Senator Coburn’s office released its 2014 Wastebook. Last year I looked at a few highlight (lowlights) from the 2013 Wastebook. This book includes one hundred outrageous wastes of taxpayer dollars. In a day when even some big-government type politicians are starting to worry about the national debt and deficit (not so low as touted) it is worth finding programs such as this to trim. There are over $25 billion worth of government waste in this years edition. That is slightly down from the $30 billion in last years edition; but it worth noting that many of the programs from last years edition are still going…
Often when talking about government waste I will hear something similar to “well, these government agencies are doing good and are very thrifty with the taxpayers dollars”. Even supposing most government agencies are doing good work for the public (which I doubt with most agencies), it still doesn’t mean these agencies are being thrifty with the taxpayer dollars. Here are some examples from the 2014 Wastebook highlighting how various government agencies are misdirecting taxpayer dollars in a way that is clearly out of alignment with what their mission is.
#15 – US Coast Guard protects the parties of the rich
Faced with budget cuts, the U.S. Coast Guard reduced drug and migrant interdictions while continuing to provide free patrols in the waters along “some of the country’s most exclusive real estate” to stop uninvited guests from crashing private parties.
While taxpayers appreciate the crucial role the Coast Guard serves protecting our nation’s waterways and rescuing nearly 5,000 people a year,255 most are probably unaware its crewmen also serve as bouncers to keep the general public and other uninvited guests out of private events on and along yachts, beaches, and estates.
The Wastebook goes on to tell examples of the Coast Guard being used as basically private security for the rich, all put on the bill of the taxpayers. It is estimated that such protection for rich boaters has cost US Taxpayers over $100,000. Of course since the Coast Guard doesn’t document all of this security work it is hard to tell for sure. And don’t be mistaken, the security work being done is not against terrorists or anyone that wishes to cause harm. Rather the coast guard is making sure that rich boaters are not disturbed by common folk. That doesn’t sound like a good use of Coast Guard resources to me.
#39 – SBA backs Polynesian Resort loan guarantees for Disney
One of the biggest companies in the world, the Walt Disney Company ranked 61st in the Fortune 100 rankings for 2014 – and may not seem like an obvious candidate to benefit from small business assistance.538 It operates nine of the world’s ten most popular amusement parks, which together bring in more than $2 billion in annual profit.539
The Small Business Administration provided a total of $1.4 million in surety bond guarantees to two firms hired by Disney, meaning if they fail to perform the taxpayer will step into make sure Disney is made whole.
I believe most taxpayers would be hard pressed to believe Disney would qualify as a small business. Since the SBA supposedly is there to help small businesses it seems odd they would put $1.5 billion dollars of taxpayer dollars on the line in order to help one of the largest corporations in the world. Of course I personally believe the SBA should be done away with. Recent research shows that the SBA may actually be reducing economic growth within the US. But that is a different debate. Whether the outcomes of the SBA are good or bad, it is hard to discern why the SBA would be so blatantly providing a corporate-welfare type safety-net to one of the world largest corporations.
#75 – Federal dollars spent to promote tax increases in Austin
An extensive, and expensive, rail project for the City of Austin, Texas, is getting some fiscal assistance from Washington. Project Connect, the program management group spearheading transit for the Central Corridor Advisory Group in central Texas, has spent $157,000 on an ad campaign to prop up public support to approve floating a billion dollar bond to help pay for the rail line.9
The catch? Approximately 80% of the ad campaign is being financed with federal grant money, essentially using taxpayer money to encourage taxpayers to pay more taxes. Critics have voiced concerns over the media campaign’s funding sources and questioned want to know how it can be considered appropriate when “Taxpayers are paying money to the federal government, which is then turning around and lobbying Austinites to support more taxpayer spending.” The advertisements ended just before being subjected to provisions on election laws regarding ballot measures
Talk about taxpayer dollars being used against them. In this case federal dollars were used to create a media campaign to raise local taxes for a special interest group. I actually spoke with a friend of mine that lives in Austin. He said the fliers he received during this campaign from Project Connect were outright misleading. Sadly it is typical for political propaganda fliers to be misleading (I’m sure plenty of people received many misleading fliers during the 2014 election); what is troubling though is that taxpayer dollars were used to for a special interest group so they could use the peoples own money to lobby against them.
#88 – The Navy’s green initiative utilizes massive amounts of paper to propagandize itself
Yet for all its efforts to showcase itself as the “Great Green Fleet,”1011 the Navy still mails out 9,500 hard copies of the magazine every quarter, including 535 to each member of Congress, at a cost of an additional $72,000 a year over the $260,000 it takes the staff of four contractors and federal employees to develop the content
This publication, Currents, is little more than a magazine used to promote the Green efforts by the US Navy. Going green is good. What the Navy is doing actually counteracts many of the good green steps they’ve already taken, especially since all issues of Currents are available digital. If the Navy were truly serious about going green they would get rid of this wasteful propaganda program.
It is worth reading the whole 2014 Wastebook to see where taxpayer dollars are going. I believe these few examples I highlighted show some areas that government agencies have used taxpayer dollars in direct conflict to their actual mission. Until such wasteful spending is reduced it is hard to believe that any “revenue enhancements” are ever needed at the federal level.
Over at the Austrian Insider there is a great new Infographic showing the difference between Keynesian Economic and Austrian Economics. As someone studying Austrian Economics I find it helpful to have any means available to compare the two schools of economic theories. Keynesian economists are of course who Democrat and Republican politicians are talking about when they quote economists to get their way. It is hard to find politicians that support Austrian Economics, mostly because it doesn’t reinforce their wish to spend public money any way they wish.
At the end of this infographic there is a great quote from Lord Keynes that has always been my favorite economics quote:
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist
Below is the infographic. This infographic was created by someone who follows Austrian Economics, but I do think the author did a great job of representing both schools of thought properly.
Now I can’t really do a post on Keynesian vs Austrian Economics without also posting these two great rap videos from EconStories. Both videos do a fair job of showing differences between Lord Keynes and FA Hayek.
The Trans-Pacific Partnership (TPP) has become a top issue for me this year. Therefore I took note when Representative Kristi Noem was promoting an article in which she talks about supporting TPP. She is supporting TPP because it could open new trade opportunities for SD. I would contend the risks associated with TPP far outweigh the perceived value that will come from the expanded trade opportunities from TPP.
I first blogged about the topic in March after the SD Legislature passed a resolution promoting TPP. At that time I derided the SD legislature for promoting a treaty that is shrouded in secrecy and would inhibit free speech in the US if passed. Then in April I brought attention to the Obama Administration and a Congressional delegation (including Noem) going to Asia in order to push for the completion of TPP. And finally, in June I attended the SD Ag Summit, where USDA Under Secretary Michael Scuse promoted TPP. So far the little media attention I’ve seen given to TPP appears to be little more than passing on the talking points of politicians such as Noem. Hopefully that will change.
TPP is a complex issue that whole books could be written about. My earlier posts linked above includes some basic info about TPP. But here are a few bullet points explaining briefly why I believe TPP is NOT good for the US, or SD:
- TPP has 29 chapters, very few of which are what most would consider trade related.
- By passing TPP in the US, Congress would basically be allowing US regulations to change based upon what is agreed to in the treaty. Many of these changes would be contradictory to current US laws and regulations.
- The TPP chapter focused on intellectual property (IP) would negatively impact US citizens freedom of speech, right to privacy , and due process.
- Copyright terms in the US would be changed for the worse. An already broken copyright system will become even more restrictive and would provide new fines and jail sentences for minor copyright infringements.
- TPP is being done completely in secret. The only things actually known about TPP have been discovered via leaks.
- When voting on TPP it would have to be signed in a “sign it to see what’s in it” fashion. Did that work out so well for ACA?
In the article Noem promotes, she is said to be promoting TPP because it could open new trade opportunities for South Dakota. Here is an excerpt from the article:
“Of note, China is the largest purchaser of U.S. soybeans, representing about 50 percent of total U.S. soybean exports, and Japan is the largest importer of feed grains and U.S. corn,” Noem said. “They both — along with South Korea — also play key roles in keeping the regional peace, and alongside it economic stability, in an area that is also home to an unpredictable North Korea.”
Noem said that further negotiations on a Transatlantic Trade and Investment Partnership with the European Union could lead to even greater trade opportunities for U.S. agricultural producers.
I agree with Noem. From the research I’ve done on the topic I understand that China, Japan, and South Korea are important trade partners for the US This is especially true for SD agricultural products. But that will continue to be true regardless of whether TPP passes or not. Trade opportunities will continue to exist and expand in the Asian markets. If TPP were simply about trade, then a simple trade agreements could be created. TPP is NOT a simple trade agreement. Just as I did in April, I find it quite troubling that SD’s lone Representative in the House of Representative would be so focused on one special interest (agriculture) that she would support something like TPP. TPP would essentially rewrite US laws and regulations in ways are still not understood. That doesn’t sound like a very conservative stance for a politician to take in an election year (or any year).
I’ll continue to monitor TPP. So far Noem really hasn’t released any statements with any true substance about TPP. That isn’t surprising. Members of Congress are not included in the secretive TPP negotiations. Basically Noem is promoting the idea of expanding agricultural markets without actually looking at all aspects of TPP. Hopefully when it comes time to vote on TPP Noem will remember her job, and not vote for something she hasn’t ready or studied up on…
A couple months ago I noted the new online cartoon series “The Kronies”. This super-powered team of cronies has now added a team-member that will be difficult for any free-market loving individual to defeat: General Surgeon! Here is the introduction video for General Surgeon and the power he wields in the healthcare industry:
Here is the backstory on General Surgeon:
General Surgeon isn’t just the team medic, he’s Big G’s own Doctor Feelgood. Combining Krony powers from every healthcare sector, he’s four Kronies in one! His hermetically sealed helmet glows green with the steady, life-sustaining drip of G-Force. This K-Street veteran has the prescription for catastrophic plans: A federal mandate. General Surgeon’s central plan has you covered…for life!
A warrior, a healer, a crony. During WWII, Colonel Pierce Healy, M.D. was Big G’s private valet. He swiftly rose in the ranks to become head of Veterans Affairs during the Vietnam War, and eventually a key Senatorial vote during the passage of Medicare Part D. For decades he passed through the revolving doors between the Senate Chamber and K-Street, until the day he gave it all for Affordable Care Act…the day he became General Surgeon.
Also don’t miss this new commercial for Kaptain Kornies Cereal:
Actually, this commercial really isn’t so funny after thinking about how true it is….
Last week free-market comedian/musician Remy released a rebuttal to Kristen Bell’s Mary Poppin’s Quits video. The Bell video received quite a few views and has been used to promote minimum wage increases. Below is the rebuttal Remy recorded. He brings up a couple of points rich celebrities like Bell fail to ever take into account: unintended consequences and voluntary exchange. Enjoy the video:
A huge political talking point used by both sides of the aisle in recent years is corporate inversions. Corporate inversion (also known as corporate tax inversions) occur when a company relocates its headquarters into a country that has dramatically lower tax rates than the companies country of origin. The companies that do this generally are competing in the global market. Being headquartered in a country with a much higher tax rate gives companies a serious disadvantage in the market. If the US is serious about reducing the amount of corporations going to other countries then something needs to be done about the corporate tax rate.
I know what some people will say: “but corporations aren’t paying their fair share”. KMPG has provided a nice table showing the corporate tax rates between 2006 and 2014 of 134 countries and average rates for regions. In this table the United States has the second highest corporate tax rate with 40%. The only country higher is the United Arab Emirates (UAE); but it should be noted the 55% tax rate in the UAE only applies to Oil Companies. Ireland is a country many US companies have chosen when deciding to go overseas. In Ireland the corporate tax rate is 12.5%. That is a huge drop from 40% that US headquartered companies must be crippled with.
Looking at this chart comparing the United States corporate income tax rates to other regions shows how disadvantaged our businesses are in the global market. Even in North America the US is at a disadvantage. Canada has a corporate tax rate of 26.5% and Mexico has a corporate tax rate of 30%. In the global market the US can’t even be competitive with its two neighbors.
Another talking point brought up often is “all of these corporations get special tax breaks, so they really aren’t paying their fair share”. I would agree with that statement. Personally I would rather get rid of all corporate taxes… but since that isn’t likely to happen anytime soon I think the corporate tax should be flattened. The current corporate income tax system in the US is nothing but income redistribution done at the corporate level. Republican and Democrat politicians have worked for decades to get special tax deductions and tax credits for their favored businesses or industries. That has made it hard for small businesses, which are disadvantaged with paying the full 40% while their large competitors have bought tax breaks in DC. The same disadvantage that US companies have on the global level is shared by corporations within the US if they are not connected to DC politicians.
If the US is serious about ending corporate inversion the current tax rates must be lowered. Unfortunately that isn’t likely to happen any time soon. Too many people think corporations aren’t taxed enough and too many politicians have been bought by big business to provide special tax breaks. In such an environment it is unlikely anyone will look at the obvious answer: cut corporate taxes to a flat rate with no special deductions.
If you haven’t heard of Bitcoin yet, the chances you will as time goes on. Bitcoin is currently the most popular alternative to regular bill-and-coin money. Almost every day now it seems more companies are offering to use bitcoin as an option in financial transactions. On this site I won’t get into the details behind Bitcoin, there are many great websites dedicated to that purpose. Instead I would like to mention where the greatest source of resistance to Bitcoin will be coming from: banks!
Banks make a lot of money charging for fees and penalties. One of the many advantages to bitcoin is the lack of hidden fees. What fees do exist are so small they are almost negligible compared to what a bank charges. For example the average credit card merchant account will charge around 3% to a retailer for the convenience of accepting credit cards. The same transaction via bitcoin will have a minuscule fee (or no fee at all). It really depends on the miner (but that is a different topic). The point is the banking industry will lose billions of dollars if consumers choose alternatives such as cryptocurrencies. For those looking to fight against the big-money crony-capitalists on Wall Street there is no better means than via Bitcoin.
I would urge everyone to veiw the infographic below to see why the banking industry might be afraid of the new cryptocurrencies (especially Bitcoin). The infographic was provided by the Visual Capitalist and does a good job highlighting why the banking, insruance, credit card, and other financial industries are afraid of people switching away from bill-and-coin money.
PS. I accept tips via Bitcoin on the right hand side of my site. I also accept tips via Paypal for those not yet ready for cryptocurrency.