December, 2013 Political Class Insanity, Part 1: General Motors Owes Us Billions Of Dollars, The Pentagon Owes Us Trillions of Dollars and More

It’s the start of another month which means its time again for as review of the latest insanity, wasteful spending and corruption that has recently occurred from the American political class. We have done these monthly reviews since 2009 and two clear conclusions have emerged:

• The ineptness and lunacy of how the political class behave has grown exponentially since 2009. What used to take a day or so to review now usually takes at least a week.
• We are suffering through the worst set of politicians this country has ever had to endure. Major and minor problems never get resolved and any efforts that do get put together by the political class just seem to make a bad situation worse.

With those two happy thoughts, let’s see what the politicians have done to us this past month.

1) The Associated Press reported on November 21, 2013 that the Federal government would sell its stake in General Motors by the end of the year. The government became a major owner in the company when it unnecessarily bailed out GM during the Great Recession.

The article reported that the American taxpayer will lose about $10 billion on the deal. This means that about every U.S. household spent about $90 each to keep the company alive in its present form rather than let the bankruptcy courts do their thing and have the General Motors bankruptcy cost the American taxpayer nothing. 

But the article goes on to explain that:

• The company currently has $26.8 billion in cash. This raises the obvious question: if the company is so flush with cash, why is it not paying back its entire debt to the American taxpayer, wiping out the $10 billion shortfall?
• General Motors has added 3,000 workers since the Great Recession. Dividing the 3,000 new workers into the $10 billion unpaid debt results in a cost per U.S. job created of $3,333,333 per job created. In other words, the promise that the bailout was good economic policy since it would create jobs is nonsense if it costs over $3 million to create one new job.
• Despite having $26.8 billion in cash reserves, the company has not paid any income taxes for years because it was able to shed its debt but carry its accumulated losses forward and avoid Federal income taxes, another hit to the U.S. taxpayer.

Just another bad bailout deal that has cost taxpayers billions of dollars with nothing in return.

2) Consider a recent news report from Reuters which disclosed how ridiculously poorly the Defense Department manages its financial affairs:

• The Pentagon cannot account for $8.5 trillion dollars of taxpayer money Congress has appropriated the Department of Defense since 1996.
• For the fiscal year 2012, it is “impossible to determine” how much of the $565 billion for the Pentagon budget was used for what it was supposed to be used for.
• According to the article, there exist numerous examples of unnecessary military spending in the Pentagon; there is about a half trillion dollars in unaudited contracts with private companies, and often there is no way to tell whether goods and services were ever actually delivered to the Defense Department.
• This is not a new problem since Secretary of Defense Donald Rumsfeld stated in September, 2001 that there were possibly $2.3 TRILLION in Pentagon spending that couldn’t be tracked. In other words, twelve years have gone by and nothing has been done to track TRILLIONS of dollars in wasted taxpayer wealth.
• The article lays out just one of the problems by describing how every month Defense Department employees were told by their superiors to make up false numbers in the monthly accounting ledger entries to make them jive with other government agencies' reports even though they were wrong.

Such incompetence and falsifying accounting reports would get normal citizens arrested and thrown in jail for fraud. But nothing happens, no one is fired, no one goes to jail when the government does it and wastes TRILLIONS of taxpayer dollars over the years. No wonder we have a $17 TRILLION national debt.

3) We have often made the comparison on how Washington D.C. is actually a true life replica of the capital city in the “Hunger Games” books and movies. In the “Hunger Games,” ordinary citizens from around the country are heavily taxed in order to subsidize and support an outrageously lavish life style for the elite ruling class in the capital city.

A November 18, 2013 article from the St. Louis News Dispatch newspaper reinforces that image and reality, “D.C. Awash In Lobbyist, Contracts, Wealth:”

• During the past decade, the D.C. metro area has added 21,000 households whose earnings place them in the top 1% of all U.S. households with no other metro area even coming close to matching this growth rate.
• In 2010, a single Virginia Congressional district received $43 billion worth of Federal contracts, almost as much as the whole state of Texas received.
• Much of the wasteful spending is a result of 9-11 and the gigantic and unbridled increases in national defense-related spending, spending that was mostly unable to be tracked (see above).

The article goes on to describe the lobbyists feeding frenzy and government spending frenzy in the D.C. metro area. The very sad part of what is going on is that it's economy is not based on producing valued goods and services, it is based on lobbying for better tax breaks, favorable legislation, a bigger cut of unnecessary spending, etc. Very little societal benefits are resulting from this Hunger Games scenario.

I will not go into the gruesome details of how the American taxpayer is being fleeced by this environment, as laid out by this excellent, well researched article. You can read the extensive details at:

http://www.stltoday.com/news/national/govt-and-politics/d-c-awash-in-contracts-lobbying-wealth/article_53336d9b-a75f-5a1a-bb19-d46d3186a960.html

4) What would a month be without a major failure from the Transportation Safety Administration (TSA), those wonderful folks at airports that grope you on a random basis? In 2007, the TSA started the SPOT program, “Screening Of Passengers by Observation Techniques.” The program was supposed to train some TSA employees to stand around and just watch people, identifying those travelers that were acting suspicious, stressed or afraid, and could be terrorists.

A billion dollars and five years later, the General Accounting Office has issued a report that finds that SPOT is no more effective than random suspect targeting:

The meta-analyses we reviewed — which collectively included research from over 400 separate studies related to detecting deception conducted over the past 60 years — found that the ability of human observers to accurately identify deceptive behavior based on behavioral cues or indicators is the same as or slightly better than chance (54%).

Which raises an interesting question: why didn’t the Federal government do this comprehensive study BEFORE spending a billion dollars? Since they studied research from the past 60 years, the analysis could have been done five years ago before the taxpayer wealth was wasted. Insanely poor planning. But given the TSA history of poor planning, this is not surprising.

This will do it for today but there is plenty more insanity to cover in the next several posts. Keep in mind that probably the only way to minimize the insanity, given the incompetence of our current politicians, is to reduce the amount of taxpayer money they can waste. 

We need to get them focused on a much smaller set of functions and issues since they have proven that they currently cannot control any spending, cannot control a wasteful government bureaucracy, they cannot control the insanity. Maybe if we shrunk government and focused only on a few major issues, they might eventually resolve an issue. Today that focus does not exist and no issues, small or large, are ever resolved.

This was the main purpose of Step 1 from "Love My Country, Loathe My Government.” This step would reduce Federal government spending by 10% a year for five years, resulting in a much leaner government focused on a much smaller but overall more important set of priorities. Keep this proposal in mind as we go through the stupid wasteful spending and activities of the American political class over the next few days.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now:http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w