My first instinct, when arguing against higher taxes, is to pontificate about the negative impact of high marginal tax rates and punitive effect of double taxation on saving and investment.
Those are very legitimate concerns, and they’re the obvious things for an economist to highlight.
But I’m going to confess that my main motive for fighting tax increases is that I don’t think we should reward incompetent and feckless politicians by giving them more of our money.
I routinely cite horrifying cases of government waste and bureaucratic stupidity and it galls me to think that American families might have to sacrifice more of their income to the gaping maw of Washington.
And now I have more reasons to despise the political class. Check out these three additional examples of foolish waste.
The Washington Examiner reports that agents from the Drug Enforcement Administration got illegal bonuses after “partying” with prostitutes.
Drug Enforcement Agency officials linked to sex parties and prostitutes paid by drug cartels weren’t fired but rewarded with $95,000 in performance bonuses, according to a shocking new report from the Justice Department’s inspector general. What’s more, the bonuses weren’t allowed. …The report outraged House Oversight and Government Reform Committee Chairman Jason Chaffetz…”It is a disgrace that taxpayer dollars are being wasted on those who violate our trust and abuse their positions.”
I’m particularly impressed that they didn’t just hang out with normal prostitutes. These hookers were provided by the drug cartels!
I’m surprised they didn’t get free cocaine as well.
Our second story is from the Los Angeles Times, and it reveals that the Federal Air Marshall program is an ineffectual waste of money.
I realize “ineffectual waste of money” applies to most everything the government does, but this program must be uniquely wasteful.
…the federal air marshal program is mired in…allegations of misconduct and management turmoil, prompting some in Congress to question whether the multi-billion dollar experiment has outlived its usefulness. …At a price tag of $9 billion over the past 10 years, Duncan called the program “ineffective” and “irrelevant.”
I had no idea the government was squandering almost $1 billion per year on this empty gesture of security theater.
But I guess the costs add up with the Marshalls get to fly in first class while the taxpayers are stuck in coach.
Some air marshals have complained they feel they are merely “riding the bus” as they hopscotch around on domestic and international planes. …In addition, the agency, part of the Department of Homeland Security, has been hit recently with several scandals. In 2012 some agents were accused of setting up sexual liaisons to coincide with their work flights. …some Chicago-based marshals allegedly disguised themselves as pornography producers to hire prostitutes after some trips. …the program “has come to be a symbol of everything that’s wrong with the DHS, when 4,000 bored cops fly around the country First Class, committing more crimes than they stop.”
But not every Air Marshall was satisfied by first class travel and hookers.
“I hated every day of it,” said former air marshal Jay Lacson, who said he is suing after being fired for inappropriately releasing confidential job information. “I couldn’t stay awake. I got colds. You get complacent.” He added, “They don’t need the agency anymore.”
To complete a trifecta of brainless government waste, now let’s turn to the Equal Employment Opportunity Commission.
As recounted by my colleague Walter Olson, this bureaucracy sued a trucking company for failing to provide “reasonable accommodation” to Muslim truck drivers who didn’t want to deliver alcoholic beverages.
In 2013 the commission sued the Star Transport Co. in Illinois for failing to provide a reasonable accommodation to two Muslim truck drivers when it dismissed them for refusing to haul booze
Since the EEOC bureaucrats already have gone after a trucking company that wanted to weed out alcoholics (seemingly a prudent step), I briefly wondered whether these pinheads are trying to tilt the playing field in favor of air cargo and/or railroads.
But that assumes they know enough about investing to manipulate the market. But if they were that clever, they probably wouldn’t be languishing in the federal bureaucracy.
Instead, I think the EEOC simply wants to make sure it’s still recognized as America’s most clueless and malicious bureaucracy.
P.S. Since today’s topic is wasteful spending, I suppose it’s appropriate to share these excerpts from a report by the Daily Caller.
Entitlement spending accounts for most erroneous federal payments, and it’s only going to get worse, Comptroller General Gene Dodaro told Congress Thursday. “Improper” Medicaid, Medicare, and Earned Income Tax Credit disbursements made up 75 percent of all erroneous federal payments in fiscal year 2014, and were the main driver behind a nearly $19 billion increase in improper payments — from $105.8 billion in fiscal year 2013 to $124.7 billion in fiscal year 2014… Medicare incorrectly paid out one of every $10 the program spent last year, or $59.9 billion of its $603 billion budget.
Something to keep in mind next time someone argues that we can stick our heads in the sand and not enact genuine entitlement reform.
[…] EEOC sued a trucking company that dismissed Muslim drivers who refused to deliver […]
[…] EEOC sued a trucking company that dismissed Muslim drivers who refused to deliver […]
[…] EEOC sued a trucking company that dismissed Muslim drivers who refused to deliver […]
[…] isn’t Kristof clever. If you don’t support a bankrupt entitlement state and inane over-regulation, then you must want chaos and civil […]
[…] isn’t Kristof clever. If you don’t support a bankrupt entitlement state and inane over-regulation, then you must want chaos and civil […]
[…] isn’t Kristof clever. If you don’t support a bankrupt entitlement state and inane over-regulation, then you must want chaos and civil […]
One reason for command economies to do well, even with bad policies, is that they can emulate what mature economies want. If mature economies want cell phones, make cell phones cheaper.
Growth will stall when command economies have to innovate.
It’s a good question. It’s the one quadrillion question.
A simple empirical answer is that they do grow, as evidenced by an average world growth trendline of four percent.
Looking into why, given the same policies, it is easier to grow when you are still relatively poor. After all you are further away from the equilibrium point that is commensurate to your policies.
This is why China has been growing so fast. Because in recent years, after many decades of near zero freedom, China has finally transformed into a middle-freedom country. But has not become a middle-income country yet. The fact that it is slowing down is likely indicative of the fact that it might indeed be approaching that equilibrium, and that without further freedom it will indeed stall, like Europe has, and as the U.S. is now doing.
Besides not all countries in the world are having bad policies, or are reverting to less freedom instead of more, as European and American voter-lemmings have been doing recently.
And thank heavens that they are not. Masking underperformance because nobody else is doing better would be a pathetically dismal consolation.
No matter how small the core of fast growing developed nations is, many others will sooner or later cry uncle under the compounding obvious divergence. Then they will hopefully join in, or spend a few more decades yet crying uncle.
One has to understand the exponential nature of growth to comprehend the fantastic future we are delaying for ourselves and our descendants when we acquiesce to slower growth. At 2% growth, 70 years yield a 4 fold increase in prosperity. At 4%, 70 years yield a 15 fold prosperity increase. Encapsulated into that 15 multiplier are probably things like a cure for cancer. In a 4 fold increase only, I’m not so sure. Growing at 4% annually, the Zambian of the next century will be wealthier than today’s American. And have at his disposal things that today Americans cannot have at any price, because they have not been invented yet.
Growth is a new phenomenon in humanity. Even a mere 0.7% growth (think France) over the last two millennia would have yielded a 1,000,000 fold (yes that’s times one million) increase in prosperity. Clearly that has not happened. Growth is a new phenomenon and humanity’s future looks fantastic either way (barring WMD self annihilation).
But wouldn’t we rather have a cure for cancer by 2060 at 4% growth rather than have to wait until 2090 at 2% growth? The stakes are colossal and when looked this way, slow growth becomes a mean spirited tyrannical endeavor. Had humanity had a mere 0.3% annual growth in the last two millennia, the tens of billions who suffered plagues, infections, malnutrition, tuberculosis, kidney stones, would have never died.
Even if one does not agree, the future belongs to the higher growing, whether one likes it or (foolishly) not. It’s unstoppable. Consolation in defeatist slow growth can only be but temporary.
Having lived in Europe, I can guarantee you. There is little that is different in the psychology of Europeans and Americans. A little less envy, a little less coercive collectivism is all the advantage Americans have. But it’s enough. Like the joke of the campers on the Serengeti who awaken to the noise of a threatening leopard and when one of the campers starts lacing his running shoes the other exclaims “it’s futile, you’ll never outrun a lapsed”, to which the other responds “the only one I have to outrun is you”.
Even small divergences in growth compound to enormous consequences.
The post you referenced, in turn, references a paper by the federal reserve. That paper claims “with a few exceptions that is not happening [middle income countries are not converging to the developed world]”. I think that is quantitatively wrong. If Europeans are growing along a 1% trendline and Americans now at 2%, and the world as a whole is still growing at 4%, that means that there is an ocean of human souls growing faster than Europeans and Americans.
I don’t know if the following graph is quantitatively correct. But the general theme of a declining American ranking and even faster declining European ranking is correct.
http://www.google.com/imgres?imgurl=http://wallstreetpit.com/wp-content/uploads/2010/02/image073.png&imgrefurl=http://www.debate.org/forums/politics/topic/29163/2/&h=373&w=500&tbnid=AcvZUkCvijcTAM:&docid=AxwVqgL1xazQ7M&hl=en&ei=0PsrVv3yHJGqoQT3oZWYDw&tbm=isch&client=safari&ved=0CB8QMygDMANqFQoTCP2ah5mK3MgCFRFViAod91AF8w
[…] Author: Dan Mitchell […]
It’s always entertaining (though depressing) to read Zorba’s comments.
But I have to disagree with one theme.
Why assume the rest of the world will converge when other nations also have bad policy?
This post has stuck with me: https://danieljmitchell.wordpress.com/2015/03/29/if-poor-nations-want-economic-convergence-and-capital-accumulation-they-need-good-policy/
And how’s that remaining in the world’s top three percent working out for you?
The new American norm of growth, at 2%, is half the average world growth rate.
Not much hope on that trajectory. Is there?
As total taxation, as in % of GDP controlled by government increases towards 50%, then, in a nutshell:
“You can work 8am-12pm for yourself and your family. But then from 12pm-5pm you shall work for ‘the people’. Distant unknowns in the next block, next town,county, state.
But you shall do so with enough enthusiasm that America maintains top competitiveness so that the American middle class will retain its rightful prosperity position in the world’s top three percent.”
The essence of delusion.