Tag Archives: Waste

News

Can government create jobs more efficiently than private businesses?

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Consider this story from CNS News.

Excerpt:

According to the Government Accountability Office (GAO), the federal government helped pay the home air conditioning bills for more than 11,000 dead people, 1,100 federal employees, and 725 convicts in fiscal year 2009.

The payments were made by a $5 billion program known as the Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP is designed to provide federal assistance, administered by the states, to help people pay the energy bills to heat their homes in the winter and cool them in the summer. The funds are disbursed by the Department of Health and Human Services and are distributed based on a formula that takes into account a state’s weather and the size of its low-income population.

The GAO examined the LIHEAP programs in seven states: Virginia, Maryland, Ohio, New York, Illinois, Michigan, and New Jersey.  The agency found evidence of fraud in each state.

“Our analysis of LIHEAP data revealed that the program is at risk of fraud and providing improper benefits in all seven of our selected states,” reported the GAO.  “About 260,000 applications–9 percent of households receiving benefits in the selected states–contained invalid identity information, such as Social Security numbers, names, or dates of birth.”

Think that’s an isolated event?

Consider this list of government spending projects from Andrew Breitbart’s Big Government. (H/T The Blog Prof)

Excerpt:

  • $5 million to create a geothermal energy system for a shopping mall in Tennessee. The mall is over half empty of tenants and has had falling shopper attendance for years *
  • $1.57 million to Penn State University study fossils in Argentina *
  • $100,000 to a puppet theater in Minnesota *
  • $2 million to build a replica railroad tourist trap in Carson City, Nev. *
  • A boat cruise company in Chicago got almost $1 million to “combat terrorism” *
  • $500,000 went to Ariz. State Univ. to study ant genetics *
  • Another $450,000 went to Uinv. of Arizona to study ants *
  • Almost $400,000 went to Univ. of New York to pay students to drink beer and smoke marijuana for a study there *
  • $219,000 to the Nat’l Institute of Health to study if young people “hook-up” after getting drunk *
  • $210,000 to the Univ. of Hawaii to study bees *
  • $700,000 to crab fishermen in Oregon to pay for lost crab pots *
  • $5,000 a person tax rebate if you buy a new electric golf cart (Wall Street Journal)
  • Up to $1 million went to prisoners in $250 stimulus checks (FoxNews)
  • $54 mil to a New York Indian tribe to run its casino (New York Post)
  • $1 billion for a power plant in Mattoon, Illinois that is based on speculative science and may not even work **
  • $15 million to back-road bridges that get little traffic in Wisconsin **
  • $800,000 for a practically unused airport in Pennsylvania **
  • $3.4 million for an animal walk way under a road in Florida **
  • $1.15 million to install a guard rail for a lake that doesn’t even exist in Oklahoma **
  • $10 million to renovate a rail station that has stood unused for a decade **
  • $578,000 to battle homelessness in Union, New York even though the town says they have no homeless people there **
  • $233,000 to the Univ. of Calif. to study why Africans vote… in Africa ***
  • $2 million to build a new fire house in a Nevada town that has no firemen ***
  • North Carolina schools got $4.4 million for literacy and math coaches… to teach their teachers! ***
  • $54 million for a railroad project in Napa Valley went to a minority-owned company that then hired a local construction company for half the price, pocketing the rest ***
  • A California company was given $15 million in stimulus money to monitor water quality in a stream it was under indictment for polluting previously***

I’m sure that no small business has money to waste on boondoggles like these – but they are being taxed to pay for the government to do it! And that leaves less money for them to create jobs.

Obama’s spending spree is about one thing and one thing alone – buying votes from the constituencies that voted for him so that they’ll vote for him again. That’s why public sector employment, public sector salaries and public sector benefits are all up during this massive recession, while millions of jobs have been lost in the private sector.

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. In fact, you can even see it failing today in Japan: Did massive government spending succeed or fail in Japan?

News

The Republicans want YOU to tell them how to cut wasteful spending!

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Here’s what the new Republican program is all about:

YouCut – a first-of-its-kind project – is designed to defeat the permissive culture of runaway spending in Congress. It allows you to vote, both online and on your cell phone, on spending cuts that you want to see the House enact. Vote on this page today for your priorities and together we can begin to change Washington’s culture of spending into a culture of savings.

Here is the announcement for the new program:

And they announce what people vote to cut every week, and submit a bill to do it! Then they show the voting results.

Here’s week #1, announced by Tom Price:

Here’s week #2, announced by Michele Bachmann:

And you can suggest your own program to cut at the web site! I want them to abolish the Department of Education.

News

If government is paying the piper, then government is calling the tune

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Veronique de Rugy

Check out this post from GMU economist Veronica de Rugy on Big Government. (H/T ECM)

First, she puts up this chart.

Veronique writes:

On this chart we can see the changes over time in the composition of personal income in the United States since 1929. The most notable trend is the increase in the portion of personal income coming from government transfers (mainly social Security payments, unemployment benefits, food stamps, and personal and business tax credits.)  And the increase isn’t minor: the proportion of total personal income constituted by government money has grown from 0.9% to 17.2%.

Complementary decreases of wage earnings as percentages of total personal income (from 59.5% to 52.3%) are also going on.

The problem with government giving people money is that it creates a culture of dependency, as with Greece. Politicians take money from job-creating business-owners, or from productive individual workers, and they redistribute it to whiny unproductive, immature victim groups like unions, in order to buy their votes. Eventually, the government goes too far making promises and the productive people just stop or slow their working or they move away, since they keep less and less of their own money for the same amount of work and risk-taking.

And that’s when welfare checks of the losers dry up, and they have no choice but to riot and kill people. Why do they riot? Well, if they were earning their own money by working, then they would know that they are responsible for themselves, not government. They would understand that something might go wrong, and they would know that they had to cut their spending and save for a rainy day. So when things do go bad, they would have known how to live cheaply off of their savings while they find another job.

But people who take welfare don’t save – they think the money will always be there. What do they do when the taxpayers slow or stop production? They have no skills, and they have no savings. They can’t just find a new government because a new government isn’t going to find any more money from somewhere – there isn’t any left. So the only way to get their welfare back is to revolt – which is exactly what the socialists in Greece are doing right now. They’ve been spoiled rotten and they want their welfare back, like little babies crying for their mommies.

It’s sick. And this is what Obama and the Democrats idolize, because that’s how they grew up – begging their rich parents for money and bailouts for their own irresponsible behaviors. Their policies aren’t thought through – it’s just reliving their silver spoon childhoods of never having to work for anything.

Would you like to know what Republicans are like? Consider Michele Bachmann.

At 13, Bachmann was forced to become almost financially independent after her parents divorced. She used her babysitting money to buy her own clothes and lunches at school and saved up enough to purchase her first pair of contact lenses. Between college semesters at Winona State University, she took her hardworking streak to Alaska where on one memorable day she cleaned 280 salmon.

She also quit her job as a tax litigation attorney to homeschool her five kids, because she didn’t like the job the public schools were doing. Her business runs a small business, and she helped him to start it. That’s what Republicans do. We work. And we give.

We need to stop increasing the size of government so they can “take care” of all our needs. We need to take care of all our needs, and to take care of our neighbor’s needs, too. That’s capitalism. Having something to share from what you can make from your own industry and labor.