Sunday, February 10, 2019

February, 2019, Part 9, Political Class Insanity: Cities Going Bankrupt, Food Stamp Fraud at The Strip Club, and Democrats Out of Touch With America

It is another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

Let’s get started:

1) We have previously reported how much in debt the Federal government and state governments are in:
  • The Federal government national debt recently broke through $22 TRILLION.
  • The Congressional Budget office estimated that the Federal government is looking at $82 TRILLION in unfunded liabilities, mostly Social Security and Medicare.
  • State governments have about $7 TRILLION in unfunded liabilities.
  • Total state and Federal debt and unfunded liabilities: $109 TRILLION and growing.
Given that the total wealth of the entire country is less than $100 TRILLION (and a lot less than $100 TRILLION depending on your data source), the country now owes more money than what it is worth.

But it is not just states and the Federal government that have a huge debt problem:
  • Truth In Accounting (TIA) is a nonprofit, politically unaffiliated organization composed of business, community, and academic leaders interested in improving government financial reporting.
  • It researches and publishes an annual analysis, “Financial State of the Cities.
  • Unfortunately, their latest analysis of 75 of the most populous cities in the country found that 63 of these cities cannot pay their bills, if real accounting methods were used, and have a total unfunded liability debt load of almost $330 billion.
  • Much like the state and Federal governments, most of this unfunded liabilities is related to pension and health care costs of government retirees.
  • This year, pension debt accounts for $189.1 billion, and other post-employment benefits (OPEB) – mainly retiree health care liabilities – totaled $139.2 billion. Many state and local governments are not in good shape, despite the economic and financial market recovery since 2009,” Bill Bergman, director of research at TIA. 
  • The five cities in the worst shape are New York City, Chicago, Philadelphia, Honolulu, and San Francisco.
  • These five worst cities and Dallas, Oakland, and Portland all got F grades from the TIA.
  • NYC has set aside reserves of $4.7 billion but needs to have $100.6 billion to cover its expected liabilities.
  • In Philadelphia, the city would have to access every city taxpayer a one time levy of almost $28,000 to cover its city debt while San Francisco would have to bill every taxpayer almost $23,000 to cover its debt load.
  • The TIA concluded that local politicians are just plain lying when presenting the current and future financial picture to voters: “Unfortunately, some elected officials have used portions of the money that is owed to pension funds to keep taxes low and pay for politically popular programs. This is like charging earned benefits to a credit card without having the money to pay off the debt. Instead of funding promised benefits now, they have been charged to future taxpayers. Shifting the payment of employee benefits to future taxpayers allows the budget to appear balanced, while municipal debt is increasing.”
Wow! Politicians who lie and who cannot manage money. Who knew?! 

The scary part of all of this is that this debt at all levels of government has been piling up in a record length economic recovery and prosperity. Imagine what happens when the next recession hits, and it will hit: fewer jobs, smaller tax revenue streams, more debt and the financial death spiral is underway. This will result in fewer and fewer benefits to retirees at all levels of government as tax rates increase as politicians desperately try to extend the Ponzi Scheme of debt. Scary indeed.

2) One of the things that the Washington political class does really, really bad is make sure that our hard earned tax dollars are not wasted. Consider one instance where they failed miserably to do so:
  • After a five month undercover operation, a strip club in Dayton, Ohio lost its liquor license because it accepted Federal food stamps in exchange for lap dances and the purchase of drugs.
  • Undercover agents used over $2,400 in food stamps to buy lap dances and drugs including cocaine heroin, and fentanyl
  • As a result, Sharkey’s Bar has been shut down and criminal charges filed against both employees and patrons for drug trafficking, food stamp trafficking, aggravated shipment, distribution of heroin, and other offenses.
  • This is the second Ohio strip club shut down for using food stamps to purchase strip club services..
This helps you understand why millions of American go hungry every day and why we have a $22 TRILLION national debt. The good news is that these two abusing businesses got shut down, the bad news is there are probably many more out there that are doing the same thing.

3) A lot of politicians want the government, in other words themselves, to have much more power over the government bureaucracy, your money, and your freedoms. They somehow think that they know what is best for 325 million individual Americans.

But according to s recent Godfather Politics website article by Warner Todd Huston, Americans seem to have a and different and better view of what is going on in reality:
  • While politicians may think they are the be all and end all when it comes to handling the matters of the country, according to a recent Gallup poll, Americans view government, and consequently the politicians that run it, as the nation’s biggest problem.
  • Gallup asked a sample of Americans what were the biggest problems facing the country and then reported those problems that attained at least a 3% response rate.
  • The largest issue identified was government as the biggest problem facing the country at 19% with immigration second at 16%.
  • According to Gallup: “These data come from a Gallup Dec. 3-12 survey, conducted as a looming budget impasse between Republicans and Democrats threatened to shut down the government. The government has commonly been cited in recent years as the most important problem facing the country, with the problem having received or been tied for the most mentions — 22 times in the last 24 months.”
  • 22 times in the last 24 months, and probably further back than that, indicates that this is not a one time fluke in the measurement, it is a trend that Americans view government as the biggest problem facing the country today.
  • Only 3% of those polled viewed gun control as the biggest issue facing the country today.
What makes these findings so hilarious is what Nancy Pelosi and Democrats/liberals are focusing on:
  • They want to make government more intrusive in our lives with such inane and impossible programs like Medicare For All, the New Green Deal, free college, etc. but Americans view them, the government and politicians, as the biggest problem facing the country.
  • They want to open up our borders to any and all people to immigrate into this country be they drug cartel members, crime syndicate members, terrorists, disease carrying individuals, etc. but Americans view these types of behaviors and immigration in general as the second biggest problem facing the country today.
  • They want to institute broad ranging gun control laws but Americans view gun control as a very, very minor issue facing the country today.
Could a bunch of politicians be any more out of touch with what Americans want done in the country today? Probably not.

That will do it for today’s insanity: politicians out of touch with the issues American find important, more food stamp abuse and criminal fraud, and financially strapped cities and the coming debt bomb that will bankrupt them.

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