May, 2014 Political Class Insanity, Part 5: Tapxayers Pay For A Congressman's Crimes, Making Tanks Nobody Wants,The Illinois Fiscal Cliff and More

This is our fifth post this month in our monthly series nonpolitical class insanity. Every month we spend more and more time trying to keep up with the wasteful spending, idiotic programs and laws, and general ineptness of the American political class. This is a task that seems to get harder and harder to do every month as their incompetence seems to be growing exponentially.

1) There are still over twenty million Americans who are either unemployed or under employed throughout this nation. One reason might be because of what the following graph illustrates, as presented in a recent Independent Journal Review article:



Since 1978, the percentages of businesses being created every year (‘firm entry” rate) has generally been declining while the percentage of businesses being terminated every year (“firm exit” rate) has recently been increasing. These two trends crossed over in 2008 when the rate of business creation fell below the rate of business termination.

One could try and fine tune the data to their own political views and by blame patterns. However, the bottom line is that over the past 36 years, a time period when Democrats and Republicans controlled Congress and the Presidency at different times, no one in the political class was able to reverse the two negative trends illustrated in this graph.

Their economic incompetence as created a death spiral of business the business failure rate increasing and the business creation rate decreasing, getting us into the position where over 20 million Americans can not find a good job for themselves and their families. 

Einstein once said the definition of insanity was doing the same thing over and over and expecting different results. Our political class has been doing the same lame economic dance for 36 years, raising existing taxes and creating new business taxes, expecting different results but proving Einstein right after all: pure insanity. 

2) All parts of the Federal government are big wasters of taxpayer wealth but the Pentagon has to be one of the biggest black holes of waste. Recall in past posts that we have discussed the fact that government auditors have thrown up their hands trying to get their arms around the wasteful spending in the Pentagon and actually gave up, contending that Pentagon spending is so out of control that it is not possible to even audit and document the waste.

A recent example of how bad and insane Pentagon spending is concerns the production of the Abrams tank, a tank that is only made in one location in Ohio:

• The Army currently has more than 2,300 in active use around the world to serve its needs.
• Unbelievably, it also has another 3,000 in storage that it does not need or use.
• In the most recent budget agreement in Congress, another $181 m illion was authorized to continue production of more tanks that the Army does not need into the next year or so.
• Even those in the actual Army do not want more unused and unneeded tanks: “If we had our choice, we would use that money in a different way,” Gen. Ray Odierno, the Army’s chief of staff, told the Associated Press in April.
• Even the Pentagon’s assessments estimate that holding off on tank production and refurbishment for just three years would save the taxpayers $3 billion.
• But there are Ohio jobs and political careers at stake along with the financial results of General Dynamics who makes the tanks so the combination of corny capitalism and political cowardice in thousands of tanks being produced but never used.

So rather than restore the reductions in military benefit packages that Congress and the White House recently approved, rather than divert some of this wealth back to the taxpayer wallets or some other worthy cause such as job training, feeding the hungry, treating the addicted, housing the homeless, etc., our political class in Washington would rather just continue making unused and unneeded tanks. Pathetic.

3) Now this is a nice racket if you can get it. Unfortunately, you have to be a card carrying member of the Washington political class so god luck with that. Jess Jackson. Jr. was convicted of a number of financial felonies in connection with and his wife’s misuse and abuse of campaign contributions he was sentenced to two and half years in jail for his crimes. Remember those two words: “convicted” and “crimes.”

Despite having no mental problems for his entire life and his seventeen years in Congress, the former Congressman has suddenly developed a “mood disorder,“ allegedly happening as the Feds started closing in and examining his crimes. As a result of this sudden trauma to his odd, he has somehow been approved to receive a whopping $8,700 MONTHLY payment in Federal government disability pay. Remember those words, convicted and crimes, but still eligible to get $8,700 a month of taxpayer wealth for his mental state.

But it gets better. Despite him being “convicted” for his “crimes,” he is somehow still elibigle for an annual Federal pension of $450,000 a year. Thus, between his monthly $8,700 in disability payments and his annual $45,000 Congressional pension, he will be earning almost $150,000 a year despite having been :convicted for felonious “crimes.“ Again, great work if you can get it.

Thus, for doing nothing in the future, he will earn almost as much as if he was still a Congressman ($150,000 in pension and disability vs. a Congressional salary of about $170,000.) Even worse, at $150,000, he will be making about three times as much as what the median U.S. household earns in a year even though the members of that household have to go to a job everyday to get one third of what this convicted politician will earn. It does not get much more insane that this.

4) But it is not just rich Washington politicians that stick it to working Americans and taxpayers. Consider a recent, in-depth analysis done by the Taxpayer Union of America (TUA) relative to the horrid financial condition of the state government of Illinois:

• Just the pension liabilities for government workers in Illinois is an unreal $187 billion.
• This means that every Illinois household would have to write a check for over $35,000 just to pay for the current liability of the Illinois pension system.
• And that $187 billion is the estimate today, but given that the state political class and state government has not put any true reforms into place, that number is highly likely to grow in the coming years.
• The real insult is when you get underneath the $187 billion number and find 11,054 Illinois state pensioners now get more than $100,000 per year in pension payments, twice what the median U.S. household income level is. 
• By the year 2020, number will more than double to 25,000. 
• There are over 78,526 state pensioners receiving annual pension payments over $50,000. The TUA pointed out in their analysis that these robust pensions are funded by taxpayers who get an average Social Security pension of about $15,000.
• Funding those impossible pension liabilities is even more difficult since Illinois has the second highest unemployment rates at 8.4%, the second highest property taxes in the country, and the lowest rating in the country for its general operating bonds, making it difficult to raise more taxes when taxes are already so high and so many citizens are unemployed and contributing nothing to the tax revenue.
• Getting even further down into the TUA analysis on finds that someone named Tapas das Gupta has annual pension of $452,843, about nine times more than what the typical U.S. household earns in a year. 
• His estimated lifetime pension payout of $5,276,384 makes him a millionaire five times over.
• Edward Abraham has an Illinois state annual pension of $439,965, or $9,073,587 in estimated lifetime payouts according to the TUA. 
• Larry K. Fleming retired from Lincolnshire-Prairie View District 103 at the age of 55 and is now receiving $258,163 per year while only paying in $326,507 into the system during his career. In other words, he recoup his payments into the system in less than 16 months of pensions payouts. Disgraceful.

Again, nice work if you can get it as long as you and your union keep supporting the same crooked politicians in office.

Something has to break at some point. You cannot keep rewarding Washington politicians for non-performance and criminal performance and expect no consequences. 

You cannot keep having exorbitant pension payouts to your union supporters and not expect the entire Illinois financial system to crash at some point in time. 

You cannot keep building Army tanks that never get used and which contribute nothing to society except any ever increasing national debt burden without the Federal government eventually crashing under that burden.

And you cannot keep increasing the tax burden on businesses, both existing and new, and expect them to continue creating jobs and economic vitality as they did in the past.

Our politicians are taking us to the edge of a very steep cliff in so many ways and one day, probably sooner than later, we are all or some going over that steep cliff for a nasty fall. That is why we call it insanity, going over a cliff even though we see it ahead of us in so many ways.

To avoid that cliff, please consider joining our term limits effort at:

www.howmuchworsecoulditget.com

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

www.loathemygovernment.com

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

Please visit the following sites for freedom:

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

Budget Cutting For Dummies...And Washington Politicians - Part 2: Government Efficiency

This is a second part of our themed week on how and why the political class needs to reign in its spending as soon as possible to avoid a financial disaster and suggest ways to accomplish the task. Yesterday's post identified anywhere from $100 billion to $140 billion worth annual savings that could be wrung out of government with relatively no pain except for corporate welfare recipients and incumbent politicans' re-election finances.

Today's focus is on making government more efficient, either by doing things better and smarter or just plain eliminating wasteful spending that benefits relatively few Americans. The basis for the following budget cuts is a comprehensive analysis jointly done by Nicole Tichon, Federal Tax And Budget Reform Advocate in the U.S. Public Interest Research Group and Andrew Moylan, Director of Government Affairs, in the National Taxpayers Union. Although I will not review all of their excellent work below, understand that it appears to be relevant, analytically sound, well researched, based on solid, underlying financial and government statistics and best of all, nonpartisan. Their recommendations cross many government functions.

Their work concentrated on four specific areas of government spending that could be reduced significantly or eliminated:

1. Ending Wasteful Subsidies - Budget savings by 2015 = $62 billion
2. Improving Contracting and Asset Acquisition - Budget savings by 2015 = $353 billion
3. Improving Program Execution and Government Operations - Budget savings by 2015 = $77 billion
4. Addressing Outdated Or Ineffective Military Programs - Budget savings by 2015 = $107 billion

Thus, over the next four years, their recommendations could save taxpayers about $600 billion or about $150 billion a year on average. Combine these results with the savings we estimated yesterday from other areas that are not included above and in just two days, we have identified about $250 billion a year in wasteful government spending, or about about $2.5 TRILLION over ten years. Compare these savings with the meager ten year savings of President Obama's budget of $1 TRILLION. And we are not even done yet.

Below are some examples from each of the four categories above that Ms. Tichon and Mr. Moylan identified for savings:

* Ending Wasteful Subsidies

- Terminate the Federal government's Overseas Private Investment Corporation (OPIC) which uses taxpayer money to subsidize the foreign operations of many large multinational corporations via financing and insurance support. This is a blatant form of corporate welfare, let these large corporations support themselves overseas and save the taxpayers $154 million by 2015.

- Eliminate the Market Access Program which uses taxpayer dollars to fund advertising and promotions for private companies that sell agricultural products overseas. Given how well the U.S. farming industry is doing, let these companies fund their own advertising and promotions overseas. Drop this corporate welfare program and save $1 billion by 2015.

- Eliminate insurance subsidies for repeatedly flooded homes through the National Flood Insurance Program. One percent of these policies represent up to 30% of all insurance claims since they are repeatedly damaged by flooding. Eliminate the subsidies for these loser properties and save $891 million by 2015.

- Eliminate the program that subsidizes deepwater natural gas and petroleum research. With oil prices rapidly galloping to over $100 a barrel, eliminate this corporate welfare program and let the oil companies themselves decide whether or not they want to fund the research, saving the taxpayer $258 million by 2015.

- Reduce funding for public timber sales since the Forest Service has spent more on Federal timber sales in recent years than it has collected from the companies that harvest the timber. Save $279 million by 2015.

* Improving Contracting And Asset Acquisition

- If the government implemented the reforms of the bipartisan Defense Acquisition Panel which was passed last year by Congress in an attempt to address Department Of Defense acquisition processes, taxpayer savings by 2015 would be $135 billion.

- A recent audit by the Defense Contract Audit Agency found 32 existing Homeland Security contracts, collectively worth $34.3 billion, that have been plagued by waste, abuse, and/or mismanagement. Eliminate these poorly performing contracts and bank the $34.3 billion.

- The Government Accountability Office (GAO) investigated armed forces purchasing and inventory processes and results and found that our armed forces continually purchase  products that are never used, never required, or are obsolete. Fix these purchasing problems, as identified by the GAO, and save $184.5 billion by 2015.

* Improve Program Execution and Government Operations

- Sell off 25% of the 55,500 buildings that the Federal government owns that are vacant or are underutilized, according to the Office of Management and Budget, netting the taxpayer $24 billion by 2015.

- According to the Congressional Budget Office (CBO), if Medicare better aligned its payments to cover actual costs for its graduate medical education program, the taxpayer would save over $20 billion by 2015.

- According to the GAO, the Federal government wastes large amounts of money through the Housing and Urban Development's programs due to a variety of overpayment errors. If corrected, the government would save more than $4.5 billion by 2015.

- The Troubled Asset Relief Program still has an unspent amount of $15 billion on its books. Given that the banks are much healthier and the economy is much healthier, return that money to the taxpayers and save $15 billion immediately.

- The GAO has investigated and concluded that the National Drug Intelligence Center's functions are  duplicative and its scandals numerous. Terminate the program and save $223 million by 2015.

* End Wasteful or Outdated Military Programs and Systems

- Cancel the production of the overly expensive and under performing V-22 Osprey aircraft and save over $6 billion by 2015.

- According to the Sustainable Defense Task Force, the "F-35 Lightning may represent all that is wrong with our acquisition process." It is overly expensive, has serious cost overrun problems, and "would provide a capability that is not warranted, considering emerging threats." Drop the program and save $22.5 billion by 2015.

- Terminate spending for high risk satellites and replace them with low-cost alternatives since the Defense Department has already determined that ground based radars "not only provide a viable alternative to a space based system but also provide this capability at significantly lower risk and costs." Drop the expensive system, go with the less costly and less risky alternative and bank the $5 billion in savings by 2015.

- Align or right size the nation's nuclear arsenal and save $56.75 billion by 2015.

- Eliminate the outdated, unreliable, and unneeded Expeditionary Fighting Vehicle which even the Secretary of Defense does not need or want. Savings would exceed $16 billion by 2015.

Thus, these judicial and intelligent budget cuts are similar to yesterday's cuts since:

• No animals were killed or harmed in the development of the budget cut list.
• No Americans went hungrier, sicker, or poorer as a result of any of the identified cuts.
• Corporate welfare was cut back, personal welfare or aid to the poor was unaffected.
• Americans' freedom was unaffected but the freedom of politicians to use taxpayer money to fund their re-election campaigns via earmarks, defense contractor and lobbyist donations, and corporate welfare donations was negatively affected.

This is an outstanding piece of analytical work from these two Americans, each of them representing two different views of the world. The U.S. Public Interest Research Group usually comes at the world from a left leaning, Democratic party perspective while the National Taxpayers Union usually comes at the world from a right leaning, Republican party perspective.

However, on this issue they come to the same conclusion: "Our nation faces unprecedented fiscal challenges, as the commitments we've made now and into the future far outpace our fiscal capacity.... It will be critical to reach out across party lines and across ideological persuasions to achieve common-sense reforms that bring us closer to balance."

Now look at their statement relative to the petty actions and petty politics that the Washington political class have engaged in relative to this grave problem. Pretty pathetic performance from our politicians' perspective. It does not appear that they appreciate the "unprecedented fiscal challenges" the nation faces with their meager and petty attempts at budget reform. 

A typical, non-political American found over $100 billion in annual budget cuts yesterday and these two smart people, Ms. Tichon and Mr. Moylan, from two widely different perspectives, have found about $600 billion in budget cuts within just a very small sample of government operations. It is not that difficult... any dummy can do it. Well, most any dummy.

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