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By the narrowest margin ever the Senate has confirmed Janet Yellen to head the Federal Reserve. She will be the first female Fed boss, but that’s not the news. As the New York Times put it, Yellen is “an influential proponent of the Fed’s extraordinary measures to revive the economy.” She told the Times that the Fed’s policies had helped not only Wall Street, but Main Street. The stimulus campaign has “made a meaningful contribution to economic growth. The ripple effects go through the economy and bring benefits to, I would say, all Americans.” That may portend a new surge of inflation, as Burt Abrams noted after Barack Obama made Yellen his pick.

Abrams recalled Arthur Burns, Richard Nixon’s choice to head the Federal Reserve in 1970. The economy was mired in stagflation, leaving Burns the option to control the money supply tightly “or rev up the printing presses and risk inflation.” To alleviate unemployment and enhance his chances of reelection, Nixon wanted Burns to print more money and Burns gave the president what he wanted. “That shortsighted, politically motivated policy,” Abrams noted, “not only defied the alleged independence of the Fed, it launched the economy on an inflationary course that could be reversed only at enormous cost to the nation in the long run.” So with midterm elections looming and unemployment still running high, should the nation expect more of the same?

Last April Yellen said, “I believe progress on reducing unemployment should take center stage, even if maintaining that progress might result in inflation slightly and temporarily exceeding 2 percent.” Abrams also noted some $2.2 trillion in excess reserves. Eliminating these excess reserves before they produce “an explosive growth in the money supply and surging inflation” should be more of a concern than an unemployment rate that is more the product of “uncertainties associated with deficit spending and business fears about Obamacare.”

Abrams finds “plenty of evidence that the president is a mindless stimulator,” and Janet Yellen is the president’s choice. A veteran of the Clinton administration, “she may well be a pliable Democratic loyalist to the same degree that Arthur Burns was a Republican loyalist—or more so.” Therefore “inflation could soon mount a surge.” Contrary to Obama’s new Fed boss, that would not bring benefits to all Americans.

Obamacare does not fall short in ways to abuse Americans. It inflicts on them a grotesque federal plan based on paternalism and lies. Obamacare takes away from millions of Americans the health plans they chose, liked and wanted to keep. Obamacare subjects Americans to a dysfunctional and insecure website, built by crony incompetent contractors and abetted by “navigators” who could be convicted felons. Obamacare forces Americans to pay higher premiums for plans with inferior benefits. If Americans have “enrolled” it remains uncertain whether they actually have a plan. And if a couple expecting a child should succeed in actually securing a plan, they now face another problem, as this Associated Press report puts it.

“The Obama administration confirms there is no quick and easy way for consumers to update their coverage under the new health law for the birth of a baby and other common life changes.” What, exactly is the problem? “For now, the HealthCare.gov website can’t handle new baby updates, along with a list of other life changes including marriage and divorce, a death in the family, a new job or a change in income, even moving to a different community.” In other words, “the system’s wiring for that vital federal function isn’t yet fully connected.”

On Dec. 31 the Centers for Medicare and Medicaid Services said the federal insurance marketplace will not be able to add a child until the system’s automated features become “available later.” Unfortunately, as the report notes, “It does not provide any clue as to when that might take place.”

Bob Laszewski, a health industry consultant, told reporters “This needed to be done well before January. It’s sort of a fly-by-night approach.” The baby problem adds “to the list that shows HealthCare.gov is not done.” A lot more wasn’t done on October 1 and by December 1. But the federal government went ahead with the plan anyway and that turns out bad for babies.

Decades of fathomless federal waste ensure that every American child is born thousands of dollars in debt. Thanks to Obamacare, every American child is born into health insurance uncertainty. If that is not child abuse it’s hard to imagine what might be.

One of the biggest unacknowledged psychological problems that many bureaucrats and politicians have goes by the initials BSOS, which stands for “Bright Shiny Object Syndrome”.

This is the unfortunate condition that develops whenever a politician, attracted by the marketing behind the technological fads of the day, or perhaps just the campaign contributions being offered by the lobbyists pushing them, chooses to set aside good judgment in pursuit of something that, invariably in retrospect, turns out to be a really big waste of both time and money.

Bill Schrier, the former Chief Technology Officer for the city of Seattle, Washington, explains the phenomenon as it relates to bureaucrats and politicians:

Government employees, including senior executives and elected officials, range the gamut from early adopters to tech troglodytes. And more than a few of them are afflicted with BSO syndrome. Sometimes that’s harmless, like the employee who has an iPod plus video camera plus digital camera plus iPad and maybe two kinds of Smart Phones. As long as “he” (they are usually men) uses his desktop computer with Windows XP for work, and operates all those gadgets on his own time, I see no harm in this.

A worse situation is a senior official who directs the government or department he/she leads to adopt the latest gee-whiz gadgets or web applications without connection to either the department’s business strategic plan or a coherent technology plan.

Or perhaps even to the real world itself. Forbes John Baldoni describes what can go wrong when chasing fads (the “bright shiny objects”) substitutes for sound judgment, which politicians with little real-world experience often do in the name of innovation:

Chasing bright shiny objects is not innovation. It’s the pursuit of the make-believe. Innovation, when it works, focuses creative endeavors on products or initiatives that have the potential to deliver value to customers. Bright shiny objects do just the opposite; they waste time and energy, and produce little in return.

Worse, the pursuit of bright shiny object-based projects can actually be destructive, meaning that society is worse off than it would be if the politicians and bureaucrats had more wisely chosen to do nothing at all.

The 2013 Wastebook provides a great example of where the pursuit of a poorly-considered “green energy” project, the technological fad for this particular example, has produced a bright shiny object lesson in wasteful spending, because the politicians and bureaucrats who implemented it failed to consider a critical need, with literally blinding results:

When officials at the Manchester-Boston Regional Airport in New Hampshire installed new solar panels, they did not anticipate one quarter of them would not be used 18 months later. In Spring 2012, the panels were placed on top of the airport’s parking garage, and 25 percent have remained there, covered with a tarp, rendering them useless.

Problems with the new panels were noticed almost immediately by air traffic controllers who claimed that for 45 minutes each day, glare made it difficult to oversee the airport’s runways. However, it is not as though glare was an unforeseen problem. Prior to the solar panel installation, the airport hired consulting firm Harris, Miller, Miller & Hanson to conduct a glare study and provide recommendations to avoid the problem. While the airport followed the firm’s recommendations, they were not able to avoid glare in the control tower. The firm received $41,570 for its work, despite the mishap, and has been asked by the airport to help solve the problem.

The panels were paid for through a $3.5 million grant from the Federal Aviation Administration (FAA), which covered 95 percent of the total cost. According to estimates provided by airport officials, however, the solar panels may never recoup their costs to install. Operating at full capacity, the solar panels might save the airport as much as $100,000 annually in electricity costs, and only $2 million “over the 25 year life of the project.”

Moreover, the FAA released its own guidance on solar panel use at airports since mid-2012, after the panels were installed at Manchester Airport. It issued guidance in November 2010, but on June 26, 2012 – based on “new information and field experience” – cautioned airports against relying on it: “All users of this guidance are hereby notified that significant content in [the section on “Reflectivity] may be subject to change, and the FAA cautions users against relying solely on this section at this time.” The guidance was produced for the FAA by Harris, Miller, Miller & Hanson – the same contractor hired by the airport to conduct their own glare study.

At the end of August 2012, airport workers were “moving the tarps about every three weeks, depending on the angle of the sun,” calling the tarps a “temporary solution.” Information on the airport’s website noted they hoped the panels would “be repositioned and functioning at 100 percent capacity by next spring,” but as of August 2013 tarps remained on a large number of the solar panels.

Government logic: Spend $3.5 million to save $2 million over 25 years. Go figure.

We could have just as easily substituted any of the many examples being produced daily in the implementation of the Affordable Care Act. What other examples of projects gone wrong thanks to the Bright Shiny Object Syndrome of government officials can you name without too much effort?

While monitoring federal debacles such as Obamacare and the stimulus package, taxpayers should not lose sight of local governments such as Los Angeles County, whose population of nearly 10 million exceeds that of many states, with a bureaucracy to match. Los Angeles County once maintained something called the Office of Public Safety, a police force largely unknown to many residents. This confirms that government is always bigger than taxpayers imagine, and more wasteful.

With multiple police forces within its jurisdiction and a hefty Sheriff’s department, Los Angeles County did not need the Office of Public Safety. But as Milton Friedman observed, once some government agency or program gets going it is practically impossible to shut it down. So it came as some surprise when in 2010 Los Angeles County announced that to save money it was dissolving the Office of Public Safety. But as this Los Angeles Times report notes, it didn’t exactly turn out that way.

Many of the officers from the Office of Public Safety sought employment with the Los Angeles County Sheriff’s Department. The department took on some but rejected many because of their records of dishonesty and “serious misconduct.” Not to worry because supposedly cash-strapped Los Angeles County gave “dozens” of the rejected cops positions in county social service agencies. One officer had “cut a man’s neck with a knife in an off-duty fight outside a bar.” Another was convicted of spousal assault and an officer who in county employ solicited prostitutes “about 100 times” was given a job investigating welfare fraud.

Los Angeles County had no obligation to hire any of these people, let alone those with records of serious misconduct and prone to violence. But they hired them anyway because “they wanted to avoid as many layoffs as possible.” So the elimination of the Office of Public Safety turns out to be something of a fake, with little if any saving for taxpayers.

A government job, whether or not it is necessary, and even if the employee is incompetent, dangerous, or costs taxpayers more than $2 million in settlements, turns out to be practically impossible to eliminate. This dynamic shows why government at all levels costs much more than it should.

In 2009, Social Security began running in the red, as the amount of money the agency pays out in benefits each year began regularly exceeding the amount of money it takes in through taxes.

Fortunately for those Americans who rely on income from Social Security, there was no cut in the amount of their benefits, thanks largely to the agency’s trust fund, where the Social Security taxes that were collected in excess of the amount that actually needed to be collected to cover the cost of paying Social Security’s benefits for years were “loaned” to the U.S. government, which now is being forced to pay it back using money that it collects in regular income taxes or that it borrows.

And let’s be honest here, because the federal government has run up trillions of dollars in annual budget deficits in each year since 2009, it is borrowing money to pay today’s scheduled Social Security benefits, which means that it is progressively transforming “intragovernmental” debt (or so-called “money we owe to ourselves”) into “debt held by the public” in the process.

So what does the future hold if that situation keeps going on?

The Congressional Budget Office published its Long Term Projections for Social Security on December 17, 2013 – providing the following chart showing what they expect to happen between now and 2087.

What this chart shows is that Social Security’s trust fund should be able to pay out benefits at their “scheduled” level until 2033, just twenty years from now. At that time, the federal government will no longer have any legal obligation to sustain payments at that level, so the CBO anticipates that the program will go back to only paying out benefits equal in amount to what it collects through its dedicated taxes.

For Social Security beneficiaries who begin relying upon income from that program in the years before 2033, that will mean their benefits will be cut by nearly 25%. And because about half of today’s brand new Social Security’s beneficiaries can reasonably expect to live for at least another 20 years, that’s a problem they can reasonably expect to have to deal with in their lifetime.

At least, if U.S. politicians keep the promise they’ve written into the law.

Once upon a time, in government bureaucrat-speak, “Section 8” referred to the kind of discharge from military service that applied specifically to individuals who were judged to be too mentally unfit to continue serving.

Today however, when the term “Section 8” is thrown around, it typically refers a welfare program run through the U.S. Department of Housing and Urban Development (HUD) that provides subsidies for rent to low-income earning individuals, and often in popular usage, to any government housing assistance program that supports disadvantaged individuals, such as those with disabilities.

Unfortunately, there now appears to be a convergence developing between the old and modern use of the term “Section 8”, where HUD’s administrators and lawyers have embarked on a new policy that really brings their mental fitness into question. From the pages of the 2013 Wastebook:

After spending $2.6 million on needed apartments for the deaf, government lawyers now say the Tempe, Arizona based Apache ASL Trails (Apache) apartment facility violates the law because it has too many deaf residents. According to the Department of Housing and Urban Development (HUD), the apartment facility does not do enough to also attract non-deaf residents. However, HUD funded this award winning project “knowing” the property was designed and built “for seniors who are deaf, hard of hearing, and deaf-blind.”

About eight years ago, a federal study found that deaf and hard of hearing persons face pervasive discrimination in the rental housing market. So projects like the 75-unit apartment, designed specifically for the deaf started to be funded and built. The Tempe, Arizona building is highly successful. According to reports, more than 85 percent of the units are occupied by deaf, deaf-blind and hard of hearing tenants. Currently there is a long waiting list.

Faced with such apparent success in this single project, HUD’s administrators and legal staff became determined to right other perceived social wrongs, as only they would appear to perceive them:

HUD is now threatening to pull all Arizona housing aid unless the managers of Apache reduce the number of deaf residents to no more than 18 of the complex’s 75 apartments or 25 percent of the available units. The National Association for the Deaf has described these actions as unprecedented, saying “There is no statute or regulation that mandates any such 25 percent quota, and the imposition of any such quota is an ideological principle that ignores the reality of housing needs for many people with disabilities including deaf and hard of hearing individuals.”

This action will likely not be an isolated incident. HUD’s leadership is acting to use the federal government’s housing resources to redistribute where people live within the United States in pursuit of the goal of achieving social justice and equality, by the arbitrary diversity standards they set.

To ensure that “every American is able to choose to live in a community they feel proud of,” HUD has published a new fair-housing regulation intended to give people access to better neighborhoods than the ones they currently live in.

The goal is to help communities understand “fair housing barriers” and “establish clear goals” for “improving integrated living patterns and overcoming historic patterns of segregation.”

“This proposed rule represents a 21st century approach to fair housing, a step forward to ensuring that every American is able to choose to live in a community they feel proud of – where they have a fair shot at reaching their full potential in life,” said HUD Secretary Shaun Donovan….

Under the proposed rule, the neighborhood data provided by HUD will be used to evaluate patterns of integration and segregation, racial and ethnic concentrations of poverty, and access to “valuable community assets.” HUD wants to know if existing laws and policies — such as zoning, financing, infrastructure planning and transportation — create, perpetuate or alleviate segregation.

That thinking has now reached the crazy extreme where even a single housing facility built to accommodate the specific disabilities and needs of people who have eagerly sought to live in it has come to represent the creation and perpetuation of segregation that must be alleviated at any cost. In the eyes of HUD’s administrators, that facility would now appear to represent such an intolerable level of inequality that the residents themselves must be redistributed in order to achieve the government bureaucrats’ perception of social justice and equality.

There’s a cost for that kind of insanity, both personal and financial. The 2013 Wastebook provides the final word:

Apache residents say living at facility has positively transformed their lives and that they would be devastated if this housing were not available. One resident in sign language told a reporter that “I would be devastated. I would cry. I want to stay here, we need this place.”

Bernie Horwitz, A 73-year old Apache tenant, told Arizona Family in 2012, “I get the sense HUD is almost coming in here saying they want to get rid of deaf people.” A bipartisan coalition of members of the Arizona Congressional Delegation is leading efforts to resolve this matter in a manner that protects the current residents of Apache and the purpose for which the building was built.

HUD officials claim to have no plans to kick any of the tenants out, but their proposed actions will deny this type of supportive housing to future residents who need and would benefit from the accessibility features of the building. Also, the $1.2 million cost of retrofitting the apartments for deaf residents will have been wasted.

2013 was a banner year for waste, fraud and abuse in government, with several strong contenders for the top ranking. Companies that got hundreds of millions of dollars under the federal stimulus package continued to go bankrupt, and the federal largesse failed to revive the economy. The Internal Revenue Service made life difficult for groups with ideas different from those of the president and claimed it was all a matter of bad customer service. The Environmental Protection Agency continued its inquisitorial ways but confirmed that it has no internal controls by keeping on it staff John Beale, a corrupt fraud who claimed to be working for the CIA. The EPA even paid him retention bonuses after he retired. For sheer drama that was hard to beat but for waste, fraud and abuse all wrapped into one, top honors must go to Obamacare.

Obamacare contends that the federal government can manage health care in a way that benefits everyone, with no downside of any kind to anyone, and no negative consequences down the road. This marvel of statist superstition passed on a partisan basis and its eager acolytes knew it was a disaster but rolled it out anyway. Crony contractors wasted hundreds of millions setting up the dysfunctional, insecure federal healthcare website, whose “navigators” could be convicted felons, according to HHS boss Kathleen Sebelius. She and other bureaucratic bosses did not lose their jobs over the rollout debacle but millions of Americans lost the health plans the president said they could keep.

They found out the hard way that Obamacare was based on paternalism, deliberate deception and force. Those who opt out face fines, to be collected by the IRS. In the new year, many of those who get healthcare through their employers will lose their policies. So in 2014 Obamacare is already the top contender for the government program that best combines waste, fraud and abuse.

President Barack Obama repeatedly told Americans that under Obamacare they could keep their health plan but that turned out to be an “incorrect promise,” as the New York Times famously put it. Obamacare took away Americans’ health plans by the millions, which was the plan all along. Obamacare mandates more expensive plans with weaker benefits, and to that end steers Americans toward the Obamacare website. Trouble is, from the beginning that website has been dysfunctional and insecure. Even those who “enroll” remain unsure if they actually have a policy. All that, and much more, is a tough act to follow, but during the holiday season Obamacare proved up to the task.

As the New York Times noted, on December 24, Christmas Eve, the Obama administration said “it would provide more time for people to complete their applications for health insurance if they could show that they missed the deadline because of problems with the federal health care website.” But the administration places the burden of proof on the individual to prove that the website caused them to miss the deadline. And as the report noted:

“The announcement itself was vague, saying only that if website problems had prevented any consumers from enrolling, they might qualify for what the government has called ‘a special enrollment period.’ The administration did not say how long that would last. Nor did it define what website errors might be involved.” This was not a “blanket extension” but an offer of “assistance to individuals on a case-by-case basis.” Obamacare even offered an 800 number for Americans to call and “explain why they could not complete their applications in time.”

The latest deadline extension doesn’t apply in California, where Covered California is supposedly a model of Obamacare efficiency. But according to a report by Sarah Hellesen of the CHCF Center for Health Reporting, many applicants to Covered California could not even finish the application process, “thwarted by website glitches and swamped phone lines and the inability to find in-person help.” Others thought they had enrolled “but never received confirmation of the transaction.”

So those who expect health care could wind up with a lump of coal in their stocking, and that does not bode well for a happy new year. In 2014 Obamacare will doubtless set new standards for waste, incompetence and abuse.

There are all sorts of gems in the 2013 Wastebook, Senator Tom Coburn’s annual compendium of the most wasteful spending originating in Washington D.C. Here’s one we couldn’t pass up sharing!

Outgoing U.S. Secretary of Transportation Ray LaHood ended his tenure describing the state of America’s roads as “one big pothole.” LaHood blamed a lack of transportation funding for the deteriorating condition of U.S. roads and highways and unsafe bridges. The outgoing Secretary emphasized that the U.S. Department of Transportation needed a bold plan to fund transportation infrastructure.

Isn’t it nice when a lifelong politician or bureaucrat describes the full impact of all their years in office? If only he had an annual budget of $74 billion and been put in charge of spending it to improve the condition of the nation’s transportation infrastructure!

Then again, we can get a good idea of how far that kind of money that former DOT Secretary Ray LaHood would really have gone from the example cited in this year’s Wastebook:

So when a tiny Kansas town wanted to spruce up one block on its Main Street, one would naturally assume that this town would use local funds, not federal dollars, for improvements that would be an exclusive benefit to the town.

Instead, the Kansas town of Rossville received $532,000 from the U.S. Department of Transportation in Washington, D.C. because there “hasn’t been much done to [the] main street in years.”

U.S. taxpayers shelled out over half a million dollars for improvements to one-tenth of a mile on the Main Street of a town with a population of only 1,150. Taxpayers in New York, Louisiana, Oklahoma, and California paid to make Rossville’s one-block downtown area “more decorative and colorful.”

These decorative and colorful improvements to one street block in Rossville, Kansas cost U.S. taxpayers $462 per resident of Rossville or $38,000 for each of the 14 businesses located on this block of Main Street.

To get a sense of perspective, here’s the town map from the town’s web site:

Doing the math, that $532,000 for sprucing up one-tenth of a mile of road works out to be $5.32 million per mile. If Ray Lahood could have spent the entire annual budget of the U.S. Department of Transportation under his administration just on fixing up America’s roads, he could have spruced up almost 13,910 miles worth of the nation’s 3,900,000 miles of public roads, or just 0.36% of the total!

And that’s why Ray Lahood could really have used a bigger budget to come up with and execute a really bold plan for repairing all of the nation’s roads instead of leaving them behind in such a state of disrepair. With the kind of bureaucratic spending efficiency achieved under his administration for this single project, he would need at least $20.75 trillion to do the job right.

To put that number in perspective, the GDP of the entire U.S. economy is $16.3 trillion. The U.S. federal government would have to tax 100% of that amount, then borrow another $4.45 trillion on top of that, just to really clean up that one big pothole that Lahood claims he left behind in his rear view mirror.

The holiday season will be rough for many Americans, particularly those staring down the barrel of higher health insurance premiums due to Obamacare. The national and state economies are not exactly booming but for some city officials in California the Christmas stocking has been stuffed chock full all year. Recent data from the state Controller John Chiang cover 637,435 local government employees earning some $38.9 billion in 2012. Consider the top three spots in city government.

Buena Park, a city of 82,155 in Orange County, pays its city manager $545,349 a year. That’s more than half a million dollars for a city that covers some 10 square miles. South Gate, in Los Angeles County, a community of seven square miles and some 95,000 residents, pays a police sergeant an annual salary of $486,044. The number three spot goes to Pleasant Hill, a Contra Costa County city of only 33,381 residents, but which pays its city attorney $465,222. The rest of the top ten are all above $400,000, including the fire battalion chief in Milpitas at $461,212. The city manager of Menifee, a small city in Riverside County, bags $440,000 a year. Some cities fail to file the date, so others may be even higher, as is total compensation.

Taxpayers also must add the usual gold-plated benefit and retirement packages, and all the protection privileges government workers enjoy. Even if engaged in criminal activity the first response is to put them on paid administrative leave. Taxpayers might remain skeptical of city officials’ claim that they are worth the money. The default position of city bosses is that they must pay the big bucks to get the best people. With California cities such as San Bernardino going bankrupt, and many others in trouble, that amounts to a bad joke. The state itself has a negative net worth of $127.2 billion and the pension fund for teachers is in serious trouble.

In such conditions government extravagance continues, at all levels. Taxpayers nationwide might make a resolution to keep an eye on their own cities in 2014 and beyond.