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The U.S. National Debt Superhighway

Friday October 3rd, 2014   •   Posted by Craig Eyermann at 6:14am PDT   •  

ii-map-2790-miles-nyc-to-la The national debt is that it is so big that it can be difficult to describe the magnitude of the nation’s liabilities in terms that make sense on a human scale.

That didn’t stop Mick Teufel from trying, though! Here’s his attempt to describe the size of the national debt using the metaphor that anyone who has ever driven or ridden in a car might appreciate:

Imagine 250 lanes of Cadillac Premium Edition Escalades (manufacturer’s suggested retail price of $81,190) placed bumper to bumper going from New York to Los Angeles (2,790 miles). This is an illustration of how much our national debt is. Our debt has been a problem for many years; however, it has been greatly accelerating the last 14 years.

According to the Department of Transportation, the minimum width for a freeway lane in the United States, not including shoulders or curbs, is 12 feet (3.6 meters). With 250 lanes side-by-side, the U.S. debt superhighway would be 3,000 feet wide (900 meters).

That’s some gridlock!

But more to the point, if the federal government had actually borrowed all the money it has for the purpose of buying and parking so many of GM’s Cadillac division’s luxury gas guzzlers on a superhighway between New York and Los Angeles, the national debt would be visible from low Earth orbit.

How Ruling Class Railroads Taxpayers

Tuesday September 30th, 2014   •   Posted by K. Lloyd Billingsley at 10:14am PDT   •  

HiSpeedCATrain_200A high-speed rail line from Los Angeles to San Francisco could have been built privately. That remarkable admission comes from none other than Jeff Morales, CEO of the California High-Speed Rail Authority, in an interview with Allen Young of the Sacramento Business Journal. The article, titled “Why Does California’s High-Speed Rail Need Public Money?”, notes that a new rail line from Houston to Dallas will be privately financed. So why isn’t California’s?

Morales claims that this plan would bypass “population centers” in the central valley. But as Allen points out, those centers are home to less than 10 percent of the state’s population. Even so, the government bullet train, originally sold as a conduit from Los Angeles to the Bay Area, aims to start somewhere near Fresno. These cities have vacant land “perfect for sprawl development,” Allen says, so the project “has morphed into crony capitalism with generous government support.”

In reality, high-speed rail is designed to shore up the prospects of California congressmen by spending money in their districts. That’s why the first stretch of the system is slated for the boondocks. The High Speed Rail Authority also serves as a soft landing spot for washed-up politicians such as board member Lynn Schenck, a former congresswoman and chief of staff for governor Gray Davis. The bullet train also rewards politicians’ support networks. All the work will go to union contractors, even though more than 90 percent of workers in the private sector are not union members.

High Speed Rail may serve as a legacy project for Governor Jerry Brown, but it won’t take people where they want to go or get “old people” out of their cars, as Brown says. But there’s more to it still. Politicians love to spend other people’s money. As bullet train boss Jeff Morales notes, they do so even when they know full well that an independent, privately funded project would be better. That’s why the bullet train railroads taxpayers.

U.S. Debt versus the Rest of the G7

Tuesday September 30th, 2014   •   Posted by Craig Eyermann at 5:41am PDT   •  

In international politics, the Group of 7, or G-7, is made up of the world’s seven most industrialized economies, which include the United States, Japan, Germany, Canada, France, Italy, and the United Kingdom. Rebecca Strauss of the Council of Foreign Relations recently compared how the national debt of the United States changed with respect to the other six members of this exclusive club since 2000:

On matters of fiscal health, the US has not traditionally looked to Europe for guidance. For much of the past three decades, governments in Italy, France, and Germany were much deeper in the hole than the US.

How things have changed. The US racked up debt faster than any other G7 country during the Great Recession, so that its debt burden is now as bad as the average European country. If current projections hold, by 2040 the US will have the worst debt burden of any G7 country save for Japan, reaching levels not seen since World War II.


Almost all of the U.S. achievement in catching up to and nearly surpassing the debt carried by the other six nations of the G-7 has been racked in the second half of the period from 2000 through 2014.

Government Power of “No” Still Trumps Taxpayers’ Right to Know

Friday September 26th, 2014   •   Posted by K. Lloyd Billingsley at 4:55pm PDT   •  

California_State_Capitol_p1080924-230x172As we noted, governments indulge their own form of insider trading through cronyism and nepotism. In California’s capital, that was on display with longtime Senate human-resources boss Dina Hidalgo. Her practice was not to give jobs to those most qualified. Rather, she gave jobs to her own son, Gerardo Lopez, other family members, and even members of her softball team. What a cozy world. Since the California Highway Patrol polices the Capitol, Lopez’s post as a sergeant at arms is really a sinecure. As the Sacramento Bee noted, Lopez “routinely received special treatment during the 15 years he worked for the Senate.” Lopez’s wife, Jennifer Delao, managed to gain a job with Senate boss Darrel Steinberg in his policy unit.

This cronyism and nepotism took long time to emerge, but the Senate finally paid a private law firm $98,000 to look into it. Those were all taxpayer dollars, but taxpayers did not see the result because the Senate refused to release the report citing privacy concerns and attorney-client privilege. So a public matter that should have been investigated by the CHP winds up an expensive cover-up. The secrecy is part of Dina Hidalgo’s retirement deal, including $85,400 in cash and $13,000 for her legal fees. One thing it fails to include is any kind of punishment or accountability. And she gets her generous pension also courtesy of taxpayers.

Steinberg is also on the way out, but taxpayers should recall that in 2012 he blocked the California Channel from showing a Senate Governance and Finance Committee hearing on four ballot measures that involved taxes and spending. And in a lame apology Steinberg said, “I pride myself on being open and transparent.” That’s how it works with the ruling class.

Drying Out the “Food Deserts”

Friday September 26th, 2014   •   Posted by Craig Eyermann at 7:18am PDT   •  

Most journalists aren’t aware of this, but “food deserts” in the United States are a hoax.

A food desert has been arbitrarily defined as an area in which at least 20 percent of the households have incomes that put them below the federal poverty line, before receiving any welfare benefits or considering public transportation options or the existence of grocery delivery services, where the nearest grocery store is more than a mile away in urban areas or more than 10 miles away in rural areas.

The U.S. Department of Agriculture produced the following map to describe the areas where food deserts meet its definition:


What most journalists don’t realize is that the concept of a food desert originated with a study in 2006 funded by the LaSalle Bank of Chicago, which was then the largest business lender in the city.

That’s important because, as a business lender, the bank would profit from the solutions most likely to be implemented by politicians seeking to rectify the “crisis”: building more grocery stores.

That inherent conflict of interest came to a head in Portland, Oregon, where the residents of such a food desert successfully fought against having a grocery store put in their community to “fix” their neighborhood’s food-desert crisis. Gawker‘s Vann R. Newkirk II explains, starting with the role of one of Chicago’s more preeminent former citizens in promoting the concept of food deserts as a crisis requiring government action:

In previous efforts to promote her “Let’s Move” campaign, First Lady Michelle Obama lauded mayors for easing zoning and permit requirements for grocery stores to move into food deserts. One of her stated goals of the program is “to bring grocery stores and other healthy food retailers to underserved communities all across the country.” Obama’s campaign to get people moving, increase awareness about nutrition and get farmers markets to disadvantaged areas was so politically safe—and universally accepted as necessary—that she remains easily one of the most favored public figures in this country, despite being married to one of its least. Locally, across several large metropolitan areas, efforts to move grocers and farmers markets near poor neighborhoods have often been met with wide acclaim. These were the rare policy options that worked in a free market system and helped increase quality of life for disadvantaged communities. Slam dunks, they seemed.

But the evidence that grocers and farmers markets actually irrigate food deserts never came. In fact, the actual existence and mechanisms of food deserts have been questioned. The developing body of research has suggested over the past few years that while spatial access to groceries is a factor, economic and cultural access are more important. As Betsy Breyer, a researcher from Portland State University noted, “I don’t think the [food deserts] idea captures the full spectrum of food access possibilities and problems in poor communities.” In many cases, even building expensive stores directly next door to poor people, while solving the “food desert” issue from a definitional perspective, actually does little to help the underlying problem. Public perception and policy, however, have been retreating from the woefully inadequate but somewhat compelling conclusions about nutrition justice at an absolutely glacial pace.

The conflict between public policy, perception and local facts and realities came to a head in national news when earlier this year residents of a once-predominantly black neighborhood in Portland successfully rallied against the building of a Trader Joe’s on a vacant lot in the area. Many folks were baffled. Why wouldn’t people in this place labeled as a clear food desert rejoice at the fact that they could get great groceries (and tasty cookie butter) right down the street? But what outside viewers and eager Traderites willfully ignored was that many citizens were deathly afraid of gentrification and being displaced from their own neighborhoods in a city well-known for aggressive gentrification, much of which had involved early incursions by large chain grocery stores.

Breyer said that in the case of Trader Joe’s in Portland, the food desert concept was “used as an excuse to push an agenda that had nothing to do with food access for low-income communities” and had more to do with providing a rationale for securing access to cheap, promising real estate for developers and, eventually, the chain. The lower-income inhabitants of the neighborhood had figured out what policymakers and informed citizens across the country hadn’t: that the courtship dance with grocery stores was a dance with death for the people that needed the groceries most. The jig was up.

Solving the “problem” of food deserts was never the point of the government programs supposedly established for the purpose of eliminating them. The purpose of these programs is and always have been to benefit the crony capitalist industrial complex of banks, real estate developers, and corrupt politicians.

Never mind the interests of those who would rather not have their tax dollars fund such follies or see their already debt-burdened government borrow large amounts of money to solve problems that really never existed in the first place.


Tuesday September 23rd, 2014   •   Posted by K. Lloyd Billingsley at 8:49am PDT   •  

Dept_of_Education_Logo_200The new school year has kicked off but many students, particularly African Americans in the inner cities, remain interned in dysfunctional and dangerous schools. This is not an accident. Those are the very schools that legislators, bureaucrats, and government employee union bosses want for low-income students. In government education, money goes directly to the education bureaucracy, and it keeps on coming despite dismal results. Should parents want to opt for an independent school, the money does not follow the student. It keeps going to the bureaucracy.

In Washington DC, African American parents got some relief from the DC Opportunity Scholarship Program, which empowered them to choose the schools they wanted. The program was popular and effective but the education establishment and teacher unions fought it tooth and nail. President Barack Obama opposed the program and teamed with his education secretary, Arne Duncan, to cancel a number of scholarships that had already been issued and limit the number of students who may take advantage. This year the number is a paltry 285.

This all comes under a president who is a product of exclusive private schools, elementary through university, and who sends his own children to exclusive private schools, just like Jimmy Carter and Bill Clinton. And as Larry Elder has noted 37 percent of representatives and 45 percent of senators also send their own kids to private school. In the Congressional Hispanic Caucus it’s 38 percent and the Congressional Black Caucus 52 percent. Public school teachers also send their own children to private schools at a high rate, 44 percent in Philadelphia, 39 percent in Chicago, and 38 percent in Rochester, New York. Like politicians, they want the best for their kids, while denying opportunity to low-income African Americans and Hispanics.

This is not a partisan issue. There are currently 29 Republican governors and not a single one is advancing a plan for parental choice in education. The bipartisan ruling class prefers private schools for their own kids. Everybody else, particularly low-income African Americans, gets only the schools the ruling class wants them to have.

How to Get Better, Cheaper Government

Tuesday September 23rd, 2014   •   Posted by Craig Eyermann at 6:42am PDT   •  

05162012_Corruption1_jpg_600 Is there a completely painless way to cut wasteful government spending without having to give up the perceived benefits of the spending?

The answer, of course, is yes! By clamping down on corruption and other ethically questionable practices by politicians and bureaucrats, regular Americans could benefit by both reducing government spending and making it more effective in achieving its intended purposes.

How much could be saved? According to a recent study by Cheol Liu and John Mikesell, who measured the cost of corruption at the state government level, an average of $1,308 per person could be saved in just the 10 states with the highest level of corruption as determined by the number of convictions of public officials under federal corruption laws in the years from 1976 through 2008.

Fortune‘s Chris Matthews describes the researchers findings:

The researchers studied more than 25,000 convictions of public officials for violation of federal corruption laws between 1976 and 2008 as well as patterns in state spending to develop a corruption index that estimates the most and least corrupt states in the union. Based on this method, the the most corrupt states are:

1. Mississippi
2. Louisiana
3. Tennessee
4. Illinois
5. Pennsylvania
6. Alabama
7. Alaska
8. South Dakota
9. Kentucky
10. Florida

That these places landed on the list isn’t exactly surprising. Illinois, which has gain notoriety for its high-profile corruption cases in recent years, is paired with states like Mississippi and Louisiana, which are some of the least economically developed in the country. The researchers also found that for 9 out of the 10 of the most corrupt states, overall state spending was higher than in less corrupt states (South Dakota was the only exception). Attacking corruption, the researchers argue, could be a good way to bring down state spending without hurting services that people need.

Researchers also found that spending in these states was different than their less corrupt counterparts. According to the report, “states with higher levels of corruption are likely to favor construction, salaries, borrowing, correction, and police protection at the expense of social sectors such as education, health and hospitals.”

The same principles apply to the federal government, but on a much larger scale, given its much larger level of spending, and that’s been particularly true since the nation’s spending exploded in the years since 2008, beginning with President Obama’s economic stimulus bill in 2009, which unleashed a torrent of corruption at the federal level, hurting regular Americans far more than it helped them:

WASHINGTON—The largest government infusion of cash into the U.S. economy in generations—the 2009 stimulus—was riddled with a massive labor scheme that harmed workers and cheated unsuspecting American taxpayers.

At the time, government regulators watched as money slipped out the door and into the hands of companies that rob state and federal treasuries of billions of dollars each year on stimulus projects and other construction jobs across the country, a yearlong McClatchy investigation found.

A review of public records in 28 states uncovered widespread cheating by construction companies that listed workers as contractors instead of employees in order to beat competitors and cut costs. The federal government, while cracking down on the practice in private industry, let it happen in stimulus projects in the rush to pump money into the economy at a time of crisis.

The stimulus set the stage for the institutionalization of corruption throughout the federal government, which continues to this day as a corrupted federal government continues to establish crony capitalism as President Obama’s primary economic program.

Clamping down on this unrestricted corruption by effectively enforcing federal laws against the unethical and unlawful conduct of politicians and bureaucrats would go a long way toward restoring trust to government while making the government that Americans are paying for both better and cheaper. And a good place to begin would be with the Department of Justice, which could get started by changing sides to join regular Americans in the fight against corruption in government.

The Expired Subsidy That Won’t Die

Friday September 19th, 2014   •   Posted by Craig Eyermann at 6:08am PDT   •  

23357939_S In December 2013, one of the biggest successes for opponents of wasteful government spending took place: the Production Tax Credit (PTC) for the government subsidydependent wind-power industry expired, which would progressively save U.S. taxpayers up to $12 billion as no new wind-energy development projects could claim it.

It was an event we noted earlier this year, as President Obama attempted to resuscitate it despite the opposition of a majority of lawmakers. But now, with legislation to revive the subsidy stalled in the Senate, the Obama administration is rewriting the IRS rules to do an end run around the opposition to the wasteful subsidy. Former U.S. Senator and current lobbyist Don Nickles explains how the IRS is tweaking its rules so that the wind industry can take more dollars away from taxpayers:

In a boon to wind developers, the IRS said renewable energy projects could qualify for the PTC if they had incurred at least 3 percent of the total project cost before the beginning of 2014, down from the previous threshold of 5 percent. Of course, this news comes on the heels of prodding from wind developers who have been waiting for this direction since this spring, when investors that provide the cash to fund major wind power projects began demanding a guarantee that projects would qualify. Alas, if only we all lived in a world where we could get paid based on accomplishing 5 percent of something.

Perhaps President Obama is smart to throw his pals a lifeline, because the legislative process won’t get him anywhere when it comes to the real prize. Opposition to an extension of the PTC is strong and bipartisan, with 54 Members of Congress recently issuing a letter to House leaders calling for its end. This comes on the heels of other members who were once supportive of the PTC changing their tune in recognition that the subsidy has served its purpose. House Majority Leader Kevin McCarthy is one of them, which is notable coming from California, a state that has generally supported these kinds of incentives. Other members of Congress are also bound to take note that the PTC should end, especially in the wake of developments like the CEO of Power Company of Wyoming admitting that the PTC is not needed and that its demise will not halt the company’s plans to build a large wind farm.

In a recent Forbes op-ed, Christine Harbin Hanson of Americans for Prosperity took issue with the back-door way the credit is actually being expanded:

On a recent Friday afternoon during August recess, the IRS issued new guidance that expanded the PTC even further. Now, in certain situations, the IRS will allow wind farm developers to sell a project that is either completed or in-progress and the use the selling costs they incur to count toward qualifying for the PTC. The IRS also clarified what “significant work of a physical nature” is needed in order to qualify for the tax credit. The IRS provided a loose definition, saying ... that it is the nature of the work that matters (e.g., digging foundations, installing transformers, building roads), not the extent or the cost.

These repeated changes occur with little public notice, seemingly always on Friday afternoons while most in Washington are away from their Blackberries. These are a problem because arbitrary action by a handful of unelected bureaucrats is quietly expanding this taxpayer subsidy, increasing the price tag of this handout more and more every year. Historically, the PTC program has cost an average of $5 billion per year; thanks largely to these expansions, a 1-year extension would cost a whopping $13 billion over the next decade. Given the federal government’s serious fiscal problems, it makes no sense to increase giveaways like this to any private industry, let alone one as economically unviable as wind energy.

Further alarming is the fact that this is happening without actions from elected officials. Members of Congress facing future elections are able to be held accountable to their constituency; out-of-control IRS bureaucrats like Lois Lerner are not. Since Congress has outsourced so much of its authority to federal agencies over the course of the Obama Administration and its predecessors, the IRS can claim that it is acting within the scope of its legal authority when it issues this type of new “guidance” that expands this controversial subsidy program even though it’s expired.

We can’t get federal spending under control if our elected officials aren’t willing to stand up to special interests like those in the wind energy industry. Congress should reject efforts to extend or grow this special carve-out for wind producers, and it should disapprove of the IRS’s ongoing actions to expand it.

Indeed. An expired government subsidy for a failing government-supported industry should stay dead. If only it would finally die.

It’s the sort of zombie government regulation that gives zombies a bad name.

USDA at Odds with Immigrants’ Work Ethic

Thursday September 18th, 2014   •   Posted by K. Lloyd Billingsley at 2:39pm PDT   •  

USDA_logo_200Alvaro Vargas Llosa, a native of Peru, notes in his book Global Crossings that workers from many nations tend to migrate in search of employment opportunities and prosperity. In the new book A Race for the Future, Cuban native Mike Gonzalez shows how, from the 1940s into the 1960s, the Bracero program allowed Mexican nationals to work legally in the United States. Then American labor unions pressed Congress to kill the program. The jobs remained, forcing workers to cross the border illegally to fill them. Instead of making it easier for workers to migrate legally, U.S. government agencies operate at odds with their work ethic. Take, for example, the U.S. Department of Agriculture, which operates food stamp programs.

As Gonzalez shows, the USDA has crafted radio soap operas in Spanish to get immigrants to drop their natural resistance to being a public burden and accept food stamps. And the USDA even collaborates with foreign governments in that regard. The long-term goal, as Gonzalez sees it, is to co-opt the growing number of immigrants from Mexico, El Salvador, Guatemala, Honduras, and other Latin American countries into the Great Society welfare programs created by the administration of Lyndon Johnson. That does not help the immigrants themselves and fails to serve the U.S. economy. It does, however, increase the power of federal bureaucracies. In effect, they are importing new clients to justify their positions and expand their power.

Weakening the work ethic of immigrants is hardly the only harm perpetrated by the USDA, which has paid more than $34 million to grow soybeans in Afghanistan since 2009. According to a report by a special inspector general, this was a multi-million-dollar waste of time, money, and resources. The USDA has also turned its the Center for Nutrition Policy and Promotion into a promotional agency for “save the planet” zealotry. The CNPP is now headed by “green food” activist Angie Tagtow, who believes that government policy “dictates everything.” In Big Government, bad policies work together for the detriment of all, even those who seek to work in the United States.

Federal NHTSA Unsafe at Any Speed

Tuesday September 16th, 2014   •   Posted by K. Lloyd Billingsley at 9:17am PDT   •  

nhtsa_logo_200The National Highway Traffic Safety Administration purports to hold the safety of American motorists in high esteem, but according to a recent investigation reported by the Boston Globe, the federal agency is slow to identify safety problems and tentative to take action. This is not a new development. As we noted in April, NHTSA bosses knew about the faulty ignition switches in General Motors vehicles that could cause engines to turn off, disabling air bags with deadly results. The faulty switches led to at least 13 deaths and more than 2.6 million recalled vehicles. The NHTSA had an investigation all teed up but “deep-sixed it,” which an independent investigator found troubling. The most likely explanation is that the federal safety bosses wanted to go easy on General Motors, also known as Government Motors, which the federal government had bailed out to the tune of some $50 billion.

Now it turns out that the NHTSA spends about as much money to rate new automobiles as it does investigating manufacturing defects. Taxpayers will note the abundance of independent review media, such as Consumer Reports. There is no need for the NHTSA to review cars, but it is typical of a federal agency to perform poorly on its actual job and waste money on other tasks better handled by independent, non-governmental groups.

We should also recall that a related agency, the National Transportation Safety Board, is mounting a snoop surge by pushing for installation of “black box” data recorders in cars and trucks. These function only after the fact of any accident, so their safety value may well be doubted. But the black boxes do help the government keep tabs on drivers. This comes at a time when government irresponsibility and unaccountability have plunged to an all-time low. Job one for federal bureaucrats is protecting their jobs, salaries, and budgets. Taxpayers aren’t even number two. By any standard, the system is unsafe at any speed.

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