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Op-ed at RealClearMarkets: Austerity Works: It's Time to Give It a Try

This piece is with my son Sherwin. The graphs are pretty powerful. The piece starts this way:

Austerity or growth, is that the choice facing Americans and others around the world?
The debate never seems to abate. European Union finance ministers last week gave Spain permission to delay cutting some government spending and reducing its deficit, though many such as The Economist magazine fear that even the cuts that will be made go too far. A similar decision may soon have to be made for Greece. Even though the pro-bailout parties won the June Parliamentary election, they too are asking for a two-year delay in cutting spending and reducing their budget deficit.
The Obama administration has put increasing pressure on German Chancellor Angela Merkel to ease up on Germany's austerity prescription. President Obama continually touts more government spending as the cure, and derided Republican "let's cut more" spending strategy as the cause of Europe's economic problems.
Last month, German Finance Minister Wolfgang Schäuble was having none of it, telling Obama to fix the U.S. deficit before giving Europe advice: "Herr Obama should above all deal with the reduction of the American deficit. That is higher than that in the euro zone." . . .

49% of Americans live in Households Receiving Government Benefits

Government Obama wealthtransfers

From the WSJ:

. . . . The 49.1% of the population in a household that gets benefits is up from 30% in the early 1980s and 44.4% as recently as the third quarter of 2008.
The increase in recent years is likely due in large part to the lingering effects of the recession. As of early 2011, 15% of people lived in a household that received food stamps, 26% had someone enrolled in Medicaid and 2% had a member receiving unemployment benefits. Families doubling up to save money or pool expenses also is likely leading to more multigenerational households. But even without the effects of the recession, there would be a larger reliance on government.
The Census data show that 16% of the population lives in a household where at least one member receives Social Security and 15% receive or live with someone who gets Medicare. There is likely a lot of overlap, since Social Security and Medicare tend to go hand in hand, but those percentages also are likely to increase as the Baby Boom generation ages. . . .

Something to remember the next time people say that government employees don't get paid enough

Government

Economists have long used turnover rate as a proxy for how good a job is. I suspect that this measure is highly correlated with that. From Forbes:

Our list of the happiest and unhappiest industries to work in, compiled by CareerBliss, is based on more than 43,000 independent employee reviews. Those employees, all over the country, were asked to evaluate nine factors that affect workplace happiness. Those included their relationship with the boss and co-workers, work environment, job resources, compensation, growth opportunities, company culture, daily tasks, and control over the work done does on a daily basis. They evaluated each item on a five-point scale and also indicated how important it was to their overall happiness.
Heading the list of the unhappiest industries to work in is agriculture and mining, with an index score of 3.76. Agriculture and mining workers also expressed the most pessimism about growth opportunities and compensation.
“Often agriculture and mining jobs have lower salaries, and our data shows that workers in these areas felt that growth opportunity was limited, which can have a drastic impact on the way employees feel about their overall future,” Miller says. . . .
But the most blissful employees of all work for the government. With an index score of 4.07, government employees said they are more than satisfied with the people they work with and their daily tasks. They’re most dissatisfied with growth opportunities, compensation and company culture. . . .
The education industry follows close behind in the No. 2 spot, with a 4.06 index score. Workers in education are particularly happy with their boss and colleagues. . . .

Wacky Democrat Laws: Banning youtube videos of karaoke singing?

Democrats Government

I thought that this was a joke the first time that I read this.

Justin Bieber says Minnesota Sen. Amy Klobuchar should be "locked up" and led away in "handcuffs!"

And, we agree with him on this issue.

The senator (pictured, right) is trying to pass the "Bieber Bill," which would ban people from singing other people's songs -- specifically online, in places like YouTube.

"Whomever she is she needs to know that I'm saying she needs to be locked up," he told Clear Channel's Kane of The Kane Show today. "I just think that's ridiculous." . . .

Does the New York Times ever fact check Krugman?

book Government paulkrugman stimulus

Normally, I don't even bother responding to Krugman's claims, but this one deserved some comment ("Hey, Small Spender," New York Times, Oct. 10, 2010).

the big government expansion everyone talks about never happened. This fact, however, raises two questions. First, we know that Congress enacted a stimulus bill in early 2009; why didn’t that translate into a big rise in government spending? Second, if the expansion never happened, why does everyone think it did?

Part of the answer to the first question is that the stimulus wasn’t actually all that big compared with the size of the economy. Furthermore, it wasn’t mainly focused on increasing government spending. Of the roughly $600 billion cost of the Recovery Act in 2009 and 2010, more than 40 percent came from tax cuts, while another large chunk consisted of aid to state and local governments. Only the remainder involved direct federal spending.

And federal aid to state and local governments wasn’t enough to make up for plunging tax receipts in the face of the economic slump. So states and cities, which can’t run large deficits, were forced into drastic spending cuts, more than offsetting the modest increase at the federal level.

The answer to the second question — why there’s a widespread perception that government spending has surged, when it hasn’t — is that there has been a disinformation campaign from the right, based on the usual combination of fact-free assertions and cooked numbers. And this campaign has been effective in part because the Obama administration hasn’t offered an effective reply. . . .

Two interesting pieces at NRO

deficits Government Regulation

James Carter & James C. Miller III have a useful piece on how tiny the budget cuts really are.

Conrad Black weighs in on Dodd-Frank.

Is all the debate over a difference of a 4% cut in Federal spending?

deficits Government

The debate in Washington right now is whether government spending over the next decade can be cut by $2 trillion or $4.4 trillion. These sound like big numbers right? In billions of dollars, here are the spending levels planned by President Obama as evaluated by the CBO on March 18th. From 2012 to 2021 in billions:

2012 $3,639 2013 $3,779 2014 $3,954 2015 $4,180 2016 $4,460 2017 $4,661 2018 $4,856 2019 $5,148 2020 $5,412 2021 $5,680. The total over 10 years is $45,770.

Reportedly, Senate Dems:

“are close to agreement on a spending plan that would reduce borrowing by more than $4 trillion over the next decade, with about half the savings coming from higher taxes. That would offer a sharp contrast to the GOP budget, which relies entirely on deep cuts in spending.”

OK, so the $2 trillion cut that Democrats are saying is possible in spending is only 4.37% of spending. And this is after Obama has overseen a massive government spending increase of 28% from 2008 to 2011. The stimulus was just supposed to be temporary. Now we find that all this stimulus on so-called "green" energy and other programs is permanent.

On the left, Ezra Klein explains the reason that Democrats won't release their spending plans here. Ed Morrissey has a response here.

The White House tables are available here.

Why is the CDC doing this "research" on guns?

Crime Government mediabias mediamatters

Why does USA Today cover this? Why is this news worthy enough for an article by them? If it was important enough for a news story, why couldn't USA Today simply assign a reporter to spend a few hours going through the FBI UCR reports to get this information? The value added from the CDC doing this seems negligible. I can only imagine how much tax dollars was wasted by the CDC restating the FBI UCR numbers. In the discussion of 10 to 19 year olds committing most of the murders, couldn't they have mentioned that virtually none of these were by the younger kids in this range. Why not include have the range from 5 to 19? It would be even more sensational.

UPDATE: Let me be clear about this. The title of this posting was important. The central issue was the CDC report and the news coverage given to the CDC, not the point about gun violence per se. Given that the CDC is just repeating information already put out by the Justice Department, why is this news worthy enough for an article by them? There is nothing new in this CDC report. Not only is this out in the DOJ numbers, it has been discussed for years. My first edition of More Guns, Less Crime pointed out that in 1992 over 70 percent of the murders take place in just 3.5 percent of the counties. The fact that most murders occur in urban areas and actually a very small portion of those urban areas is nothing new. Note as an aside, that the gun ownership rate among law-abiding citizens is also much lower in these urban areas. The CDC is just restating what is already in the FBI UCR numbers and adding nothing new to that discussion and they are distorting even that by not making it clear over what ages the murders are occurring. If the CDC is going to do a study, it should add something new to the debate. Otherwise our tax dollars are just being wasted.

Typo fixed in the original first paragraph.

UPDATE 2: Media Matters has an attack on this post available here. Can Media Matters get anything right? There claim about "Based on the CDC data" is the whole point of my post. This is DOJ data, and the CDC added nothing to the DOJ UCR report about murders being concentrated in urban areas.

The USA Today piece is available here.

Large metropolitan areas suffer about two-thirds of all firearm homicides in the United States, with inner cities most affected, according to a new report from the U.S. Centers for Disease Control and Prevention.
"The central cities really bear the burden of firearm homicides," said Linda L. Dahlberg, the associate director for science in CDC's Division of Violence Prevention, noting that the gun murder rate was highest among male children and teens.
These findings "speak to the importance of addressing youth if we really want to do something about the gun violence problem," Dahlberg said.
According to the CDC, 25,423 murders by gunfire took place in the United States in 2006 through 2007 — the years of the most recent available statistics.
Among these deaths, the rate of firearm homicides was higher in inner cities than in other parts of cities and higher than the murder rate of the country as a whole, Dahlberg said. People living in 50 of the largest cities, in fact, accounted for 67% of all firearm homicides.
In addition, children and teens aged 10 to 19 in these areas — more than 85% of them male — accounted for 73% of all firearm homicides, Dahlberg noted. . . .

"U.S. Postal Service reports $2.2 billion loss"

Government privatization

The post office has a government guaranteed monopoly on first class mail, but even with a monopoly it can't make money.

The U.S. Postal Service continues to hemorrhage money, with a loss of $2.2 billion in the most recent quarter.
The national mail service said Tuesday that it expects to have a cash shortfall and reach its statutory borrowing limit by the time its fiscal year ends in September. That means the agency could be forced to default on some of its payments to the federal government. . . .

Here is an article that suggests privatization.

The U.S. Postal Service is losing money so quickly you'd think it somehow got mixed up in the subprime mortgage business. It's on track this year for an operating loss of between $6 billion and $12 billion, debt surpassing $10 billion, and a $1 billion cash shortfall. For any business, those are some ugly numbers. . . .

But here's how the USPS is not treated like everyone else: It's exempt from taxes and antitrust law. No one else is allowed to deliver first-class mail. Those are advantages, but on the other hand USPS is subjected to constant meddling from Congress -- for instance, the postmaster general Jack Potter has to ask Congress for permission to reduce a six-day delivery schedule to five in order to save money. And these same politicians get an earful from constituents anytime a local post-office branch, no matter how unprofitable for the USPS, is threatened with closure. . . .

Germany's Deutsche Post, which runs the DHL brand, has been private since 2000 and is now the world's largest logistics group. The European Union is in the midst of privatizing the postal services of all its member nations. And in 2005, Japan approved the privatization of its postal service, Japan Post. . . .

California's high costs of prison

Government Prison

So why do you think that it costs almost three times more for prisoners in California than Texas? Do you think that it is the public employee unions in California? What incentive does it create for the Federal government to pay more for states that spend more?

The number of criminal aliens incarcerated in California rose to 102,795 in 2009, a 17 percent increase since 2003, federal auditors reported Thursday.

This isn't cheap. Nationwide, the Government Accountability Office reports, it costs well over $1.1 billion a year for states to imprison criminal aliens -- those who committed a crime after entering the United States illegally. California, moreover, is more expensive than other states. GAO auditors estimated California spends $34,000 to incarcerate a criminal alien for one year; in Texas, it's only $12,000.

The audit, requested by Rep. Zoe Lofgren, D-San Jose, will provide ammunition for states' perennial effort to secure more federal reimbursement dollars. . . .

"Republicans will make US 'Third World' nation: Obama"

Government stimulus

So what is going to be more effective? Government investments (generally political payoffs and money spent on projects that no private person would put their money in (alternative energy or high speed bullet trains that no one is going to ride)) or private investments where people have put their own money? Republicans "plan to shrink" government all the way back to the tiny government we had in 2008? Wasn't the Stimulus supposed to be temporary?

US President Barack Obama accused Republicans of wanting to turn the United States into a "Third World" country as he rallied support for his reelection campaign.
The attack came a day after Obama savaged Republican budget plans and unveiled his $4-trillion deficit reduction drive that aims to raise taxes on the wealthiest Americans in order to preserve key social services.
The debate over fiscal policy will prove critical to the 2012 campaign and Obama sought to frame it as a "stark choice" between investing in the future or watching the country fall apart.
"Under their vision, we can't invest in roads and bridges and broadband and high-speed rail," Obama told a select group of the Democratic faithful at the second of three fundraising events in his hometown of Chicago.
"I mean, we would be a nation of potholes, and our airports would be worse than places that we thought -- that we used to call the Third World, but who are now investing in infrastructure."
Republicans plans to shrink the reach of government is "not a vision that's impelled by the numbers" but a "choice" to give a trillion dollars in tax breaks to the rich rather than ask those who've been "blessed" to "give a little more.". . .

GE's "fierce lobbying for tax breaks" pays off with the Obama administration

Corruption Government

So much for the notion that companies support the free market. Will this come back to haunt the Obama administration?

The results of GE’s tight relationship with the Obama administration are starting to show.

The company’s CEO, Jeffrey Immelt, went from being an Obama ally on green energy to being one of his top outside advisers on the economy in the last two years.

In the process, The New York Times reports, GE had one of its best years in 2010, in part by getting a huge tax benefit from Uncle Sam.

Last year, the company paid nothing to the government. Instead, the government paid GE $3.2 billion in tax breaks.

“Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore,” according to The Times. . . .

Should a baby conceived after a father's death be given Social Security survivor benefits?

Government Insurance

While this is a cute baby, it seems very clear to me that a child shouldn't be eligible for Social Security benefits if it is conceived of after the parent's death. The point of insurance is to protect one against unforeseen events. You conceive the child and then have the parent die unexpectedly. In that case, it makes sense to get insurance. But having the baby after the child is born is not the same.

Melissa Amen conceived her 3-year-old daughter, Kayah, seven days after Kayah's father died of cancer.
"It's my miracle," the 28-year-old Nebraska resident told FoxNews.com. Melissa and her husband, Joshua, struggled for two years to have a child before she conceived through intrauterine insemination. Joshua had stored his sperm in a bank in case treatments for his cancer rendered him sterile. They were planning to raise a family together despite his three-year battle with cancer.
Now Amen faces her own battle: Winning Social Security benefits for Kayah from a federal government that, in essence, doesn't recognize Joshua as the father.
The Social Security Administration denied Melissa's application seeking survivor benefits for Kayah because she was conceived after the death of her father.
"I was so frustrated. I didn't know what to do," Amen said. "I knew I had to fight for her benefits." . . .

10 percent of Medicare payments are fraudulent

Fraud Government healthcare

The estimate of fraud leaves out certain obvious instances of fraud from the nearly 10 percent claim.

Nearly 10 percent of all Medicare payments are fraudulent or otherwise improper, and the government isn’t doing enough to stop them.

That’s the conclusion of a Government Accountability Office report released Wednesday. The report, issued at the request of a House subcommittee investigating Medicare and Medicaid fraud, estimates that the federal government is losing $48 billion on the improper payments – a significant amount for a program that “is fiscally unsustainable in the long term” unless action is taken.

The report, prepared for a House Energy and Commerce Oversight Subcommittee hearing, said “CMS needs a plan with clear measures and benchmarks for reducing Medicare’s risk for improper payments, inefficient payment methods and issues in program management and patient care and safety.”

CMS estimates that $48 billion of estimated Medicare outlays of $509 billion in fiscal 2010 went to improper payments, including fraudulent ones. “However, this improper payment estimate did not include all of the program’s risk since it did not include improper payments in its Part D prescription drug benefit, for which the agency has not yet estimated a total amount,” said Kathleen King, director of GAO’s health care team. . . .

Newest Fox News piece: So How Much Do Public Union Workers Really Make?

education Government op-ed Unions

My newest Fox News piece starts this way:

President Obama lashed out at Republicans Monday for having "denigrated or vilified" public union employees. Without collective bargaining and the ability to go on strike, he said we wouldn't be able to attract "the best and the brightest to public service." Are public employees simply the best and the brightest? Or are we simply lavishing them with much better employment deals than their private counterparts?
To measure how attractive a job is, economists study how employees vote with their feet -- that is, comparing the rate at which different categories of employees voluntarily quit their jobs.
Over the last six months, private workers have been 3.4 times more likely to quit their jobs than either state and local or federal workers. Indeed, no private industry comes close to the low "quit rate" for government employees. Manufacturing, which has the lowest rate, still faces twice the quit rate as the government. . . .

Hundreds of billions in Federal Government Waste

deficits Government

With House Republicans battling Obama and Senate Democrats over $61 billion in spending cuts, a new GAO report indicates that the Federal government may be wasting hundreds of billions of dollars each year. From the WSJ:

The U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.

These are a few of the findings in a massive study of overlapping and duplicative programs that cost taxpayers billions of dollars each year, according to the Government Accountability Office.

A report from the nonpartisan GAO, to be released Tuesday, compiles a list of redundant and potentially ineffective federal programs, and it could serve as a template for lawmakers in both parties as they move to cut federal spending and consolidate programs to reduce the deficit. Sen. Tom Coburn (R., Okla.), who pushed for the report, estimated it identifies between $100 billion and $200 billion in duplicative spending. The GAO didn't put a specific figure on the spending overlap.

The GAO examined numerous federal agencies, including the departments of defense, agriculture and housing and urban development, and pointed to instances where different arms of the government should be coordinating or consolidating efforts to save taxpayers' money.

The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances, according to a draft of the report reviewed by The Wall Street Journal.

Instances of ineffective and unfocused federal programs can lead to a mishmash of occasionally arbitrary policies and rules, the report said. It recommends merging or consolidating a number of programs to both save money and make the government more efficient.

"Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services," the report said. . . .

So how big has the Federal government really gotten?

Government governmentcontrol

Remember that LBJ created the Great Society programs for the Federal government. This CNS News article is interesting, but they really need to adjust for inflation and growth in population.

Anyone who doubts that the trend toward socialism is pushing America toward ruin should examine the historical tables President Obama published Monday along with his $3.7 trillion budget.
In fiscal 2011, according to these tables, the Department of Health and Human Services will spend $909.7 billion. In fiscal 1965, the entire federal government spent $118.228 billion.
What about inflation? According to the Bureau of Labor Statistics' inflation calculator, $118.228 billion in 1965 dollars equals $822.6 billion in 2010 dollars. In real terms, the $909.7 billion HHS is spending this year is about $87.1 billion more than the entire federal government spent in 1965. . . .

$288,700 per "green" job

Corruption Government

Boy, talk about a UN "anti-poverty" program. Wouldn't it have just been better to have given the poor people $288,700 each?

according to documentation obtained by Fox News, the projects that generated those jobs have a total cost of about $1.68 billion—which would work out to a much more staggering average figure of about $288,700 per job.
The wildly differing size of those price tags for a fairly trivial amount of employment emerged as part of a muted rebranding effort at UNDP. Top management is trying to burnish some of its credentials in the face of internal critics who feel that when it comes to merging environmental management and economic development to solve poverty problems, UNDP is not very good at its job.
The stakes for UNDP are high. UNDP spends about $570 million a year on implementing environmental programs and projects, mostly on behalf of outside donors. . . .

"House GOP Lists $2.5 Trillion in Spending Cuts"