Is Underwear a Legitimate Function of the Federal Government?

Here’s another entry for our UK vs US Government Stupidity Contest. Or perhaps it belongs in the great-moments-in-government-waste category.

The spendaholics in Washington have squandered $400,000 on underwear that detects cigarette smoke.

I’m not joking. Here are some details from CNS.

Coming Soon to Victoria’s Secret: Trendy and Sexy Government-Funded Underwear

The National Institutes of Health (NIH) has awarded more than $400,000 to a research project involving underwear that can detect when a person smokes cigarettes. …the project…so far has produced a “very early prototype” of the monitoring system, which — in its current state — fits like a vest. …“The modern methods of monitoring smoking, primarily you rely on self-report,” said Dr. Edward Sazonov, an associate professor at the University of Alabama… The PACT Sazonov created is a “very early prototype,” that fits like a vest with multiple straps and wires, far from the “non-invasive, wearable” underwear the project developers had in mind. “It’s not very user friendly,” Sazonov said.

And it’s definitely not taxpayer friendly either.

Why is Uncle Sam wasting $400,000-plus on ugly and clunky underwear? The excuse for this boondoggle is that it will help monitor whether people smoke.

I fail to see how this would promote smoking cessation. I assume 99.99 percent of smokers are aware that they smoke.

Or are we going to have some sort of nanny-state program with the government forcing people to wear the underwear so the snoops in DC can monitor our private lives.

But even if that type of intrusive system would work, why is smoking any business of the federal government? It’s certainly not one of the enumerated powers in Article I, Section VIII.

This is yet another reason why there shouldn’t be any discussion of tax increases. Any government that has $400,000 to spend on a cigarette vest obviously has far too much money on its hands.

P.S. An odious and ridiculous subset of the UK-US Stupidity Contest is anti-gun political correctness. You can read absurd examples here.

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Preposterous Waste, Pentagon Style

National defense is one of the few legitimate functions of the federal government, but that doesn’t mean the military should get a blank check to spend unlimited amounts of money.

To make sure taxpayers get the best bang for the buck (no pun intended), there should be a sober assessment of threats to national security and a plan to defend against those threats without adding superfluous expenditures.

That being said, America already accounts for close to 50 percent of world military spending, with another 25 percent of the global total coming from nations that are allied to the United States, so I’m fairly confident that we’re not under-spending on the Pentagon.

That’s one of the reasons I don’t worry that much about the sequester, particularly since military spending actually climbs by about $100 billion over the next 10 years.

But I would like the Defense Department to have some flexibility to reallocate funds so that we spend money on national security rather than boondoggles.

And there are some absurd examples of waste at the Pentagon, including “green” jet fuel that costs 15 times as much as regular fuel. Here are some of the mind-boggling details from the Washington Examiner.

Defense Secretary Chuck Hagel recently warned that sequestration would cause “suspension of important activities, curtailed training, and could result in furloughs of civilian personnel” but the spending cuts haven’t killed the green fuels program, as the Pentagon has continued purchasing renewable fuel at $59 per gallon. “In March, Gevo entered into a contract with the Defense Logistics Agency to supply the U.S. Army with 3,650 gallons of renewable jet fuel to be delivered by the second quarter of 2013,” Gevo announced this week in its first quarter financial report. “This initial order may be increased by 12,500 gallons.

This is even worse than the bizarre $600,000 frog statue than the Defense Department selected to adorn a new $700 million office building.

I realize that the $700 million office building should be the bigger issue, but I can’t help but be irked by the thought that taxpayers are being raped and pillaged for the frog.

In any event, the $700 million for the office building is pocket change compared to the amount of money we misallocate to subsidize Western Europe to protect against a Warsaw Pact military alliance that no longer exists!

Yes, it’s true that America’s main fiscal problem is entitlement spending. And, yes, domestic discretionary spending is a bigger problem than the defense budget.

But wasting money in those areas is not a reason to also have waste at the Pentagon.

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An Aggravating Reminder of Government Waste on Tax Day

Remember the Spending Quiz from 2010, which asked people to guess whether absurd examples of government waste were true or false?

Well, we have a new video on government waste, though bureaucrats and politicians have become so profligate it doesn’t even bother to trick people with fake examples.

While very well done, I do have two small complaints about the video.

First, it asks whether we should cut spending or raise taxes to deal with the national debt. I think that’s too narrow. We shouldn’t be wasting money even if the budget was balanced and there wasn’t a penny of debt.

In other words, the problem isn’t deficits. Red ink is just a symptom. The real problem is that government is too big.

Second, the video sort of acquiesces to the dishonest Washington terminology by asking whether we should cut spending or raise taxes, implying those are the only two options. I favor genuine spending cuts, of course, but the most accurate way of phrasing the question is to ask whether we should cut spending, restrain spending, or let government grow on auto-pilot.

As I explained earlier this year, we can balance the budget in just 10 years if spending grows “only” 3.4 percent per year. When people understand that detail, there’s almost no support for higher taxes.

But I’m nitpicking. Overall, a very good video.

P.S. If the examples of pork-barrel spending in the video get you angry, you’ll probably have a stroke if you also watch the waste video from the folks at Government Gone Wild.

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This Wins the “Booby Prize” for Great Moments in Government-Run Healthcare

I’ve posted some horrifying examples about what happens when you put politicians and bureaucrats in charge of health care.

The story that makes every guy wince comes from Sweden, where a man wound up having his penis amputated because of government incompetence.

And I’ve shared numerous examples of substandard care from the United Kingdom, in part because I can’t resist mocking Paul Krugman.

Speaking of the U.K., here’s a story that may lure some young men into supporting government-run healthcare.

Did taxpayers get good value for their money?

…22-year-old Josie Cunningham recently was approved for breast enhancement surgery that cost more than $7,000, and paid for entirely by taxpayers, reports Opposing Views. Why? Because she told her General Practitioner that being flat-chested was causing her emotional distress. “My GP referred me for the operation because I wasn’t just flat-chested — I didn’t have any boobs whatsoever,” Cunningham said. “I could never go on holiday as I lived in terror of ever being seen in a bikini and could never set foot outside without a padded bra.” Her doctor’s prescription to counter the “emotional distress” was to enhance her breast size from a 32A to 36DD.

I’ve never heard of the website that contains this story, and I’ve never heard of Opposing Views, where it supposedly originated, so I confess to being a bit skeptical of this story.

Then again, who would have guessed that the government in the United Kingdom would provide taxpayer-financed sex trips to Amsterdam? Or that the bureaucrats at the European Commission would be able to get penile implants at public expense?

Closer to home, let’s not forget that Obamacare allows taxpayer-subsidized viagra for sex offenders! And Medicare pays for penis pumps, which creates frightening visual images.

So even if this specific story isn’t true, I have no doubt that the British government has squandered money in similar ways.

P.S. Speaking of breast augmentation, one of the few well-functioning parts of the American healthcare system is cosmetic surgery. Why? Because consumers largely pay out of pocket and, as a result, costs are restrained.

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Great Moments in Government Waste

Every time some class-warfare Democrat or Charlie Brown Republican says we need higher taxes, I think of all the ways the government wastes money and I get angry because the political elite is ripping off the American people.

Should we send more money to Washington when the federal government is:

• Forcing taxpayers to pay millions of dollars for pro-Obamacare and pro-IRS propaganda.
• Doing interviews about erectile dysfunction for $6,000 each and sticking the tab on us.
• Hiring bureaucrats to monitor school lunches and replace healthy turkey sandwiches with processed chicken nuggets.

And those are just examples of nickel-and-dime programs. The bigger outrage is that politicians have created costly, inefficient, and bankrupt entitlement programs that threaten our fiscal future.

But the small examples have symbolic value, and now I have something new to add to the list. The idiots at the State Department thought it was just fine and dandy to pay 35 times the market price for some Kindles.

“Hey, let’s stimulate the economy by paying 35 times the retail price!”

IPads are too fancy, Nooks aren’t fancy enough, but Kindles are just right for teaching English, the State Department thinks, which is why it bought 2,500 of them from Amazon in a $16.5 million no-bid contract, NextGov’s Dawn Lim reports. That works out to $6,600 per Kindle Touch — a lot more than the $189 retail price. The plan, according to Kim, is to send the e-readers to “designated libraries and U.S.-friendly educational centers around the world.”

Since your paying for this ripoff, you might be a tad bit irritated. But that’s only because you’re an unsophisticated taxpayer. According to PR hacks, we really are getting a good deal because of all the extras in the agreement. Put down your coffee or soda before reading this passage from the report because I don’t want to be responsible for liquid on your computer screen.

Amazon is responsible for shipping the Kindles, providing 24-7 customer service, sharing data on how the Kindles are used to access content and pushing serialized content to the Kindles regularly. Amazon is also responsible for disabling “standard features, as as [sic.] requested by DoS, for the device such as individual purchasing ability.”

Wow, free shipping. That’s worth a lot. And the customer service surely adds a couple of bucks per unit, not to mention the extra pennies it must cost to disable features and provide electronic updates.

But let’s not be too hard on clueless bureaucrats. Maybe they just don’t understand high tech. After all, moronic government officials paid more than $22,000 each for big institutional Internet routers hooked up to just a handful of computers.

It’s almost enough to make you think government spending is the problem rather than the solution.

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Another Magnificent Moment in the World of Government Stimulus

Most of my work on government stimulus focuses on economic theory and evidence.

But every so often it’s a good idea to remind ourselves of the ridiculous ways that government wastes money.

Here are some details from a boondoggle in West Virginia.

Nobody told Hurricane librarian Rebecca Elliot that the $22,600 Internet router in the branch library’s storage closet was powerful enough to serve an entire college campus. Nobody told Elliot how much the router cost or who paid for it. Workers just showed up and installed the device. They left behind no instructions, no user manual. The high-end router serves four public computer terminals at the small library in Putnam County. …The state of West Virginia is using $24 million in federal economic stimulus money to put high-powered Internet computer routers in small libraries, elementary schools and health clinics, even though the pricey equipment is designed to serve major research universities, medical centers and large corporations, a Gazette-Mail investigation has found. …The Cisco 3945 series routers, which cost $22,600 each, are built to serve “tens of thousands” of users or device connections, according to a Cisco sales agent. The routers are designed to serve a minimum of 500 users. Yet state broadband project officials directed the installation of the stimulus-funded Cisco routers in West Virginia schools with fewer than a dozen computers and libraries that have only a single terminal for patrons.

Sounds like the government could have bought every user a laptop and squandered less money.

It’s important to realize that this type of boondoggle is the rule, not the exception. Every so often, we see stories about absurd waste, such as the $423,000 study to find out that men don’t like to wear condoms, the Pentagon spending $900 on a $7 control switch, or a $100,000 library grant to a city without a library.

We should get upset about these examples. But remember that the second cartoon in this post is exactly right. The waste, fraud, and pork that we find out about is dwarfed by what remains hidden.

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California’s Train to Nowhere

I’ve explained before that “high-speed rail” is a boondoggle, and I’ve also posted a thorough presentation on the topic from the folks at Reason about this issue.

But some politicians can’t resist throwing good money after bad on these money-losing schemes. The latest example is from the People’s Republic of California, where Governor Jerry Brown is acting as if he wants the state to become a basket case.

Here are some passages from the Wall Street Journal’s editorial on the topic.

The good news in this debacle is that the state’s fiscal woes will make it nearly impossible to complete Governor Jerry Brown’s runaway high-speed rail train. The bad news is that the Governor is going to try anyway. Transportation experts warn that the 500-mile bullet train from San Francisco to Los Angeles could cost more than $100 billion, though the Governor pegs the price at a mere $68 billion. The state has $12.3 billion in pocket, $9 billion from the state and $3.3 billion from the feds, but Mr. Brown hasn’t a clue where he’ll get the rest. …In 2008 voters approved $9 billion in bonds for construction under the pretense that the train would cost only $33 billion and be financed primarily by the federal government and private enterprise. Investors, however, won’t put up any money because the rail authority’s business plans are too risky. Rail companies have refused to operate the train without a revenue guarantee, which the ballot initiative prohibits. Even contractors are declining to bid on the project because they’re worried they won’t get paid. Mr. Brown is hoping that Washington will pony up more than $50 billion, but the feds have committed only $3.3 billion so far—and Republicans intend to claw it back if they take the Senate and White House this fall. If that happens, the state won’t have enough money to complete its first 130-mile segment in the lightly populated Central Valley, which in any event wouldn’t be operable since the state can’t afford to electrify the tracks. …Mr. Brown and the White House are betting that the state will be in far too deep when the money runs out to abandon this mission on Camino Unreal. The Governor also figures that the $100 billion bill will seem smaller spread out over 30 years. What’s an extra $3 billion a year when the state’s already $16 billion in the hole?

The uncharitable part of me is thinking “Good, these morons are getting exactly what they deserve since voters were foolish enough to approve the 2008 referendum.”

But even though I think there is a value in having bad examples (whether cities or countries), it is tragic to see a beautiful state destroyed by reckless politicians and their big-government schemes.

I wrote that year that the last job creator to leave California should make sure to turn off the lights. I doubt that will be necessary since the electrical system probably will have failed by that time.

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The Octo-Moocher

I’ve complained about food stamp abuse on several occasions, including people using them to buy luxury coffee at Starbucks and to buy steaks and lobster. I’ve groused about college kids scamming the program and the Obama Administration rewarding states that sign up more food stamp recipients.

I’ve also been outraged by schemes to make it easier to use food stamps at fast food restaurants, and I’ve criticized New York City for giving food stamps to newly released prisoners and running foreign-language ads encouraging more people to sign up for the program.

But we now have a winner for the strangest story of food stamp abuse. Here are the distasteful details from a Fox News report.

Nadya “Octomom” Suleman is on food stamps. …California offers $2,000 a month food assistance to large families earning less than $119,000 a year. Suleman has 14 children after undergoing repeated in vitro fertilizations. She is famous for having octuplets after she already had six children.

I’m not sure what gets me most agitated about this story.

• Should I be upset that the state of California pays $24,000 per year to help subsidize people who have children they can’t afford?
• Should I be upset that the state of California is giving handouts to families that make more than $100,000 per year and can afford to feed themselves?
• Should I be upset that I probably helped pay for the expensive fertilization procedures this single mother utilized (I’m just guessing, but I would be shocked if taxpayers didn’t pick up the tab)?

I would conclude by saying this woman is in desperate need of counseling, but I’m sure taxpayers would get stuck with the bill for that as well.

This is one of the reasons why I support the federalist approach to welfare reform. If we shift all redistribution programs back to the states, we’ll generally get better policy.

And when leftist states such as California continue to finance bad behavior, at least I’ll know that I’m not being coerced to subsidize foolishness.

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Taxpayers get Screwed to Finance a $537,767-Per-Year Bureaucrat

I’ve reported some horror stories about bureaucrats ripping off taxpayers with lavish compensation packages, including:

• The chief bureaucrat of a low-income California city getting almost $800,000 per year.
• Cops in Oakland getting average compensation of $188,000.
• A Philadelphia bureaucrat, after working only 2-1/2 years, nailing down a guaranteed pension of $50,000 per year.
• A New York school bureaucrat simultaneously getting a $225,000 salary and $300,000 pension.
• California taxpayers being forced to pay a fired bureaucrat $550,000 for unused vacation time.
• An employee of the New Jersey Turnpike system raking in annual compensation of $320,000.

We now have another über-bureaucrat to add to our list.

Here are the key details from the New York Post.

Take your salary cap and shove it. While Gov. Cuomo continues to push a bill that would limit New York school superintendents’ annual salaries to $175,000, Syosset, LI, Superintendent Carole Hankin — the highest paid in the state —has already circumvented the proposed ceiling. Last June, four months after Cuomo first proposed the salary cap, Hankin, 69, quietly inked a five-year contract that guarantees she will receive no less than her current salary— $405,244, The Post has learned. …“This is despicable and gives new meaning to the word ‘chutzpah,’ ” said Desmond Ryan, executive director of the Association for a Better Long Island, a developer’s lobby. “In these difficult economic times, that the school board would even consider this is a disgrace.” …Hankin’s total annual compensation comes to $537,767, including retirement funds and fringe benefits. Expenses include use of a “late-model car” and gas. She can also do outside consulting on her time off. She oversees about 6,600 students in 10 schools, yet her salary is nearly double that of New York City Chancellor Dennis Walcott, who gets $212,614, to watch over 1.1 million kids in 1,700 schools. Hankin’s first deputy, Jeffrey Streitman, rakes in $419,033 in salary and other benefits, but Cuomo’s bill would not apply to underlings. …Joshua Lafazan, an 18-year-old Syosset HS senior running for a seat on the school board, blasts Hankin’s cushy deal and the nine board members he calls her “puppets.”

Ms. Hankin and the other bureaucrats mentioned above are extreme examples, but they help underscore the problem that exists when politicians and bureaucrat unions make insider deals, swapping political support for lavish compensation levels.

Taxpayers, meanwhile, get screwed. This video explains why this is a problem at all levels of government.

What makes this so outrageous is that most bureaucrats get overpaid for position that shouldn’t even exist. If we shrink government to its proper size, the problem is mostly resolved.

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Battle of the Bums: Diaper Man vs. Footless Hans

I’ve commented on some really nauseating and reprehensible examples of the welfare state running amok, ranging from handouts to terrorists in Europe to disgusting human scum in Florida who wanted to impregnate a child to increase monthly freebies from the state.

And I posted three examples of bizarrely wasteful spending on welfare state programs and asked which was the biggest ripoff.

Now let’s compare two unfathomably grotesque examples of the welfare state. And let’s make it a contest, sort of a “battle of the bums.”

Even better, let’s call it the Klondike Bar Contest, in honor of the a semi-famous jingle for an ice cream treat that asks, “What would you do for a Klondike Bar?”

Our first contestant is from Europe. He was asked, “What would you do to keep mooching off jobless benefits?”

In hopes of winning this battle of the bums contest, Hans Url of Austria took a big step. So to speak.

Here are some excerpts from the Daily Mail.

A scrounger…almost died after cutting his own foot off so he could stay on jobless benefits… Long term unemployed Hans Url, 56, had just been told his hand-outs would stop if he did not accept work found for him by job centre staff. And when his claims that he was too sick and did not like the work were challenged with the offer of a medical, he took drastic measures. …Url, of Mitterlabill, southern Austria, rigged up a mitre saw and sliced off his foot – then put it in the oven for good measure to ensure no surgeon could reattach it. …The police added that the man had almost died from loss of blood before the emergency services arrived and that they had recovered the foot from the oven – but that it had been too badly burned to reattach.

This story is so absurd that I wonder whether it is an April Fool’s prank. But the Daily Mail is a serious newspaper in England, and the story is dated March 27, not April 1. And there are also version of the story on Yahoo and at the Austrian Times. So it appears it might be true.

Not that we should be too surprised, because we also have an American version of the Klondike Bar contest, only this one asks, “What would you do to get a disability check?”

Here’s some of what I wrote last May about Stanley Thornton, a.k.a. Diaper Man, also known as Adult Baby.

The latest outrage is a 30-year old man who pretends to be an infant, and his roommate, who pretends to be his mother. I don’t care that he wears diapers and she changes them. I don’t care that he weighs 350 pounds. I wouldn’t care if I found out that they have sex with turtles and eat horse manure. As a libertarian, I genuinely believe people should be free to do anything that doesn’t infringe on the rights of others. But I care very much that they are scamming taxpayers. In a typical display of government incompetence, both of them have convinced the Social Security Administration to give them disability payments.

By the way, after this scam was exposed, the Social Security Administration investigated and decided that this was a legitimate handout. Isn’t it nice that they are so generous with other people’s money!

What’s really tragic about these examples is that the people involved presumably are mentally ill. Or at least they are very disturbed.

I have no idea if the welfare state made their problems worse, but it’s also a safe assumption to say that handouts didn’t make them better. And they definitely didn’t promote responsibility and good behavior.

In any event, Stanley Thornton and Hans Url are screwed-up people, so we shouldn’t extrapolate from their odd behavior.

But we can look at other examples that show the perils of dependency, including this story from Connecticut, this court case from England, and this display of entitlement mentality from Greece.

And this is what matters most. We have decades of experience showing that redistribution programs create dependency and trap people in lives of despair.

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A Test for the GOP: Shutting Down the Spigot of Corporate Welfare at the Export-Import Bank

Republicans are telling voters that they’ve learned the hard lessons from the 2006 and 2008 elections and that they are back on the side of taxpayers. I’m not convinced, which is why I’ve outlined some key tests that will demonstrate whether the GOP genuinely supports limited government.

o No tax increases, since more money for Washington will encourage a bigger burden of government and undermine prosperity.

o To stop bailouts for Europe’s decrepit welfare states, no more money for the International Monetary Fund.

o Reform the biased number-crunching methodology at the Congressional Budget Office and Joint Committee on Taxation.

o No more money from American taxpayers to subsidize the left-wing bureaucrats at the Paris-based Organization for Economic Cooperation and Development.

I have another item to add to this list, and it’s one that may actually go the right way.

It appears that there’s a chance to end a major source of corporate welfare known as the Export-Import Bank. As the irreplaceable Tim Carney notes, a handful of Republicans are standing up for free markets over corrupt cronyism.

Ex-Im reauthorization typically passes easily. But after the Wall Street bailouts, Fannie Mae’s bailout, Solyndra’s collapse, and the rise of the Tea Party, many conservatives in Washington have grown hostile to corporate welfare. The free-enterprise Club for Growth, which was central in 2010 in helping conservatives and hurting moderate Republicans, blasted Ex-Im as “nothing more than a corporate welfare slush fund for companies with the best lobbyists.”

You won’t be surprised to learn that the President wants to expand this honeypot of corporate welfare. Here’s some of what George Will wrote about Obama’s plan to divert more capital to subsidize the well-connected.

This looks like a promise to compound market distortions by further politicizing credit markets, while enunciating no limiting principle. Obama is directing the bank to offer United Airlines a subsidy to match any subsidy Canada offers to persuade United to choose the Montreal-made Bombardier as United chooses between it, Boeing and Airbus. So American taxpayers will subsidize United to subsidize Boeing, which is already being subsidized in ways injurious to Delta and others.

Other than self-interested companies with their snouts in the trough – and the politicians and lobbyists they finance, it is very difficult to find any legitimate argument for this cesspool of cronyism.

One of the few self-professed conservatives to support the program is Hugh Hewitt, though I’m befuddled how anybody who supports corporate welfare (and Mitt Romney) can call himself a conservative.

But let’s set that aside. Hewitt’s main argument is that exports are good and that the federal government should subsidize good things. If that argument sounds familiar, it’s probably because you’ve heard Barack Obama say that health insurance is good and that the federal government should subsidize good things.

If you think I’m being unfair, I invite you to read the column. You’ll be especially amused by this passage.

Hamilton argued for a trading empire, a robust union deploying its combined power and resources to advance the nation’s interests abroad to the benefit of its merchants and thus its people at home.

Sounds reasonable, but Hewitt fails to mention that Hamilton’s view of “a robust union” did not include subsidized exports. Heck, Hewitt notes earlier in his column didn’t exist until it was created during the New Deal – about 130 years after Hamilton’s death!

Besides, the Export-Import Bank doesn’t even have an impact on trade balances, as explained by my colleague Sallie James, so mercantilists are barking up the wrong tree.

The Ex-Im Bank at best recreates, and at worst misallocates, private financial behavior. And to what end? The U.S. General Accounting Office (now the Government Accounting Office) has pointed out that“export promotion programs cannot produce a substantial change in the U.S. trade balance.” A country’s trade balance is driven largely by underlying macroeconomic factors, such as the ratio of savings to investment.  …rather than authorizing an increase in the Ex-Im Bank’s operating bud-get, or expanding its role in the U.S. economy,Congress should recognize that the alleged justifications for the Ex-Im Bank’s existence are hollow and abolish the agency completely.

Let’s also address the argument of Frank Gaffney, who normally is sensible about public policy. He makes the claim that the Export-Import bank is a profitable activity for the Treasury.

the Export-Import Bank is a money-making activity for the U.S. government.  According to the U.S. Chamber of Commerce, since 2005, Ex-Im loans, guarantees and insurance programs have returned $3.4 billion over and above its costs and loss reserves, with a default rate of less than 2%.  That includes $400 million in 2011 alone.

Since defenders of Fannie Mae and Freddie Mac made the same claims up until the eve of the financial crisis, this is not exactly a compelling claim. And deposit insurance premiums were a money-maker for the federal government prior to the Savings & Loan crisis about 20 years ago.

It’s possible, of course, that the Ex-Im Bank avoids losses in the future, but that’s not the key point. The real issue is whether the allocation of capital should be distorted by government subsidies. I imagine the government could “profit” by giving sweetheart loans to selected big companies, which would allow those firms to undercut their competitors. Such a scheme might generate some revenue, but it would still undermine prosperity and foment corruption.

Last but not least, don’t forget the moral component. This is a debate about whether ordinary Americans should directly and indirectly pay for a program that enriches some of the biggest companies and richest shareholders in America.

This galls me so much that I’m motivated to create another narcissistic poster (adding to Mitchell’s Law and Mitchell’s Golden Rule), which I’ll call Mitchell’s Guide to an Ethical Bleeding Heart.

This is a formalized version of something I wrote when writing last year about a disgraceful welfare queen.

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The Ultimate TSA Takedown

I’ve commented on the TSA’s incompetence in previous posts.

I’ve also shared some horror stories about TSA abuse.

And I’ve posted many jokes about the Keystone Cops of airport security (for more laughs, see this, this, this, and this).

But this graphic, sent to me by Tony Shin, is a superb visual display of what the TSA really means.

Created by: OnlineCriminalJusticeDegree.com

All of this underscores why the private sector would do a better job.

Unfortunately, the Obama White House seems more interested in using airport security as an opportunity to expand the universe of unionized bureaucrats.

And to make matters worse, it’s very distressing that the ideologues in the Obama Administration are trying to reverse the very successful policy of arming pilots (many of whom are former military).

Remember, this poster sums up everything that happens in Washington.

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Government Stupidity Defies Satire When a $50 Light Bulb Wins an Affordability Prize

I’ve written about the government’s war on consumer-friendly light bulbs (and also similar attacks on working toilets and washing machines that actually clean), so I’m generally not surprised by bureaucratic nonsense.

But even I’m shocked the federal government gave an affordability award for a light bulb that costs $50. I’m not making this up. Here’s a blurb from ABC News.

The U.S. government has awarded appliance-maker Philips $10 million for devising an “affordable” alternative to today’s standard 60-watt incandescent bulb. That standard bulb sells for around $1. The Philips alternative sells for $50. Of course, the award-winner is no ordinary bulb. It uses only one-sixth the energy of an incandescent. And it lasts 30,000 hours–about 30 times as long. In fact, if you don’t drop it, it may last 10 years or more. But only the U.S. Government (in this case, the Department of Energy) could view a $50 bulb as cheap.

Isn’t that wonderful? My tax dollars were used to reward a company that produced a light bulb I can’t afford.

Lisa Benson has a very good cartoon about this light bulb, as well as the less-than-shocking news that Obamacare will be more costly than originally forecast.

If you like Lisa’s work, there are some other good examples here and here.

Last but not least, I’m up in New York City for an investment funds conference about the Cayman Islands. Not a bad view from my window, though you need to click on the image to get a good idea of what I woke up to.

Too bad the state and the city are high-tax hell holes.

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At Least the Federal Government Is Competent at Waste, Inefficiency, and Duplication

I sometimes get accused of being too libertarian. One leftist blogger even said my views are insane.

So I decided to show my open-mindedness by finding a way to praise big government. It took a bit of head scratching, but I think I discovered something that is impressive, sort of.

As you can see in this chart prepared by the Republican Study Committee, the federal government is remarkably effective at wasting money with duplication and featherbedding.

But I don’t want to be chintzy in my praise of the federal government. If you look at the areas where there is the most duplication and waste, you’ll find programs for energy, housing, and education – all of which are areas where the Constitution does not authorize spending and intervention by the federal government. So let’s also praise the politicians in Washington for their agility in sidestepping the system set up by the Founding Fathers!

And let’s not be shy about crediting the political elite for shoulder-to-the-grindstone diligence. It takes a certain dedication – or something like that – to continue to pour money into these programs when all the evidence suggests federal involvement in education has undermined outcomes, that federal housing programs helped cause the financial crisis, and that federal energy programs have become cesspools for cronyism.

I know I’m guilty of sometime posting absurd examples of government stupidity. I hope today’s post shows that I’m capable of looking at the positive side of government.

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Should the IRS Be Squandering $15 Million on P.R. Flacks to Improve its Image?

The overwhelming fiscal policy challenge for America is entitlement programs, as I explain in this set of videos. To protect America from becoming another Greece, we need personal retirement accounts for Social Security. We need vouchers for Medicare. And we need to block-grant Medicaid back to the states.

Real reform can give people more security and save taxpayers by reducing the burden of government spending by trillions of dollars over the next several decades.

But sometimes it is the comparatively tiny bits of spending that effectively illustrate the waste, stupidity, and venality of big government. Lets talk about how the Internal Revenue Service (IRS) is squandering $15 million in a way that should drive taxpayers ballistic with rage.

Here are some disturbing details from the Wall Street Journal report.

The nation’s tax collector wants a “full service communications and marketing company” to help convey its “corporate vision and goals,” according to a 49-page solicitation sent to 12 agencies. The winner’s duties could include market research, educating the public about new tax provisions, and designing national information campaigns. The one-year contract could be extended for four more years, with a total value of as much as $15 million, the IRS solicitation says. PR firm Porter Novelli has had the contract for four years, but it reached the $17.5 million limit, IRS spokesman Terry Lemons said. …The IRS has relied on Porter Novelli to help inform taxpayers about some new laws and programs. Porter Novelli confirmed that the firm works with the IRS, but declined to comment further. Public relations experts said it would be an attractive challenge, given the agency’s unpopularity. …PR types said it’s technically possible to think of tougher marketing challenges — but not many. “Advancing the interests of the North Korean leadership at the moment would be harder than the IRS,” suggested Matthew Harrington.

Isn’t it wonderful that the IRS isn’t as despised as the North Korean dictatorship! I guess that’s because the North Korean government will sometimes kill you or starve you to death. The IRS, by contrast, only steals your money and occasionally gets you tossed in prison.

To show that I’m a public-spirited person, I’m going to save taxpayers $15 million by giving the IRS two good pieces of advice.

1) Obey the Constitution, which means respecting the presumption of innocence and following the Fourth Amendment’s guidelines about illegal search and seizure. I realize that complicates the job of enforcing a terrible tax code, but the Constitution exists precisely because the Founding Fathers thought some things were more important than “efficient” government.

2) Urge your overseers in the U.S. Congress to junk the internal revenue code and replace it with a simple and fair flat tax. The video below provides a simple explanation.

See how simple that was. No need to throw $15 million down the toilet of some politically connected PR firm.

Enjoy the video.

And here’s another video documenting the onerous compliance burden of the current system and explaining how that flat tax would de-fang the IRS.

Seems like such a good idea that only people who benefit from the current system would be opposed. Unfortunately, that describes the political class, upon which we’re relying to get such reforms.

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Penile Moments in Government Waste

It’s not often that I get to use the word “penis” on a public policy blog. But with my juvenile sense of humor, I exploit such opportunities whenever they arise.

• I wrote about an unfortunate guy who had his you-know-what amputated thanks to the incompetence of Sweden’s government-run health care system.
• I commented on the nanny-state mentality behind a campaign to ban circumcisions in San Francisco.
• I posted three wretched examples of welfare state waste, including the fact that Uncle Sam has spent about a quarter-billion dollars on penis pumps in the past decade.

And I also managed to produce a couple of posts with the word “penile.”

• I noted that European taxpayers were paying to provide politicians and bureaucrats in Brussels with coverage for penile implants.
• I expressed amazement that the U.K. government decided it is a human right to have taxpayer-financed sex trips to Amsterdam.

These are such good examples that you may be wondering what I could do for an encore.

Well, when the federal government spends about $4 trillion per year, much of it pissed away (pun intended) on useless and counterproductive programs, it’s just a matter of time before we find another example.

In this instance, we return to the world of taxpayer-financed penis pumps. Here are the relevant parts of an AP report.

An Illinois man was sentenced Friday by a federal judge in Rhode Island to more than three years in prison for shipping unwanted penis enlargers to diabetes patients as part of a larger fraud scheme that prosecutors say bilked $2.2 million from Medicare over four years. …Winner purchased penis enlargers for an average of $26 each from online sex shops and then repackaged and shipped them to patients… Winner targeted Medicare beneficiaries…and persuaded patients to provide their Medicare information by offering free medical equipment and supplies, prosecutors said. …Winner then charged Medicare an average of $284 each for a total of $370,305, authorities said.

I cite this story not because I’m shocked that somebody bilked the government, but rather because it should irritate all taxpayers that it takes so long for the bureaucrats to figure out what’s happening.

My credit card company periodically will block my account, especially when I’m traveling, because of unusual transactions. But the federal government will blindly reimburse fraudsters for years.

The most powerful part of the story, though, is the way that Mr. Winner justified his crimes.

When employees confronted Winner about sending out supplies regardless of need, authorities allege he responded: “It doesn’t cost the client anything as the government is paying for it, and that the government would just print more money, so order more.”

He managed to combine the ills of third-party payer, government dependency, fiscal profligacy, and irresponsible monetary policy in one sentence.

This guy belongs in Washington. Heck, he’s qualified to be a member of the Obama cabinet!

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Notwithstanding Tea Party Election in 2010, Republicans on Capitol Hill still susceptible to Big-Government Virus

I’ve written before about the importance of getting rid of the Department of Transportation, and I’ve also written about Republicans getting in bed with big government.

So you can imagine how agitated I was to read this article about transportation spending at National Review. Written by Andrew McCarthy, it shows that the GOP still has a long way to go before cleansing themselves of the big-government corruption of the Bush-Rove years. Here are some nauseating passages.

The problem is not the GOP infighting. The problem is the GOP. Republicans are simply not interested in limiting government or addressing our death spiral of spending. …The federal government should not be in the transportation business at all. A federal role was rationalized in the mid-Fifties to finance the construction of interstate highways. As National Review’s editors observed in 2005, that project was completed in the early Eighties, at which time the fuel tax that funded it should have been repealed and the upkeep of highways left to the states. “Instead,” they wrote, “Congress morphed the program into a slush fund for some of its most indefensible pork-barrel spending.” …see how easily a “highway system” morphs into a “transportation system.” The taxes that Leviathan confiscates from drivers, purportedly for road construction and maintenance, are actually redistributed to subsidize other forms of transit preferred by progressives — including walking. For that, you can thank Republicans. With a compassionate wink from President Bush, the Republican Congress enacted an obscene $286.5 billion transportation bill in 2005… SAFETEA-LU featured all the uglies that outraged voters into telling the GOP to take a hike in the 2006 and 2008 elections. These included Alaska’s infamous $250 million “Bridge to Nowhere,” one of the bill’s 6,376 earmarks totaling $24 billion — you know, the sorts of budget-busting recklessness Republicans promised us they’d sworn off in order to get elected in 2010. …And now that the “Pledge to America” crowd that promised to stop the madness is back in charge, what do you suppose the plan is? Why, to persist in the madness. Team Boehner, whose “pledge” to voters explicitly promised “to stop out-of-control spending and reduce the size of government,” proposes to continue funding transportation at “current levels” for the next five years, which translates to an additional budget shortfall of about $60 billion dollars. So much for decrying “Washington Democrats [who] refuse to listen to the American people and eliminate, restrain, or even budget for their out-of-control spending spree.” …Naturally, conservatives who expected Republicans to do what they promised are apt to go ballistic. So, just as in the debt-ceiling fiasco, the establishment’s plan is to dazzle the rubes with some smoke-and-mirrors. On the debt ceiling, it was phantom cuts that would occur, um, someday. This time around it is a commitment to ramp up oil and gas production, the additional revenues from which, we’re told, will alleviate the transportation burden. …The brute fact is that today’s Republican establishment does not believe in limited government. “Limited government” is a slogan reserved for campaigns and fund-raising drives. The idea is not to rein in big government; it’s to hold the reins of big government.

Amen. Every time someone posts a comment or sends an email to complain that I’m too mean to GOPers, they should read this column. Principles should come first, not the self interest of a political party filled with corrupt hacks.

Yes, I realize that “corrupt hacks” is a bit unfair and over the top. After all, these are the folks who voted last year for real entitlement reform, so I need to remind myself that politicians are combinations of good and bad.

But this transportation bill shows what happens when the bad part is running amok.

And it teaches us a lesson that it is not progress to replace big-spending Democrats with big-spending Republicans.

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Debating at U.S. News & World Report, I Explain Double Taxation to the Economic Heathens

Never let it be said I back down from a fight, even when it’s the other team’s game, played by the other team’s rules, and for the benefit of the wrong person.

And that definitely went through my mind when U.S. News & World Report asked me to contribute to their “Debate Club” on the topic of “Should Mitt Romney pay higher taxes?”

I’m not a Romney fan, and it irks me to defend good tax policy on behalf of someone who is incapable and/or unwilling to make the same principled arguments.

But my job is to do the right thing and bring truth to the economic heathens, so I agreed to participate. And I’m glad I did, because it gave me a chance to try out a new argument that I hope will educate more people about the perverse impact of double taxation.

Let me know what you think of this approach, which asks people whether they would think it would be fair if they couldn’t take credit for withheld taxes when filling out their 1040 tax return.

Capital gains taxes and dividend taxes are both forms of double taxation. That income already is hit by the 35 percent corporate income tax. So the real tax rate for people like Mitt Romney is closer to 45 percent. And if you add the death tax to the equation, the effective tax rate begins to approach 60 percent.  Here’s a simply analogy. Imagine you make $50,000 per year and your employer withholds $5,000 for personal income tax. How would you feel if the IRS then told you that your income was $45,000 and you had to pay full tax on that amount, and that you weren’t allowed to count the $5,000 withholding when you filled out your 1040 form? You would be outraged, correctly yelling and screaming that you should be allowed to count those withheld tax payments.  Welcome to the world of double taxation.

By the way, if you like my argument, feel free to vote for my entry, which you can do on this page.

I won my previous debate for U.S. News, so I’m hoping the keep a good thing going. As they say in Chicago, vote early and vote often.

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Newt Gingrich Wants to Send Our Wallets and Purses into Outer Space

I was nauseated when Newt Gingrich did the infamous global warming ad with Nancy Pelosi.

I was disgusted when he criticized Paul Ryan’s entitlement reforms.

But I’m not sure what my reaction is to Newt’s latest brain fart. For lack of anything clever, let’s just say I’m bemused by his proposed galactic boondoggle.

Here are some of the absurd details for a Politico report.

Newt Gingrich wants to colonize the moon. …“By the end of my second term, we will have the first permanent base on the moon and it will be American,” Gingrich said… It’s just the kind of Gingrich big-think for which he has been ridiculed by others in the GOP field, including Mitt Romney. But Wednesday’s speech — which Gingrich himself called “grandiose” — could actually resonate politically in Florida, where space exploration is good politics… Gingrich even envisions a moon state. “When we have 13,000 Americans living on the moon, they can petition to become a state,” he said, drawing laughter from the crowd. …But Gingrich’s space fantasies don’t stop at the moon. He wants to see trips to Mars by 2020. “By the end of 2020, we will have the first continuous propulsion system in space capable of getting to Mars in a remarkably short time because I am sick of being told we have to be timid and I am sick of being told we have to be limited in technologies that are 50 years old,” he said.

But I’m not just bemused. To use Newt’s rhetoric, I am sick of politicians coming up with new ways to spend my money and I am sick of being told by the clowns in Washington that my wallet is a pinata to fund their grandiose dreams.

If Newt likes space travel and wants a base on the moon and trips to Mars, then he should take some of the money he “earned” as Freddie Mac’s “historian” and invest it in a space company.

About 10 days ago, I was in the British Virgin Islands, speaking at a conference that was keynoted by Sir Richard Branson of the Virgin empire. Branson is doing what Newt wants, but in an ethical fashion. He’s using private money to set up a profit-making space-travel business.

Too bad politics and ethics are mutually exclusive concepts.

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Can You Identify the Most Egregious Example of Wasteful Spending by the Welfare State?

I’ve commented many times about wasteful government spending, including Social Security bureaucrats spending $700 thousand to party at a luxury resort, HUD bureaucrats giving huge subsidies for welfare recipients to live in upscale neighborhoods, rampant fraud in the unemployment insurance program, and tax dollars being used to subsidize a grown man wearing diapers and living as an “adult baby.”

Those are depressing examples, but here are three additional stories that may be even worse. They all show how entitlement programs squander other people’s money.

1. A local news outlet in Oregon revealed that recipients can use food stamps to buy luxury products:

Oregon Trail Cards — which are part of the state’s food stamp program — can be used to purchase luxury coffee concoctions at Starbucks counters inside grocery stores, investigators from Fox 12 in Oregon have discovered. …According to federal Supplemental Nutrition Assistance Program (SNAP) guidelines, people cannot buy foods that will be eaten in the store or hot foods. However, luxury items that are allowed include soft drinks, candy, cookies, ice cream, even bakery cakes and energy drinks that have a nutrition facts label.

2. Benjamin Domenech of the Heartland Institute reports that hundreds of millions of dollars are being spent on penis pumps:

According to data collected by the Centers for Medicare and Medicaid Services (CMS), Medicare has spent more than $240 million of taxpayer money on penis pumps for elderly men over the past decade, and will surpass a quarter of a billion dollars this year for costs since 2001. The cost to taxpayers for the pumps more than quadrupled during that period… And these represent only the costs for external devices, technically classified as “Male Vacuum Erection Systems,” not implantable devices or oral drugs such as Viagra.”

3. A Seattle TV station has an expose about a woman receiving various forms of welfare even though she lives in a million-dollar home.

Search warrant documents unsealed Friday in federal court reveal that she received more than $1,200 a month in public housing vouchers, plus monthly cash from the federal and state government for a disability, as well as food stamps. Property records show the woman lives in a 2,500 square-foot home, with gardens and a boat dock, that is valued at $1.2 million. Records show she has received welfare benefits while living in the plush home since 2003. Records also show she truthfully provided her address when she applied for benefits.

These are the stories that I keep in mind every time I hear some politician whining that “spending has been cut to the bone” and higher taxes are needed.

P.S. I’m happy to report that American taxpayers were not victimized by the all-time record for the most absurd example of government waste, which took place when British taxpayers financed sex trips to Amsterdam for welfare recipients.

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Just in Case You Needed More Evidence that Obama’s Faux Stimulus Was a Failure

Much of the “stimulus” debate has revolved around macroeconomic issues. Obama squandered about $800 billion, supposedly to “jolt” the economy, but growth has been anemic and the employment situation has been miserable.

But it’s equally instructive to look at the microeconomic impact. And that’s exactly what the folks at Reason TV did with this expose of how money was wasted in a suburb of Washington, DC.

While the video is a damning indictment of how the faux stimulus failed, it actually is too generous in its analysis.

It looks at how much money was misallocated in Silver Spring, MD, and shows how few jobs were created, but it also should have asked what would have happened if the so-called stimulus never happened and the $800 billion was left in the productive sector of the economy.

In other words, As I wrote back in September, how much stronger would the economy be if the government had not diverted all that money to Washington?

..to paraphrase Bastiat, we want to look not only as the “seen” of government spending, but we also want to look at the “unseen” of how the money otherwise would have been allocated. What modern economists sometimes refer to as the “opportunity cost” …The relevant question, from an economic perspective, is whether the government can utilize resources more efficiently and productively than the private sector. Needless to say, there are not many types of government spending that meet this test.

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Why Are American Tax Dollars Subsidizing a Paris-Based Bureaucracy so It Can Help the AFL-CIO Push Obama’s Class-Warfare Agenda?

To be blunt, I’m not a big fan of the Organization for Economic Cooperation and Development. But my animosity isn’t because OECD bureaucrats threatened to have me arrested and thrown in a Mexican jail.

Instead, I don’t like the Paris-based bureaucracy because it pushes a statist agenda of bigger government. This Center for Freedom and Prosperity study has all the gory details, revealing that OECD bureaucrats endorsed Obamacare, supported the failed stimulus, and are big advocates of a value-added tax for America.

And I am very upset that the OECD gets a giant $100 million-plus subsidy every year from American taxpayers. For all intents and purposes, we’re paying for a bunch of left-wing bureaucrats so they can recommend that the United States adopt that policies that have caused so much misery in Europe. And to add insult to injury, these socialist pencil pushers receive tax-free salaries.

And now, just when you thought things couldn’t get worse, the OECD has opened a new front in its battle against America. The bureaucrats from Paris have climbed into bed with the hard left at the AFL-CIO and are pushing a class-warfare agenda. Next Wednesday, the two organizations will be at the union’s headquarters for a panel on “Divided We Stand – Tackling Growing Inequality Now.”

Co-sponsoring a panel at the AFL-CIO’s offices, it should be noted, doesn’t necessarily make an organization guilty of left-wing activism and mis-use of American tax dollars. But when you look at other information on the OECD’s website, it quickly becomes apparent that the Paris-based bureaucracy has launched a new project to promote class-warfare.

For instance, the OECD’s corruption-tainted Secretary-General spoke at the release of a new report on inequality and was favorable not only to higher income tax rates, but also expressed support for punitive and destructive wealth taxes.

Over the last two decades, there was a move away from highly progressive income tax rates and net wealth taxes in many countries. As top earners now have a greater capacity to pay taxes than before, some governments are re-examining their tax systems to ensure that wealthier individuals contribute their fair share of the tax burden. This aim can be achieved in several different ways. They include not only the possibility of raising marginal tax rates on the rich but also…reassessing the role of taxes on all forms of property and wealth.

And here’s some of what the OECD stated in its press release on income differences.

The OECD underlines the need for governments to review their tax systems to ensure that wealthier individuals contribute their fair share of the tax burden. This can be achieved by raising marginal tax rates on the rich.

Like Obama, the folks at the OECD like to talk about “fair share.” These passages sounds like they could have been taken from one of Obama’s hate-and-envy speeches on class warfare.

But the fact that a bunch of Europeans support Obama’s efforts to Europeanize America is not a surprise. The point of this post is that the OECD shouldn’t be using American tax dollars to promote Obama’s class-warfare agenda.

Here’s a video showing some of the other assaults against free markets by the OECD. This is why I’ve written that the $100 million-plus that American taxpayers send to Paris may be – on a per dollar basis – the most destructively wasteful part of the entire federal budget.

One last point is that the video was produced more than one year ago, which was not only before this new class-warfare campaign, but also before the OECD began promoting a global tax organization designed to undermine national sovereignty and promote higher taxes and bigger government.

In other words, the OECD is far more destructive and pernicious than you think.

And remember, all this is happening thanks to your tax dollars being sent to Paris to subsidize these anti-capitalism statists.

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Big Spenders Gone Wild

Last month, I shared a video about bloated bureaucracy from a group called Government Gone Wild.

That generated a big response, so here’s another video from the same group, only this one looks at egregious examples of government waste.

If you like videos on wasteful spending, but prefer a more attractive narrator, click here.

And if you want a video that looks at the economic cost of excessive government spending, watch this mini-documentary on the Rahn Curve.

We’ve reached a point where even economists from the welfare state of Sweden are producing studies showing there’s a negative relationship between government spending and economic performance.

One can only hope this message seeps through the thick skulls of the political class before it’s too late.

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Per Dollar Spent, OECD Subsidies May Be the Most Destructively Wasteful Part of the Federal Budget

I’m not a fan of international bureaucracies.

I’ve criticized the United Nations for wanting global taxes. I’ve condemned the International Monetary Fund for promoting bigger government. I’ve even excoriated the largely unknown Basel Committee on Banking Supervision for misguided regulations that contributed to the financial crisis.

But the worse international bureaucracy, at least when measured on a per-dollar-spent basis, has to be the Paris-based Organization for Economic Cooperation and Development.

OECD Headquarters: Living the good life at US expense

American taxpayers finance nearly one-fourth of the OECD’s budget, at a cost of more than $100 million per year, and in exchange we get a never-ending stream of bad policy recommendations.

This Center for Freedom and Prosperity study has all the gory details. The OECD bureaucrats (who get tax-free salaries, by the way) endorsed Obamacare, supported the failed stimulus, and are big advocates of a value-added tax for America.

What’s especially frustrating is that the OECD initially was designed to be a relatively innocuous bureaucracy that focused on statistics. Indeed, it was even viewed as a free-market counterpart to the Soviet Bloc’s Council for Mutual Economic Assistance.

My, how things change.

Perhaps the most odious example of bad OECD policy is the campaign against tax competition. Beginning during the 1990s, the OECD has attacked low-tax jurisdiction for the supposed crime of having good tax laws that attract jobs and capital from high-tax nations such as France and Greece.

So why did the OECD launch this project to prop up Europe’s welfare states?  The answer can be found in an excellent new study from Professor Andrew Morriss at the University of Alabama Law School and Lotta Moberg, a Ph.D student in economics at George Mason University.

It’s a publication designed for academic journals, but it avoids jargon and gibberish, so a regular person can read and understand how the OECD has morphed from a harmless (though presumably still wasteful) bureaucracy into a force for global statism. Here are some of the key findings in the study.

…this transition was in part the result of entrepreneurship by a group of OECD staff, who spotted an opportunity to expand their mission, bringing with it a concomitant increase in resources and prestige. They accomplished this by providing a framework for interests within a group of high tax states to create a cartel that would channel competition in tax policy away from areas where those states had a competitive disadvantage and toward areas in which they had a competitive advantage. …These states then sought to restrict tax competition, which in turn required them to create a means of delegitimizing such competition and by preventing each other from defecting from the cartel by lowering tax rates unilaterally. …The French…realized that single-country financial controls were unworkable within a global financial system.

In other words, the bureaucrats at the OECD and governments from decrepit welfare states like France both saw a benefit in creating a tax cartel.

This “OPEC for politicians” is grossly contrary to good tax policy, international comity, and national sovereignty. But those factors didn’t matter.

Unfortunately, it’s quite likely that we will see further schemes from the OECD and other international bureaucracies. The politicians have learned that transnational cartels increase their power.

…the evolution of the OECD from a facilitator of economic competition to a cartel enforcer represents something new in international organization behavior. …The cartelization of tax policy is an important effort to hold off the impact of the forces unleashed by competition on a more level playing field, but it is certainly not the only one. …If the opportunity is provided, it may be better from a politician’s point of view to form a cartel on taxation as a protection. With a cartel, there are fewer constraints on domestic policy, improving the politicians’ welfare by increasing the degrees of freedom available to satisfy domestic constituents and win re-election.

This video has more information on why the OECD is contrary to the interests of American taxpayers.

Needless to say, it is outrageous that the politicians in Washington are sending more than $100 million to Paris every year to subsidize this bureaucracy. For all intents and purposes, we are being coerced into paying for a bunch of European bureaucrats so they can then advocate even bigger government in the United States.

And those bureaucrats get tax-free salaries why pushing for higher taxes for the rest of us!

Can anyone think of a more destructive item in the federal budget, at least when measured on a per-dollar-spent basis? I can’t. That’s why I’ve been fighting the OECD for years, even to the point that the bureaucrats threatened to put me in a Mexican jail for the “crime” of standing in the public lobby of a public hotel.

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Here’s a Powerful Example of Why Obama’s “Stimulus” Proposal for more Infrastructure Spending Should Be Rejected

As part of his latest “stimulus” scam, President Obama argues that the federal government should spend more money on infrastructure.

Yet there is widespread evidence that politicians use such projects to squander money – often in exchange for contributions from contractors and construction unions.

There’s a very unfortunate example of this phenomenon in my backyard. Fairfax County is part of a $7 billion (that’s not a misprint) project to extend the metro (subway) system to Dulles Airport.

The project is way over budget (which happens 99 percent of the time with government spending projects).

But what’s really remarkable is that supporters of the boondoggle now admit they lied to taxpayers.

What’s noteworthy isn’t the lie. Heck, they always lie and underestimate costs (and then pretend the subsequent cost-overruns were unpredictable and unforeseen).

But not many proponents actually ‘fess up and admit that taxpayers were intentionally deceived.

Here is some of what the DC Examiner said in an editorial denouncing the duplicity and mendacity of the project’s chief bureaucrat.

Metropolitan Washington Airports Authority Chairman Charles Snelling finally admitted that he deliberately misled the public when he stated it was “beyond dispute” that Dulles Rail was “on time and on budget.” Turns out it is neither — a fact Snelling and his fellow MWAA Board members knew all along, stripping the last pretenses of transparency and accountability from one of the largest infrastructure projects in the nation. Snelling later acknowledged that construction managers warned MWAA that the opening of Phase I would be delayed six months and that unexpected expenses were depleting the project’s contingency fund. …Snelling’s less-than-candid assurances were an attempt to deprive taxpayers of a true accounting of this runaway project before November’s county and state elections. But what do you expect when you sever the critical tie between voters and officials with the authority to spend public funds? Unaccountable political hacks like MWAA board members, who cannot be removed — even by the governor of Virginia — have no incentive to spend the people’s tax dollars wisely — or even to tell them the truth, for that matter.

 The answer, at least in part, is to do the opposite of what Obama is proposing. Abolish the Department of Transportation and get the federal government out of the business of funding local infrastructure.

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Just in Case You Need One More Reason Why the Department of Housing and Urban Development Should Be Abolished…

Welcome Instapundit readers. If you want to get even more upset, here’s a big list of posts about waste, fraud, and abuse, including one about Social Security bureaucrats enjoying a $700,000 junket and another about a lawyer getting $25,000 of “stimulus” money for writing a two-sentence memo.

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While I’ve been somewhat critical of Senator Coburn’s willingness to raise taxes, I’ve never doubted that he is a sincere and tireless fighter for smaller government.

Indeed, his staff periodically share examples of government waste that boggle the mind, though I don’t share many of them on the blog since I’m afraid people will become desensitized to the sleazy boondoggles that are so beloved by lawmakers.

However, the last email from Senator Coburn’s office included a story that shows, in a rather remarkable fashion, how a bloated federal government has a corrupting impact on the rest of society.

According to a Wisconsin newspaper, a local governments is trying to “sell” federal funds, sort of like how I used to scalp football tickets as a student.

River Hills, Milwaukee County’s richest suburb, has found little use for what has become an annual allocation of about $20,000 in federal community development block grant money. So village leaders instead have cut deals with other suburbs to lend or transfer the grant money and have even sought unsuccessfully to sell the River Hills block grant allocation to another community. …Assistant Corporation Counsel John Jorgensen said selling the HUD allocation wouldn’t break any rules or laws, as long as the grant money is used for allowable projects. In a memo to county supervisors, Jorgensen said his opinion matched advice he’d gotten from local HUD officials. But Sullivan said the Milwaukee field office had questioned the practice in the past. Officials from the Milwaukee office of the Department of Housing and Urban Development declined to comment.

The Department of Housing and Urban Development has always been near the top of my list of government entities that should be shut down. This latest scam is merely the cherry on the ice-cream sundae of the argument to eliminate HUD as soon as possible.

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The Never-Ending Government Fraud Racket

Here’s a great example of family values, but only if you think it’s noble for a husband, wife, and daughter to conspire together to rip off taxpayers. I guess the family that steals together, stays together.

Here are some of the details from the Daily Caller expose.

A special investigation by The Daily Caller has discovered that a State Department contract specialist participated in awarding more than $52 million in taxpayer-funded contracts to a company owned and operated by her husband and daughter. Kathleen McGrade helped their company, Sterling Royale Group, win 43 federally funded contracts over the last few years. McGrade acted as the Contracting Officer (CO) for awards to Sterling Royale Group. McGrade’s husband, Brian Collinsworth, serves as the company’s Vice President. McGrade’s daughter, J.L. (Jennifer) Herring, is its president and CEO.

What isn’t apparent from the story, but which presumably will add insult to injury (or, perhaps in this case, injury to injury) is how much money was involved and the degree to which the money was spent on purposes that would be illegitimate even if the contracting process was honest. And speaking of government fraud (is that a redundancy?), James O’Keefe of ACORN fame is back with a set of undercover videos on Medicaid fraud. Experts have estimated that there are tens of billions of dollars of fraud in Medicare and Medicaid, so O’Keefe isn’t uncovering the tip of the iceberg. He’s looking at one snowflake on top of the tip of the iceberg.

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More Disgusting Examples of Government Waste, Fraud, and Abuse

It gets my blood boiling that the crowd in Washington is talking about raising our taxes when the budget is so riddled with excess spending. Here are two stories that illustrate the waste, fraud, and abuse that is pervasive in the federal budget.

Our first example is about unemployment benefits fraud. I’ve noted on several occasions (including this very amusing cartoon) that the main problem with unemployment benefits is that they lure people into long-term joblessness and dependency. That gets me angry in my role as an economist. As a taxpayer, though, I get upset that 10 percent of the funds (that’s just what the government admits, so the real figure surely is higher) are squandered because of fraud. Here’s some info from an AP report.

A nationwide crackdown is coming for people fraudulently drawing unemployment payments — those who were never eligible and workers who keep getting checks after they return to work — a $17 billion benefits swindle last year alone, say federal officials. …As much as 30 percent of the wrong payments in 2010 went to people who had returned to the workforce but continued to claim benefits, according to Dale Ziegler, deputy administrator for the Office of Unemployment Insurance at the U.S. Department of Labor.

Our second example comes from a news report in West Virginia, and it deals with the weatherization program (one of the flagship components of Obama’s failed stimulus scheme). You won’t be surprised to learn the program has been a farce.

Federal audits are turning up misspent taxpayer dollars in a $5 billion stimulus program aimed at lowering the utility bills of disabled, poor and older Americans by making their homes more energy-efficient. In West Virginia, which received $38 million in weatherization funds, some of the money went for lobbying, to consultants who did little work and to recipients with connections to state officials who are doling out the funds, the Energy Department’s inspector general found. In one case, West Virginia paid $25,000 to a lawyer for writing two sentences stating that weatherization contracts had been reviewed, reportedly after four hours’ work at a state office, according to a report analyzing how the federal stimulus money was used. A $20,000 consulting fee was paid to the former director of the state’s weatherization program after he left the job in May 2009 even though there were no specific work requirements set for the consulting contract. …more than half of weatherized homes that were re-inspected needed to be redone because of faulty work, the report said. Meanwhile, $2,500 was spent on lobbying in Washington – even though such use is expressly forbidden – to “get the word out” that there wasn’t enough funding to administer stimulus programs, it said.

These stories aren’t even the tip of the iceberg. They are a few tiny crystals in one snowflake sitting on the top of the tip of the iceberg. The politicians want more revenue so they can maintain this corrupt scam.

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Time to Shut Down the Department of Agriculture

I have a confession to make: I have a hard time making up my mind. At times, I am overcome by indecision. To be more specific, I can’t figure out which department of the federal government should be shut down first.

In the past, I’ve written about the squalid waste and corruption at the Department of Housing and Urban Development and argued that HUD should be shuttered.

But I’ve also written about the grotesque inefficiency and bloat at the Department of Transportation and urged that the building be razed to the ground.

Today, I can’t resist turning my attention to the Department of Agriculture. This is another part of the federal behemoth that specializes in taking money from productive taxpayers and dispensing it to well-connected agri-businesses to maintain a system of subsidies and central planning so Byzantine that it would probably make a North Korean Commissar shake his head with bemusement.

If you want to share my anger, read this column by Victor David Hanson. Here’s an excerpt to get your blood boiling.

The Department of Agriculture…is a vast, self-perpetuating postmodern bureaucracy with an amorphous budget of some $130 billion — a sum far greater than the nation’s net farm income this year. …This year it will give a record $20 billion in various crop “supports” to the nation’s wealthiest farmers — with the richest 10 percent receiving over 70 percent of all the redistributive payouts. …Then there is the more than $5 billion in ethanol subsidies that goes to the nation’s corn farmers to divert their acreage to produce transportation fuel. That program has somehow managed to cost the nation billions, to send worldwide corn prices sky-high, and to distort global trade in ethanol at the expense of far cheaper sugarcane. …About every 10 years or so, public outrage forces Congress to promise to curtail the subsidy programs. But when the deadline arrives, our elected officials always find a trendy excuse like “green energy” or “national security” to continue welfare to agribusiness. …In a brilliantly conceived devil’s bargain, the Department of Agriculture gives welfare to the wealthy on the one hand, while on the other sending more than $70 billion to the lower income brackets in food stamps. Originally, the food stamp program focused on the noble aim of supplementing the income of only the very poor and the disabled. But now eligibility is such that some members of the middle class find a way to manipulate such grants. In fact, 2011 could be another sort of record year for the Agriculture Department, as it may achieve an all-time high in subsidizing 47 million Americans on food stamps — nearly one-sixth of the country. …The multilayered Department of Agriculture has no real mission, much less a methodology other than to provide cash to congressional pet constituencies.

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Why on Earth Should We Consider Tax Increases When Politicians and Bureaucrats Allow Multi-Billion Dollar Losses of Taxpayer Money Because of Waste, Fraud, and Abuse?

Maybe I’m just old fashioned, or maybe I’m a bit stiff-necked, but I will never relent in my opposition to tax increases so long as the crowd in Washington is spending money on things that are not appropriate functions of the federal government.

But that’s just one obstacle that has to be overcome. I will also be dogmatic in my fight against higher taxes so long as there is massive waste, fraud, and abuse in federal programs.

And sometimes, to really get me upset, we have massive waste, fraud, and abuse for programs that are not legitimate functions of the federal government.

Here’s an excerpt from a story in Time magazine, but don’t read it if you have high blood pressure.

The Social Security Administration made $6.5 billion in overpayments to people not entitled to receive them in 2009, including $4 billion under a supplemental income program for the very poor, a government investigator said Tuesday. In all, about 10 percent of the payments made under the agency’s Supplemental Security Income program were improper, said Patrick P. O’Carroll Jr., the Social Security inspector general. …Throughout the federal government, improper payments totaled $125 billion last year, up from $110 billion in 2009, O’Carroll said. In 2009, only two other agencies — the Departments of Health and Human Services, and Labor — had more improper payments than Social Security, he said.

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