May, 2023, By The Numbers: The Financial Death Spirals Of California, New York, New Jersey, and Illinois

 On a periodic basis we do some posts that fall under the theme of “by the numbers.” Rather than trust what the American political tells us about reality, we like to examine the real numbers and the real reality in the world to understand what is actually going on. Relying on politicians, and their cohorts in the media, to tell us what is reality is always a sucker bet. They have their own agendas and goals, usually centering around their needs and self-enrichment. So we need to look at the reality of the numbers to determine what is really going on.

Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post this month where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us. 

1)We have often discussed the financial race to bankruptcy that many American cities and states seem to be in. Their governments and politicians continue to increasingly waste and spend taxpayer money, which requires more and more taxation which also reduces government services which causes more and more businesses and residents to move out which reduces the tax base and the financial death spiral is underway.

Our top candidates for this financial death have stayed pretty constant over the past few years. Our candidate cities include Chicago, New York City, San Francisco, Los Angeles, and dark horses Portland and Seattle. Our top state candidates include Illinois, New York, New Jersey, and California. 

And recent data confirms that California, New York, and Illinois are still the front runners to go bankrupt. Their states are being drained of residents and businesses which results in lower and lower tax revenue. Rather than reduce government spending, these states’ politicians instead raise taxes which causes more out migration further reducing the tax base and thus, the dreaded financial death spiral:

• IRS data shows that 105,000 taxpaying residents left Illinois in 2021 and they took with them $10.9 billion of AGI, with AGI being how much taxable revenue left the state.

• That is on top of the $8.5 billion that left the state in 2020 and the $8 billion that left the state in 2019.

• New York state lost even more, $24.5 billion in 2021, up from $19.5 billion in 2020 and $9 billion in 2019.

• It gets worse for California, $29.1 in 2021, three times what it lost in 2019.

• These are some of the higher taxation states in the country.

• And these tens of billions of dollars of income are ending up in the lower taxation states in the country with Florida gaining a whopping $80 billion or so of AGI in the past three years with a lot of that additional income coming from New York, Illinois, New Jersey and California.

• Texas, another low taxation state, also showed AGI gains of over $20 billion over the past three years with newly arrived, former California residents representing over half of the $20 billion.

• And these numbers should not be a surprise since Florida’s net population grew 256,000 in 2020 and Texas had a net population gain of 175,000 people while California lost 332,000 residents in 2020, by far the biggest net population loss of any state.

• The dilenma that states like Illinois face is that there are more people leaving their states than coming in and even  more troublesome is that the folks leaving those states are higher earners on average than those coming into the state.

• Those residents leaving Illinois on average had annual earnings of $118,000 while those moving into the state had average earnings of only $74,000. 

• Thus, a state like Illinois gets a double hit: fewer taxpayers and a taxpayer base that earns less money on average and thus, pays less taxes.

You get the idea: as state and city politicians spend more and more taxpayer money, they continue to raise taxpayers’ tax burden. At some point the increased tax burden becomes too much and those that are more able to leave the state, i.e. the wealthier, move out for states that allow them to keep more of their wealth.  In the face of less taxpayers with less taxable wages, the state tax revenue stream is reduced. 

Rather than reducing state government spending to match the reduced tax revenue, state politicians like those in Illinois, New York, and elsewhere raise tax rates. These increased tax rates drive more people out of the state, reducing the tax revenue stream and the financial death spiral is underway.

And despite losing residents and taxable income for years, these politicians in those states still do not get it: people want to be free and that involves keeping as much of their hard earned wealth as possible. Without change, Illinois, California, New York and New Jersey will go bankrupt and that bankruptcy will occur in the not too distant future.

2)According to a recent Forbes magazine article, several of the above states sit at the top of the list when it comes to net moves in and out of their states according moving company data:

• In the latest annual moving company information, of all the moves involving the state of  New York, out of state moves were 60.6% of all moves while moves into the state were only 39.4%, i.e. for every six moves out of the state only four moves were offsetting that out migration.

• For New Jersey, 62.9% of all moves were out of the state and only 37.1% moves were into the state.

• And for Illinois, 63.4% of all moves were out of state while only 36.6% of all moves were into the state.

A state government cannot stay financially viable if it continues to steadily lose more and more residents than it gains unless it drastically reduces government spending. Since we have seen no indication that this will happen even in these distressed states, we continue to be confident in our forecast that Illinois, New York,New jersey and California will continue to be the leaders when it comes to declaring bankruptcy.

3)Despite facing the increasing chance of going bankrupt, the state of California continues to toy with the ridiculous concept of “slavery reparations.” The basic concept is that descendants of slaves should be paid for being related to people that were slaves over 170 years ago. 

These folks today were not slaves, they never picked cotton and never lived on a southern plantation. And yet, liberals in the state think these folks deserve to be paid simply because of a long ago ancestor.

And the amounts of money that supporters want to give to these state slave descentants is not insignificant. The overall cost is estimated to be a whopping $800,000,000,000. Think about how large this number is, especially in a state that is losing its residents, business, and tax base at an alarming rate and as we have reported previously, has almost a trillion dollars in unfunded future financial liabilities:

• There are over 39 million residents in the  state which means that every resident would have to pay over $20,000 out of their own pocket to cover this $800 billion reparation number, i.e. a family of four would pay $80,000.

• Since the current state government budget is just under $300 billion, this means that the state would need almost three years of devoting its ENTIRE annual budget to pay off the reparations bill, i.e. no government functions would be funded for almost three years to pay this number off.

• All of which means the state would have to raise taxes to account for the $800,000,000,000 and this would undoubtedly lead to more out migration of residents and businesses further reducing the tax base and state government bankruptcy happens even sooner.

A state that is hurtling towards bankruptcy, losing residents and busineses every day is considering paying $800 billion to slave ancestors, taking money from people who never owned slaves and whose ancestors likley never owned slaves.. Insanity.

While politicians lie, numbers do not: and the numbers show that the leading states to go bankrupt have not changed over time, California, Illinois, New York and New Jersey, whose state politicians refuse to cut government spending even in the face of a dwindling tax base.

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:

https://www.amazon.com/Love-My-Country-Loathe-Government/dp/1604942789/ref=sr_1_1?dchild=1&keywords=love+my+country%2C+loathe+my+government&qid=1607716020&sr=8-1

Please visit the following sites for freedom:

http://www.reason.com

http://www.cato.org

http://www.openthebooks.com

http://www.conventionofstates.com

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

 

July, 2013 Political Class Insanity, Part 5: Federal Employee Scams, More IRS Incompetence, And Americans Living Week To Week

This is our fifth in this month’s series about the political class insanity that we are subjected to every month by the American political class. Wasteful spending, stupid legislation, unbridled arrogance, and the destruction of liberty, there is no facet of our life that the political class cannot screw up.

The first blog post on this month’s insanity can be read at:

http://www.loathemygovernment.blogspot.com/2013/07/july-2013-political-class-insanity-part_2.html

Thus, let’s get started with the fifth, but not last, set of lunacy and insanity from our politicians:

1) A favorite tactic of gun control advocates to get guns out of the hands of both law abiding citizens and criminals is to conduct so-called “gun buybacks.” At gun buybacks, people can drop off any kind of gun to the police, no questions asked, and receive some sort of compensation in return. That compensation could be cash, tickets to sporting events, and other enticements.

There are a lot of problems with these types of activities. First, any criminal who needs a gun to conduct their criminal activities is not going to turn over that gun for a basketball game ticket.

Second, criminals can use these types of events to dump weapons that have previously been used in crimes since there are no questions asked and the weapons are destroyed in a mass manner, making the potential for solving previous gun-related crimes less likely.

Third, is a basketball ticket really worth giving up the use of your Second Amendment rights?

To this list, we add another problem with gun buybacks. UPI news recently reported that a police department outside Chicago, the St. Charles Police, operated one of these gun buy-back things to “get guns off the streets.” But what did the police do? They turned around and sold many of the guns to ordinary citizens to make a profit and put those guns right back “on the streets.”

Apparently, this police department saw a way to increase its departmental budget by reselling the guns. Another government program that does the exact opposite of what it is supposed to do.

2) Four years after the recession supposedly ended, economic conditions are really not different for most Americans. According to a recent survey by Bankrate:

• The survey found that a whopping 71% of Americans don’t have enough money in savings to weather a six-month emergency’s worth of living expenses.
• 50% of Americans have no more than three months’ worth of savings.
• 27% have no savings at all.
• One in five Americans feels their overall financial situation is worse now than one year ago.

Combine this information with the fact that the latest government economic statistics show that the economy grew only 1.8% in the first quarter of 2013, not the original estimated 2.4% growth, and we see just more evidence that the Washington political class has no ability, knowledge, or plan to grow the economy, resulting in stagnant economic growth and tenuous economic situations for the majority of American households. Despicable.

3) Every issue of political class insanity would not be complete without with an IRS misadventure. Today's IRS insult and insanity follws up on a recent report that a high ranking IRS official had steered a $500 million contract to a friend of his. According to an article published in The Hill on June 25, 2103, the IRS official helped funnel work to a friend whose technology company received some $500 million in agency contracts, according to a new congressional investigation.

The House Oversight Committee determined that Greg Roseman, the IRS’s deputy director for IT acquisition, helped direct contracts to Braulio Castillo, the chief executive of Strong Castle, “through back channels.” Back channels, just another way of saying illegally and unethically.

The website, Bankrupting America, did some simple math to determine the good that $500 million could have done for ordinary American taxpayers:

• $500 million would wipe out tax bills For 169,434 Middle-Income Americans. The average tax bill for an American household earning $43,400 was $2,951 in 2009 (the latest information available). $500 million would wipe out the bills of 169,434 of these households.
• $500 million would cover a half day of Federal interest payments. The Federal government spent $359.8 billion on interest payments on its debt in fiscal year 2012, about $985 million per day. $500 million would cover about 12 hours of interest payments.
• $500 million would cover the funding for The National Endowment For The Arts for more than three years. The budget for the NEA for fiscal year 2012 was $146 million. $500 million would fund the NEA for about three-and-a-half years.
• $500 million would pay for three weeks of IRS operations. The IRS’s budget for operations for fiscal year 2012 was $11.8 billion, or about $32.3 million per day. $500 million could fund IRS operations for about 15 days.
• $500 million would cover the more than 500 years of White House tours.

But alas, this will never happen since that $500 million was used by a rogue IRS executive to enrich a friend, and probably himself, at the expense of the American taxpayer.

4) The Washington Examiner reported on more government fraud in a June 17, 2013 article. However, rather than reporting on civilians and criminal elements that defraud Social Security, Medicare, and Medicaid out of over $200 billion a year, this article reported on how Federal employees defraud the American taxpayer via the Federal employee disability programs:

• A former postal worker was running marathons even though she was drawing Federal disability checks for a bogus back injury.
• A disabled Federal employee was found out to have gone scuba diving, skied in Switzerland and did flips on a trapeze. Additionally, she spent part of her $193,000 in her taxpayer funded disability payments on a boat named "Free Ride" before she was eventually caught.
• A Justice Department lawyer got $90,000 in ANNUAL disability checks after claiming the stress of his job kept him off the job. Apparently the cable TV show he began hosting while drawing disability pay wasn't so stressful.
• Then there was the civilian Navy employee who owned and operated a "gentleman's club" while on disability.

And the worst part of these insults to taxpayer wealth is that the government really has no clue how bad the problem is:

• According to the article, Federal employee disability compensation is highly vulnerable to fraud by Federal employees who exaggerate their bogus injuries they claim keep them from returning to work.
• The Federal employee disability programs cost the American taxpayer $3 billion per year, including about $2.1 billion in direct payments for lost wages and the rest for things like medical treatment and death benefits.
• No one in the Federal government knows how much fraud is occurring because the Department of Labor, which tracks disabilities programs for 70 Federal entities, doesn't even track fraud referrals and convictions.
• Employees claiming workplace injuries can pick the diagnosing doctor to prove their disability then change their stories as needed to be awarded claims. The Federal agency employing the employee claiming the disability cannot order a second medical examination to verify the disability.
• Injured workers are mostly trusted to provide accurate information on things like dependents and outside income.
• Federal authorities cannot get access to payroll databases from the Social Security Administration or the National Directory of New Hires, sources which could show whether a Federal employee on disability is working an unreported side job while collecting disability benefits.

Billions at risk and no way to rein in the fraud. Sound about par for the course when it comes to the political class and Federal government managing our tax dollars.

That will do it for today. Depressed yet? We still have more insanity in store for at least the next few days since if we have learned anything from reviewing politicians antics and actions, the insanity rarely ever slows down and certainly never stops.

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:

http://www.reason.com/
http://www.cato.org
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

April, 2013 Wasteful Government Spending, Part 2: How To Use Condoms, Studying Old Folks Knees, and Ignoring The Spending Problem

I would like to talk about different topics than the many ways that governments and politicians waste our hard earned wealth but the avalanche of wasteful spending examples keeps piling up. I feel if I do not continually clear them out at one point I will never be able t talk about anything else.

Yesterday's post discussed a compilation of idiotic government spending programs that was compiled by the Independent Journal Review. It included such lunacy as spending half a million dollars to create a prom week video game program, $27 million dollars to help people in Morroco become better pottery makers, $325 million dollars to create a robotic squirrel and 22 other equally stupid expenses which can be accessed at the following link:

http://www.loathemygovernment.blogspot.com/2013/04/april-2013-wasteful-government-spending.html

To that list of 25, let me two more horrific wastes of spending:

1) A recent news report described how the University of Florida received a $712,714 grant under Obama’s economic stimulus program to fund a study to “characterize ethnic differences in experimental pain sensitivity, endogenous pain inhibition, clinical pain and pain-related disability among older African Americans and non-Hispanic whites with knee osteoarthritis.” Huh?

A couple of problems with this type of wasteful spending:

* It was part of the stimulus program, a massive $800+ billion program that was supposed to create jobs and get the economy moving. The stimulus program was jammed with programs like this, short term, small scale, pitiful projects that resulted in no long term economic growth or sustainable job growth, the basic premise of spending $800 billion.

In fact, according to the government's own website that tracked stimulus spending, this program even admits that not a single job was created for this $712,714 expenditure. It makes you wonder how many other hundreds of similar programs within the stimulus spending also created not a single, lasting job but still wasted billions in funding.

* Putting stimulus spending aside, in times of $17 TRILLION debt levels do we really need to spend scarce Federal government resources exploring a SINGLE condition concerning a SINGLE part of the human body, namely the SINGLE condition of osteoarthritis on a SINGLE joint, the knee? If we are going to spend limited funds on health research, let's spend it major problems affecting a major segment of the population like lung and breast cancer, dementia and Alzheimer's, Parkinsons Disease, etc. rather than one affliction of one joint.

2) Staying with the economic stimulus program but moving onto the really absurd area of wasteful spending, it has come to light that $423,000 of taxpayer money was spent on a study about how to properly use a condom. Yes, the Department of Health and Human Services allowed a grant to someone in Bloomington, Indiana to study "Correct Condom Use."

Never mind that condoms have been around forever and most people should know how to use them.

For those that do not know how to use them, instructions are included with every package.

For those that do not read the package, they could access this information on correct usage form the library, the Internet, their partner, or they could ask their friends.

Of all the idiotic uses of taxpayer wealth, this has to be in the top five. Of course, no long lasting jobs were created from this expense, according to the government's own website, how could it?

This puts yet another program in the failed category of Obama's economic stimulus program. I only wish that I could have gotten in on this giveaway several years ago. I would have studied how drinking alcohol impairs my golf game. How lying out in the sun causes sun burn. How buying a new car improves one's self esteem. I could have made a killing if I knew that programs like correct condom use were worth over $400,000 to the Obama administration.

As we have said before, these two program alone would not have solved our $17 TRILLION debt problem. Together they total only abut $1.1 million. But before you can save trillions of dollars you have to save billions of dollars and before you save billions of dollars you have to save millions of dollars. You have to start somewhere and these two expenditures would have been a great start.


Plus, just because you can do something, waste taxpayer wealth, does not mean you should do it, waste taxpayer wealth. And an even sadder part of this disgrace is that there are some people and entities within the Federal government that have done a fine job of identifying waste and insanity spending like this but their voices and recommendations have gone unheeded.

Consider a posting by the fine website, Bankrupting America, that went up on April 2, 2013:

• The Government Accountability Office (GAO) is the Federal government’s internal audit and investigation branch.
• It was created in 1921 to help better manage government finances, spending, and expense streams.
• According to Bankrupting America, their sources estimate the GAO saves taxpayers $81 for every dollar the Office spends.
• And the GAO is not the only the Federal government entity that is assigned the responsibility with identifying waste and fraud and offering suggestions for how to reduce it.
• The Offices of the Inspector General (more than 70 Federal agencies have them) also research and highlight areas of government waste in hopes that these mistakes would be corrected.
• For example, it was an inspector general that uncovered the over $800,000 that GSA employees wasted on lavish party for themselves in 2012.
• However, according to a recent report from the House Committee on Oversight and Government Reform, a majority of inspector general recommendations were ignored.
• The committee found that during 2012, government agencies failed to implement 16,906 IG recommendations that would have saved $67 billion worth of taxpayer wealth.
• Implementing just these changes would have wiped out about 7% of the Federal government deficit in 2012 and relieved pressure on our $17 TRILLION national debt.
• In 2011, the committee found government agencies ignored 15,784 recommendations that could have saved $55 billion.
• Thus, the Federal government and Obama administration knew about at least $120 billion in spending savings over just the past two years and did nothing to avoid those unnecessary expenses.
• A possible reason for the lapse: currently the position of Inspector General is vacant in six different agencies including the State Department, Department of Homeland Security and USAID.
• The House report explained that there was a direct relationship between these vacancies and recommendations being ignored. According to the report, “In 2012, those agencies [State, Homeland Security and USAID] ranked first, second, and fourth among agencies with the most unimplemented recommendations.”

Well, duh! Sinfully incompetent government. The latest Senate budget from the Democrats controlling the Senate (after four years of unlawfully not producing a budget) is asking for another $1 TRILLION in tax increases over the next ten years. If they were truly doing their government oversight job and following the advice of the Inspector Generals and the GAO, they could fund the vast majority of that ten year increase by just implementing the changes these two fine organizations have already identified.

If you add in cleaning up the fraud in Social Security, Medicare, Medicaid, food stamps and unemployment programs along with finally getting the out of control Defense Department spending, there would be so much extra money laying around that every American could see their taxes go down without any personal significant downside from the reduced level of government spending.

But as always, we are left with the same question: Do politicians not reduce wasteful spending because they are incapable of doing so from a process or intelligence perspective, they do not want to reduce wasteful spending, or they are too lazy to reduce wasteful spending?

Whatever answer you arrive at for that question, the subsequent action is unchanged: ALL current Washington politicians need to be replaced as soon ass possible, either through elections, election process reform, or the best way possible way, the implementation of term limits, as outlined in Step 39 from "Love My Country, Loathe My Government." These people have blown their chance to make government efficient and effective, they need to leave, the sooner the better, and take their knee studies and condom studies with them.

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:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

 

Obama's March Of Dimes...Into Oblivion

In his recent state of the union message, President Obama proposed that over two dozen new Federal government programs be implemented. In doing so, he spoke one of his more comical lines in his whole Presidency, stating that implementing these programs would not cost the American taxpayer a single dime. Which raises two conflicting questions:

A) If these programs do not cost a dime, how will they actually work and be implemented and how effective could they possibly be?

B) If they are going to be effective, shouldn’t they cost more than a dime?

More political nonsensical talk from an ineffective political leader. Especially this political leader, who has the annoying habit of throwing out these grandiose rhetoric ideas without any solid back up plans at all, never mind even pie-in-the-sky ineffective plans to back up his empty promises.

And why would we even believe that 29 new programs will not cost anything, given the Federal government’s mismanagement of trillions of taxpayer payers dimes historically:

• Every year, Medicare and Medicaid waste or lose to criminal fraud over $100 billion (One trillion dimes).
• Every year, Social Security wastes or loses to criminal fraud over $100 billion (One trillion dimes).
• Every year, the IRS readily admits that it fails to collect over $380 billion from American tax evaders (3.8 trillion dimes).

We could cite hundreds of other examples of Washington political class financial mismanagement that cost Americans a lot of dimes and would cost Americans a lot more dimes of these new programs ever happened.

Consider four recent examples of wasted dimes that extend Washington’s tradition of wasting dimes:

1) A January 25, 2013 article on the CNN/Money website reported actual criminals, locked up in prisons across the country annually bilk the IRS out of millions and millions of dollars by filing fraudulent tax returns with the IRS from within their prison walls. Thus, not only are would-be convicts pillaging the American taxpayer from outside of prisons, actual convicts are also doing some pillaging inside prisons.

Details of this fraud include the following:

• This tax fraud usually involves prisoners filing fraudulent tax refunds from their respective prisons using stolen or fake identities.
• The prisoners often are in partnership with non-prisoners outside of prison, with all parties sharing in the cut of fraud that they execute.
• In one variation of the scams, prisons access company annual reports in the prison library that list Federal tax ID numbers, and then claim they worked for these companies on phony 1040 forms that they file.
• Other scams involve prisoners claiming wages from companies that are in bank bankruptcy proceedings since those wages can be harder for the IRS to track and verify.
• Some prisoners scan obituaries, looking for people’s identities to steal to be used in filing the false tax returns.
• Others use prison computers to file tax returns electronically online and have their fraudulent refunds easily and electronically deposited into the bank accounts of friends on the outside.

How embarrassing, the Federal government is so inept financially that even those already convicted can continue their crime sprees behind bars where their room and board is already being paid for by the taxpayers across this country. The article estimates that in 2010, prisoners attempted to fraudulently bilk the IRS for over $750 million and were successful in obtaining $35 million of taxpayer wealth.

Now, in the big Federal budget picture, this does not sound like a lot. But consider two things:

1. This is the IRS estimates of what is going on. Who knows how accurate these estimates are. The IRS could be lowballing the estimates to minimize their embarrassment in not being capable or they really do not have a handle on the extent of the fraud and it is much worse than what they can identify.
2. Second, theoretically this $35 million could have been used to put armed police professionals in over 600 U.S. schools in order to prevent future Newtown-like school shootings, a much better use of the resources than allowing criminals to continue their crime sprees in prison.

In any case, this losing $35 million, or 350,000,000 dimes every year is a testimony to ineptness of the Federal government.

2) The Bankrupting America website carried an interesting but depressing article on January 30, 2013 about how another Federal government program wastes billions and billions of dollars every year via incompetence

• An important, comprehensive report from the Government Office of Accountability (GAO) reported that $108 billion of unemployment benefits and other government appropriations went towards “improper payments” over the past several years.
• These improper payments often went to the wrong person or were issued in the incorrect amount.
• Citing a Roll Call article: “No business would allow this much of its budget to be wasted. Sadly, this is business as usual in Washington, and solutions are tough to come by.”

The website goes on to give examples of what this wasted $108 billion in taxpayer wealth could have been used for in order to illustrate the extent of the waste:

• On an average American household basis, this error rate would have reduced that average household’s monthly income by about $200 a month. This is $200 that they could not have used for food, gas, and other expenses, a significant drag on a household’s financials, an economic drag repeated over 110 million times across every U.S. household
• The $108 billion could also be used to buy 366,000 Ferraris.
• It also could have been used to make 101 million mortgage payments at $1061 per month.

To this list we would add the calculation that the $108 billion that was wastefully distributed could have put one armed police professional in every U.S. school for about 15 years, a much better use of the 1,080,000,000,000 dimes.

3) An Associated Press report from February 8, 2013 reported that the U.S. Post Office lost $1.3 billion in the fourth quarter of 2012 or about 13,000,000,000 dimes. This loss came despite the fact that billions and billions of dollars were spent on the November elections, a lot of which ended up funding mailings from the various candidates and other political entities. Thus, the better measure of the slumping Post Office financials iis not the loss of $1.3 billion in the fourth quarter of 2012 but the loss of $3.3 billion in the comparable timeframe of 2011 where there was no major election spending.

But this should come as no surprise. We reported on the mess that was the Post Office over a year ago in September, 2011:

http://loathemygovernment.blogspot.com/2011/09/political-class-when-it-comes-to-post.html

In that post we quoted Senator Joe Lieberman’s warning that “we must act quickly” to fix the red ink problems of the Post Office. Apparently, that warning did not get the right attention since seventeen months, later the dimes keep getting wasted due to Post Office inefficiencies.

Quick note: this is not meant as a knock against the management of the Post Office. Back in September, 2011 and now, management seems to have a good handle on what is happening to their industry and what could be done to adjust the Post Office operations to address those changes, e.g. their recent announcement to stop Saturday mail deliveries. It is the political class that is dithering while our dimes slide away, not those employees and executives that recognize the need to change.

4) And finally, a case where the number of dimes being lost is actually incalculable. That, at least is the conclusion of a GAO report on their audit of the Federal government financials. In a massive audit of the entire Federal government, the GAO report concluded the following:

• Our report on the U.S. government’s consolidated financial statements illustrates that much work remains to improve federal financial management. Further improvements are urgently needed.
• Certain material weaknesses in internal control over financial reporting and other limitations on the scope of our work resulted in conditions that prevented us from expressing an opinion on the fiscal years 2012 and 2011 accrual-based consolidated financial statements.
• About 34 percent of the federal government’s reported total assets as of September 30, 2012, and approximately 21 percent of the federal government’s reported net cost for fiscal year 2012 relate to the Department of Defense (DOD), which received a disclaimer of opinion on its consolidated financial statements.
• Because of significant uncertainties, primarily related to the achievement of projected reductions in Medicare cost growth reflected in the 2012, 2011, and 2010 Statements of Social Insurance, we are unable to, and we do not, express opinions on the 2012, 2011, and 2010 Statements of Social Insurance, as well as on the 2012 and 2011 Statement of Changes in Social Insurance Amounts.
• Material weaknesses resulted in ineffective internal control over financial reporting for fiscal year 2012.
• Our tests of compliance with selected provisions of laws and regulations for fiscal year 2012 were limited by the material weaknesses and other scope limitations discussed in our report.

In other words, the Federal government’s accounting processes are so screwed up that we have no idea what is going on or how many trillions of dimes are wasted every year. How scary is this report, the Federal government is so messed up that trained auditors cannot unravel the mess.

All of these examples get us back to the original discussion on Obama’s two dozen plus new programs. If he and the rest of the Washington political class were actually doing their jobs and watching over our dimes, they could fund their additional programs and it truly would not cost the American taxpayer a dime in additional taxes. They could put armed police professionals in every U.S. school to protect our kids. They could do a lot if they just started watching and caring for our dimes.

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:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Amgen: A Classic Example of Lobbying Washington At Taxpayer Expense

We have covered political class corruption many, many times in this blog. It has gotten so bad that it seems that finding, creating, and profiting from government corruption is more important to our Washington politicians than actually doing their Constitutional jobs, e.g. developing and living up to sane budgets, researching, developing, READING, and voting on legislation, etc.

Just a very small handful of political class corruption that we have covered include the following examples:

• The Obama administration gave out billions of taxpayer dollars to its crony capitalists partners and political fundraisers and donors in the alternative energy industry. All of which provided no societal benefit and many of whom went out into bankruptcy and out of business. The almost endless list of failures included Solyndra, Spectra, Beacon, Evergreen, Ecotality, A123, and many others.
• The Obama administration also gave out hundreds and hundreds of millions of dollars to its crony capitalist partners and political fundraisers and donors in the alternative transportation industry with no societal benefit in return. The major companies that received taxpayer wealth because they were Obama fundraisers for his elections include Tesla and Fisker Motors.
• Barney Frank used to be the chairman of a powerful House of Representatives committee that oversaw the financial industry. However, that did not prevent him from accepting massive reelection campaign donations from the various companies his committee was responsible for regulating along with top executives from those companies. Blatant conflicts of interest.
• Former Speaker of The House Nancy Pelosi participated in about nine company IPOs, one of which was the VISA IPO that happened after the House mysteriously postponed legislation that would have been detrimental to the company and its IPO. Within a matter of days, Ms. Pelosi, who was then responsible for scheduling the House’s legislative schedule, made a hundred thousands dollars from her IPO access.
• A number of Congressional people made investment decisions and choices shortly after being briefed by Treasury Department people in the run up to the Great Recession, trying to leverage this insider information in their personal financial portfolios before the deteriorating condition of the economy was pubic knowledge.
• Many Congressional members and members of their staffs got sweetheart mortgage deals from Countrywide Financial, one of the prime reasons for the housing and economic collapse.

We could go on and on about Washington political class corruption. However, today we will look at the latest, classic example of corporate interests being used to leverage and basically bribe politicians to get what both need, financial rewards, all at the expense to the American taxpayer.

What makes this instance of corruption classic is that it was done as part of the fiscal cliff deal, a deal that was supposed to prevent the economy from crashing on January 1, 2013. This was a very important piece of legislation, the failure of which would have caused economic harm to most Americans. However, the prideless Washington political class viewed it as just another legislative opportunity to enrich themselves and take care of their business cronies.

The details of this latest classic of political class corruption was outlined in a January 19, 2013 New York Times article:

• In early January, Amgen, which is the world’s biggest biotech company, pleaded guilty in a major Federal fraud case.
• However, that did not prevent the Washington political class from presenting the company with a belated Christmas gift, buried deep within the fiscal cliff deal.
• In that deal, Congressional members insisted on a paragraph that while it did not mention Amgen explicitly, the paragraph was very financially friendly to one of Amgen’s major drug products.
• The paragraph was inserted into Section 632 fiscal cliff final legislation and it delays a set of Medicare price restraints on a particular type of drugs.
• That category of drugs includes Sensipar, a top performing Amgen pill used for dialysis patients.
• This giveaway allows Amgen an additional two years to sell Sensipar without government price and cost controls.
• It must have been a big deal since according to the Times article, “the company’s chief executive quickly relayed it to investment analysts.”
• Good news for Amgen and its investors but bad news for Medicare since its cost for the product will not go down and save the American taxpayer up to $500 million over the next two years.
• Congressional aides were reported surprised by the inclusion of the delay since Amgen was the only company to lobby for the delay, leveraging its 74 Washington lobbyists for the effort, and this was on top of a previous two year delay that critics found unnecessary to extend another two years.
• Supporters of the delay and the legislative paragraph, mostly leaders of the Senate Finance Committee who, according to the Times, “ have long benefited from Amgen’s political largess,“ defended the action, saying it was necessary to allow regulators to prepare properly for the pricing change, even though no one expected the pricing change to be delayed and the pricing changed had already been delayed two years previously.

Okay, that is “what” happened, political cronyism results in an unneeded relief package to political donors, costing the American taxpayer about half a billion dollars. Before we get into the “how” of this disgrace, keep in mind that just before this deal was passed, Amgen pleaded guilty to marketing one of its drugs illegally. It had to pay criminal and civil penalties totaling $762 million, a record settlement for a biotechnology company. Thus, not only are the politicians dealing away taxpayer money, they are dealing it away with a company that just pleaded guilty to massive fraud.
The following summarizes the “how” of the corruption, taken right out of the lobbyists’ playbook:

• Amgen has deep historical, financial and political ties to lawmakers like Senate Minority Leader Mitch McConnell Kentucky, and Senators Max Baucus, of Montana, and Orrin G. Hatch, of Utah. who hold serious power over Medicare payment policy as the leaders of the Finance Committee.
• Amgen also has extensive ties with the Obama administration, with its lobbyists visiting the White House more than a dozen times since 2009.
• Amgen’s employees and political action committee have donated almost nearly $5 million to political candidates and committees since 2007.
• Not surprisingly, these donations include $67,750 to Baucus and $59,000 to Hatch.
• An additional $73,000 went to McConnell, some of it at a fund-raising event for him that Amgen helped sponsor in December while the debate over the fiscal legislation was under way.
• More than $141,000 was also donated from Amgen employees to President Obama’s reelection campaigns.
• Additionally Amgen and its foundation have given hundreds of thousands of dollars in charitable contributions to powerful organizations like the Congressional Black Caucus and groups like the Utah Families Foundation, which, surprise, surprise, was founded by Senator Hatch, an organization that provides positive coverage to the Utah news media.
• Amgen has also contributed to Glacier PAC, a PAC sponsored by Baucus in Montana, and OrrinPAC, a Hatch PAC in Utah.
• When Hatch was facing difficulties in his reelection bid in 2012, group called Freedom Path paid for advertisements in Utah that attacked his opponent. The group was backed and financed by Pharmaceutical Research and Manufacturers of America, a trade group that includes, wait for it,….. Amgen.
• And finally, one of Mr. Hatch’s top Finance Committee staff members on health and Medicare policy, Dan Todd, actually worked as a health policy analyst for Amgen’s government affairs office from 2005 to 2009.

Now, all of this could have been a coincidence. The Senators and the rest of the politicians that stood by when this piece of legislation was introduced might actually be truly thinking that this was a good deal for the taxpayer…but probably not. The money goes round and round and when the music stops, the American taxpayer is the one without a seat even though we funded the whole party.

That is why two steps from “Love My Country, Loathe My Government” need to be implemented right away:

1. Step 5 would allow only individual American citizens to contribute to election campaigns. No more PAC, union, corporate, or lobbyist money could be used to bribe political figures.
2. Step 39 would impose term limits on all Federally elected officials. If you review the corruption cases over the past few years, the ones listed above and others, it is usually the longest serving politicians who are the most ingrained to the culture of corruption. Pelosi, Frank, Baucus, Hatch, etc. have been around for decades. They have not resolved any of the major issues facing American during that time so how much worse could be without them, ousted from office because of term limits.

Without these two steps, the corruption train keeps on rolling and we are not longer a government by the people and for the people, we are a government by the lobbyists for the lobbyists.

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:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Wastebook 2012, Wasteful Federal Government Spending, Part 1- Beefy Jerky Research, Sidewalks To Nowhere, Pet Toothpaste and More

It is no secret our country and our economy are in dire financial shape. Our national debt is now over $16 TRILLION, with over $5 TRILLION added to it in just the first three and a half years of the Obama administration. Many times we have documented and discussed the brutal inefficiency, waste, corruption, and criminal fraud involved when the Federal government is in charge of our tax dollars and wealth:

• Medicare and Medicaid waste between $110 and $150 billion a year.
• Social Security wastes over $100 billion a year.
• The IRS fails to collect over $380 billion from tax evaders every year.
• Federal food stamp and unemployment benefits easily waste over $20 billion every year.
• The National Science Foundation uses its $8 billion budget every year to study such irrelevant topics like when did dogs become man’s best friend, creating a scale model of the 1964 New York World’s Fair, studying if online dating sites are racist, a study to determine if playing Farmville helps adults develop and maintain relationships, a study on why the same college basketball teams seem to dominate March Madness, etc. (see: http://loathemygovernment.blogspot.com/2011/06/national-science-foundation-wasting.html for more details.)
• Corporate welfare programs give away billions of dollars every year of taxpayer wealth to major corporations that could survive quite nicely without them (see: http://loathemygovernment.blogspot.com/2012/07/mining-federal-treasury-corporate.html)
• One of our sources tallied up the wasteful government spending on trivial efforts over the past ten years and came up with $1.2 TRILLION of taxpayer funds that have been totally wasted on minor efforts and studies. These programs included a study on why people cheat, lie and act rudely on local Virginia tennis courts, a study costing more than $600,000 that was spent on researching the sex lives of South African ground squirrels, and a $1,500,000 Federal program to promote silk production in Laos, just a small sampling of the waste. (see http://loathemygovernment.blogspot.com/2012/05/wasteful-government-spending-week.html)
• The waste and inefficiency is so rampant that we have easily identified over $9 TRILLION of wealth savings that could be realized over the next decade if the Washington political class focused just on the major priorities, needs, and problems of our times. (see: http://loathemygovernment.blogspot.com/2012/02/united-states-of-purple-presidency-plan.html).

Unfortunately, no matter how bad our national debt gets, no matter how burdensome our outrageous high tax burden becomes, no matter how many times smart, intelligent Americans point out the thousands of sources of waste, our politicians never seem to get the message. Wasting taxpayer money seems to be a great thing to talk about but they do nothing to stop it since it might cost them a few votes in their never ending quest to stay in office.

How do we know they do not care or do not know how to stop the insane spending? Senator Tom Coburn has published his annual “Wastebook” for 2012, which again proves the idiotic Washington spending and waste goes on unabated. Today and tomorrow we will look at one hundred of the wasteful spending sources that the Senator has uncovered and written about, 50 today and 50 tomorrow.

The following day we will also review some of the insightful opinions of the Senator who may be one of the only politicians in Washington who understand that we cannot afford to keep wasting wealth like this and actually has the guts to stand up in the face of the waste onslaught. We will recommend several easy-to-understand steps that are needed to stop the insanity that the Senator has uncovered.

But let’s examine the first 50 instances of totally useless Federal spending and waste:

1) The NFL, NHL, and PGA all classify themselves as non-profit organizations. Taxpayers may be losing at least $89.9 million a year subsidizing these tax loopholes for professional sports leagues that generate billions of dollars
annually in profits, despite professional teams often being owned by billionaires who pay some of their players millions of dollars in salary.

2) Lax accounting and audit controls and mismanagement in the food stamp program results in billions of dollars annually being spent not on healthy meals for hungry kids and needy families but instead wasted on questionable or illegal expenditures, including Starbucks, alcohol, diapers, and guns.

3) The Oklahoma Aeronautics Commission voted again this year to keep the rarely used Lake Murray State Park Airport open. It is not needed to serve the local markets or citizens, it is kept open solely to receive $150,000 in Federal funds it can then transfer to other airports. The airport has just one landing per month, i.e. it is essentially unused by planes and used only to fulfill some silly Federal guideline to get taxpayer money it does not deserve.

4) A USAID development program in Morocco included pottery classes that was funded using American taxpayer wealth.

5) Despite skyrocketing national debt, the Federal government is spending $947,000 via NASA to study what food astronauts could eat on Mars, by simulating a
Mars outpost at a barren location in Hawaii. When and if this research might be needed is far, far off in the future if ever.

6) A $325,000 NSF grant was used to create a robot squirrel to study how squirrels and rattlesnakes interact. What makes this expenditure doubly bad is that apparently the American taxpayer has already funded a similar program in the past, making this study doubly unnecessary and wasteful.

7) USDA gave a $300,000 grant to a caviar producer in Idaho for marketing purposes. I wonder how big a market there is for caviar in Idaho, both from a production and consumption perspective?

8) The American taxpayer paid out $3.3 million to bail out a local Arkansas tourist boat company that was going out of business.

9) The Department of Transportation gave an Alaskan tribe millions to start a ferry business that competes with existing private ferry services. Apparently, these other businesses, who never asked for or received a government handout, are now struggling to survive in the face of this government subsidized ferry service.

10) The Department of Health and Human Services wastes $2 million annually in maintenance fees for grant accounts that are either expired or empty of funds, all because the Department never got around to closing out the unneeded accounts.

11) If the Treasury Department stopped producing pennies, it would save the American taxpayer $70 million a year since it now costs $0.024 to produce a $.01 penny.

12) $1.5 billion is spent every year, a total that is growing every year, for the Federal government program that provides free cell phones for people that qualify for Federal welfare programs.

13) State officials used a Federal stimulus grant to purchase massive, overpowered routers that are too big and unnecessary for rural schools, libraries, and government offices, wasting $24 million in the process.

14) The National Science Foundation spent $516,000 on a research program that created a computer game simulating a high school “Prom Night” and the week leading up to the prom night.

15) Paper and pulp companies are still taking advantage of a loophole, costing the American taxpayer $268 million a year, allowing these companies to cash in their black liquor byproduct as an alternative fuel under a tax credit intended for vehicular fuel alternatives, not paper production byproducts.

16) Beverly Hills sold part of its Federal Community Development Block Grant funds to a neighboring town for a discounted 70 cents on the dollar to get around Federal
requirements.

17) The Department Of Energy is still running a Cold War era nuclear nonproliferation program, at a cost of $15 million a year, that was established to recruit new scientists in Russia.

18) NASA has spent $1.6 million to develop a number of video games.

19) The Department of Agriculture spends $49,337 a year to have a Smokey The Bear hot air balloon at festivals and pubic events in the southwest United States but claims it does not have enough funds for more DC 10 tanker planes to fight forest fires.

20) The National Science Foundation (why does this organization’s name keep popping up when discussing waste?) spent $30,000 of taxpayer wealth on a study to see whether people can determine another person’s sexual orientation with just a glance.

21) Federal agencies could save billions every year if they did a better job pooling their procurements to leverage their buying power.

22) The National Endowment for the Arts spends $1 million a year to fund book clubs, movie screenings, theatrical productions, fishing lessons, and concerts.

23) Housing and Urban Development gave $505,000 to a pet shampoo company for machinery to make pet toothpaste and shampoo.

24) A business park in New York received $1.3 million of Federal funds to make a road for a Pepsico yogurt factory.

25) $350,000 was spent by the National Science Foundation (Again?!?) to study of how golfers can putt better if they envision the hole is bigger.

26) $13,000 of anti-obesity Federal funds were sent to Maine to pay for a giant graffiti mural focused on sustainability.

27) Federal taxpayer funds were used to rehabilitate a covered bridge in Ohio, a bridge that is not used by cars or tied to any walking or bike trail.

28) Medicare and the Veterans’ Administration pay for health care twice for veterans who have Medicare Advantage but still seek care from the VA, which cannot seek reimbursement from Medicare.

29) A Department of Transportation grant paid $142,419 to provide free bus rides during the 2012 Super Bowl in Indianapolis even though average prices for those Super Bowl tickets are around $3,000.

30) $57,000 of Federal education funds were misused in Texas to send fifth-grade boys to a movie theater to see “Red Tails” while girls were left behind.

31) The National Endowment for the Humanities funding paid $40,000 for a video game simulating Thoreau’s experience at Walden Pond.

32) $10,000 worth of Department of Transportation funds were used in Michigan to buy 400 talking urinal cakes to fight drunk driving. You cannot make this stuff up.

33) A cartooning school in Vermont received $220,000 of HUD funds to build a new center, though it has very few students and is unaccredited.

34) We have already covered this waste in a previous post, waste that totaled over $400 million. The State Department’s Iraq police training program has failed miserably, according the Special Inspector General for Iraq Reconstruction. No objectives were created, and classes did not help Iraqis at all. The State Department will hand over to the Iraqis several building projects that ended up being unnecessary.

35) $445,444 of NSF funds were spent on a musical about biodiversity and climate change. Reviews of the play said it was boring and needed improvement.

36) $35.6 million of Federal Transportation money will help build a trolley in St. Louis that has been called the “Streetcar Named No Desire” by one local. It duplicates
existing light rail and public transportation and thus, is unnecessary for the transportation needs of local residents.

37) Congress split a new line of Navy ships between two completely different designs, increasing costs and undermining the Navy’s capabilities, wasting $148 million in the process.

38) $67,926 of EPA funds went to an anti-trash poster contest for college students, with winners getting a paid trip to New York City. Did I mention that this poster contest was for college students? Unbelievable.

39) The city of Grants Pass, Oregon, will spend $388,000 in Federal funds to build just five bus shelters in its small bus system, a per shelter cost of $77,600 per BUS SHELTER. Makes you wonder if it is heated, has indoor plumbing, and a two car garage. I would bet that you might be able to get all those features in an actual home in Grants Pass, Oregon for the same cost, if not in their bus shelters.

40) Health and Human Services spent almost $100,000 to put together a YouTube video contest to promote eating fruits and vegetables.

41) Regional FEMA officials miscalculated renovation cost of two University of Iowa buildings by including unallowable costs, leading to unnecessary
replacement of the buildings at a cost of $75.4 million.

42) The Federal government gave out $150,000 to the Strong National Museum of Play to develop an exhibit on America’s games and puzzles.

43) $1.1 million of Department of Transportation funds were used for “sidewalks to nowhere” in Florida and Michigan. In Florida, the sidewalk was a “safe route to school” that was still unsafe. In Michigan, Federal requirements forced a county to make sidewalk ramps at an intersection without sidewalks.

44) NASA paid $771,000 for a knowledge management database that has never been used.

45)  The Alaska Railroad has received $38.8 million in Federal money for a tourist train to serve not the citizens of Alaska but tourists and cruise ship passengers.

46) The Agriculture Department spends about $1.5 million a year to help vineyards.

47) Medicaid providers who have unpaid taxes are still able to receive their full Medicaid reimbursements, costing taxpayers about $330 million a year due to these tax evading doctors.

48) The General Services Administration has been trying to build a $330 million court house in California for ten years even though the General Accounting Office has continually challenged the need for such a building.

49) The Department of Defense has spent $770,000 to research a new way to make beef jerky with processed meat. Other Federal money has been given to a number of beef jerky companies for other jerky projects. Has the word “jerky” ever had such a double meaning.

50) $7.3 million worth Department of Education dollars for School Improvement Grants in Washington hardly helped students, a study found, and funds were used for changes that could be made without additional funding.

Enough of this depressing material for now. We will review the other 50 waste examples tomorrow and provide a number of suggestions on how to get this fiasco under control. You know that your government has gone dysfunctional when it runs up TRILLIONS of dollars in debt but still continues to spend money on talking urinal cakes, beef jerky research, pet toothpaste subsidies, and other nonsense. Our political class has taken us down the rabbit hole of waste and has no clue or desire to get us out.

We invite all readers of this blog to visit our new website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.

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:

http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/