Rx: How to start fixing the IRS …

OK, here’s my diagnosis – the Dx — and my short-term prescription – the Rx.

First, the Dx …

Of course, the Tea Party and other conservative groups were targeted for political purposes.

Any claim of “efficiency procedures” or “inadvertent error” are simply ridiculous.

Of course,  folks high up the food chain were involved … setting the broad mission (with Mob-like deniability) — “punish your enemies” –- and condoning the actions by failing to stop them them when they became well known.

So, what to do?

Here is how I’d get started righting the ship … the Rx:

Nums: Will the scandal hurt the IRS’s image?

Trick question since the public’s perception of the IRS is already pretty low

According to A Pew survey, the Internal Revenue Service, now under intense scrutiny for singling out conservative groups,  is one of the least-popular federal agencies.

Specifically. the IRS ranks 11th out of 14 agencies (the 13 listed below plus the Homeland Security Department) in terms of public perception of their performance.

Only 47% of people surveyed said they had a “very” or “mostly” favorable opinion of the IRS.

Hmmm.

That pesky 47% number.

 

I guess that folks who don’t pay income taxes think that the IRS lightening everybody else’s wallets is way cool.

The IRS is the second-lowest among the 13 agencies people were asked about.

The only agencies ranking lower were Eric Holder’s Justice Department (38% excellent or good), the Social Security Administration (36%) and Arne Duncan’s Education Department (33%).

* * * * *
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Vanguard CEO: “Uncertainty the enemy of the economy” … I disagree”

In a WSJ editorial today, Vanguard CEO Bill McNabb says that …

Americans who seek to earn a living and save for the future are confused and discouraged.

Concerns of investors are asking: How does this affect my retirement fund? What about my college savings account? How does this affect my taxes? Would I be better off putting my savings under the mattress?

Firms can’t see a clear road to economic recovery ahead, so they’re not going to hire and they’re not going to spend.

It’s what economists call a “deadweight loss“.

He points to economic research that indicates U.S. economic policy uncertainty has been 50% higher in the past two years than it has been since 1985.

Source: PolicyUncertainty.com 

The uncertainty revolves around regulatory policy, monetary policy, foreign policy and, most significantly, uncertainty about U.S. fiscal policy and the national debt.

Vanguard estimates that the rise in policy uncertainty has created a $261 billion cumulative drag on the economy … which adds up to more than one million jobs that we could have had by now, but don’t.

Mr. McNabb makes a strong argument.

But, I respectfully disagree.

An IRS agent, an FBI agent and a gardener ….

No, this isn’t the lead line of a bad joke.

It’s a question of priorities.

Let’s start with the gardener …

Before you cut the football team, band, honors classes and hot lunches …. consider these places to cut government spending

According to an IBD recap …

The Government Accountability Office’s latest annual report on government waste and duplication found 31 areas in the government that overlap, duplicate efforts or are egregiously inefficient.

That’s on top of the 131 found in its previous two annual reports …. the vast majority of which have been totally ignored by Obama’s crack team of budget-cutters.

Sen. Tom Coburn (R-Okla.), who pushed for this report, figures the latest examples alone add up to $95 billion — more than the spending cuts under this year’s “sequester.”

Here are some of head-scratchers that the GAO found …

Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

Since yesterday was tax day, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

Taxes: Did you hear me screaming yesterday?

Timing is everything, right?

Yesterday, like many – err, make that some Americans, I was putting the finishing touches on my 2012 tax returns (which are due in a couple of days).

Like some – err, make that a few Americans, I have to pay income taxes.

Yesterday morning I swallowed hard and wrote out the check … the big check.

Lots of money … at least half of it will be out-and-out wasted by a cost-bloated government machine,

Most of the rest will be spent on stuff that I don’t agree with or support.

OK, it’s still my civic duty, right?

Tried to put taxes out of my mind.

Then, President Obama unveils his new budget.

The chart below tells the story.

Lots of taxes and some phony “savings” against grossly escalating budgets.

Source

Bottom line: those who already paying all the taxes should pay even more …

Couldn’t the President at least had the courtesy of waiting for the ink to dry on my check before calling me out as a piker and saying I wasn’t paying my fair share.

Gimme a break, man.

You’re making ME want to stop working …

* * * * *
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Barack Obama, Derek Bell … and “Operation Shutdown”

Last Saturday, my son forwarded a friend’s Tweet to me:

Hmmm.

Started me thinking … Sequester announced on Friday … slow down on Saturday … coincidence?

Then, Obama announces that he’s shutting down White House tours because of the Sequester – the Presidential version of taking his bat & ball and going home.

Wait a second: I’ve seen this play before … bat & ball, Operation Shutdown.

Of course.

It’s the Derek Bell story.

The year was 2002.

WaPo: Public SUPPORTS the Sequester’s budget cuts almost 2-to-1 …

Hot off the wire …

Despite the Administration’s dire warnings, the release of jailed  criminal immigrants and the slower-than-usual TSA checks …

The  Washington Post is reporting survey results indicating that 61% of folks support the Sequester’s budget cuts overall … though 60% oppose the cuts to military spending.

Said differently, folks overwhelmingly support the non-military donestic spending cuts.

That’s huge!

* * * * *
Here are some interesting details …

It’s snowing in DC … “non-essentials” need not report.

It’s snowing in DC today … err, kinda.

Not much on the ground … temp is 34 degrees … roads are clear … but those AccuWeaterher folks are saying more snow is coming.

Good enough for the Feds … to shut the government down.

Archive phote … not from today!

* * * * *
Just heard my absolute favorite public service message on TV:

Due the inclement weather, non-essential Federal government workers do not have to report for work today.

Maybe the Feds can use the snow storm to solve the Sequester bruhaha … here’s how.

Hey Arne: Which Federal government agency is rated lowest?

Last week, Secretary of Education Arne Duncan was racking up Pinocchios, trying to whip up some Sequester hysteria.

He said that the world will end if the Fed’s Ed budget is cut by 2% … 40,000 will lose their jobs.

Hmmm.

His analysis was quickly debunked but, for me,  it prompted a fundamental question: how is the Dept. of Education doing?

Today, let’s look at perceptions.

Bottom line:  folks – you know, taxpayers – the Ed Dept’s  “customers” –  rate the Dept. of Education the lowest among Federal Agencies … and the agency with the sharpest decline.

A Pew Research poll reports that …

Despite spending hundreds of billions of dollars over the past couple of decades, the Department of Education gets the fewest favorability nods for Americans … only 40% give it a favorable rating … and its favorability rating is falling faster than any other agency.

The Education Dept’s low ratings aren’t that surprising since the U.S. is constantly reported to be trailing other developed nations in math, science and other basic skills … and since every politician lasers in on our need to fix public education (while protecting the sanctity of the teachers’ unions).

Want more analysis?

Kerry threatens 6,000 teachers’ jobs … Where’s the outrage?

Last week, Secretary of Education Arne Duncan was shrilling on behalf of the Chicken Little crowd that because of the Sequester  40,000 teachers would lose their jobs.

His claim was quickly debunked, but he left a lasting impression .. on me, at least.

“Dollars” don’t have emotional impact any more.

So, let’s start thinking in terms of full-time teacher equivalents (FTTEs).

Duncan got his estimate by assuming that an average teacher makes $70,000.

Maybe in Chicago they do.

But, according to PayScale.com the national average  is in the mid-40s.

Let’s do a hard round for arithmetic convenience and call it $50,000.

Here’s what Kerry did, evaluated using the new metric full-time teacher equivalents (FTTEs) …

Obama was wrong, Annie was right … case closed!

Yesterday, while the President was ringing Sequester Armageddon alarm bells, Annie was  pitching calm and confidence.

The sun’ll come out tomorrow
Bet your bottom dollar that tomorrow there’ll be sun
Just thinkin’ about tomorrow
Clears away the cobwebs and the sorrow till there’s none

When I’m stuck with a day that’s gray and lonely
I just stick out my chin and grin and say

The sun’ll come out tomorrow
So you got to hang on till tomorrow, came what may!

* * * * *
If you need an upper today …

click to listen … it’ll make you feel better, for sure.

I say, Annie for President !
* * * * *
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OMG: Sequester puts the football season is at risk …

OK, here’s the silliness of the day ….

The fiscal pin prick (aka, the “Catastrophic Sequester”) puts this fall’s college football season at risk …  at least for the National Champions — the University of Alabama.

Apparently, the only thing that can possibly be cut from the FAA budget are the air traffic controllers at the Tuscaloosa, Alabama airport on Crimson Tide football weekends.

According to Channel 42 WIAT News:

Looming budget cuts from the Federal Aviation Administration could have an impact on the next college football season.

Budget cuts could include eliminating local air traffic controllers at the Tuscaloosa Regional Airport.

We’re told that the airport wouldn’t shut down, but pilots would fly in and out using “visual flight rules” and Birmingham’s air traffic system.

Hundreds of flights come in and out of the Tuscaloosa  Airport during the football season.

This development is mind-blowing for a couple of reasons …

Fugetaboutit: Maybe 40,000 teachers won’t lose their jobs …

Arne Duncan – Secretary of Education – has been the  one Obama cabinet member who seemed competent to most people.

Then, he jumped on Obama’s Sequester Armageddon train, claiming that:

• 40,000 teachers were going to lose their jobs, and
• School districts had already started laying off teachers because of the Sequester

Oops.

That earned the dude 4 Pinocchios from the Washington Post for “Significant factual errors and/or obvious contradictions.”

Here’s the real story …

According to the Post’s factchecker …

Regarding the 40,000 jobs:

An aide to Duncan described it as a “rough back-of-the-envelope calculation,” derived by dividing the average pay and benefits of a teacher — $70,000 — by the amount — $2.8 billion — that needed to be cut in education programs.

But, school districts and states may find many ways to juggle funds or reduce expenses to avoid losing many teachers, which is what has happened during previous periods of financial stress.

Keep in mind that local taxes (i.e. real estate taxes) fund about 90% of teachers. … and, remember that most districts are now bloated with administrators feeding the Federal bear with paper.

Regarding the layoffs already occurring:

The Education Department for days was unable to cough up the name of a single school district where these notices had been delivered.

Then, Duncan appeared before the White House press corps and produced a name — Kanawha County in West Virginia.

But, no one in the county seemed to know what Duncan was talking about, including the education reporters who cover the school district for the Charleston, W.V., newspapers.

“There’s very little sequestration-related panic, at least on the education side of things,” one reporter said.

Our colleague Lyndsey Layton helped unravel the mystery.

She discovered that these were not layoffs, but rather “transfer notices” sent to 104 Title I teachers for reasons unrelated to the sequestration cuts.

In other words, Duncan was peddling a made-up story.

Good luck rebuilding your cred, Arne.

* * * * *
Follow on Twitter @KenHoma             >> Latest Posts

Ready to Rumble: Woodward vs. Obama (and the rest of the media) …

Perhaps, the first break in the mass media ranks.

In a Washington Post blog post, famous journalist Bob Woodward:

• Repeated his claim that the Sequester idea came from Obama and his sidekick Jack Lew
• Declared that Obama is now constantly moving the Sequester’s goalposts

Well, that didn’t sit well with the White House.

Woodward told CNN that a “very senior person” at the White House warned him in an email that he would “regret doing this,”

Uh-oh.

Woodward countered on MSNBC, calling Obama’s hysterical Sequester claims “…  a kind of madness that I haven’t seen in a long time.“

click to view

I don’t think this bruhaha is over.

Team O isn’t attacking Rush or Hannity … they’re shooting at a journalistic institution.

This one will be fun to watch.

* * * * *
Want to read the transcript?

WARNING: Graphic image of a catastrophe …

With only a day or two until Armageddon

… until life as we know it ends

… or until, at least, the sky falls

… let’s put the Sequester in perspective.

This single graphic says more than a thousand words … or, in Obama’s case, a couple of thousand words,

Source

Please, sleep well tonight … I think the Nation can absorb this fiscal pin prick.

Thanks to MC for feeding the lead.

* * * * *
Follow on Twitter @KenHoma               >> Latest Posts

Want to know the difference between the private sector and the government?

Today, a couple of big Wall Street firms announced another round of cuts:

• Citigroup plans to slash 11,000 jobs and close branches worldwide as part of a broad restructuring effort it hopes will save about $1.1 billion in expenses,
• JPMorgan Chase became the latest Wall Street firm to scale back in an uncertain economy, announcing plans Tuesday to save $1 billion through various costs cuts and about 4,000 job reductions.
• Goldman – which has already let 3,300 employees go worldwide in the past two years – announced another round of layoffs to cut costs by a cool billion dollars

OK, so 3 companies are cutting over $3 billion in expense.

No gnashing of teeth ,,, no “the sky is falling”

Just “times are tough … we’ve gotta do it.”

No so on the Sequester front … apparently the torch has officially been passed from the 12-21-12 Doomsday crowd to Team Obama …

Today was another day of .hysteria  … and silly rhetoric.

Allegedly, Obama said that – because of the Sequester – an already closed agency would have to be shuttered.

Say, what?

And, here’s the gem of the day …

Ouch: Sequestration gets personal …

The band, the football team, the honors program, hot lunches … and the Blue Angels.

Every year, a friend holds a BBQ at their home on Annapolis’ Severn River on the Naval Academy’s graduation day.

Why?

Because the Blue Angels put on an awesome show as part of the graduation ceremony.

Well, maybe not this year.

According to the Baltimore Business Journal:  Blue Angels shows in Annapolis, Ocean City are jeopardized by sequestration.

I’m bummed … and a bit perplexed by the accounting.

The Feds claim the Navy will save $28 million.

Other than the fuel that the Angels burn, where’s the cost savings.

They’re not going to fire jettison the pilots or sell the planes, right?

Sounds like the Feds need a crash course on marginal accounting.

Thanks to SMH for feeding the bad news.

* * * * *
Follow on Twitter @KenHoma                         >> Latest Posts

Answer to Sequestration: pray for snow !

The news broadcasts today are talking a lot about Sequestration and Snowstorm Q.

Let’s connect those dots …

Football, band, honors classes, hot lunches … and dead cows … say, what?

This is getting downright silly.

Sequestration will cut less than 3% of Federal spending … about the amount that was granted to Hurricane Sandy states in the whisk of a pen.

Still, President Obama had to broadcast dire consequences in front of a group of firemen … who will have to be laid off, probably causing small children to die in fires.

Give me a break.

We covered this topic earlier this week Football, band, honors classes and hot lunches … here we go again.

Apparently, the folks at Business Insider didn’t read the post.

Evidence?

An article titled “11 Ways The Sequestration Will Ravage The US Government“ … replete with an alarming picture of dead cows.

Technical note: It’s no clear o me how the sequestration will do the cows in.

Also, it’s not clear to me that the cows aren’t just taking a snooze.

What are the 11 Ways The Sequestration Will Ravage The US Government? 

Football, band, honors classes and hot lunches … here we go again.

When I was a kid, the local school board would biennially warn that football, the band, the honors program and hot lunches would be cut unless a levy was passed to boost real estate taxes.

I remember that – even as a kid – it sounded like a bunch of bull.

Sometimes the levies passed. Sometimes they didn’t.

Regardless of the vote, the stadium lights still glowed bright on Friday nights, the smart kids still got their honors courses, and the cafeteria kept serving up hot slop.

Today’s equivalent of football, band, honors and lunches is Obama’s dire warning that there will be dire consequences if sequestration happens.

Just for openers, the White House says it has no choice but to put the following on the chopping block:

Getting financial houses in order … and not.

Here are a couple of charts that put things in perspective

Ask yourself: Which one doesn’t isn’t like the others?

* * * * *
Consumers have been deleveraging.

The ratio of mortgage debt to disposable income has retreated by 20 percentage points and continues to fall.

* * * * *
More broadly, the percentage of disposable income servicing household debt is at a historic low …

Oink: Porking deficit reduction … say,what?

Nice recap  in the WSJ today outing the pork that was sausaged into the deficit-adding Fiscal Cliff Bill:

Here’s a sampling:

• Michigan Democrat Debbie Stabenow was able to retain an accelerated tax write-off for owners of Nascar tracks (cost: $78 million
• New Mexico’s Jeff Bingaman saved a tax credit for companies operating in American Samoa ($62 million), including a StarKist factory.
• Distillers are able to drink to a $222 million rum tax rebate.
• Businesses located on Indian reservations will receive $222 million in accelerated depreciation.

The WSJ gave special recognition to Chris Dodd, the former Senator who lobbied for Hollywood’s movie studios … getting a provision that allows film and television producers to expense the first $15 million of production costs incurred in the United States … this Hollywood special will cost the Treasury $430 million in 2013 and 2014.

Consumers will get tax credits for buying plug-in motorcycles ($7 million).

Do the jabrones in Washington have no shame?

You can’t reduce the debt by adding to the deficit.

It’s that simple guys.

* * * * *
Follow on Twitter @KenHoma       >> Latest Posts

Sweetheart deal: Board member gets a premium priced buyback

In the private sector, this would be be grounds for a perp-walk.

But, not in government world, I guess.

The headline: GM to Buy Back Stock From Treasury

The story:

General Motors (aka. Government Motors) announced that it will purchase 200 million shares of stock held by the U.S. Treasury Department.

The auto maker will pay $5.5 billion for the shares.

The repurchase price of $27.50 a share represents a 7.9% premium over the closing price on Dec. 18.

After the repurchase, the U.S. Treasury will continue to own approximately 300 million shares of GM common stock, or approximately 19% of the outstanding shares on a fully-diluted basis.

GM expects to take a charge of approximately $400 million in the fourth quarter, which will be treated as a special item.

OK, let work through the pieces …

Even at the inflated price, since the Feds bought i at the $33 IPO   taxpayers will incur a trading loss of $5.50 per share … totaling to $1.1 billion.

GM’s largesse in premium pricing the deal “saved” taxpayers about $400 million.

Keep in mind, this is hardly an arm’s length transaction.

And, we the people still own 300 million shares … representing a paper loss of another $2 billion.

Gentlemen start your engines …

* * * * *
Follow on Twitter @KenHoma             >> Latest Posts

Reality: The end of “cake & eat it”

Why the DC gridlock re: taxes & spending?

First, while Obama won a relatively slim majority of the countrywide macro vote … the GOP won a majority of the district-by-district micro vote.

In other words, the whole doesn’t equal the sum of the parts.

Further, as argued by Jay Cost in an Insightful Weekly Standard piece, people don’t really grasp the perilous financial situation the US is in … in part, because past economic growth rates have insulated folks from the hard choice of higher taxes or lower spending.

They’ve been able to have their cake … and eat it, too.

Here’s the essence of Cost’s argument:

The election in a nutshell … maybe jobs don’t matter as much any more!

There’s a sobering,  must read editorial in the WSJ today … Can Government Benefits Turn an Election?

Here are key points …

The federal government’s 120 means-tested programs today provide $1 trillion of benefits.

• Unemployment insurance has stretched to 99 weeks
• Record numbers of unemployed have qualified for disability benefits
• Food stamps recipients have increase 40% to almost 50 million

The spending for these programs has grown 2½ times faster during the Obama presidency than in any other comparable period in American history.

To what extent might these benefits not just foster dependency but also make the economy’s performance seem less of a deciding factor in voters’ choices?

If you are concerned about your well-being and worried about a failed recovery — but getting new help from the government— do you vote for the candidate who promises more jobs or do you support the candidate who promises more government benefits?

Voters have historically set high standards and voted out incumbents not because they personally disliked them.

Rather, they’ve elected a new president because they understood the importance of a strong economy to their jobs, their income and the future prospects of their children.

Based on the economy, Mr. Obama should lose on Nov. 6. Yet it seems implausible that tens of millions of Americans who have received additional government benefits during his presidency can be completely unaffected by that largess. The election will test the relative power of private-sector aspirations and public-sector dependence.

Based on the economy, Mr. Obama should lose on Nov. 6.

Yet it seems implausible that tens of millions of Americans who have received additional government benefits during his presidency can be completely unaffected by that largess.

The election will test the relative power of private-sector aspirations and public-sector dependence.

Keep in mind that most jobs being created are relatively low paying service sector jobs … an increasing number of which are part-time … in part of duck Fed regulations and taxes (think, ObamaCare).

To get a visceral sense of the electoral “tension”, read Threats to Assassinate Romney Explode After Debate.

And, consider that an increasing number of folks feel that they are paying their fair  share (or more) with the government wasting much or most of the taxes it takes in …   what if those folks decide it’s not worth 60 hour weeks any more any more and shift into neutral?

This year’s election won’t be the end of the process … regardless of the outcome.

>> Latest Posts

Just in time for tonite’s debate … battery maker A123 files for bankruptcy.

Hot off the wires from Bloomberg …

A123 Systems –  the electric car battery maker that received a $249 million federal grant –  filed for bankruptcy protection after failing to make a debt payment that was due yesterday.

There is “no assurance” that A123 will be able to find a way to continue to operate its business as a going concern, the company said.

For those keeping score,  Solyndra left taxpayers holding a  $535 million loan guarantee granted by the U.S. Energy Department.

Dennis Miller: “Just quit !”

Dennis Miller – comedian & political commentator – does a regular Wednesday nite segment on O’Reilly.

This Wednesday, he was unusually provocative by commenting:

If you’ve got a family of 4 and you’re busting your hump 40 or 60 hours a week – maybe 2 jobs — to make $45 grand and make ends meet … if Obama gets re-elected, just quit. 

Kick back … take the handouts and enjoy life. 

You can make just as much just sitting around …

If you don’t, those who are just  riding the train will be laughing at you. 

Why keep hitting your head against the wall?

Paraphrased from O’Reilly 9-26-12

Struck me at the time as akin to Rick Santelli’s “We need a Tea Party” rant on CNBC.

O’Reilly tried to soften the blow by bloviating (his word) about the American work ethic and how “most Americans have too much pride to stop working … that being on the dole has a stigma attached to it”

O’Reilly’s words seemed quite hollow in comparison to Miller’s.

And, reminded me of the government government promotional campaign to counter the “pride and other beliefs” that keep people from signing up for the SNAP program and getting food stamps.

The USDA has adopted a range of strategies and programs designed to bring more people to SNAP, including taking on “pride.”

Local assistance offices have been rewarded for “counteracting” pride and pushing more people to sign up for benefits.

The Ashe County Department of Social Services in Jefferson, N.C., for example, received a “Gold” award for confronting “mountain pride” and increasing food stamp participation.

“Eventually, many accepted assistance from the Low Income Energy Assistance Program, the Qualified Medicare Beneficiary program, and others, in some cases doubling a household’s net income. In 1 year, SNAP participation increased over 10 percent.”

Overcoming “beliefs” is a stated method from the USDA to bring more people to the program.

A “Supplemental Nutrition Assistance Program (SNAP) Community Outreach Partner Toolkit” details the importance of reaching people who … have beliefs that conflict with accepting food stamps.

Excerpted from the Daily Caller

Since the USDA has “mountain pride” in the win column, will “work pride” be the next to fall?

I think Miller is onto something.

>> Latest Posts

Which Federal government agency is rated lowest?

Answer: the Department of Education

As Nick Cannon would say on AGT, “America has voted … via a Pew Research poll.

Despite spending hundreds of billions of dollars over the past couple of decades*, the Department of Education gets the fewest favorability nods for Americans …  only 40% give it a favorable rating … and its favorability rating is falling faster than any other agency.

The Education Dept’s low ratings aren’t that surprising since the U.S. is constantly reported to be trailing other developed nations in math, science and other basic skills … and since every politician lasers in on our need to fix public education (while protecting the sanctity of the teachers’ unions).

Second lowest is the IRS … also not surprising given its adversarial role versus citizens …  imagine the IRS rating once the 15,000 new agents start enforcing the ObamaCare mandates on companies and individuals.

I was surprised to see the low rating for the Social Security Administration … especially since its primary mission is handing out money.  Best hypothesis I can conjure is that the SSA is generally regarded as a hassle to deal with, and probably gets the brunt of ill-feelings when folks can’t make ends meet when on Social Security.

Initially, I was most surprised to see the comparatively high score for the oft-maligned Post Office … with an 89% favorability score, it’s 10 points higher than #3 – the Center for Disease Control.

Come to think of it, the Post Office hasn’t disappointed me often – especially given the number of transactions it handles.  In fact, our local Post Office and our neighborhood mail carrier provide really good service.  I guess that happens when people are customers not captives, and when there is some private enterprise competitors keeping the system somewhat on its toes.

* Source re: Dept. of Education Spending

>> Latest Posts

Is the Federal government a good value?

A Kaiser Foundation survey asked folks:

Thinking about all that the Federal government does for you, do you think that you get more or less value than what you pay in taxes?

The results

• Less than 10% said that they got more value than what they paid in taxes.
• About 1/3 thought they got about the right value for taxes paid
• More than half of the respondents said that they got less value than what they paid in taxes.

Of course, the last finding is most interesting since it’s a majority … and since about half of the folks don’t pay any income taxes.

Hmmm

* * * * * *

Source question

>> Latest Posts

What’s the government’s GPA?

A Kaiser Foundation survey asked folks to grade the government on a traditional A to F grading scale.

Back in 2000, the government scored a “gentleman’s C” … GPA = 2.07.

In the past decade, the GPA has dropped to 1.63 … a C-minus / D-plus.

Hmmm.

Isn’t that probationary at most b-schools?

 

 

Source question

>> Latest Posts

Great moments in science …

No, not confirmation of the so-called “god particle” … I’m talking about the NOAA’s refutation of the existence of mermaids.

According to the LA Times …

There’s no evidence mermaids exist, and most people above the age of 6 probably realize it

To put the matter to rest, the National Oceanic and Atmospheric Administration has announced  that there is no evidence that mermaids are real.

“The belief in mermaids may have arisen at the very dawn of our species,” the post explains. “Magical female figures first appear in cave paintings in the late Paleolithic (Stone Age) period some 30,000 years ago, when modern humans gained dominion over the land and, presumably, began to sail the seas. Half-human creatures, called chimeras, also abound in mythology…. But are mermaids real? No evidence of aquatic humanoids has ever been found.”

Perhaps the most surprising aspect of this revelation is why NOAA, a U.S. scientific agency, would want to weigh in on these mythical creatures any more than they’d want to expound on the potential atmospheric perturbations caused by Santa Claus’ countless Christmas Eve flights around the globe.

Our tax dollars at work.

I guess this is one item that President Obama missed when he scoured the budget line-by-line to eliminate fraud and waste …

>> Latest Posts

IRS: “Your mail is very important to us” … well, not really.

According to Business Week:

• One in three people who call the IRS don’t get their calls answered
• 10% of all mail sent to the IRS sits for at least 2 months before processing starts
• Less than half of all people who write to the IRS get replies in less than 6 weeks 
• 10% of all mail sent by the IRS never reaches the intended recipient.

Yipes !

>> Latest Posts

Presidential “piggybacking” … your tax dollars at work (but only if you pay taxes)

In an earlier post “Government Gone Wild?”, I said:

If the President takes day trips on Air Force One to campaign, why shouldn’t GSA folks take day trips to Hawaii for ribbon cuttings?

A loyal, left-leaning reader (maybe now a former left-leaning reader) challenged the Homa Files fact-checkers as “just plain wrong” since:

The campaign reimburses the federal gov’t for the usage of Air Force One and costs associated with protection of the POTUS directly related to campaigning.

My immediate reply:

There is partial reimbursement …. the campaign pays for “incremental costs not related to official business” …. it’s not prorated …. when he gives a 30 minute Buffett Rule speech and does 3 hour long fund-raisers, the campaign doesn’t pay for 75% (or 85%) of the cost of the trip.

Just to sure, we doubled back on the facts.

Landed on a point-on article by ever right-wing ABC: Presidential Piggybacking: Obama Trips Combine Official, Political Business

The act of presidential piggybacking — coupling official duties, in this case a speech on the economy, with political fundraising — was not pioneered by Obama but is prominently on display this year.

The president’s jet-setting has raised the curiosity and questions from taxpayers about who bears the sky-high costs.

Official presidential travel has traditionally been paid for by taxpayers as part of executive branch operations, while political trips and events are to be covered by a candidate’s campaign committee.

On the occasions that they mix, the costs are to be split.

“Most presidents have doubled up on trips and said they followed the law, which is a complex formula no one really understands. At the end of the day the Federal Election Commission has not been abundantly clear about how the costs of mixed purpose travel should be paid for”

As a rule of thumb, an incumbent president’s campaign is expected to reimburse the government the cost of a first class commercial airline ticket for each person riding Air Force One to or from a political event.

But the amount doesn’t come close to covering the proportional operating cost of Air Force One, or the army of Secret Service agents, White House advance teams, the fleet of Air Force cargo planes transporting the presidential motorcade or the helicopters that often ferry the president from an airport to a remote site.

Air Force One alone cost $179,750 per flight hour in fiscal year 2012.

That figure includes fuel, flight consumables, depot level repairs, aircraft overhaul and engine overhaul. Pilot and airmen salaries are not included because they are paid regardless of the plane’s use.

On a recent three-day, three-state swing that included two official events and eight fundraisers, netting more than $8 million, incurred flight costs alone of $2.1 million, based on the Air Force figure and flight times gathered from press pool reports.

The Obama campaign has reimbursed more than $1.5 million for travel so far this election cycle, according to FEC records.

Read that last paragraph carefully.

80% of the “stops” of the cited trip were campaign-related.

And, just the cost of AF One were over $2 million.

So, you’d expect that the Obama Campaign would have picked up at least $1.6 million of the costs — just for AF one, just on this one trip.

But, according to ABC, the Campaign has only picked up $1.5 million in total, for the entire campaign cycle so far.

C’mon man.

I say to the GSA guys: Go cut some ribbons” … Why not?.

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MoFoFree: Cell phones update …

Punch line: Wireless operators like Sprint Nextel are building a big business providing free cellular service to the poor. Taxpayers pick up the tab.

Ouch

* * * * *

Last year, we blogged about the Feds free cellphone service to low income folks.

You see, chatting and texting is an entitlement that tax payers are morally required to subsidize.

Say, what?

The program started with good intentions: to provide every low income household with a landline for emergency use.  No long distance.  No special service.  Just local calls and 911.

No problem.

Well, then landlines became “so yesterday” and the program morphed to cell phones

And, guess what?

Demand is exploding.

According to Business Week:

Companies like Sprint Nextel aren’t driven by altruism.

Serving cash-pinched customers  can pay off due to federal government subsidies.

And finding new customers isn’t hard.

Now the poor or unemployed form a large pool of would-be customers.

With unemployment at 9.4 percent and one in six Americans living in poverty, Sprint and  TracFone have seen an explosion in sign-ups for the government-subsidized free wireless services. 

Applicants have to be eligible for Medicaid or several other low-income assistance programs, have a family income significantly below the local poverty level (poverty guidelines vary by state), or receive food stamps.

In October, 43.2 million received such food assistance, up 14.7 percent from a year earlier.

Despite the rules, it’s reported to be  pretty easy to get one of these phones – or to get several of them.  Think “no doc” mortgages with fewer controls.

One reported scam is for qualified people to sign up, sell their phones on eBay, and then go back to the government  trough for another phone.

But, not to worry.

Also according to Business Week: “A staffer at the Federal Communications Commission, which oversees carriers, says the agency may consider tightening oversight and cost management of the fast-growing program.”

That’s a relief, for sure.

And, oh yeah … under consideration is extending the program to broadband service.

Gimme a break already.

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With junk mail & gov’t checks being the pillars of their business, what’s the USPS to do ?

Talk about being at the end of the product-life-cycle … how would you like to be the dude running the US Postal Service?

The vast majority of the stuff still handled by USPS is made up of catalogues, junk mail ads, unwanted solicitations and, oh yeah, government checks.

In a few years, all that will be left will be government checks.

Hard to make a living off them.

Unless, of course, Team O gets re-upped for a 2nd term.

Excerpted from WSJ: Junking the Junk Mail Office

Email and Fedex already take care of serious delivery business. Why subsidize catalogue carriers?.

The United States Postal Service (USPS) lost $9 billion last year.

The rapid growth of email, online bill paying and the like has reduced the volume of first class mail by 22% since 2006, cutting into the government’s monopoly.

An inexorable decline is underway. The lesson here is that even monopolies can die if they provide inefficient services to shrinking markets.

Both Fedex and UPS do a much better job shipping packages than does the USPS.

The cost of a first-class stamp to 44 cents when it should be closer to 30 cents, if held to the rate of inflation.

Meanwhile, bulk-mail discounts have resulted in a glut of unwanted catalogues and credit-card offers in our mailboxes — and have led to billions of dollars in losses.

Our political leaders should end the USPS’s dysfunctional first-class mail monopoly, opening it up to private competition.

Postal Service employees are generally very well paid and (with some notable exceptions, usually in smaller towns) have rarely been characterized by high productivity.

Visits to the post office are not normally known to be user-friendly experiences. It is a good bet that the private sector will be considerably more productive — and user-friendly — than today’s government employees, no matter how loyal they may be.

And, post offices usually occupy prime real estate in cities and towns across America, potentially of great interest to retailers, restaurateurs, municipal governments and others.

And, don’t forget, the more than 200,000 USPS vehicles are also saleable.

I’d bid on one of those USPS carrier jeeps …

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Cutting to the chase on Solyndra (again) …

Punch line: The proper role for government is to support basic research, not commercial ventures

Excerpted from the WSJ: The Solyndra Economy

“Listening to the President, Solyndra was a necessary casualty in the greater campaign to steer the U.S. economy toward Mr. Obama’s noble goals.

Private competition that winnows out losers is so yesterday.

Brad Jones of Redpoint Ventures got to the heart of the Solyndra economy in a December 2009 email to then-National Economic Council director Larry Summers:

“The allocation of spending to clean energy is haphazard; the government is just not well equipped to decide which companies should get the money and how much . . . One of our solar companies with revenues of less than $100 million (and not yet profitable) received a government loan of $580 million; while that is good for us, I can’t imagine it’s a good way for the government to use taxpayer money.”

Which is precisely the point.

The proper role for government is to support basic research, not commercial ventures that become exercises in taxpayer risk but private reward.

When government takes $535 million and invests in a loser, it not only wastes taxpayer money but it also denies that capital to some other project in the private economy that might have succeeded.

The Solyndra emails show how ill-equipped government is to predict the industries of the present, much less the future.”

Why no Occupy Wall Street placards on this one ?

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Shocker: Over 80% of Americans dissatisfied with government

Punch line: According to Gallup a record-high 81% of Americans are dissatisfied with the way the country is being governed

As Gomer Pyle would say “surprise, surprise, surprise.”

Ken’s Take  Carter tanked it, Reagan brought it back, Clinton held it, Bush re-tanked it,  Obama sqandered hope & change to all-time lows.

* * * * *

Drilling Down

Majorities of Democrats (65%) and Republicans (92%) are dissatisfied with the nation’s governance.

69% say they have little or no confidence in the legislative branch of government, an all-time high and up from 63% in 2010.

57% have little or no confidence in the federal government to solve domestic problems

43% have little or no confidence in the government to solve international problems.

53% have little or no confidence in the men and women who seek or hold elected office.

Americans believe, on average, that the federal government wastes 51 cents of every tax dollar

49% of Americans believe the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens.

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Americans say Feds waste 51 cents of every dollar spent … I’m betting the over.

OK, this poll cuts to the chase.

This is why many folks – me included – resist tax increases (oops, I mean ‘revenue increases’) … because there’s enough wasted money to pay for everything the gov’t needs to do … including debt reduction.

Interesting note: even liberal Dems who push hard for tax increases think that at least 45 cents of every dollar are wasted. …  yet, they keep pushing for tax increases.

Huh?

According to Gallup:

Americans estimate that the federal government wastes 51 cents of every dollar it spends, a new high in a Gallup question first asked in 1979.

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From the “No Choice but to Withhold Granny’s Check” file …

Courtesy of http://dirtyspendingsecrets.com/

Sure wouldn’t want to cut any of these fine programs.

• Incredibly, Washington is spending $2.6 million training Chinese prostitutes to drink more responsibly on the job.
• Congress recently gave Alaska Airlines $500,000  to paint a picture of a Chinook salmon on a Boeing 737
• Federal employees cost taxpayers $146 million each year when they upgrade to business class flights. The Government Accountability Office found that more than half of these upgrades were not properly authorized.
• The government has spent $3 billion to re-sand our nation’s beaches. Advocates claim this prevents erosion and keeps the beaches attractive to tourists. But the National Oceanic and Atmospheric Administration says the sand does nothing to prevent erosion—and this sand gets swept out to sea just as easily as existing sand!

Pick your favorite …

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About those 800,000 non-essential gov’t employees …

Perhaps the biggest win from last week’s possible government shut-down is that (apparently) all gov’t departments had to scrub their employment lists to classify employees as essential or non-essential.

Now, if gov’t were a business, somebody (think Jack Welch – or, better yet, Chainsaw Al Dunlop) would start scouring the list … to re-classify some of the non-essentials to ‘former employees’.

I’m taking the under on that bet.

The non-essentials will likely continue doing their non-essential “work” … on our dollar.

Ouch.

About those oversized government pensions …. what about Congressmen?

The flap over government employees’ pensions resurrected an old question of mine: I’ve always wondered what retired members of the Congress and Senate got to live on when they retired.  Here’s the scoop ..:

* * * * *

Members of Congress are eligible for a pension at age 62 if they have completed at least five years of service.

Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service.

The amount of the pension depends on years of service, an accrual rate (2.5%), and the average of the highest three years of salary.

For example, after 30 years of Congressional service and a high-3 average salary of $161,800, the initial annual Civil Service Retirement System (CSRS) pension for a Member who retired in December 2006 at the end of the 109th Congress would be: 
                $161,800 x 30 x .025 = $121,350

• Note: It’s unclear whether the qualifier is Congressional service or civilian government service … both terms are used.
• Note: Base pay for Representatives and Senators was $165,200 in 2006.

Federal law limits the maximum CSRS pension that may be paid at the start of retirement to 80% of the Member’s final annual salary

As of October 1, 2006, 413 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service. Of this number, 290  had retired under CSRS and were receiving an average annual pension of $60,972.

In 1983, Congress passed a law (P.L. 98-21) that required all federal employees first hired after 1983 to participate in Social Security.

The law also required all members of Congress to participate in Social Security as of January 1, 1984, regardless of when they first entered Congress.

Because the CSRS was not designed to coordinate with Social Security, Congress directed the development of a new retirement plan for federal employees, called the Federal Employees Retirement System (FERS), which does coordinate a federal pension with Social Security.

A total of 123 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $35,952 in 2006.

Since, on average, SS benefits are typically around $24,000 annually,  the total is bumped to about $60,000.

Bottom line: a typical member of Congress get a pension of about $60,000. 

According to the National Taxpayers Union, the Congressional pension program is about two-to-three times more generous than the average corporate executive pension plan, .

* * * * *

Source:
http://www.senate.gov/reference/common/faq/retirement_for_members.shtml

Full report:
http://www.senate.gov/reference/common/faq/retirement_for_members.shtml

McKinsey says;”Public sector productivity is at least 10 years behind the private sector” … that’s a shocker, isn’t it?

Winding through TSA at BWI on Sunday, I could only laugh.  When the supply of shoe-bins reached empty, the world’s slowest  moving human started wheeling a fresh stacks of bins to the front of the line.  I swear, the women was moving at the speed of about 10 feet per minute.  What-she-worry?  She was getting paid by the hour, not based on how many bins she stacked per hour.

With that experience fresh on my mind, a friend emailed the below article to me.

Coincidence?

* * * * *

According to Time mag …

Many Americans think of Washington when they think of government workers.

But the vast majority are state and local employees. The country has 2.2 million federal civilian workers — compared with 19.4 million at the state and local levels.

Almost half of the 19 million work in education, which rivals health care for the most wasteful sector in America.

The rest are mostly police officers, firefighters, social workers, nurses and prison guards.

* * * * *
And though public workers have suffered job losses in the past year (and will suffer more this year), the government remains the most reliable employer in the country.

Compared with before the recession, there are only 1% fewer employees at the state and local levels, according to the U.S. Bureau of Labor Statistics.

The federal civilian workforce is actually 12% larger than it was in November 2007.

Meanwhile, the number of private-sector employees has declined 6.5%

* * * * *.

For now, the efficiency gap between the public and private sectors is holding us all back.

The U.S. ranked 68th (out of 139 countries) in terms of wastefulness of government spending in the 2010-11 World Economic Forum report on global competitiveness.

Experts put our public-sector productivity about 10 years behind that of the rest of our workforce.

If public workers could halve that gap, the annual savings would ring in at $100 billion to $300 billion, according to a new study by the McKinsey Global Institute.

That would mean the equivalent of a recurring stimulus package every three to eight years.

* * * * *

Full article: Time, What Public Employees Really Cost, Mar. 07, 2011 

Thanks to SGC for feeding the lead.

My favorite winter radio announcement …

Roads were icy in DC yesterday, so on the way into Georgetown I heard my favorite weather-related announcement:

“Only essential Federal employees need to report today; non-essential employees may take liberal leave”

Raises an obvious question: why do non-essential government employees ever need to report?

Sounds like a cost reduction opportunity to me … nice place to start the belt tightening … get rid of the slackers who self-identify as “non-essential”.

Why not?

Should gov’t employees get pay cuts?

That’s the question, and a recent Rasmussen Reports national telephone survey found that:

• 40% of Adults favor a 10% pay cut for all state employees to help reduce state spending
• 41% oppose a 10% across-the-board pay cut
• 19% are not sure

A pretty even split, but digging deeper:

• 60% of entrepreneurs favor a 10% pay cut for public employees
• A plurality (45%) of private company workers favor a 10% pay cut
• 75% of those employed by the government do not favor a pay cut.

Flipping the numbers: 1 in 4 government employees think their pay should be cut.

Hmmm.

P.S. Note that they’re called government “employees”, not “government workers”.

Double hmmm.

Exceprted from:
http://www.rasmussenreports.com/public_content/business/jobs_employment/january_2011/many_favor_cutting_pay_benefits_of_state_employees

Bumps ahead for gov’t gravy train …

Honestly, excluding the military and first-responders, what’s your view of government employees? 

How many fulfilling experiences have you had with the IRS,  the DMV, the tax assessor’s office, the planning board, etc. ?  My bet: not many.

In the old days, most folks got annoyed but gave passes because they thought the inefficient bureaucrats weren’t getting paid very much.

Recent news reports have burst those myths: revealing high pay relative to private sector employees and outrageous benefits packages.

For sure, the next couple of years will have spotlights shining on government employees and their candidate-contributing unions.

Blue states (think NY, CA, IL) will get hit particularly hard now that fiscally responsible red states are refusing to bail them out.

Since the unions won’t budge, expect higher state taxes and cuts in services …   

Compared with many sectors that have suffered grievously from the slump — housing, automobiles, finance — state and local governments have been relatively sheltered.

One reason is President Obama’s  “stimulus” packages … have provided about $158 billion to states.

As these transfers dwindle … local governments may be less lucky. They rely on property taxes for about a third of their revenues, and because property appraisals are done every few years, “the decline in house prices implies that collections will probably fall in the coming years.”

The truly bad news lies in the future with massive retiree pension and health benefits that haven’t been prefunded. How big are the shortfalls? All estimates are huge … the gaps are about $3 trillion for states and almost $600 billion for localities.

Whatever the ultimate costs, they threaten future levels of public services.

The generous benefits encourage workers to retire in their late 50s or early 60s after 25 years of service. The health benefits typically provide coverage until retirees qualify for Medicare at 65.

To pay for unfunded benefits, either government services must either be cut or taxes raised.

So support for schools, police, roads and other state and local activities is undermined by careless — or corrupt — bargains between politicians and their public-worker unions.

Promises of generous future retirement benefits were expedient contract sweeteners, with most costs conveniently deferred. Even when pension contributions were supposed to be made, they were often reduced or postponed when budgets were tight.

If these arrangements look familiar, they should. The U.S. auto industry adopted the same model; the costs helped bankrupt General Motors and Chrysler.

RCP,Cheating Our Children (Again), December 20, 2010
http://www.realclearpolitics.com/articles/2010/12/20/cheating_our_children_again_108288.html

Bailing out government pension plans …

There has been mucho chatter recently about gov’t pay levels which exceed comparable private industry rates and gov’t pension plans that make the UAW envious.

Bottom line: Many states have crafted gov’t pension plans that are going to implode in the not too distant future.

So, tax payers in fiscally responsible states will be forced to ante more into the pot to bail out the free-promising, overspending states.

Think about it next time you’re standing in line at the DMV.

* * * * *

Bloomberg: Pension Plans Go Broke as Public Payrolls Expand, June 11, 2010

Seven states will run out of money to pay public pensions by 2020.

That hasn’t stopped them from hiring new employees.

The seven are Illinois, Connecticut, Indiana, New Jersey, Hawaii, Louisiana and Oklahoma.

Combined, these states added 9,700 workers to both state and local government payrolls between December 2007 and April of this year.

Companies started firing more employees than they hired in January 2008.

Employment peaked in December 2007 at 115.6 million. During the subsequent two years, companies shed 8.5 million workers, or 7.3 percent.

By contrast,  from a peak of 19.8 million, state and local governments have reduced headcount by 231,000, or 1.2 percent.

What our politicians are telling us is that state and local governments are optimally sized — just right.

If tax revenue declines, well, then we’ll just have to find more taxes and fees to replace it.

We couldn’t possibly look at the cost-of-labor side of the equation.

If you really want to provoke outrage, you have to take into consideration public pensions.

Generous and bloated are the terms that have been used to describe them … What’s clear is that such pensions and benefits now seem unaffordable, because those responsible — state and, sometimes, local governments — didn’t put away enough, or haven’t invested wisely enough, to pay for them.

Full article:
http://www.bloomberg.com/apps/news?pid=20601039&sid=awW.rqJzAad4

1 million government census workers ???

Last Friday’s jobs report included 48,000 temporary census workers … less than anticipated given the plan to eventually hire 1 million temporary gov’t workers to service the census.

Prompted a great question from wife Kathy: “Why does it take 1 million people 6 months to count 300 million other people?“

Think about it … that’s 300 counted citizens per hired temporary census worker … or each census worker counting about 2 people per day spread over the 6-months’ data collection period.

This, from the same government that’s going to eliminate waste from our healthcare system …  yeah, right.