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The Fix Is In for Broken Government


Wednesday May 6th, 2015   •   Posted by K. Lloyd Billingsley at 5:02am PDT   •  

FixCAChallenge_Logo_200“They can’t complete a project, like building a bridge or updating a computer system, without it being late, over budget, or even obsolete by the time of completion.” That’s venture capitalist Tim Draper on California government, and he’s right. As we have observed, the new eastern span of the Bay Bridge was 10 years late, $5 billion over budget, and serious questions remain about its safety. The state’s bullet train project is supposed to cost $68 billion, will likely be slower and more expensive than air travel, and doesn’t take people where they need to go. These boondoggles are not the only evidence that government violates the maxim: if it ain’t broke, don’t break it.

Mr. Draper has launched Innovate Your State, a nonprofit (501c3) organization dedicated to educating and encouraging public participation to fundamentally improve government. The first project is the Fix California Challenge, which will field and evaluate ideas in government spending, waste, debt, pensions, taxes, health care, water policy, and education, one of the more serious concerns. Government’s idea for education is to transfer taxpayer dollars to a bureaucracy and keep the dollars coming despite meager results. Currently, approximately 74 percent of California’s college freshmen need remedial math and English, and these are supposedly the best students. True to form, the state has just named part of the education code after the late John Mockler, a lobbyist who enriched himself by working both sides of the table. Taxpayers and think tanks alike would do well to promote educational choice for all, as a matter of basic civil rights.

Government’s idea for health care is Covered California, the wholly owned subsidiary of Obamacare, which turns out to be a misery index. Taxpayers and think tanks should advance ideas that give choice to patients and promote innovation. Bureaucracies don’t innovate. Current government ideas have worsened California’s ongoing drought. Taxpayers and think tanks should pursue water exchanges, an innovative idea already working in Australia.

As the San Jose Mercury News noted, there is “no shortage of ideas for fixing government. FixCal.org may be something to watch.” Taxpayers and think tanks should keep the ideas coming. And with so many corrupt politicians going to jail, Mr. Draper might expand the categories to include criminal justice. Jon Coupal of the Howard Jarvis Taxpayers Association suggests limiting politicians to two terms, one in office and one in prison. As he observes, “Illinois already does this, and it seems to be working.”

The Government versus Infrastructure


Tuesday May 5th, 2015   •   Posted by Craig Eyermann at 6:55am PDT   •  

FHWA_Hec1 We’ve answered another question at Quora, this time related to the perception of why there haven’t been any recent large-scale innovative infrastructure or civil projects in the United States. As you’ll see in our response, there actually have been, but there’s also a very good explanation for why we don’t have a better civil infrastructure.

In a nutshell, the answer to the question of why there haven’t been any large scale civil infrastructure projects is that the nature of large scale civil infrastructure projects has changed.

Here, instead of launching something on the scale of an interstate highway system to connect major cities, a lot of focus has been placed upon connecting smaller cities to that system and to expand the local highway networks surrounding the major cities themselves and also their airports. That activity has continued into the present day, as there have also been a number of highly visible civil engineering projects completed in very recent years, the most successful of which is perhaps the Hoover Dam bypass between Arizona and Nevada over the Colorado River gorge.

Hoover Dam Bridge Top 10 Engineering Facts

We would also consider the development of the Internet and mobile phone networks as great examples of modern infrastructure development, but many don’t put them in the same class as the very visible concrete and steel construction efforts that most automatically think of when they think of civil infrastructure.

But to get to the real meat of the question, the answer is that a lot of these “concrete and steel” projects have been considerably less successful, to the point where they became such money pits that they actually prevent other, better projects from going forward because the money isn’t there to build them. California’s Bay Bridge is generally recognized as both a major waste and potential engineering catastrophe in waiting.

Bay Bridge Crack-up Continues

Do Big Infrastructure Projects Boost GDP?

The same is true for Boston’s “Big Dig” project, the cost of which is still adding up.

The Boston Big Dig and the Problems with Complex Projects

Other massive multi-billion dollar projects have to be considered to be abject failures, most notably, Seattle’s Alaskan Way Viaduct tunnel replacement project.

Government Tunnel Vision Shafts Taxpayers

Not only was that particular project not wanted by the people it is intended to serve, all work on it has actually stalled out because the massive tunnel boring machine that was specifically built for the task has broken and nobody can figure out why. It’s been stuck underground for several years now.

Seattle’s unbelievable transportation megaproject fustercluck

Meanwhile, a lot of transportation funding is being diverted to similar pet projects of politicians, namely high speed rail and light rail projects, at the expense of effective public transportation systems.

Roads or Light Rail?

How Ruling Class Railroads Taxpayers

What If We Bought Cars for the Poor Instead of Light Rail Systems?

So the bottom line answer to the original question is that we are still doing innovative civil infrastructure projects, but not as much as we could be because politicians are making far too many wasteful decisions.

Note: We edited our original reply above to relocate the “Roads or Light Rail” link to be grouped with similar links related to railroads and light rail projects.

Government Deploys Bogus Science to Quash Business


Monday May 4th, 2015   •   Posted by K. Lloyd Billingsley at 8:56am PDT   •  

national-parks-logo_200Back in December of 2012 we noted federal government efforts, headed by then Interior Secretary Ken Salazar, to eliminate a longstanding oyster farm on the California coast, even though the small operation caused no environmental damage and kept 30 people employed. The Sierra Club and California Senator Barbara Boxer applauded Salazar’s move, but Senator Dianne Feinstein decried a flawed review process that advanced “false and misleading science.” As Michael Bastach observed in the Daily Caller, the government continued to deploy false science for the same destructive purpose.

The federal National Park Service charged that the Drakes Bay Oyster Company, which had operated in the Point Reyes National Seashore for decades, was to blame for an 80 percent decline in the local population of harbor seals. Park Service bosses also blamed the farm, operated by Ken Lunny and his family, for upsetting the ecological balance of Drakes Estero. These charges turned out to be completely false, but the agency continued to make false claims. It used data from a sixty-year-old study from the Sea of Japan, and substituted jet-ski noise from New Jersey for the impact of Lunny’s small outboard motors.

Mr. Lunny told the Subcommittee on Oversight and Investigations that the National Park Service “engaged in a taxpayer-funded enterprise of corruption to run our small business out of Point Reyes.” It falsified data, but “no one has apologized” for doing so. Lunny appealed to higher-ups at the agency and finally took the matter to the Secretary of the Interior.

“No one, at any level, was willing to admit that false science was being used against us,” he testified.

The inspector general of the Interior Department found misconduct, but as Bastach notes, the IG “was powerless to stop Parks Service officials from attacking Lunny’s business.” An axis of false science and regulatory zealotry forced the family to shut down.

This “unconscionable” action, as Mr. Lunny called it, confirms that the federal government is too big, too abusive, and far too unaccountable.

Congress Reached a Budget Deal?


Saturday May 2nd, 2015   •   Posted by Craig Eyermann at 10:48am PDT   •  

wh_2015_budget_0For the first time since 2009, the U.S. Congress has done something amazing with respect to the budget of the U.S. government. It reached a deal to even have one!

WASHINGTON — Congressional Republicans announced Wednesday that negotiators have reached a deal to reconcile House and Senate budgets plans, which, if approved, would mark the first GOP budget in nearly a decade and the first joint congressional budget since 2009.

“This balanced budget reflects a commitment on the part of the House and Senate to fulfill our obligation to be responsible stewards of taxpayer dollars,” said House Chairman Tom Price, R-Ga., in a joint statement with Senate Budget Chairman Mike Enzi, R-Wyo….

Final passage — which could come as early as this week — will also trigger a legislative pathway for Republicans to vote again this year to repeal President Obama’s health care law.

Since that tentative deal was struck, the U.S. House of Representatives has passed the final version of the Congressional budget deal, while the U.S. Senate is expected to take up the measure sometime during the next week.

The really sad thing about this news is that it’s even remarkable.

The Unchanging Incentives of Bureaucrats


Tuesday April 28th, 2015   •   Posted by Craig Eyermann at 7:59am PDT   •  

VA It has been nearly a year since we first weighed in on the Veterans Affairs (VA) scandal. In that post, we discussed how incentives for bonuses led federal employees and managers to implement a bizarre rationing scheme that effectively denied timely medical treatment to former American military personnel by shunting them onto secret waiting lists while maintaining official records that falsely indicated they were hitting their targets for providing timely medical care.

On March 13, 2015, just under a year after the scandal first erupted, President Obama visited the Phoenix branch of the Veterans Administration’s national network of hospitals, the location where whistleblowers first revealed what turned out to be the widespread use of such secret waiting lists. The president pledged “to restore the trust and confidence” of the nation’s veterans who depend upon the VA for their medical care:

“We all know that there have been significant problems at this facility,” Obama said. “The kind of cooking the books and unwillingness to face up to the fact that veterans were not being adequately served went on too long.”

Obama and Veterans Affairs Secretary Robert McDonald spoke with veterans, hospital employees and members of Congress during the president’s first visit to the facility where long wait times for veterans seeking care and falsified records were first discovered. It spurred an internal VA investigation that found medical facilities throughout the country were falsifying records to create the appearance that veterans were receiving treatment in a timely manner.

Those long wait times contributed to patient deaths, officials said.

Here is what has been revealed about the VA’s Phoenix branch since President Obama pledged to restore veterans’ confidence and trust in the agency:

  1. The Phoenix VA prioritized the spending of $5,000 to clean the floors of its facility for President Obama’s special visit on March 13, 2015.
  2. On the same day as the president’s visit to the Phoenix VA’s facilities, the agency was ordered to repay the bonus that disgraced Phoenix VA director Sharon Helman received for falsely reporting that veterans at her facility were receiving timely medical care.
  3. Claims that VA Secretary Robert McDonald made about having fired 900 agency employees, including 60 directly related to the wait-list rationing scheme, have turned out to be almost completely false. The New York Times has just reported that only three VA employees have been involuntarily dismissed from their jobs, none related to the wait-list scandal.
  4. Meanwhile, retaliation against whistleblowers at the Phoenix VA has continued, including episodes where agency officials have even accessed the medical records of whistleblowers for the purpose of using them to discredit their allegations of ongoing misconduct along with other forms of harassment.

Given the lack of meaningful consequences for those involved in promoting the secret wait-list medical care rationing scheme and other misconduct, it would seem very unlikely that the more than 300,000 employees of the VA and their managers have really gotten the message that their professional conduct was and continues to be inappropriate.

The problem is a lack of accountability: promises of reform are not being kept by the VA’s directors and managers, making the pledges themselves just hollow lies. Responsibility for fixing that problem belongs to the very highest level of the U.S. government, where unfortunately, it seems that the pervasive corruption that defines the status quo of the VA’s bureaucracy is tolerated.

Government Raisin Ransacking


Friday April 24th, 2015   •   Posted by K. Lloyd Billingsley at 8:50am PDT   •  

USDA_logo_200“Central planning was thought to work very well in 1937,” observes U.S. Supreme Court Justice Antonin Scalia, “and Russia tried it for a long time.” So did the United States, through schemes such as the Agricultural Marketing Agreement Act of 1937. Authorized by Congress during the New Deal, the Act set up cooperative boards and conscripted growers into reserve set-asides. After 78 years, the corruption inherent in this program has finally reached the nation’s highest court.

As The Economist observed, Fresno raisin growers Marvin and Laura Horne had complied with the Act, but in 2003-4 the Hornes “would have had to fork over 30 percent of their crop and receive nothing in return. To them, this looked like theft.” So the Hornes proceeded to grow, package and sell raisins on their own, apart from government planners. Their reward was a fine of $695,000. The Hornes appealed and the case has now reached the high court, where, as David Savage of the Los Angeles Times observes, a majority appear ready to rule that the “taking” of their raisins entitles the Hornes to just compensation. “The government literally takes possession of the raisins,” said the Hornes’ lawyer Michael McConnell, a Stanford law professor. “And USDA came after our clients with heavy fines because they objected.”

Government lawyers said that if growers didn’t like the program, they were free to plant other crops. According to Chief Justice John Roberts, “That’s a pretty audacious statement. If you don’t like our regulations, do something else.” Justice Elena Kagan called the program “ridiculous,” and Justice Samuel Alito compared it to government grabbing one of every five automobiles or cell phones. A decision is expected in June, and as The Economist noted, it will be significant. “If the court halts the raisin ransacking, it could affect other coercive farm programs, too.” In 2015, nearly 80 years after the Agricultural Marketing Agreement Act of 1937, many politicians and bureaucrats still believe central planning works very well.

The Tax Hikes of Obamacare


Friday April 24th, 2015   •   Posted by Craig Eyermann at 7:12am PDT   •  

Because we mentioned the new taxes imposed by the Affordable Care Act (a.k.a. “Obamacare”) in a recent article, we thought we ought to share the Heritage Foundation’s visualization of how its $800 billion worth of new taxes are being phased in over the 10 years from 2013 through 2022:

obamacare-tax-hikes-680

The chart above is part of Heritage’s “Federal Budget in Pictures” project — do check it out!

The Deficit Stops Shrinking


Tuesday April 21st, 2015   •   Posted by Craig Eyermann at 8:12am PDT   •  

19203935_S While the U.S. government’s 2015 fiscal year is now half over, the days of a shrinking budget deficit now also appear to be over as well. The Washington Examiner‘s Joseph Lawler reports:

The federal budget deficit through the first half of fiscal year 2015 totaled $430 billion, the Congressional Budget Office said Tuesday, $17 billion more than at the same point in fiscal year 2014.

Both revenues and spending were up roughly 7 percent over the same time last year.

The total deficit for fiscal year 2014 was $483 billion, according to the Treasury, the lowest shortfall of President Obama’s tenure.

Lawler dug into the data and found two culprits that explain the sooner-than-expected reversal in the direction of the U.S. government’s annual budget deficits. First, 2014 marked the end of a number of one-time payments to the U.S. Treasury from Fannie Mae and Freddie Mac, the mortgage-lending government-sponsored enterprises that received large bailouts during the 2008-09 financial crisis.

Second, spending growth is once again outstripping the growth in the government’s revenue streams, despite increases in payroll tax collections from higher employment levels. Much of the increase in spending occurred in government-funded health care programs, such as Medicaid, Medicare, and Affordable Care Act subsidies, as well as for Social Security.

In a follow up article, Lawler identified the key driver behind what will be expected to be increasing budget deficits for the federal government in the future, despite an expected massive increase in the government’s tax revenue from additional new taxes imposed by the Affordable Care Act, increases which are set to take effect during the next several years:

Over time, the government is expected to see its finances drained by the long-term mismatch between planned taxation and the growing number of retirees owed Social Security and Medicare benefits.

Although the Congressional Budget Office sees the deficit dropping to $455 billion in 2016 and 2017, eventually it projects deficits to grow to $1 trillion over the next 10 years.

Beginning in 2016, most of the growth in the U.S. government’s tax collections will come from the imposition of the Affordable Care Act’s individual and employer health insurance coverage “mandates,” because many individual consumers and businesses are expected to choose to pay higher taxes rather than pay even higher costs for health insurance premiums.

And that’s also despite the even higher taxes to be impose by the Affordable Care Act in 2018, when the new tax on so-called “Cadillac” health insurance plans will begin to penalize Americans with plans that provide what the ACA’s authors believe to be excessively generous coverage, such as plans that include health care savings accounts and flexible spending accounts, or where employers directly provide on-site health care clinics as a benefit for their employees.

Not Getting the Job Done


Friday April 17th, 2015   •   Posted by Craig Eyermann at 6:29am PDT   •  

Money-Down-The-Toilet-Over-3-Trillion-Dollars-Spent-By-Barack-Obama-286x300CBS MarketWatch’s Brett Arends recently featured a number of “brain-busters,” in a Question & Answer format, related to findings that the U.S. Government Accountability Office has made regarding waste, duplication, and inefficiencies in the federal government’s operations. We reviewed each of the items and selected those that fit into a special category, which we’ll explain below the excerpted Q&A material.

Question. How many facilities does the Pentagon own and operate worldwide?

Answer: 562,000, spread across 4,800 sites.

Q: For what percentage of those facilities does the Pentagon have utilization data?

Just 53% — which means there about 264,000 military facilities around the world where the Pentagon doesn’t know for sure what they’re used for — if they are used at all.

Q: What percentage of federal procurement is managed through strategic sourcing in order to make sure we get the best value per dollar?

About 5%, or $26 billion — compared to about 90% for private sector businesses.

Q: How much money does the government spend each year on maintenance and operations of old, “legacy” computer systems without conducting proper reviews to see whether they’ll still worth it?

$37 billion.

Q: How much money is still sitting idle in the bank account of an old and defunct uranium-management agency, the U.S. Enrichment Corp.?

$1.6 billion.

Q: How much could the government pocket by selling off the excess amounts of oil in the Strategic Petroleum Reserve?

$6.7 billion.

Q: How much does Medicare overpay to 11 specialist cancer hospitals due to poor billing systems?

$500 million a year

Q: Of the 440 cost and efficiency changes recommended by the GAO in previous years, how many remain partially or completely undone?

269, or around 60%

While there are a number of other items on the full list that relate to what would amount to be tax evasion on the part of U.S. individuals and businesses, the items we’ve listed above are the ones that U.S. federal bureaucrats are fully capable of addressing all by themselves, not requiring the actions of anyone else, if only they would.

Alas, making the federal government less wasteful, and getting it to work better for the people it is intended to serve, would not appear to be among Uncle Sam’s top priorities.

Tax Freedom Day Delayed in 2015


Tuesday April 14th, 2015   •   Posted by Craig Eyermann at 6:41am PDT   •  

In the United States, Tax Day, April 15, marks the deadline for Americans to file their income tax returns for what they earned in the previous calendar year.

Tax Freedom Day, however, marks the day after which the average American begins earning money that he or she can spend on things other than taxes, if we assume that every dollar earned before that day went to pay federal, state and local taxes.

According to calculations by the non-partisan Tax Foundation, in 2015, Tax Freedom Day will fall on April 24, one day later than in 2014. Here are its key findings:

  • This year, Tax Freedom Day falls on April 24, or 114 days into the year.
  • Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31 percent of the nation’s income.
  • Tax Freedom Day is one day later than last year due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.
  • Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined.
  • If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later on May 8.
  • Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.

You read that fourth item correctly – in 2015, Americans will collectively pay more in taxes than they do on necessities such as food, shelter and clothing!

Americans Spend More on Taxes and Food, Clothing, and Housing Combined

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