May, 2015, Part 3, By The Numbers: More IRS Tomfoolery, Squandering Billions In Baltimore, and Failing the Small Business Owners of America

On a semi-regular basis we revisit the theme "by the numbers" just to check in on the state of the country and political class using actual realities and their underlying numbers, not the spin or lies from our politicians. You see, politicians usually have nothing to gain by looking at reality and the numbers since they are more than likely to have screwed up reality and our lives in the first place.

That is why they would rather lie and deceive than tell the truth. But that approach can be destroyed by looking at the hard numbers behind the mess they have created. I once worked for a boss whose favorite saying was: "There is nothing more devastating to an opinion than the right number.” And that is what we try to do with this theme, devastate politicians’ opinions by looking at the right numbers.

So let’s take a look at the numbers that have recently cropped up and again prove that the political class in America continues to be one of the worst set of people to ever hold office, given the state of the country, the many ways they screw up our wealth and government functions, and their inability or non-desire to step up and tell the truth.

1) I know we did a lot of numbers about Baltimore yesterday in light of the rioting going on there but one last set of numbers today on the subject. Some politicians, including the President, have made the inane statements that not enough “investment” was being done in cities like Baltimore and the President blamed Republicans in Congress for that.

But it appears a lot of investment has recently been made in Baltimore using Federal taxpayer money. Within the President’s failed Economic Stimulus Program a few years ago, the city of Baltimore received $1,831,768,487 for its use, according to research done by the Washington Beacon newspaper. That’s right, almost $2 billion.

According to the Obama administration’s own reporting via the Recovery.com website, one of Balitmore central zipcodes, 21201, received an amazing $837,955,866. That money was spread out over 276 awards which, according to the Obama administration, through 2013 had created a grand total of …. 290 jobs. Doing some simple division, on average it took about $2.9 million to create single job out of the Economic Stimulus Program. Pathetic waste of money and Obama and other politicians want to spend more money.

Let’s take another approach and set of numbers. There are about 2,700 households in an average zipcode area. If we assume it costs $200,000 to build an average house in Baltimore, than that $837,955,866 could have built 4,200 homes or given a new home to every household in 21201 and had a lot of money left over. This is how inefficient government in general is and the Obama administration in particular.

2) Let’s move out of Baltimore and talk some economic numbers. According to recent analyses by different sources, there are still major small business capital access problems, years after the recession ended. In a Pepperdine University survey, 63% of small businesses say it is still hard to get business loans compared to 36% of large companies. 

According to Goldman Sachs, the most likely driver of this loan difficulty is the overwhelming and growing number of regulations that businesses have to deal with, something that large companies can handle better than small businesses. Maybe that is why job creation has been pathetic in this economic recovery, small businesses are usually the primary driver of economic growth and overwhelming bureaucratic Washington is choking off business expansion.

3) Recently we have already reviewed some horrendous customer service numbers of the IRS. The IRS commissioner testified in front of Congress that about 60% or so of calls coming into the IRS customer service help lines were going unanswered. In addition, if you were fortunate enough to get through, the average waiting time was over 30 minutes on hold. Horrendous numbers.

Apparently, according to a recent Washington Examiner article by Ethan Barton, based on a recent IRS internal audit and analysis, it is not just customer service where the IRS numbers are pathetic:

• Despite being told years ago that they were erroneously handing out billions of taxpayer dollars a year relative to a college education tax credit program, the IRS continues to commit the same mistake every year.
• A Treasury inspector general analysis found that the IRS handed out $5.6 billion in bogus education tax credits to 3.6 million taxpayers in 2012.
• In response, the IRS claim that their fraud catching programs are good enough despite the reality that the 3.6 million number is a whopping 1.5 million more than the previous year, 2011.
• If the Inspector General is right, the $5.6 million represents a fraud rate of almost one third since the total amount sent out by the IRS in 2012 was only $19 billion.
• The $5.6 billion in fraudulent payouts is up from $3.2 billion in 2011, a year over year increase about 80%.
• Inspector General J. Russell George said in a statement: "The IRS still does not have effective processes to identify erroneous claims for education credits. Although the IRS has taken steps to address some of our recommendations, many of the deficiencies TIGTA previously identified still exist. As a result, taxpayers continue to receive billions of dollars in potentially erroneous education credits."
• IRS officials, however, argued that the agency can effectively detect erroneous education credit claims. Investigators noted that the agency's processes only caught about half the questionable claims.
• The inspector general also reported in 2011 that 2.1 million taxpayers received $3.2 billion in likely fraudulent education credits.
• In 2012, 2 million taxpayers received $3.2 billion for education credits without providing a required form that proves they paid tuition, another 1.6 million taxpayers received an estimated $2.5 billion in credits for students attending noneligible schools.
• Over $650 million in education credits was given to 420,000 taxpayers who had made claims for more than four years, the time limit for the credit. 
• Nearly 430,000 taxpayers received around $662 million in credits for students who attended school less than half-time.
• Almost 40,000 of the total claims worth $61.5 million were for students who were either under 14 years old or over 65 years old. 
• 2,100 claims, worth almost $4 million, were handed out for students that were in jail for all of 2012, making it unlikely for them to be full-time students (well, duh!). 
• And that's almost 16 times more than the $256,000 in credits for incarcerated students reported in 2011, implying someone found the cookie jar known as the IRS from 2011 to 2012.

Thus, the numbers for the IRS are bad no matter what they do. What a dysfunctional organization, one that apparently wastes tens of billions of dollars every year that taxpayer across the country worked hard for, just to see the wealth given away by incompetence.

So what did the numbers tell us to day:

• For whatever reason, if history is any indicator, the numbers tell us that spending more money in Baltimore without wholesale changes in strategy and oversight is a fool’s errand.
• Small businesses in this country cannot get the loans they need to expand and reduce unemployment.
• The current IRS may be the worst government organization ever, given their abysmal horrendous customer service and auditing results.

More (likely bad) numbers tomorrow.

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.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

By The Numbers Update, Part 3: No Jobs for Teenagers, Obama's Failure As A Perceived Leader And More

This will be the third and final post in this update to our semi-regular series, “by the numbers.” In this series, we look at the latest numbers as generated by opinion polls, government statistics and from other sources to see what the true state of the union is. Rather than rely on the lies and deceit of what politicians tell us, it is better to look at the numbers which define our true reality, not the mirage our politicians try to pass of as reality.

Unfortunately, as we go through our by the numbers review it becomes obvious that the numbers are not good. Spending too much on stupid stuff and not enough on the needs of Americans is the way of life in Washington, a way of life that results in no major issue or problem ever getting resolved. The first post in this update series can be accessed at:

http://loathemygovernment.blogspot.com/2014/06/by-numbers-part-1-what-is-reality-of.html

1) One of the traditional measures of how well the economy is doing is the unemployment rate. In steady times, it is a good barometer of how well the domestic economy is doing at creating job opportunities for American workers.

But these are not steady times. The traditional measure of unemployment relies on a steady workforce employment run rate. That has not been the case over the past few years, despite the so-called recovery from the Great Recession. More and more Americans have become so discouraged when it comes to looking for employment that they stop looking and drop out of the workforce. This skews the traditional measure of unemployment lower than reality.

That is what is happening now. The official unemployment number is 6.3%. However, since the nation’s labor participation rate has dropped so low, reaching depths not seen since the 1970s, the real unemployment rate is probably much higher. In fact, members of Congress believe that the real unemployment rate and the associated pain is over 12%.

These members of Congress feel so strongly that we are using the wrong unemployment calculation that socialist leaning Senator Bernie Sanders and Republican Congressman Duncan Hunter want to legislatively change the measure to be more realistic, using the so-called U-6 unemployment number rather than the current U-3 unemployment number.

If the U-6 number is better to use, than the myth that the Obama recovery has been a smashing success is just that, a myth. With over 12% of Americans still without a job, over 20 million Americans, than the numbers are not good for the President’s and Congress’s economic policies, we are either still in recession or living through the weakest recovery ever, so say the numbers.

2) The liberal Economic Policy Institute recently pointed out that the economy would have to generate 7.1 million jobs to keep pace with population growth since the Great Recession. Since the current run rate for monthly for job creation is a little north of 200,000 a month, before taking out those Americans who became too discouraged to look for a job any more, you can see that we still have a long way to go just to get to an employment breakeven number.

3) Over the past two days we have looked at polling numbers that showed that Americans no longer think so highly of the President. Recent Gallup poll results reinforce this negative trend:

• Less than half of Americans feel that the President shares their values. 
• 56% of Americans believe that the President cannot manage government effectively. 
• A majority of Americans don’t believe he can get things done. 
• An amazing 62% of Americans do not think President Obama has a clear plan for solving the country’s problems. 
• 60% do not believe he works well with both parties in Washington.
• The majority of Americans feel that he puts his political interests ahead of the country’s interests.

All of these naysayers must be racists since it cannot possibly that the President is under performing in office [sarcasm].

4) The following numbers are really bad as they relate to teenage unemployment. It is critical that teenagers get job experience in order to develop a sense of self confidence and worth and learn to interact in a business and boss-subordinate relationship:

“These numbers are staggering,” according to Michael Saltsman, director of research at EPI. “Teens across the country this summer are missing out on valuable work experience as they continue to suffer through an extended period of high unemployment and difficult job prospects.”

But those experiences are getting tougher and tougher to experience around the country, given how badly the Washington political class has managed the economy and the associated economic numbers:

• Using U.S. Census Bureau data from May 2013 to April 2014, a recent analysis reveals that in Riverside-San Bernardino area of Southern California, the unemployment rate for teenagers 16 to 19 years old who don’t have a high school diploma is a whopping 54.2%.
• In the Portland-Vancouver-Beaverton, Oregon metropolitan area, the unemployment rate from that teenage population is 53.8%.
• The national average for this teenage group and skill level is 21.6%.
• The top ten on the list for worst places for teenagers to find a job are: Los Angeles-Long Beach-Santa An, CA (39%), San Diego-Carlsbad-San Marcos, CA (37.5%), San Francisco-Oakland-Fremont, CA (35.2%), Philadelphia-Camden-Wilmington, PA-NJ-DE (33.2%), Chicago-Naperville-Joliet, IN-IN-WI (33%), Pittsburgh, PA (32.9%), Sacramento-Arden-Arcade Roseville, CA (32.1%), and Baltimore-Towson, MD (31.4%)

If Washington’s economic policies and nonsense cannot create basic, simple jobs for our kids, what chance do they have for creating higher paying, better career jobs for them in a few years when they become young adults? Probably pretty slim, given the pathetic employment numbers today for teenagers.

5) We have already discussed the numbers of wounded and killed American soldiers that have died in Afghanistan during the Obama administration and how those numbers are much higher than the numbers during the Bush administration. 

But those numbers are only part of the story:

• Congress has approved $650 billion to be spent on the Afghanistan operation with a whopping $487.5 billion of that (about 75%) being budgeted and spent after President Obama took office 
• 75% of the $42 billion spent on beefing up the Afghanistan national security forces was spent under President Obama’s watchful eye.
• The total cost of the Afghanistan war from 2002-2013 comes out to about $7,100 per American who filed a tax return. But the annual cost per American taxpayer under Bush was $222 but the rate exploded to an annual rate of $1,329 per taxpayer under President Obama.
• For all of the costs in dollars and blood, under Bush and at the substantially higher rate under Obama, the Afghan poppy plantations have greatly expanded, from 75 thousand hectares in 2002 at the onset of the war to over 210 thousand hectares in 2013. 
• These hectares are now producing tons of poison that will eventually find its way into the U.S. and the blood streams of American addicts, imposing another cost on American taxpayers.

The numbers do not lie. Both Presidential administrations kept us mired in an uninnable war because of unwinnable strategies with unintended consequences. Obama’s numbers are just that much larger than Bush’s numbers with little more, if anything, in return.

So what did we learn from the numbers today:

• The government measures unemployment numbers in the wrong way and actually a deceitful way.
• The job creation numbers are bad.
• Americans do not see Obama as the leader they need in these tough times.
• Teenagers cannot get jobs in this economy. 
• Obama’s administrational spent far more budget in Afghanistan than Bush for similar, weak results.

The numbers do not lie, but the politicians that try to suppress them and the reality they represent do lie.

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