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Archive for the ‘Government Waste’ Category

It’s not too surprising to learn that spending money on “high-speed” rail is foolish. And it’s hardly a revelation to learn that politicians over-promise and under-deliver when they push through these boondoggles.

My Cato colleague, Randall O’Toole, has written extensively about these money-losing white-elephant projects. But it’s not exactly shocking news that libertarians would resist wasteful government spending.

But it is stunning when establishment leftists admit that such programs are a mistake.

Here are excerpts from a column by Charles Lane, an editorial writer for the Washington Post. Yes, your eyes are not deceiving you. Even folks at the Washington Post are recognizing (or at least beginning to recognize) that government is a giant sink-hole that squanders tax dollars and undermines prosperity.

Today, Liu Zhijun is ruined, and his high-speed rail project is in trouble. On Feb. 25, he was fired for “severe violations of discipline” — code for embezzling tens of millions of dollars. Seems his ministry has run up $271 billion in debt — roughly five times the level that bankrupted General Motors. But ticket sales can’t cover debt service that will total $27.7 billion in 2011 alone. Safety concerns also are cropping up.

…On April 13, the government cut bullet-train speeds 30 mph to improve safety, energy efficiency and affordability. The Railway Ministry’s tangled finances are being audited. Construction plans, too, are being reviewed.

Liu’s legacy, in short, is a system that could drain China’s economic resources for years. So much for the grand project that Thomas Friedman of the New York Times likened to a “moon shot” and that President Obama held up as a model for the United States.

…China’s train wreck was eminently foreseeable. High-speed rail is a capital-intensive undertaking that requires huge borrowing upfront to finance tracks, locomotives and cars, followed by years in which ticket revenue covers debt service — if all goes well. “Any . . . shortfall in ridership or yield, can quickly create financial stress,” warns a 2010 World Bank staff report.

Such “shortfalls” are all too common. Japan’s bullet trains needed a bailout in 1987. Taiwan’s line opened in 2007 and needed a government rescue in 2009. …[T]he Beijing-Tianjin line, built at a cost of $46 million per mile, is losing more than $100 million per year. …On the whole, I’d say China should envy us.

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There are very serious ways to save huge amounts of money from the defense budget, largely by making smarter choices about defining America’s national security.

This obviously involves high-profile decisions about whether it is smart to engage in nation-building in Iraq and Afghanistan. But it also involves what seem to be “gimme” choices about whether we should be spending tens of billions of dollars to maintain troops in places such as Germany, the United Kingdom, South Korea, and Japan.

And, sometimes, it’s just the simple fact that bureaucracies like to squander money. Here’s a $600,000 boondoggle that barely rises to the level of a rounding error in the Defense Department’s budget, but it is a nauseating example of how government wastes our money in genuinely spectacular ways. Every time some politician says we need to raise taxes, you should think of this piece of you-know-what and  say #*&@;^ No!

Here are the key passages from a U.S. News and World Report story.

A $600,000 frog sculpture that lights up, gurgles “sounds of nature” and carries a 10-foot fairy girl on its back could soon be greeting Defense Department employees who plan to start working at the $700 million Mark Center in Alexandria, Va. this fall. That is unless a new controversy over the price tag of the public art doesn’t torpedo the idea.

Decried as wasteful spending that will be seen by just a couple thousand of daily workers who arrive on bus shuttles, foes have tried to delay the decision, expected tomorrow, April 1. But in an E-mail, an Army Corps of Engineers official said that the decision can’t be held up because it would impact completion of the huge project.

…The Mark Center is one of the facilities that thousands of defense workers will be reporting to as part of the Base Realignment and Closure plan, or BRAC, that is shifting workers around Virginia and Maryland. The BRAC plan itself has been criticized as wasteful.

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I’ve been writing too much about the Ryan budget, the government shutdown, and other fiscal policy issues. Time for some wholesome politician bashing.

But I’m not going to pick on the U.S. Congress, which is one of my favorite targets. Instead, we’re going to cross the ocean and mock the political elite of the European Parliament (a.k.a., the Potemkin-Village legislature). These lawmakers don’t really have any real responsibility. They largely exist to give faux democratic legitimacy to the decisions of the European Commission.

But they have figured out how to butter their own bread. They are provided lavish pay and benefits in exchange for very little work. And they get all sorts of perks that might cause even American politicians to blush with embarrassment.

For example, they automatically get to travel in business class, courtesy of the long-suffering taxpayers of Europe. And when somebody has the gall to suggest that this is a waste of money, the politicians link arms and defend their privileged status.

Here are some excerpts from a report in the EU Observer.

MEPs have said parliament’s budget should be increased by 2.3 percent next year, at the same time rejecting a proposal for euro-deputies to take more economy class flights in future. …In adopting the report on Wednesday, MEPs also rejected an amendment to save money by ensuring flights under four hours were carried out on economy class, citing procedural reasons. At present, MEP travel is reimbursed to the level of a business class flight or a first class rail ticket. The rejected amendment would have saved between €15 to €20 million a year… A parliamentary source defended the decision. “Most MEPs agree that economy-flex tickets are okay, but they think the budget procedure is not the way to do this,” the official said on condition of anonymity.

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The fiscal fight on Capitol Hill has triggered a firestorm of lobbying, as greedy special interests are squealing about a potential loss of handouts.

This USA Today story focuses on funding for the Corporation for Public Broadcasting and Planned Parenthood, both of which are whining that the world will come to an end if they can no longer stick their snouts in the public trough.

But it doesn’t matter whether you like watching Sesame Street or what you think about abortion. This is a debate about whether funding those activities in a proper function of the federal government. If we can’t stop mooching in these areas, we may as well surrender now and start learning French or Greek.

Planned Parenthood, public radio stations and scores of other interests are scrambling to make their cases heard on Capitol Hill, hiring new lobbyists, mailing petitions, buying TV ads and, in one case, deploying PBS’ Arthur the Aardvark cartoon character to Congress to rescue the Corporation for Public Broadcasting from budget cutters.

A focus of the lobbying free-for-all: a House-passed bill to fund the government through Sept. 30 that would cut $61 billion in federal spending.

…The Corporation for Public Broadcasting, which helps fund public radio and television stations, has “outlived its usefulness,” said Rep. Doug Lamborn, R-Colo., who authored legislation to cut the funding. The corporation is set to receive $430 million this year.

“In this day and age, we have 150 cable channels and the Internet over our cellphones,” Lamborn said. “We no longer need a government source of media. This seems to be a natural place to start the discussion about getting our fiscal house in order.”

Patrick Butler, head of the Association of Public Television Stations, called the measure a “mortal threat” and said it would do little to reduce this year’s $1.6 trillion federal deficit.

…Planned Parenthood receives $330 million annually from Medicaid and the family planning program, spokesman Tait Sye said.

Planned Parenthood officials say no federal funds are used for abortions, but opponents say the federal support frees up money to perform the procedure.

Rep. Mike Pence, R-Ind., a strong opponent of abortion, pushed the measure. “He doesn’t believe the nation’s largest abortion provider should be the largest recipient of federal funding under Title X,” Pence spokesman Matt Lloyd said.

…The lobbying frenzy over the budget won’t end soon.

President Obama, who threatened to veto the House-passed bill, and congressional leaders are working to negotiate a new spending bill to keep the government running past midnight March 18. Even if they can reach a deal to fund agencies through the Sept. 30 end of the current fiscal year, another confrontation lies ahead — this one over the fiscal year 2012 budget, which Obama sent to Congress last month.

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This is the type of story that makes me sick to my stomach. I’ve already commented on how I don’t like redistribution from rich to poor, but I really, really hate redistribution from poor to rich. And that’s exactly what happens when taxpayers subsidize the presidential nominating conventions of the two big political parties.

Republicans claim to be on the side of taxpayers, but read this story from the Tampa newspaper to get a flavor for how the Republican National Committee was wasting our money.

They rented an exclusive waterfront mansion, wined and dined at five-star restaurants and hired family members and friends, all on the taxpayers’ dime. …Recently filed Federal Election Commission records show that Steele’s convention team, which was headed by Belinda Cook, his long-time personal assistant, spent most of a $1 million line of credit to the RNC’s Committee on Arrangements. That loan was backed by $16 million in federal funds the committee will receive for convention security next year. …Since the 1970s, the federal government has subsidized both the Republican and Democratic party conventions as part of the public financing program for presidential campaigns. Parties can use the money for any legitimate political expenses.

Political conventions are largely four-day parties for political hacks and lobbyists. And even if they were serious affairs, taxpayers should not be subsidizing private political organizations. Republicans and Democrats should be able to nominate candidates without reaching into my wallet…or your wallet.

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Since I’ve spent the past 25 years analyzing government, I’m used to spectacular levels of waste and incompetence. Examples of pork such as “$27 light bulbs” and the “turtle tunnel” barely cause me to raise an eyebrow.

It takes something really amazing to grab my attention, so I’m almost grateful to Ike Leggett, the head bureaucrat of Maryland’s Montgomery County. He has restored my faith in the extreme foolishness of the political class with a proposal that would require bums to get a panhandling license from the government.

Montgomery County Executive Ike Leggett is pushing for a state law that would allow the suburb to ban all roadside solicitation without a permit.

Just think of the new bureaucracy that could be created! Imagine all the new patronage jobs, the new forms that would be required, and the new leases to be signed!

Best of all, think of how much fun it will be to fleece taxpayers to pay for this nonsense. Other bureaucrats and politicians will be jealous of Ike for this new racket.

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Very few things that happen in Washington are legitimate functions of the federal government. I’ve already posted about the need to dismantle the Department of Transportation and send it back to the states, but some things  shouldn’t even be handled by state and local governments. Housing is a perfect example. There should be no role for government in building or subsidizing housing, period.

But I’ll be happy if we can simply get rid of the Department of Housing and Urban Development in Washington. This $53 billion turkey should be the top target for GOP reformers.

Fealty to the Constitution should be the only reason lawmakers need to abolish HUD, but if they’re looking for some tangible examples of how the Department squanders money, J.P. Freire of the Washington Examiner opines on the issue, citing some devastating findings in a report from the Center for Public Integrity.

In the more than 3,000 public housing agencies nationwide funded by the Department of Housing and Urban Development, and particularly inside the 172 that HUD considers the most troubled, ABC News and the Center for Public Integrity found a struggle to combat theft, corruption, and mismanagement. According to the report, one official embezzled $900,000 and bought a mansion. Other funds went to support sex workers. In other words, this is a perfect illustration of why recommending cuts to such assistance programs is not heartless but actually wise — waste is rampant:

The problems are widespread, from an executive in New Orleans convicted of embezzling more than $900,000 in housing money around the time he bought a lavish Florida mansion to federal funds wrongly being spent to provide housing for sex offenders or to pay vouchers to residents long since dead. Despite red flags from its own internal watchdog, HUD has continued to plow fresh federal dollars into these troubled agencies, including $218 million in stimulus funds since 2009, the joint investigation found.

These are horrific examples of government waste, and they are tailor-made for soundbites and blog posts, but waste, fraud, and corruption are not the real issues. HUD should be abolished even if every penny of the budget could be accounted for. If Republicans can’t get rid of HUD, voters should get rid of Republicans.

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