were the answer, New York and California would be booming right now and Texas would be bust.  Liberalism kills economies.

Defusing the Debt Bomb

Fareed Zakaria is one of my favorite liberals.  He and conservative George Will account for 99% of the brainpower over at Newsweek. Zakaria has written a short, smart and well-reasoned article on how to tackle the nation's mounting debt. 

I don't agree with everything he said, and it's a little simplistic, but journalism such as this is what we need to help us understand complex issues.

He lays out three simple proposals:  Adopt a VAT, end certain subsidies, adjust entitlements

"Adopt a Value Added Tax (VAT)" 
I am only for this if we completely scrap the current tax code on US citizens and businesses.  None of this "we'll impose VAT now and adjust the income tax to compensate..."  No way.  Scrap it.  Then we can talk about the VAT.

A VAT is progressive, especially if basic food staples are exempted.  Rich people buy more stuff and more expensive stuff, so they would pay more tax under this plan.  It also removes the penalty for saving and investing while promoting capital formation that powers job growth.

"End the massive, distorting subsidies for home-ownership, health care, and agriculture"
I'm willing to raise Fareed on this one:  End ALL subsidies!  Let the free market chips fall where they may.  If it's a good idea it will survive; obsolete solutions will succumb to Schumpeter's creative destruction.  Up from the ashes will grow new ideas, new jobs and new solutions to society's challenges.  

"Make sensible adjustments to entitlements"
This will have to be done, one way or another.  Entitlements constitute around 50% of the federal budget and the share is growing, along with interest payments on the debt that fund these programs.

Slowly increasing the retirement age is one way government is already doing this.  "Ending Welfare as we know it" was another.  The greatest leap would be to wholesale divest the federal government of all extra-constitutional function and free up individuals, families and communities to tailor problem solving to each one's unique situation.

Fareed Zakaria, like Paul Ryan, has done a public service by putting his ideas out there.  You may not agree with them, but we need a vigorous debate on how to avoid fiscal calamity while not starving everyone in the process.  Putting government on a diet would be a good first step.

Your Rich Uncle is Senile

That rich uncle, the one who promised you health care, a cheap house and free college?  He's not really rich.  He's senile. 

The adults knew it all along and just smiled when he promised all those things.  But the kids, the ones who still believe in the tooth fairy and man's ability to control the world's temperature, bought it hook line and sinker...

RCP - Thomas Sowell