Every week we stumble across another Obama Care calamity as the country continues to realize how bad that piece of legislation is. However, not to be overshadowed, the same pattern seems to unfold in Mexico, every week there are new and depressing news reports. In Mexico, it has to do with the violence of the drug cartels.
The latest bad news includes the following:
- The Associated Press (AP) reported on August 18, 2011 that the Mexican navy found four bodies that could include three marines and one naval cadet that had been kidnapped by drug cartel gunmen earlier in August. This is not the first time that drug cartel members had kidnapped and killed members of the Mexican armed forces. The article also reported on a gun fight between Mexican soldiers and suspected drug cartel gunmen which resulted in the death of eight gunmen and the confiscation of 10 automatic rifles, 2,000 rounds of ammunition, and military uniforms.
Imagine if this situation happened in the United States: soldiers being actively kidnapped and killed, soldiers deployed in the streets of America conducting Wild West shootouts with violent drug gang members. We would not tolerate it and yet our political class seems to ignore the whole illegal drug issue, both in our country and in Mexico, while the violence gets worse and worse.
- An AP article on August 18, 2011 reported that the Federal government had busted a drug trafficking ring that was being operating in San Diego by Mexico's most powerful drug cartel. The twist on this typical case is that the drug cartel was in a partnership with Iraqi immigrants who were not only trafficking illegal drugs but were also involved with assault rifles, grenades, and homemade explosives. The bust found 18 pounds of methamphetamine, cocaine, 3,500 pounds of marijuana, four land mines, and more than 30 guns.
Some of the Iraqi suspects who were arrested have ties to an Iraqi criminal gang based in Detroit. The article asserted that many of the Iraqis involved were in this country illegally, having been smuggled into the U.S. via Mexican connections. Part of the bust included information gathered from a DEA undercover agent who was shown a grenade and told more grenades could be bought, with the source of the grenades being the Mexican military.
Here we have an example where a lost "war on drugs" strategy combined with a leaky border is resulting in not only drugs being funneled into the country, enriching the cartels in Mexico, but now we are seeing Mexico acting like a funnel for people from around the world and illegal armaments. The unanswered question in the article is how much of the illegal drug sales cash and illegal weapons from this operation ended up with their criminal allies in Detroit and possibly other American cities?
- Illegal Iraqis' in the country and in cahoots with known, violent drug cartels dealing drugs and weapons. What an ominous new twist. However, not to be outdone, consider another AP story, this one published on August 20, 2011, that discussed how not only are illegal drugs being smuggled into the United States but illegal drugs are now being smuggled from the United States into Mexico.
Confused? According to the article, a Los Angeles doctor and 14 other people have been arrested and charged with conspiracy to smuggle prescription drugs into Mexico from California. It seems that it is easier to sell large amounts of illegal pills to pharmacies in Mexico than to keep a low profile and sell small amounts to street dealers in the United States. Once the Mexican pharmacies have the illegal pills from the United States, American addicts can take the short trip into Mexico to purchase all of the illegal pills that they want.
The economics are apparently quite lucrative. A smuggler buys thousands of pills in the United States for about $2 a pill, drives into Tijuana and sells those thousands of pills for $3.50 each to the pharmacy. The pharmacy turns around and sells the pills to addicts, from both Mexico and the United States, for $6 a pill, all done without the need to get a valid prescription from any legitimate doctor.
- A New York Times article that appeared in the August 7, 2011 issue of the St. Petersburg Times described how the United States was expanding its role in the Mexican government's fight against the drug cartels. We have already deployed CIA personnel into the country along with retired military personnel and are considering sending in private security contractors to help in "turning around a multibillion dollar effort that so far has shown few results" relative to fighting the drug cartels. Besides working with Mexican military units to gather intelligence about cartels and helping plan operations against the cartels, plans are being considered to physically embed a U.S. team of military contractors into a Mexican counternarcotics unit.
I realize that we have a serious problem with the drug cartels but I am not sure this is the right approach. It seems to be only treating a symptom where the illness is the use of illegal drugs in the United States. The use of military contractors in Iraq proved out to usually not be a good strategy and the CIA track record of operating in foreign countries is also not perfect by any stretch of the imagination.
Just seems we are randomly groping and trying to fix a problem that the political class and the Federal government does not understand. No matter how many people we send to Mexico and how many drug kings are arrested or killed and how many drug trafficking networks are crashed, the underlying root cause of our problems, drug usage, will still exist and new people will arise to supply that usage.
- There is also a political issue of sending large numbers of CIA agents, retired military people, and military contractors to Mexico. An article by Lydia Cacho, writing in El Universal, an article that was summarized in the August 19, 2011 issue of The Week magazine, worried that Mexico was moving towards military rule as the Mexican military assumes more and more government responsibility and flexibility to address the drug cartel violence and problems, destroying the Mexican democracy in the process.
Apparently the current Mexican president wants to allow the military to take over domestic police functions, override civil liberties and install wiretaps as needed, all of which could easily lead to a military regime. Ms. Cocha writes "giving the army more authority won't vanquish crime, it will only vanquish our freedom."
And who might get blamed for the loss of democracy if Ms. Cocha's fears become reality? How about the United States who is trying to improve the abilities and effectiveness of the Mexican military? By sending people into Mexico to help the military, we are likely to get painted as accomplices if the Mexican military does eventually destroy the democracy.
What a mess. We are no longer dealing with only drugs. We are dealing with illegal Iraqis dealing with guns and grenades in addition to drugs, a reverse illegal drug pipeline into Mexico in order to make illegal drug sales easier, increasing violence against anyone in Mexico fighting the drug cartels, and a very real possibility that U.S. illegal drug usage will entangle U.S.military and intelligence resources in the toppling of the Mexican democracy. All of which will do nothing to effectively remedy the current illegal drug situation.
Why do we think the root causes of all of the above chaos will not get resolved? Consider an MSNBC report that appeared on their website on June, 2, 2011, "Global War On Drugs Has Failed, Key Panel Says." A United Nation's commission has reported that the "war on drugs" has failed and that governments should consider legalizing marijuana and other controlled drug substances. The commission included former heads of state, a former UN secretary general, and others.
The Global Commission On Drug Policy has concluded that the "war on drugs has failed, with devastating consequences for individuals and societies around the world." I am sure most Mexicans would agree with this conclusion. The report went on to state that "repressive strategies will not solve the drug problem, and the war on drugs has not, and cannot, be won."
Unfortunately, the report felt that the political classes around the world should have the courage to move towards this solution of the problem, a trait that is usually sorely missing from our political leaders. That is why Step 26 from "Love My Country, Loathe My Government" needs to be implemented. This step provides a process to address this issue which minimizes any courage required by our political class. Waiting for them to step up and resolve this problem is no longer a possibility, given that we are forty years into the "war on drugs" and no progress has been made by our politicians.
Every week the situation gets worse in Mexico. And every week, the American political class ignores the danger to not only our addicted citizens but to democracy abroad and possibly within this country in the future.
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 http://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.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
Monday, August 22, 2011
Friday, August 19, 2011
What's A Week Without Another Weekly Obama Care Calamity? Or Three?
Another week, another Obama Care calamity. Last Friday, we reviewed the totality of the calamities from this horrid piece of legislation. But, another week, another calamity. In fact, this week we have a three calamities for the price of one:
- Calamity #1 - Let's start with the easiest one. Several months ago we reported and discussed the fact that within a year of passing the Obama Care legislation, the Health and Human Services Department within the Federal government had already allowed over 1,000 waivers to the early requirements of Obama Care. We made the case then, and still do, that this could not have been a well written and well researched piece of legislation if the government was issuing about three exemptions or waivers everyday to its requirements.
Well, its a few months later and recent news reports indicate that the number of exemptions being issued has not slowed down as some supporters of the legislation predicted it would. The news reports indicate that the number of company waivers and exemptions is fast approaching 1,500, keeping it on track for the same daily rate as of a few months ago. Again, how good is this piece of legislation if nearly 1,500 companies and other entities have already been exempted from its requirements, at least temporarily? If 1,500 exemptions have been granted, I cannot imagine the number that have been applied for in order to get out from under Obama Care's requirements.
- Calamity #2: About two years ago, Obama spoke to a joint meeting of Congress to press for the passage of Obama Care. During a particular part the President's speech, Congressman Joe Wilson shouted out "You lie," an outburst that he quickly apologized for and an apology that was quickly and graciously accepted by the President. However, then Speaker of The House, Nancy Pelosi, was to have none of this apology business and prompted House Of Representative action against Wilson for his behavior.
However, it turns out that Wilson may have actually been right and Pelosi may have moved for sanctions against him under false pretenses. Wilson yelled out "you lie" when the President stated: "The reforms I am proposing would not apply to those what are here illegally." In other words, no part of Obama Care would use American taxpayer money to support the health care needs of illegal aliens in the country.
Turns out, this is not the case. Recent news reports and statements from Wilson's office assert that over $8 million of Obama Care funding, which is within a larger budget of a $28.8 million budget given to community health care centers, has been specially set aside to help seasonal and migrant farm workers. These heath care centers/clinics have been explicitly told not to ask for immigration status when serving these workers.
Thus, was it a lie when the President stated two years ago that no part of Obama Care funding would be used for "those that are here illegally" or did the situation change and no one in the White House got around to updating the country on this change? In either case it looks like Wilson was right, although his venue and approach for pointing out this potential lie was not appropriate.
The Congressman makes a good point when discussing this calamity. The country is going broke, the country has a mountain of national debt, our limited funds need to be used to support Americans' health care needs, not the health care needs of illegal aliens. At the very least, Pelosi owes the Congressman an apology since the basis for forcing sanctions on Congressman Wilson was baseless.
- Calamity #3: Yesterday, over 409,000 Americans filed for first time unemployment claims, continuing a 400,000 weekly trend that seems to have been going on forever. Unemployment is still stuck around 9% or so. Recent testimony in front of Congress by Andy Puzder, the CEO of CKE restaurants (CKE operates or franchises almost 3,200 Carl's Jr. and Hardee restaurants around the world), described how some of the requirements of Obama Care is putting the brakes on his company's abilities to hire more unemployed Americans:
His views are consistent with others in the food industry. Scott Womack, who operates a company that owns 12 IHOP restaurants in Indiana and Ohio, testified that the legislation will have dramatically negative effects on his business. By the beginning of 2014, he believes that he will have to provide health insurance coverage for all of his full time employees.
Given the relatively thin business margins in the food industry, he does not know how he will be able to comply. He estimates the cost of complying will be 50 percent greater than his company's earnings. Even if he finds a way to comply with these additional costs, it will certainly hinder his ability to expand, adding new restaurants, hiring more people, paying contractors and builders to construct his new restaurants, pay advertising people to promote his new locations, and purchasing products to serve at his new locations. Many of these latter functions provide employment beyond his direct hiring of people for his company.
Adding insult to injury, Puzder and Womack have not been able to obtain waivers to Obama Care requirements while their competitors, McDonalds and Jack-In-The-Box have received waivers. Not only is Obama Care adding a heavy cost burden to their operations, it is unfairly tilting the competitive playing field by providing a large cost advantage to their competitors. Thus, Obama Care supporters can not even make the claim that all parts of America and the businesses within America will be playing under the same rules under Obama Care. Pathetic.
It might justify all of these calamities if Obama Care had a chance at working. However, more times then I care to remember, we have gone through the myriad of reasons in this blog why this legislation is doomed to failure. The writers and supporters never understood the root causes of our escalating health care costs and without understanding those root causes, our political class has virtually no chance of solving the problem.
Obama tried to solve a public health crisis (i.e. Americans eat too much, Americans eat too much of the wrong kind of food, Americans smoke too much, Americans on average are getting older), a legal crisis (our health care industry needs signficant tort reform and a lack of competition crisis (our health care industry needs to allow cross state lines competition between health care insurers), by developing a huge, expensive, cumbersome and unfair monstrosity that deals with virtually none of these root causes/crises. As a result, we see restaurants cutting back on expansion and hiring, large companies (e.g. AT&T, John Deere, and others looking to eliminate their health insurance programs because Obama Care makes it less expensive to NOT offer health care than to offer it), and the national debt exploding under Obama Care because of its poor planning and understanding of the problem.
Groucho Marx said it best many decades ago when explaining how Obama Care came into being: "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies." I could not have said it better when it comes to this legislative disaster. I can hardly wait to see what falls apart next week.
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 http://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.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
- Calamity #1 - Let's start with the easiest one. Several months ago we reported and discussed the fact that within a year of passing the Obama Care legislation, the Health and Human Services Department within the Federal government had already allowed over 1,000 waivers to the early requirements of Obama Care. We made the case then, and still do, that this could not have been a well written and well researched piece of legislation if the government was issuing about three exemptions or waivers everyday to its requirements.
Well, its a few months later and recent news reports indicate that the number of exemptions being issued has not slowed down as some supporters of the legislation predicted it would. The news reports indicate that the number of company waivers and exemptions is fast approaching 1,500, keeping it on track for the same daily rate as of a few months ago. Again, how good is this piece of legislation if nearly 1,500 companies and other entities have already been exempted from its requirements, at least temporarily? If 1,500 exemptions have been granted, I cannot imagine the number that have been applied for in order to get out from under Obama Care's requirements.
- Calamity #2: About two years ago, Obama spoke to a joint meeting of Congress to press for the passage of Obama Care. During a particular part the President's speech, Congressman Joe Wilson shouted out "You lie," an outburst that he quickly apologized for and an apology that was quickly and graciously accepted by the President. However, then Speaker of The House, Nancy Pelosi, was to have none of this apology business and prompted House Of Representative action against Wilson for his behavior.
However, it turns out that Wilson may have actually been right and Pelosi may have moved for sanctions against him under false pretenses. Wilson yelled out "you lie" when the President stated: "The reforms I am proposing would not apply to those what are here illegally." In other words, no part of Obama Care would use American taxpayer money to support the health care needs of illegal aliens in the country.
Turns out, this is not the case. Recent news reports and statements from Wilson's office assert that over $8 million of Obama Care funding, which is within a larger budget of a $28.8 million budget given to community health care centers, has been specially set aside to help seasonal and migrant farm workers. These heath care centers/clinics have been explicitly told not to ask for immigration status when serving these workers.
Thus, was it a lie when the President stated two years ago that no part of Obama Care funding would be used for "those that are here illegally" or did the situation change and no one in the White House got around to updating the country on this change? In either case it looks like Wilson was right, although his venue and approach for pointing out this potential lie was not appropriate.
The Congressman makes a good point when discussing this calamity. The country is going broke, the country has a mountain of national debt, our limited funds need to be used to support Americans' health care needs, not the health care needs of illegal aliens. At the very least, Pelosi owes the Congressman an apology since the basis for forcing sanctions on Congressman Wilson was baseless.
- Calamity #3: Yesterday, over 409,000 Americans filed for first time unemployment claims, continuing a 400,000 weekly trend that seems to have been going on forever. Unemployment is still stuck around 9% or so. Recent testimony in front of Congress by Andy Puzder, the CEO of CKE restaurants (CKE operates or franchises almost 3,200 Carl's Jr. and Hardee restaurants around the world), described how some of the requirements of Obama Care is putting the brakes on his company's abilities to hire more unemployed Americans:
- Obama Care requires restaurants such as CKE's to post the caloric content of their food on menu boards in all of their restaurants. Puzder testified that this new requirement will cost $1.5 million to implement. He did not discuss how much it would cost to change the signage everytime the menu changed. This $1.5 million is about 17% of what CKE invested in new restaurants last year.
- Thus, as a result of this sign requirement, fewer restaurants will be opened and fewer new people will be hired since the mandatory expense of $1.5 million has to come from somewhere. The saddest part of this whole story is that this component of Obama Care is unlikely to have any positive impact on America. Market research that was carried out on people who ate at similar restaurants New York City after the city implemented the same menu board requirement found that very few people noticed the caloric signs, even fewer people read the signs, and even fewer people, a very, very small percentage, changed their eating habits as a result of the signs.
His views are consistent with others in the food industry. Scott Womack, who operates a company that owns 12 IHOP restaurants in Indiana and Ohio, testified that the legislation will have dramatically negative effects on his business. By the beginning of 2014, he believes that he will have to provide health insurance coverage for all of his full time employees.
Given the relatively thin business margins in the food industry, he does not know how he will be able to comply. He estimates the cost of complying will be 50 percent greater than his company's earnings. Even if he finds a way to comply with these additional costs, it will certainly hinder his ability to expand, adding new restaurants, hiring more people, paying contractors and builders to construct his new restaurants, pay advertising people to promote his new locations, and purchasing products to serve at his new locations. Many of these latter functions provide employment beyond his direct hiring of people for his company.
Adding insult to injury, Puzder and Womack have not been able to obtain waivers to Obama Care requirements while their competitors, McDonalds and Jack-In-The-Box have received waivers. Not only is Obama Care adding a heavy cost burden to their operations, it is unfairly tilting the competitive playing field by providing a large cost advantage to their competitors. Thus, Obama Care supporters can not even make the claim that all parts of America and the businesses within America will be playing under the same rules under Obama Care. Pathetic.
It might justify all of these calamities if Obama Care had a chance at working. However, more times then I care to remember, we have gone through the myriad of reasons in this blog why this legislation is doomed to failure. The writers and supporters never understood the root causes of our escalating health care costs and without understanding those root causes, our political class has virtually no chance of solving the problem.
Obama tried to solve a public health crisis (i.e. Americans eat too much, Americans eat too much of the wrong kind of food, Americans smoke too much, Americans on average are getting older), a legal crisis (our health care industry needs signficant tort reform and a lack of competition crisis (our health care industry needs to allow cross state lines competition between health care insurers), by developing a huge, expensive, cumbersome and unfair monstrosity that deals with virtually none of these root causes/crises. As a result, we see restaurants cutting back on expansion and hiring, large companies (e.g. AT&T, John Deere, and others looking to eliminate their health insurance programs because Obama Care makes it less expensive to NOT offer health care than to offer it), and the national debt exploding under Obama Care because of its poor planning and understanding of the problem.
Groucho Marx said it best many decades ago when explaining how Obama Care came into being: "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies." I could not have said it better when it comes to this legislative disaster. I can hardly wait to see what falls apart next week.
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 http://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.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
Thursday, August 18, 2011
$300,000,000 - The Standard Unit For Government Waste (SUFGW)?
I was struck by a consistency of waste across four U.S. government entities and programs that I have come across recently. It appears that there may be a secret U.S. government standard waste unit that the government uses to measure how much taxpayer waste that government programs throw away with no benefit. It seems that $300,000,000 or so is that secret measurement of waste:
- An Associated Press (AP) report from September 2, 2006 reported on how the Internal Revenue Service gave away ... $318 million in improper refunds that year because a computer program that had been used for over ten years to screen tax returns for fraud was not working for that year's tax refunds.
The damage was actually worst than $318 million since the year before the program had stopped $412 million in fraudulent returns. Thus, the turnaround from one year to the next due to the incompetence of not having the program working properly was over $700 million ($318 in improper refunds plus the $400 million in fraud that may have been stopped).
This measure of incompetence is really sad. According to the AP report, as of September, 2006 the IRS was still trying to get the program fixed in time for the next year's returns. The IRS spent $20 million to update the program, an update that never got done in time. So the actual cost to the American taxpayer was really closer to the cost of the program update and the amount of improper payments or about $338 million. The IRS commissioner at the time stated that the performance of the IRS was "insufficient and unacceptable." No disagreement here.
- The 2006 $300 million IRS snafu was the first indication that there is a standard $300 million unit of waste in the government's operations. A few weeks ago it was reported that the U.S. Navy had almost completed the construction of two new U.S. Navy fuel tankers. The cost of the tankers was ...$300 million.
However, it took so long for the government to build the tankers that they are now obsolete and will be scrapped, without ever being used, at an additional cost to the American taxpayer of $10 million. Total cost of waste: $310 million.
- In late November, 2010, the St. Petersburg Times printed a Scipps Howard News Service report describing how the IRS fails to prosecute families who wrongfully claim tax benefits for children who are not their legitimate dependents. The estimated annual loss to the taxpayers from this fraud is ...$380 million. The article reported that the fraud involves more than a million tax returns every year so the fraud is widespread.
The very sad part of this story is the IRS has no plans to go after these tax cheats. They do not think that $380 million is a big enough fraud to devote resources to. Why the IRS cannot farm out the fraud, that they have already investigated to some degree, to an outside collection agency and give the agency a bounty for performance is beyond me.
- The latest $300 million coincidence comes from an August 16, 2011 AP news article that reported on how the U.S. military believes that ... $360 million a year is diverted from military support and reconstruction contracts in Afghanistan and ends up in the hands of our country's enemies: the Taliban, criminals, and local power brokers.
This waste and fraud was identified by a special military task force and shows how corrupt the world is inside of Afghanistan and how the Obama strategy of improving the quality of life for Afghanistan's citizens' lives is rife with corruption and fraud. After so many years operating in Afghanistan, the government and political class cannot even keep track of over $300 million a year.
The cost is probably higher than the $360 million if the Taliban is getting their hands on this money. Theoretically, the Taliban could be turning our own taxpayer money into weapons that are in turn used to harm and kill our own troops, a price and cost that cannot be estimated.
So let's review:
To paraphrase an old Senator Everett Dirksen quote: "$300 million here, $300 million there and soon you are talking about real money." And that is what the political class does not understand. If the U.S. government had not spent the $1.380 billion above, no needy poor child would have went hungry, no needy Social Security recipient would have not gotten their Social Security check and no ill, elderly American would have not gotten Medicare coverage. But the U.S. taxpayer and the national debt would have been in a little better shape. However, the political class would rather distort this reality to the benefit of their political careers.
There is extensive Federal government waste currently going on today, apparently at $300 million at a time. The political class, the White House, Congress, and every part of the Federal government should be fervently identifying and wiping out this waste. This is obviously not the case as we continue to waste taxpayer money at the standard $300 million clip.
Thus, taxing the rich, implementing new taxes, revoking the Bush tax cuts, etc. needs to all be put on hold until the political class can prove to America that their hard earned wealth will not be lost to corruption in Afghanistan, incompetency at the IRS, sunk by the Navy or flushed away by hundreds of other government entities.
We need to get the SUFGW minimized in value and minimized in frequency. A $300 million SUFGW is not acceptable.
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 http://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.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
- An Associated Press (AP) report from September 2, 2006 reported on how the Internal Revenue Service gave away ... $318 million in improper refunds that year because a computer program that had been used for over ten years to screen tax returns for fraud was not working for that year's tax refunds.
The damage was actually worst than $318 million since the year before the program had stopped $412 million in fraudulent returns. Thus, the turnaround from one year to the next due to the incompetence of not having the program working properly was over $700 million ($318 in improper refunds plus the $400 million in fraud that may have been stopped).
This measure of incompetence is really sad. According to the AP report, as of September, 2006 the IRS was still trying to get the program fixed in time for the next year's returns. The IRS spent $20 million to update the program, an update that never got done in time. So the actual cost to the American taxpayer was really closer to the cost of the program update and the amount of improper payments or about $338 million. The IRS commissioner at the time stated that the performance of the IRS was "insufficient and unacceptable." No disagreement here.
- The 2006 $300 million IRS snafu was the first indication that there is a standard $300 million unit of waste in the government's operations. A few weeks ago it was reported that the U.S. Navy had almost completed the construction of two new U.S. Navy fuel tankers. The cost of the tankers was ...$300 million.
However, it took so long for the government to build the tankers that they are now obsolete and will be scrapped, without ever being used, at an additional cost to the American taxpayer of $10 million. Total cost of waste: $310 million.
- In late November, 2010, the St. Petersburg Times printed a Scipps Howard News Service report describing how the IRS fails to prosecute families who wrongfully claim tax benefits for children who are not their legitimate dependents. The estimated annual loss to the taxpayers from this fraud is ...$380 million. The article reported that the fraud involves more than a million tax returns every year so the fraud is widespread.
The very sad part of this story is the IRS has no plans to go after these tax cheats. They do not think that $380 million is a big enough fraud to devote resources to. Why the IRS cannot farm out the fraud, that they have already investigated to some degree, to an outside collection agency and give the agency a bounty for performance is beyond me.
- The latest $300 million coincidence comes from an August 16, 2011 AP news article that reported on how the U.S. military believes that ... $360 million a year is diverted from military support and reconstruction contracts in Afghanistan and ends up in the hands of our country's enemies: the Taliban, criminals, and local power brokers.
This waste and fraud was identified by a special military task force and shows how corrupt the world is inside of Afghanistan and how the Obama strategy of improving the quality of life for Afghanistan's citizens' lives is rife with corruption and fraud. After so many years operating in Afghanistan, the government and political class cannot even keep track of over $300 million a year.
The cost is probably higher than the $360 million if the Taliban is getting their hands on this money. Theoretically, the Taliban could be turning our own taxpayer money into weapons that are in turn used to harm and kill our own troops, a price and cost that cannot be estimated.
So let's review:
- IRS waste and fraud in reported in September, 2006 - $338 million
- IRS waste and fraud in reported in November, 2010 - $380 million
- U.S. Navy waste and fraud reported in August, 2011 - $310 million
- Afghanistan waste and fraud reported in August, 2011 - $360 million
- Total waste and fraud in just these four incidents - $1.380 billion
To paraphrase an old Senator Everett Dirksen quote: "$300 million here, $300 million there and soon you are talking about real money." And that is what the political class does not understand. If the U.S. government had not spent the $1.380 billion above, no needy poor child would have went hungry, no needy Social Security recipient would have not gotten their Social Security check and no ill, elderly American would have not gotten Medicare coverage. But the U.S. taxpayer and the national debt would have been in a little better shape. However, the political class would rather distort this reality to the benefit of their political careers.
There is extensive Federal government waste currently going on today, apparently at $300 million at a time. The political class, the White House, Congress, and every part of the Federal government should be fervently identifying and wiping out this waste. This is obviously not the case as we continue to waste taxpayer money at the standard $300 million clip.
Thus, taxing the rich, implementing new taxes, revoking the Bush tax cuts, etc. needs to all be put on hold until the political class can prove to America that their hard earned wealth will not be lost to corruption in Afghanistan, incompetency at the IRS, sunk by the Navy or flushed away by hundreds of other government entities.
We need to get the SUFGW minimized in value and minimized in frequency. A $300 million SUFGW is not acceptable.
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 http://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.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
Tuesday, August 16, 2011
Warren Buffet: "Please Put Up or Shut Up" And Other Tax and Spending Fallacies
Most people probably know who Warren Buffet is. Depending on what data source you use, his net worth is about $45 billion and he is always ranked in the top five as far as the richest people in the world. Obviously, he has been very successful, so when he espouses an opinion it is no surprise that his opinion gets wide press coverage.
Thus, it is not surprising he got coverage recently when he claimed that he does not pay enough in Federal income taxes and that he deserves to pay more. He claimed that although he paid about $6.9 million in Federal income taxes in 2010, that was only about 17% of his earnings, a percentage that he also claimed is lower than the tax rate of others in his employment. He also opined that other fortunate billionaires in America should also pay more in taxes.
Mr. Buffet is certainly entitled to his opinion. However, I have two major problems with his comments. First, while he thinks he should be paying more in income taxes, he does not speak for the rest of the billionaires in this country. They should be free to legally pay what is required of them under current laws without being hassled by Buffet and the political class. These billionaires did not make the tax rules, they are just following them. Bad mouthing them for doing nothing illegal should have no place in this country.
Second, and more importantly, if Mr. Buffet thinks he has not been taxed enough then I strongly suggest that he write a check and send it to the Federal government for the amount that he has been undertaxed over the years. If he really feels that strong about the situation, then be a man, step up, and write that check.
The Federal government, via the Treasury Department, has operated a program for people such as Mr. Buffet for the past fifteen years. Americans can write a check or donate property to the government to reduce the national debt. Doing so, would free up other tax money to serve the country's needs. If he does not want to do that, I am sure some state government would eagerly accept his excess money and dedicate it to fixing some kind of worthy infrastructure project in their state, maybe even naming a bridge or road after him.
The bottom line is until he writes a check and turns over that money he has been undertaxed by, then I would prefer he keep his empty words to himself since that is all it is empty words. In addition, these grandstanding, empty words play into the class warfare political strategy that President Obama has engaged in over the first several years of his Presidency. Since Buffet is a supposed fan of Obama, it is no surprise that he is following the rich vs. not rich divisive rhetoric of the political class.
Obama is currently in full campaign mode,15 months ahead of the election and you can see his strategy of demonizing the rich in order to get some votes in November, 2012. It is behavior we have identified and found despicable many times in this blog. This rhetoric divides American without addressing the root causes of our economic problems, i.e. the Federal government, as operated by the political class, spends too much money. Taxing the rich more, as we will see below, will have absolutely minimal impact on the national debt and deficit spending crises.
The fallacy of this divisive political strategy is that Obama does not want you to know the truth about the taxing and spending situation in this country. Let's do some math, starting with Warren Buffet's tax situation. According to the interview article I saw, Mr. Buffet stated that he paid almost $7 million in taxes last year. Let's assume we doubled his tax rate and he paid an additional $7 million in Federal income taxes:
Let's get even crazier. Rather than just doubling Mr. Buffet's tax liability, let's confiscate every bit of his wealth, (homes, cars, investments, cash, etc.) and use his $45 billion to run the Federal government. What impact would that have on the Federal government's spending and budget situation:
But regardless of how minimal the impact this increase in taxation would be, it serves the Obama political strategy to a tee. Since there are many more poor and middle class voters than billionaire voters, by demonizing the billionaires, the President thinks the country is too stupid to realize that 1) taxing billionaires more will have virtually no impact on our debt problems and 2) the debt and spending problems that his Presidency has incurred will eventually impact every single taxpayer in this country since there are not enough rich Americans to cover his mismanagement.
The sad thing about this political strategy is that a non-politician, Mr. Buffet, is aiding and abetting the divisiveness. It validates Obama's political strategy and gives him some degree of credibility of not only pressing for higher taxes on billionaires, but also increasing taxes on non-billionaire (and non-millionaire) taxpayers, all without solving the root causes of our debt problems, too much government spending and waste.
So, Mr. Buffet, please do one of two things. First, write the check for all those taxes you claim you deserved to pay and prove you are more than just words. Or, second, if you are not man enough to step up and prove your convictions from a monetary perspective, then please be quiet and do not help Obama divide the country like the President usually does.
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 http://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.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
Thus, it is not surprising he got coverage recently when he claimed that he does not pay enough in Federal income taxes and that he deserves to pay more. He claimed that although he paid about $6.9 million in Federal income taxes in 2010, that was only about 17% of his earnings, a percentage that he also claimed is lower than the tax rate of others in his employment. He also opined that other fortunate billionaires in America should also pay more in taxes.
Mr. Buffet is certainly entitled to his opinion. However, I have two major problems with his comments. First, while he thinks he should be paying more in income taxes, he does not speak for the rest of the billionaires in this country. They should be free to legally pay what is required of them under current laws without being hassled by Buffet and the political class. These billionaires did not make the tax rules, they are just following them. Bad mouthing them for doing nothing illegal should have no place in this country.
Second, and more importantly, if Mr. Buffet thinks he has not been taxed enough then I strongly suggest that he write a check and send it to the Federal government for the amount that he has been undertaxed over the years. If he really feels that strong about the situation, then be a man, step up, and write that check.
The Federal government, via the Treasury Department, has operated a program for people such as Mr. Buffet for the past fifteen years. Americans can write a check or donate property to the government to reduce the national debt. Doing so, would free up other tax money to serve the country's needs. If he does not want to do that, I am sure some state government would eagerly accept his excess money and dedicate it to fixing some kind of worthy infrastructure project in their state, maybe even naming a bridge or road after him.
The bottom line is until he writes a check and turns over that money he has been undertaxed by, then I would prefer he keep his empty words to himself since that is all it is empty words. In addition, these grandstanding, empty words play into the class warfare political strategy that President Obama has engaged in over the first several years of his Presidency. Since Buffet is a supposed fan of Obama, it is no surprise that he is following the rich vs. not rich divisive rhetoric of the political class.
Obama is currently in full campaign mode,15 months ahead of the election and you can see his strategy of demonizing the rich in order to get some votes in November, 2012. It is behavior we have identified and found despicable many times in this blog. This rhetoric divides American without addressing the root causes of our economic problems, i.e. the Federal government, as operated by the political class, spends too much money. Taxing the rich more, as we will see below, will have absolutely minimal impact on the national debt and deficit spending crises.
The fallacy of this divisive political strategy is that Obama does not want you to know the truth about the taxing and spending situation in this country. Let's do some math, starting with Warren Buffet's tax situation. According to the interview article I saw, Mr. Buffet stated that he paid almost $7 million in taxes last year. Let's assume we doubled his tax rate and he paid an additional $7 million in Federal income taxes:
- If Mr. Buffet paid twice as much in taxes, he would account for about .0004% of the Federal government's 2011 budget deficit.
- If Mr. Buffet paid twice as much in taxes, he would account for about .0002% of the Federal government's 2011 total budget.
- If we we took the richest 400 Americans, as identified by Forbes magazine every year, all of whom are billionaires in net worth, and taxed them all an additional $7 million, they would account for about .17% of the Federal government's 2011 budget deficit.
Let's get even crazier. Rather than just doubling Mr. Buffet's tax liability, let's confiscate every bit of his wealth, (homes, cars, investments, cash, etc.) and use his $45 billion to run the Federal government. What impact would that have on the Federal government's spending and budget situation:
- His $48 billion would reduce the 2011 budget deficit by less than 3%. And the bad news is that you would only get that 3% reduction once since it would be a one time confiscation.
- His $48 billion would cover about 1.1% of the Federal government's 2011 operating budget. This would also be only a one time, one year hit since once you confiscate his wealth, it would not be available in subsequent years.
- His $48 billion would cover less than 10 days of the Federal government's 2011 deficit spending.
- His $48 billion would cover about .3% of the country's current national debt.
- His $48 billion would cover less than .2% of the expected national debt that the Obama budget plans expect to run up over the next ten years in addition to the current national debt.
But regardless of how minimal the impact this increase in taxation would be, it serves the Obama political strategy to a tee. Since there are many more poor and middle class voters than billionaire voters, by demonizing the billionaires, the President thinks the country is too stupid to realize that 1) taxing billionaires more will have virtually no impact on our debt problems and 2) the debt and spending problems that his Presidency has incurred will eventually impact every single taxpayer in this country since there are not enough rich Americans to cover his mismanagement.
The sad thing about this political strategy is that a non-politician, Mr. Buffet, is aiding and abetting the divisiveness. It validates Obama's political strategy and gives him some degree of credibility of not only pressing for higher taxes on billionaires, but also increasing taxes on non-billionaire (and non-millionaire) taxpayers, all without solving the root causes of our debt problems, too much government spending and waste.
So, Mr. Buffet, please do one of two things. First, write the check for all those taxes you claim you deserved to pay and prove you are more than just words. Or, second, if you are not man enough to step up and prove your convictions from a monetary perspective, then please be quiet and do not help Obama divide the country like the President usually does.
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 http://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.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
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