Peter Suderman at Reason Online has a good article about the myth that the Democrats' proposals are "deficit neutral." Right now they're pushing a "fix" for Medicare -- $240 billion! -- and since it isn't part of the health care proposal, they can keep their claim.
Something is rotten in Denmark.
Suderman says, "As legislative scams go, it's pretty obvious — pass a bill on the promise of future savings, then 'fix' those savings later when they prove unpopular."
In the end, it comes down to the fact that government cannot spend wisely. And when it needs more money, Congress votes for more money. No efficiencies ever arise, no savings ever appear.
You can find the original article here.
Showing posts with label government waste. Show all posts
Showing posts with label government waste. Show all posts
Tuesday, October 20, 2009
Monday, October 19, 2009
Spending More
Democrats are having a heyday with all the tax and spend crap going on. Even though the economy is starting to recover (with less than a quarter of the 'stimulus' being spent, by the way), the Democrats are looking to spend EVEN MORE.
Democrats are considering extending unemployment and health benefits, as well as extending and perhaps expanding a popular tax credit for first-time home buyers and creating a new credit for companies that add jobs.
Extending unemployment benefits through 2010 would cost about $100 billion, according to the liberal Center on Budget and Policy Priorities.
It's unknown exactly how much it would cost to extend subsidies for laid-off workers to help them keep the health insurance their former employers provided, known as COBRA. That's because congressional leaders haven't settled on the length of an extension, or how to pay for it. But the current program, which covers workers laid off through the end of the year, costs nearly $25 billion.
Extending the homebuyer tax credit to next summer would cost about $16.7 billion, economists say. It's not clear how much the employer tax credit would cost. But a similar proposal that was dropped from the first stimulus package had a cost of $19.5 billion.
President Obama also wants Congress to approve $250 payments to more than 50 million seniors to make up for no cost-of-living increase in Social Security next year. The total cost: $14 billion.
Taken together, the proposals could add up to nearly $200 billion, looking a lot like another economic stimulus package.
Just don't call it a stimulus. They hate that.
You can find the original article here.
Democrats are considering extending unemployment and health benefits, as well as extending and perhaps expanding a popular tax credit for first-time home buyers and creating a new credit for companies that add jobs.
Extending unemployment benefits through 2010 would cost about $100 billion, according to the liberal Center on Budget and Policy Priorities.
It's unknown exactly how much it would cost to extend subsidies for laid-off workers to help them keep the health insurance their former employers provided, known as COBRA. That's because congressional leaders haven't settled on the length of an extension, or how to pay for it. But the current program, which covers workers laid off through the end of the year, costs nearly $25 billion.
Extending the homebuyer tax credit to next summer would cost about $16.7 billion, economists say. It's not clear how much the employer tax credit would cost. But a similar proposal that was dropped from the first stimulus package had a cost of $19.5 billion.
President Obama also wants Congress to approve $250 payments to more than 50 million seniors to make up for no cost-of-living increase in Social Security next year. The total cost: $14 billion.
Taken together, the proposals could add up to nearly $200 billion, looking a lot like another economic stimulus package.
Just don't call it a stimulus. They hate that.
You can find the original article here.
Thursday, October 8, 2009
Want to Make Money? Uncle Sam Wants to Give You $500 For Each Kid
If you're short on cash, just have more kids. So goes the thinking the government has.
To be fair, the government isn't offering the money to people to have kids. It wants to spur savings so it's willing to give $500 of taxpayer money to each newborn. The money will be put into savings accounts. It's called the America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act.
And yes, that would include children of illegal aliens. It's for EVERY kid born in the U.S.
It has been pushed since 2004 but has yet to become law. Here is an article about why that is.
You can find the text of HR 3583 here.
You can find the original article here.
To be fair, the government isn't offering the money to people to have kids. It wants to spur savings so it's willing to give $500 of taxpayer money to each newborn. The money will be put into savings accounts. It's called the America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act.
And yes, that would include children of illegal aliens. It's for EVERY kid born in the U.S.
It has been pushed since 2004 but has yet to become law. Here is an article about why that is.
You can find the text of HR 3583 here.
You can find the original article here.
Stimulus Spending Worsens Unemployment
Give us money, and we’ll give you jobs. That was the promise President Barack Obama made when he asked Congress for a $789 billion stimulus bill back in January. The cash, the administration said, would create millions of jobs over the next two years.
Since April 2009, the administration spent roughly $90 billion, or 18 percent of the total stimulus spending, on top of $62 billion in tax relief. During that time, the unemployment rate grew from 8.9 percent to 9.8 percent. And according to the Bureau of Labor Statistics, job losses accelerated in September. As we see here, the current unemployment rate is already far above the 8.8 percent the administration said the rate would top out at next year without a stimulus.
Some economists, including Paul Krugman, have argued that the problem with President Obama’s plan is that it doesn't spend enough. Hence, they think that a second stimulus is needed. Yet it is hard to argue that we already need another stimulus when less than a quarter of the money has been spent.
Other economists are arguing that the money is not being spent fast enough. Indeed, at this rate, the economy is likely to have recovered before most of the stimulus money has been spent.
Um, question: If a recovering economy will bring back the jobs, why increase our national debt? Just asking.
From the article is the conclusion:
Putting aside the question of whether the stimulus is too small or being spent too slowly, what too many stimulus advocates overlook is that to spend money, the government needs to either borrow, tax, or print it (or combine these). Money taxed or borrowed from the private sector is money that firms cannot spend on goods or employees. The government’s slice of the pie gets bigger by making the rest of the pie smaller. This may explain in part why the stimulus has not translated into declining unemployment.
You can find the original article here, complete with chart.
Since April 2009, the administration spent roughly $90 billion, or 18 percent of the total stimulus spending, on top of $62 billion in tax relief. During that time, the unemployment rate grew from 8.9 percent to 9.8 percent. And according to the Bureau of Labor Statistics, job losses accelerated in September. As we see here, the current unemployment rate is already far above the 8.8 percent the administration said the rate would top out at next year without a stimulus.
Some economists, including Paul Krugman, have argued that the problem with President Obama’s plan is that it doesn't spend enough. Hence, they think that a second stimulus is needed. Yet it is hard to argue that we already need another stimulus when less than a quarter of the money has been spent.
Other economists are arguing that the money is not being spent fast enough. Indeed, at this rate, the economy is likely to have recovered before most of the stimulus money has been spent.
Um, question: If a recovering economy will bring back the jobs, why increase our national debt? Just asking.
From the article is the conclusion:
Putting aside the question of whether the stimulus is too small or being spent too slowly, what too many stimulus advocates overlook is that to spend money, the government needs to either borrow, tax, or print it (or combine these). Money taxed or borrowed from the private sector is money that firms cannot spend on goods or employees. The government’s slice of the pie gets bigger by making the rest of the pie smaller. This may explain in part why the stimulus has not translated into declining unemployment.
You can find the original article here, complete with chart.
Tuesday, October 6, 2009
Medicare Waste -- Our Government at Work
If you ever thought we could pay for the health care schemes by cutting out waste from Medicare/Medicaid, you might be onto something.
According to their own auditors, Medicare knowingly overpays for almost everything it buys. Examples include:
-- $7,215 to rent an oxygen concentrator, when the purchase price is $600.
-- $4,018 for a standard wheelchair, while the private sector pays $1,048.
-- $1,825 for a hospital bed, compared to an Internet price of $1,071.
-- $3,335 for a respiratory pump, versus an advertised price of $1,987.
-- $82 for a diabetic supply kit, instead of a $47 price on the Web.
Last year, the Health and Human Services Department tried to replace its archaic fixed-price fee schedule for 10 commonly purchased products with a competitive bidding program in 10 cities. The department said the program could save Medicare $125 million in a single year, or $1 billion if adopted nationwide. But Congress stepped in to stop it.
"There were products that we had as much as 75 percent savings. The average was 29 percent," said Mike Leavitt, the former HHS secretary who oversaw the program.
"It would have saved billions if we could've actually implemented it, but Congress deferred it. In Washington speak, that means we put it off forever," he said.
Leavitt blames Congressmen Pete Stark (D-Calif.) and Dave Camp (R-Mich.) for introducing legislation that terminated the contracts and postponed the program for 18 months. Leavitt says the congressional intervention helps explain why many are suspicious of claims that Washington can cut enough waste to actually pay for health care reform, as President Obama told a joint session of Congress last month.
Although this proves there is a vast amount of waste in the Medicare program, the meddling by Congress to keep the waste in place shows that politicians and the government are not good stewards of our money. It also proves that the government is not the place to look for responsible management or even our trust.
The original article can be found here.
According to their own auditors, Medicare knowingly overpays for almost everything it buys. Examples include:
-- $7,215 to rent an oxygen concentrator, when the purchase price is $600.
-- $4,018 for a standard wheelchair, while the private sector pays $1,048.
-- $1,825 for a hospital bed, compared to an Internet price of $1,071.
-- $3,335 for a respiratory pump, versus an advertised price of $1,987.
-- $82 for a diabetic supply kit, instead of a $47 price on the Web.
Last year, the Health and Human Services Department tried to replace its archaic fixed-price fee schedule for 10 commonly purchased products with a competitive bidding program in 10 cities. The department said the program could save Medicare $125 million in a single year, or $1 billion if adopted nationwide. But Congress stepped in to stop it.
"There were products that we had as much as 75 percent savings. The average was 29 percent," said Mike Leavitt, the former HHS secretary who oversaw the program.
"It would have saved billions if we could've actually implemented it, but Congress deferred it. In Washington speak, that means we put it off forever," he said.
Leavitt blames Congressmen Pete Stark (D-Calif.) and Dave Camp (R-Mich.) for introducing legislation that terminated the contracts and postponed the program for 18 months. Leavitt says the congressional intervention helps explain why many are suspicious of claims that Washington can cut enough waste to actually pay for health care reform, as President Obama told a joint session of Congress last month.
Although this proves there is a vast amount of waste in the Medicare program, the meddling by Congress to keep the waste in place shows that politicians and the government are not good stewards of our money. It also proves that the government is not the place to look for responsible management or even our trust.
The original article can be found here.
Monday, October 5, 2009
Military Aid to Pakistan Helped Musharraf, Not the Military
We are starting to find out how well the money we have given Pakistan has been used. And the news isn't pretty.
Between 2002 and 2008, while Al Qaeda regrouped, only $500 million of the $6.6 billion in American aid actually made it to the Pakistani military, two army generals tell The Associated Press. That's 0.0000075%, folks.
The account of the generals, who asked to remain anonymous because military rules forbid them from speaking publicly, was backed up by other retired and active generals, former bureaucrats and government ministers.
At the time of the siphoning, Pervez Musharraf, a Washington ally, served as both chief of staff and president, making it easier to divert money intended for the military to bolster his sagging image at home through economic subsidies.
Generals and ministers say the diversion of the money hurt the military in very real ways:
For more than a year, the Pentagon paid Pakistan's navy $19,000 a month per vehicle just for repair costs on a fleet of fewer than 20 vehicles. Monthly food bills doubled for no apparent reason, and for a year the Pentagon paid the bills without checking, according to the report.
And we're considering giving them more money but we can't tell what they do with it. "We don't have a mechanism for tracking the money after we have given it to them," Pentagon spokesman Lt. Col. Mark Wright said in a telephone interview.
You can find the original article here.
Between 2002 and 2008, while Al Qaeda regrouped, only $500 million of the $6.6 billion in American aid actually made it to the Pakistani military, two army generals tell The Associated Press. That's 0.0000075%, folks.
The account of the generals, who asked to remain anonymous because military rules forbid them from speaking publicly, was backed up by other retired and active generals, former bureaucrats and government ministers.
At the time of the siphoning, Pervez Musharraf, a Washington ally, served as both chief of staff and president, making it easier to divert money intended for the military to bolster his sagging image at home through economic subsidies.
Generals and ministers say the diversion of the money hurt the military in very real ways:
- Helicopters critical to the battle in rugged border regions were not available. At one point in 2007, more than 200 soldiers were trapped by insurgents in the tribal regions without a helicopter lift to rescue them.
- The limited night vision equipment given to the army was taken away every three months for inventory and returned three weeks later.
- Equipment was broken, and training was lacking. It was not until 2007 that money was given to the Frontier Corps, the front-line force, for training.
For more than a year, the Pentagon paid Pakistan's navy $19,000 a month per vehicle just for repair costs on a fleet of fewer than 20 vehicles. Monthly food bills doubled for no apparent reason, and for a year the Pentagon paid the bills without checking, according to the report.
And we're considering giving them more money but we can't tell what they do with it. "We don't have a mechanism for tracking the money after we have given it to them," Pentagon spokesman Lt. Col. Mark Wright said in a telephone interview.
You can find the original article here.
Earmarks Continuing in Defense Spending Under Obama
We all know that liberals don't understand the proper application of the military and of military force. But that doesn't mean they can't find a way to use the military.
Most people think Republicans are happy to have pork in defense bills and dismiss it when considering liberals. And while campaigning last year, Obama said, "And, absolutely, we need earmark reform. And when I'm president, I will go line by line to make sure that we are not spending money unwisely." (1)
But "wise" must be in the eye of the beholder. We can see from an editorial in USA Today that earmarks continue under the Democratic regime (2).
Now, his administration is lauding a $636 billion defense spending bill, for the fiscal year that began Thursday, that includes $2.7 billion in earmarks.
The measure contains funding for a new destroyer and 10 C-17 cargo planes that the Pentagon did not ask for. It also includes hundreds of smaller earmarks for projects of special interest to individual lawmakers, among them $25 million for a World War II museum in New Orleans and $20 million for the Edward M. Kennedy Institute for the United States Senate in Boston, a kind of think tank dedicated to the legacy of the late senator. (3)
And they want to keep alive a troubled missile-defense interceptor program and continue the troubled VH-71 presidential helicopter program (4).
Representative Jeff Flake (R-AZ) noted that at least 70 of the earmarks are for former clients of the PMA Group, a lobbying firm close to appropriations subcommittee head John P. Murtha (D-PA) that is now being probed by the Justice Department and the House ethics committee (5).
Although President Obama has repeatedly criticized earmarks, the White House statement of policy on the House bill obliquely criticized only "programs that fund narrowly focused activities." No mention was made of items such as a proposed $8 million Defense Department grant Murtha inserted for Argon ST, a Pennsylvania military contractor that has contributed $35,200 to him in the past four years, or of a $5 million grant Rep. C.W. Bill Young (R-Fla.) inserted for DRS Technologies, a Florida contractor that has contributed $46,350 to Young during that period, according to Taxpayers for Common Sense.
The White House criticized the addition of $80 million for the Kinetic Energy Interceptor program, which Gates and other Pentagon officials have said is technically troubled, behind schedule, and billions of dollars over budget. But Northrop Grumman, the principal contractor, is building a technology center in Murtha's district that would bring 150 related jobs, and Murtha's subcommittee sought its continuation as a way "to recoup the technology," according to an appropriations staff member, who was not authorized to speak on the record (6).
You can find the defense spending bill here in PDF.
==================
1. "Go "line by line" over earmarks to make sure money being spent wisely" (2008, September 26). PolitiFact.
Retrieved October 5, 2009, from PolitiFact
2. "Our view on federal spending: Cuts in military pork fall short of rhetoric" (2009, October 5). USA Today.
Retrieved October 5, 2009, from USA Today
3. "Our view on federal spending: Cuts in military pork fall short of rhetoric" (2009, October 5). USA Today.
Retrieved October 5, 2009, from USA Today
4. Smith, Jeffrey R. (2009, July 30). "House Seems To Be Set on Pork-Padded Defense Bill". The Washington Post.
Retrieved October 5, 2009, from The Washington Post
5. Smith, Jeffrey R. (2009, July 30). "House Seems To Be Set on Pork-Padded Defense Bill". The Washington Post.
Retrieved October 5, 2009, from The Washington Post
6. Smith, Jeffrey R. (2009, July 30). "House Seems To Be Set on Pork-Padded Defense Bill". The Washington Post.
Retrieved October 5, 2009, from The Washington Post
Most people think Republicans are happy to have pork in defense bills and dismiss it when considering liberals. And while campaigning last year, Obama said, "And, absolutely, we need earmark reform. And when I'm president, I will go line by line to make sure that we are not spending money unwisely." (1)
But "wise" must be in the eye of the beholder. We can see from an editorial in USA Today that earmarks continue under the Democratic regime (2).
Now, his administration is lauding a $636 billion defense spending bill, for the fiscal year that began Thursday, that includes $2.7 billion in earmarks.
The measure contains funding for a new destroyer and 10 C-17 cargo planes that the Pentagon did not ask for. It also includes hundreds of smaller earmarks for projects of special interest to individual lawmakers, among them $25 million for a World War II museum in New Orleans and $20 million for the Edward M. Kennedy Institute for the United States Senate in Boston, a kind of think tank dedicated to the legacy of the late senator. (3)
And they want to keep alive a troubled missile-defense interceptor program and continue the troubled VH-71 presidential helicopter program (4).
Representative Jeff Flake (R-AZ) noted that at least 70 of the earmarks are for former clients of the PMA Group, a lobbying firm close to appropriations subcommittee head John P. Murtha (D-PA) that is now being probed by the Justice Department and the House ethics committee (5).
Although President Obama has repeatedly criticized earmarks, the White House statement of policy on the House bill obliquely criticized only "programs that fund narrowly focused activities." No mention was made of items such as a proposed $8 million Defense Department grant Murtha inserted for Argon ST, a Pennsylvania military contractor that has contributed $35,200 to him in the past four years, or of a $5 million grant Rep. C.W. Bill Young (R-Fla.) inserted for DRS Technologies, a Florida contractor that has contributed $46,350 to Young during that period, according to Taxpayers for Common Sense.
The White House criticized the addition of $80 million for the Kinetic Energy Interceptor program, which Gates and other Pentagon officials have said is technically troubled, behind schedule, and billions of dollars over budget. But Northrop Grumman, the principal contractor, is building a technology center in Murtha's district that would bring 150 related jobs, and Murtha's subcommittee sought its continuation as a way "to recoup the technology," according to an appropriations staff member, who was not authorized to speak on the record (6).
You can find the defense spending bill here in PDF.
==================
1. "Go "line by line" over earmarks to make sure money being spent wisely" (2008, September 26). PolitiFact.
Retrieved October 5, 2009, from PolitiFact
2. "Our view on federal spending: Cuts in military pork fall short of rhetoric" (2009, October 5). USA Today.
Retrieved October 5, 2009, from USA Today
3. "Our view on federal spending: Cuts in military pork fall short of rhetoric" (2009, October 5). USA Today.
Retrieved October 5, 2009, from USA Today
4. Smith, Jeffrey R. (2009, July 30). "House Seems To Be Set on Pork-Padded Defense Bill". The Washington Post.
Retrieved October 5, 2009, from The Washington Post
5. Smith, Jeffrey R. (2009, July 30). "House Seems To Be Set on Pork-Padded Defense Bill". The Washington Post.
Retrieved October 5, 2009, from The Washington Post
6. Smith, Jeffrey R. (2009, July 30). "House Seems To Be Set on Pork-Padded Defense Bill". The Washington Post.
Retrieved October 5, 2009, from The Washington Post
Wednesday, September 23, 2009
Bill to Defund ACORN Could Catch Everyone Else
HR 3571, "Defund ACORN Act", is written so broadly that it covers "any organization" that has been charged with breaking federal or state election laws, lobbying disclosure laws, campaign finance laws or filing fraudulent paperwork with any federal or state agency. It also applies to any of the employees, contractors or other folks affiliated with a group charged with any of those things.
Rep. Alan Grayson (D-FL) picked up on the legislative overreach and asked the Project on Government Oversight (POGO) to sift through its database to find which contractors might be caught in the ACORN net.
The results can be found here. Defense contractors, Exxon and GE are at the top of the list. NOTE: The list is sortable and is initially sorted by federal contract dollars. If you click on the header for the number of violations, you see who has been the naughtiest. Clicking on the name of the company will take you to a page detailing the offenses.
You can find the text of HR 3571 here.
Rep. Alan Grayson (D-FL) picked up on the legislative overreach and asked the Project on Government Oversight (POGO) to sift through its database to find which contractors might be caught in the ACORN net.
The results can be found here. Defense contractors, Exxon and GE are at the top of the list. NOTE: The list is sortable and is initially sorted by federal contract dollars. If you click on the header for the number of violations, you see who has been the naughtiest. Clicking on the name of the company will take you to a page detailing the offenses.
You can find the text of HR 3571 here.
Spending on Welfare
Obama has criticized the spending under Bush, and many conservatives agree. I am one of them. But it's disingenuous to consider Obama more fiscally responsible than Bush. He has proven to be a bigger spender than any other president in history.
During the entire administration of Bush, the Iraq war cost a total of $622 billion (1). Compare that 8-year total to the one-year Obama has spent on welfare alone, $888 billion, and we begin to understand (2).
By 2014, annual spending on welfare programs will reach $1 trillion for the fiscal year (3).
Welfare spending has taken its toll on the federal debt. Since the beginning of the “war on poverty,” $15.9 trillion has been spent on welfare programs. The total cost of every war in American history, starting with the American Revolution, is $6.4 trillion when adjusted for inflation (4).
In a speech in West Virginia in 2008, Obama said, "Because of the Bush-McCain policies, our debt has ballooned. This is creating problems in our fragile economy. And that kind of debt also places an unfair burden on our children and grandchildren, who will have to repay it." (5) The full text of his speech can be found here.
At least you got one thing right, Mr. Obama.
============================
1. Belasco, Amy (2009, May 15). "The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11". Congressional Research Service.
Retrieved September 23, 2009, from CRS
2. Lucas, Fred (2009, September 23). "Obama Will Spend More on Welfare in the Next Year Than Bush Spent on Entire Iraq War, Study Reveals". CNS News.
Retrieved September 23, 2009, from CNS News
3. Lucas, Fred (2009, September 23). "Obama Will Spend More on Welfare in the Next Year Than Bush Spent on Entire Iraq War, Study Reveals". CNS News.
Retrieved September 23, 2009, from CNS News
4. Lucas, Fred (2009, September 23). "Obama Will Spend More on Welfare in the Next Year Than Bush Spent on Entire Iraq War, Study Reveals". CNS News.
Retrieved September 23, 2009, from CNS News
5. Obama, Barack (2008, March 20). "Obama's Speech on the Cost of War". Council on Foreign Relations.
Retrieved September 23, 2009, from CFR
During the entire administration of Bush, the Iraq war cost a total of $622 billion (1). Compare that 8-year total to the one-year Obama has spent on welfare alone, $888 billion, and we begin to understand (2).
By 2014, annual spending on welfare programs will reach $1 trillion for the fiscal year (3).
Welfare spending has taken its toll on the federal debt. Since the beginning of the “war on poverty,” $15.9 trillion has been spent on welfare programs. The total cost of every war in American history, starting with the American Revolution, is $6.4 trillion when adjusted for inflation (4).
In a speech in West Virginia in 2008, Obama said, "Because of the Bush-McCain policies, our debt has ballooned. This is creating problems in our fragile economy. And that kind of debt also places an unfair burden on our children and grandchildren, who will have to repay it." (5) The full text of his speech can be found here.
At least you got one thing right, Mr. Obama.
============================
1. Belasco, Amy (2009, May 15). "The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11". Congressional Research Service.
Retrieved September 23, 2009, from CRS
2. Lucas, Fred (2009, September 23). "Obama Will Spend More on Welfare in the Next Year Than Bush Spent on Entire Iraq War, Study Reveals". CNS News.
Retrieved September 23, 2009, from CNS News
3. Lucas, Fred (2009, September 23). "Obama Will Spend More on Welfare in the Next Year Than Bush Spent on Entire Iraq War, Study Reveals". CNS News.
Retrieved September 23, 2009, from CNS News
4. Lucas, Fred (2009, September 23). "Obama Will Spend More on Welfare in the Next Year Than Bush Spent on Entire Iraq War, Study Reveals". CNS News.
Retrieved September 23, 2009, from CNS News
5. Obama, Barack (2008, March 20). "Obama's Speech on the Cost of War". Council on Foreign Relations.
Retrieved September 23, 2009, from CFR
Thursday, September 17, 2009
Dems Want to Expand Community Reinvestment Act (CRA)
Even though the Community Reinvestment Act (CRA) is believed to be responsible in part for the mortgage meltdown, Democrats want to expand the program and give it even more money and power.
The original bill, created in 1977, has funded groups like ACORN. They claim that over $1 trillion in CRA loans have been made. So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities. (1)
Banks are screwed. If they go along with the law, they risk more defaults by loaning to people that shouldn't be getting loans. If they don't, they face financial penalties and more.
Madeline Talbott, an activist with extensive ties to Barack Obama, made an effort to, as she put it, drag banks "kicking and screaming" into high-risk loans. A September 1993 story in The Chicago Sun-Times presents her as the leader of an initiative in which five area financial institutions (including two of her former targets, now plainly cowed - Bell Federal Savings and Avondale Federal Savings) were "participating in a $55 million national pilot program with affordable-housing group ACORN to make mortgages for low- and moderate-income people with troubled credit histories." (2)
"There is clearly arguable evidence that the CRA is at the root of this financial meltdown," says one GOP committee member. "So what do they do? They try to expand CRA." (3)
H.R. 1479 (found here in PDF) was authored by Senator Eddie Bernice Johnson (D-TX). Johnson's bill has 51 co-sponsors, including some of the most liberal members of the House, like Reps. Dennis Kucinich, John Conyers, Bobby Rush, Steve Cohen, and Barbara Lee (4).
"Congress has passed a number of laws designed to combat redlining and eliminate housing discrimination," Johnson said at the hearing. "Unfortunately, we all know that redlining still occurs."
So that brings up a good question. If this stuff is already illegal, why not use the law that ALREADY EXISTS?
===============================================
1. DiLorenzo, Thomas J. (2007, September 6). "The Government-Created Subprime Mortgage Meltdown". Lew Rockwell.
Retrieved September 17, 2009, from LewRockwell.com
2. Kurtz, Stanley (2008, September 29). "O's Dangerous Pals". The New York Post.
Retrieved September 17, 2009, from nyPost.com
3. York, Byron (2009, September 16). "Dems push expanded Community Reinvestment Act; deny Act's role in mortgage meltdown; GOP cites ACORN connection". The Examiner.
Retrieved September 17, 2009, from WashingtonExaminer.com
4. York, Byron (2009, September 16). "Dems push expanded Community Reinvestment Act; deny Act's role in mortgage meltdown; GOP cites ACORN connection". The Examiner.
Retrieved September 17, 2009, from WashingtonExaminer.com
The original bill, created in 1977, has funded groups like ACORN. They claim that over $1 trillion in CRA loans have been made. So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities. (1)
Banks are screwed. If they go along with the law, they risk more defaults by loaning to people that shouldn't be getting loans. If they don't, they face financial penalties and more.
Madeline Talbott, an activist with extensive ties to Barack Obama, made an effort to, as she put it, drag banks "kicking and screaming" into high-risk loans. A September 1993 story in The Chicago Sun-Times presents her as the leader of an initiative in which five area financial institutions (including two of her former targets, now plainly cowed - Bell Federal Savings and Avondale Federal Savings) were "participating in a $55 million national pilot program with affordable-housing group ACORN to make mortgages for low- and moderate-income people with troubled credit histories." (2)
"There is clearly arguable evidence that the CRA is at the root of this financial meltdown," says one GOP committee member. "So what do they do? They try to expand CRA." (3)
H.R. 1479 (found here in PDF) was authored by Senator Eddie Bernice Johnson (D-TX). Johnson's bill has 51 co-sponsors, including some of the most liberal members of the House, like Reps. Dennis Kucinich, John Conyers, Bobby Rush, Steve Cohen, and Barbara Lee (4).
"Congress has passed a number of laws designed to combat redlining and eliminate housing discrimination," Johnson said at the hearing. "Unfortunately, we all know that redlining still occurs."
So that brings up a good question. If this stuff is already illegal, why not use the law that ALREADY EXISTS?
===============================================
1. DiLorenzo, Thomas J. (2007, September 6). "The Government-Created Subprime Mortgage Meltdown". Lew Rockwell.
Retrieved September 17, 2009, from LewRockwell.com
2. Kurtz, Stanley (2008, September 29). "O's Dangerous Pals". The New York Post.
Retrieved September 17, 2009, from nyPost.com
3. York, Byron (2009, September 16). "Dems push expanded Community Reinvestment Act; deny Act's role in mortgage meltdown; GOP cites ACORN connection". The Examiner.
Retrieved September 17, 2009, from WashingtonExaminer.com
4. York, Byron (2009, September 16). "Dems push expanded Community Reinvestment Act; deny Act's role in mortgage meltdown; GOP cites ACORN connection". The Examiner.
Retrieved September 17, 2009, from WashingtonExaminer.com
Thursday, August 27, 2009
Facta, Non Verba
Newt Gingrich writes a letter explaining why the government should not be allowed to run health care: it can't manage the programs it is already running.
The government cannot run the programs it has or meet its responsibilities. Mr. Gingrich calls for facta, non verda -- deeds, not words.
The original article can be found here.
- The Obama administration just announced this weekend that the $7 trillion it was planning on spending has now become $9 trillion -- none of which the government currently has. Deficit spending is a common problem in government because they do not have to live by the same rules we do. Or do they?
- Cash for Clunkers, largely hailed by politicians as a success, gave car dealerships very little business over what they would have had; it ran out of money too fast because the planners failed to anticipate demand; FAA flight controllers had to be pulled to help man the telephone lines; car dealerships have yet to see most of the money promised them by the government.
- Home health care, nurses taking care of people at home, saves Medicare billions of dollars. And for that efficiency, it is getting cut this year to the tune of $34 billion -- and if the health care bill passes, it will be cut even more (another $57 billion). On the opposite end of this is tremendous waste, such as men receiving maternity benefits; dead patients receiving money; and more.
The government cannot run the programs it has or meet its responsibilities. Mr. Gingrich calls for facta, non verda -- deeds, not words.
The original article can be found here.
Thursday, August 6, 2009
A Closer Look at Cash for Clunkers
The federal government has been giving away money for people to trade in their older cars and buy new cars. The requirements are (1):
The amount of the rebate is dependent upon the class of vehicle and how much more the new vehicle gets in fuel economy compared to the old vehicle (2).
Democrats say this is a win for everyone because it will put more fuel efficient cars on the road (saving gas), it will stimulate the economy and it will help out American car companies (which they now own) (3). The first round of money went by quickly and everyone is surprised. Duh. Who is going to turn down someone else's money to buy a new car?
This will help out the car makers some, and not just by selling the new cars through the program. Since the clunkers are destroyed instead of resold, there are fewer vehicles out there for sale. And what happens to something when demand goes up and supply goes down? Right, everyone gets it in the end. So if you didn't take money from Uncle Sugar and want a new car later, be prepared to pony up even more money.
This did not help out the domestic car makers much, though. Only four of the ten most popular cars bought are from domestic car makers (4).
But who is this going to hurt? Let me count the ways:
Here are some ways this could have been better:
This program should really have been called the Crummy Relief of Autos Program (CRAP). If your neighbor is driving a new car, ask to take it for a spin. After all, you paid for it.
=====================================================
1. Retrieved August 6, 2009, from CARS website
2. Reed, Philip (2009, July 31). "Cash for Clunkers Car Buying Stimulus Program". Edmunds.com
Retrieved August 6, 2009, from Edmunds.com
3. "Senate Poised to Refuel 'Clunkers' for $2B". 2009, August 6.
Retrieved August 6, 2009, from FoxNews.com
4. Thomas, Ken and Laurie Kellman (2009, August 5). "Senate to Consider $2B 'Clunkers' Refill". Associated Press
Retrieved August 5, 2009, from Yahoo! News
5. 2009, August 4. "Charities Fear Pinch from 'Clunkers' Program". The Denver Post
Retrieved August 6, 2009, from The Denver Post
6. Clouse, Thomas. "Some Businesses Say 'Clunker' Program Will Hurt'". The Spokesman Review
Retrieved August 6, 2009, from The Spokesman Review
7. Tsai, Catherine (2009, July 29). "Auto Recyclers Leery of Clunkers Program". Associated Press
Retrieved August 6, 2009, from The Boston Globe
8. Fields, Gary (2009, August 6). "Clunkers Plan Deflates Mechanics". The Wall Street Journal
Retrieved August 6, 2009, from The Wall Street Journal Online
- Your vehicle must be less than 25 years old on the trade-in date
- Only purchase or lease of new vehicles qualify
- Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
- Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in
- You don't need a voucher, dealers will apply a credit at purchase
- Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
- The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.
The amount of the rebate is dependent upon the class of vehicle and how much more the new vehicle gets in fuel economy compared to the old vehicle (2).
Democrats say this is a win for everyone because it will put more fuel efficient cars on the road (saving gas), it will stimulate the economy and it will help out American car companies (which they now own) (3). The first round of money went by quickly and everyone is surprised. Duh. Who is going to turn down someone else's money to buy a new car?
This will help out the car makers some, and not just by selling the new cars through the program. Since the clunkers are destroyed instead of resold, there are fewer vehicles out there for sale. And what happens to something when demand goes up and supply goes down? Right, everyone gets it in the end. So if you didn't take money from Uncle Sugar and want a new car later, be prepared to pony up even more money.
This did not help out the domestic car makers much, though. Only four of the ten most popular cars bought are from domestic car makers (4).
But who is this going to hurt? Let me count the ways:
- Charities who take vehicles (5)
- Used car dealers (6)
- Auto recyclers (7)
- Independent auto repair shops (8)
- Car part stores
- People who say they can't get a job because they don't have a car, and now still don't
- State governments that collect gas taxes for road repairs and sales tax on auto parts and services
- The American people, who once again rob Peter to pay Paul
Here are some ways this could have been better:
- Give tax breaks instead of money to those who buy new cars and donate old ones to charity.
- Graduate the money so that those who buy the most fuel efficient cars get more money -- if efficiency was truly the point of the legislation.
- Let people turn in a car of any age, not just 25 years or less. Presumably, older cars are even less efficient. Why limit it by age?
- Let people buy used cars that are more fuel efficient than what they are trading in.
- Instead of scrapping the cars turned in, let them go on the market. Remember markets?
This program should really have been called the Crummy Relief of Autos Program (CRAP). If your neighbor is driving a new car, ask to take it for a spin. After all, you paid for it.
=====================================================
1. Retrieved August 6, 2009, from CARS website
2. Reed, Philip (2009, July 31). "Cash for Clunkers Car Buying Stimulus Program". Edmunds.com
Retrieved August 6, 2009, from Edmunds.com
3. "Senate Poised to Refuel 'Clunkers' for $2B". 2009, August 6.
Retrieved August 6, 2009, from FoxNews.com
4. Thomas, Ken and Laurie Kellman (2009, August 5). "Senate to Consider $2B 'Clunkers' Refill". Associated Press
Retrieved August 5, 2009, from Yahoo! News
5. 2009, August 4. "Charities Fear Pinch from 'Clunkers' Program". The Denver Post
Retrieved August 6, 2009, from The Denver Post
6. Clouse, Thomas. "Some Businesses Say 'Clunker' Program Will Hurt'". The Spokesman Review
Retrieved August 6, 2009, from The Spokesman Review
7. Tsai, Catherine (2009, July 29). "Auto Recyclers Leery of Clunkers Program". Associated Press
Retrieved August 6, 2009, from The Boston Globe
8. Fields, Gary (2009, August 6). "Clunkers Plan Deflates Mechanics". The Wall Street Journal
Retrieved August 6, 2009, from The Wall Street Journal Online
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