Tag Archives: Government waste

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Can government spend tax money more efficiently than you can?

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Here’s a scary article from The American Spectator. (H/T ECM)

Excerpt:

The Social Security Administration sent out $250 checks — $18 million in all — to 72,000 dead people.

Alan Hevesi, former Controller for New York State, who was the sole trustee for the state’s large public pension fund, pled guilty to a charge of receiving $1 million in gifts and contributions from a money manager for steering $250 million of investments his way.

California, all but bankrupt, reported that last year it spent $467 million in taxpayer funds on scholarships to students at four-year colleges who failed to return for a second year.

The U.S. Postal Service, losing millions of dollars a month, has been giving cushy, non-bid contracts to former USPS executives. The USPS Inspector General found 17 of these contracts were given to former postal executives within a year of their retirement. One person received a no-bid $260,000 “knowledge transfer” contract. The IG reported, “These contracts were put in place even though highly experienced postal executives filled the positions vacated by the former executives.”

[…]Seventy-three people, led by a man who lived in the former Soviet Union, were rounded up for defrauding Medicare of $35 million-plus through phony clinics and stolen doctor and patient identities. This coast-to-coast crime ring gave their invented clinics P.O. box addresses and filed fake claims. Medicare fell for it.

[…]Thousands of Medicaid recipients in California were given debit cards with which to buy food. Instead, more than a few of them hied themselves to Las Vegas and ran up gambling losses on the debit cards. This brings to mind the periodic revelations in Washington that credit cards issued by federal government agencies have been used for – surprise — vacations, jewelry, expensive dinners, etc.

This is why conservatives value limited government. We taxpayers are paying these bureaucrats to waste our money. The private sector is a lot less corrupt and inefficient – the money needs to stay there.

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Obama says “there’s no such thing as shovel-ready projects”

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From the radically-leftist New York Times.

Excerpt:

While proud of his record, Obama has already begun thinking about what went wrong — and what he needs to do to change course for the next two years. He has spent what one aide called “a lot of time talking about Obama 2.0” with his new interim chief of staff, Pete Rouse, and his deputy chief of staff, Jim Messina. During our hour together, Obama told me he had no regrets about the broad direction of his presidency. But he did identify what he called “tactical lessons.” He let himself look too much like “the same old tax-and-spend liberal Democrat.” He realized too late that “there’s no such thing as shovel-ready projects” when it comes to public works. Perhaps he should not have proposed tax breaks as part of his stimulus and instead “let the Republicans insist on the tax cuts” so it could be seen as a bipartisan compromise.

It would have been nice to know that 2.7 trillion dollars and 8 million jobs ago.

Economics in One Lesson

Perhaps it is time to review Henry Hazlitt’s Economics in One Lesson, chapter 4, entitled “Public Works Mean Taxes”.

Excerpt:

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

Excerpt that the government, lacking a profit motive, is never as efficient as private business is in spending money – government wastes money that it never earned in the first place.

And consider Chapter 5 as well, entitled “Taxes Discourage Production”.

In our modern world there is never the same percentage of income tax levied on everybody. The great burden of income taxes is imposed on a minor percentage of the nation’s income; and these income taxes have to be supplemented by taxes of other kinds. These taxes inevitably affect the actions and incentives of those from whom they are taken. When a corporation loses a hundred cents of every dollar it loses, and is permitted to keep only fifty-two cents of every dollar it gains, and when it cannot adequately offset its years of losses against its years of gains, its policies are affected. It does not expand its operations, or it expands only those attended with a minimum of risk. People who recognize this situation are deterred from starting new enterprises. Thus old employers do not give more employment, or not as much more as they might have; and others decide not to become employers at all. Improved machinery and better-equipped factories come into existence much more slowly than they otherwise would. The result in the long run is that consumers are prevented from getting better and cheaper products to the extent that they otherwise would, and that real wages are held down, compared with what they might have been.

There is a similar effect when personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital. In addition, the capital available for risk-taking itself shrinks enormously. It is being taxed away before it can be accumulated. In brief, capital to provide new private jobs is first prevented from coming into existence, and the part that does come into existence is then discouraged from starting new enterprises. The government spenders create the very problem of unemployment that they profess to solve.

George W. Bush cut taxes in his first term and created 1 million NEW JOBS. Government spending is a job killer. Companies understand that government spending has to be paid for eventually, so they stop hiring people now to save the money for later tax increases.

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Teacher unions block volunteers from working in school libraries

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From the Boston Globe. (H/T ECM)

Excerpt:

The teachers’ union in Bridgewater and Raynham is planning to file a labor grievance that could block volunteers from keeping the school district’s libraries open. And as word of the work action spreads, it is stirring up outrage in the two towns.

Librarian positions were cut from the middle schools in both towns this year and their salaries channeled into hiring teachers to address bulging class sizes. Volunteer organizations stepped in to pick up the slack — only to be surprised and disappointed by threats of a labor complaint.

Anita Newman, president of the Bridgewater Raynham Education Association, last week confirmed the union’s plan to file a grievance with school principals. All schools whose libraries are being kept open by volunteers would be part of the grievance, she said.

“You’re putting unqualified people into the library who are not certified,’’ Newman said, calling it the basis of the grievance. “We don’t want to ruffle feathers, but you’re responsible for the children. We don’t use volunteers for recess or lunch either.’’

School Superintendent Jacqueline Forbes said she intends to keep the vol unteers in the district’s libraries. “If there is a grievance or other issue, we’ll work through that.’’

It’s important to understand that when teacher unions say “give us more money”, that they are not asking for more money because they care about children. They care about the money. If they cared about the children, then they would be demanding “make us more accountable to parents”. They want the money. They want to take your money and not give you anything in return. And they don’t want you to take your money anywhere else.