New Primer on Government Inefficiency - 'Fed Style'

Remember when $10 million dollars meant something? Nowadays, such denominations are merely rounding errors for many of our Federal Government agencies and their myriad profligate spending programs.

In today’s Wall Street Journal, reporter Damian Paletta reminds us in his ‘Billions in Bloat Uncovered in Beltway’ article of how millions quickly add up to billions.

Thanks to the stalwart fiscal oversight of Sen. Tom Coburn (R-Okla), a report was commissioned on the Fed’s cornucopia of redundancy, inconsistency and mismanagement — also known as — waste, fraud and abuse.

According to the non-partisan Government Accountability Office,

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.

This GAO report unfurls some interesting tidbits and is merely a microcosm of a wider problem -- the explosive growth of government. Just think, the savings alone in some of the proposed agency and program consolidations equates to the gross national product of many small countries.

And of course, it's not like president Obama hasn't made infrastructure one of his main tenets for his 'Winning the Future' campaign.

The report adroitly reveals,

The report said five divisions within the Department of Transportation account for 100 different programs that fund things like highways, rail projects and safety programs.

One program that funnels transportation funds to the states "functions as a cash-transfer general-purpose grant program, rather than as a tool for pursuing a cohesive national transportation policy," the report said. Similarly, it chided the government over encouraging federal agencies to purchase plug-in hybrid vehicles while having policies that agencies reduce electricity consumption. It said government agencies have purchased numerous vehicles that run on alternative fuels only to find many gas stations don't sell alternative fuels. This has led government agencies to turn around and request waivers so they didn't have to use alternative fuels.

A spokesperson for the Department of Transportation said the president's budget for fiscal year 2012 "proposes to cut waste, inefficiency and bureaucracy by consolidating over 55 separate highway programs into five core programs, and by merging six transit programs into two programs."

While Congress is mostly to blame, it is incumbent upon any president as executive leader to not-so-subtly remind the legislative branch that the fox can't always be expected to watch the hen-house.

However, I do give president Obama kudos for his Jan 2011 Wall Street Journal op-ed where he calls for a federal regulations review so the business community isn't hampered so much.

Obama points out,

Over the past two years, the goal of my administration has been to strike the right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.

This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It's a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.

Let's hope that real and serious reports like the GAO one becomes the rule rather than the exception. And likewise, that the aforementioned call by Obama for a business-process overhaul, much like something one would see in a Six Sigma, Total Quality Management or Toyota Production System 'continuous improvement' environment, will bear fruit.

As hardworking taxpayers, we could use a dose of equilibrium on our nation's fiscal ledger. Currently, our spending promises far outweigh our ability to reconcile with something called reality.

Posted by Kevin L. Lagola at March 1, 2011 8:58 AM
Comments
Comment #319397

Kevin,
You make a good pointabout finding an equilibrium. For what created all these agencies is the old idea of the Left and Right Hand not knowing what is going on. And why it is easier to pass blame from that point of view, we now see how much it is costing Americas’ in funds and lack of service. So do we want to combine what we can in order to cut the Red Tape as well as save money?

For if we look at what is going on in the House of Representatives (and that is where the debate gas to take place) we see Speaker Boehner and Conservatives wasting their time IMHO cutting programs for the Poor instead of addressing this problem.

And why I’m not for cutting 700,000 jobs in one month since we seen what that does only a few years ago. I would be for eliminating positions as Congress puts the agencies together and weed out the problems. For why we need to ensure that the knowledge increases as we go forward, I don’t think we would have near the problem if one or two agencies was in charge of food safety and such.

However, going forward we also need to insure that no single director has such power as to allow Charlatans and Vagabonds to take advantage of the system. So by starting with cutting the numbers by half should not only help save money and improve services, it will also give us time to review how the different agencies can work together in order to narrow the numbers even further.

The question is will Democrats and Republicans be able to put enough pressure on their Party Leaders to accomplish such a task. For we should already know Washington is going to use the Independents in order to try and keep their favorite agencies from the chopping block.

Posted by: Henry Schlatman at March 1, 2011 11:13 AM
Comment #319400

In attempting to see the glass as half full, I’ve always wondered if Congress and our federal bureaucracy is caused by incompetence, or caused by legislators who, along with their profligate interest and lobbying groups, too often play the crony capitalism game to garner votes. Or both?

Either way, it all adds up to enormous waste and a good bit of embarrassment.

Posted by: Kevin L. Lagola at March 1, 2011 12:01 PM
Comment #319406

Remember the scene in the movie “Wall Street” where Gordon Gecko observes there are 33 Vice Presidents at a company, and none of them actually do anything? Waste, fraud, and abuse are just as prevalent in the private sector as in the federal government, perhaps even more so. Interestingly, Gecko begins the speech noting “the trade deficit and fiscal deficit are at nightmare proportions.”
http://www.dailymotion.com/video/xex9rz_gordon-gekko-greed-is-good-full-spe_shortfilms

Posted by: phx8 at March 1, 2011 2:46 PM
Comment #319416


It is hard for the people to focus on the mismanagement in the public and private sector when there so many more important issues to focus on.

Jobs, wars, DOMA, unions, the non American socialist Muslim Obama, and many other issues that are more important than waste, fraud, and abuse.

The people are suffering from the blues, The Rhetorical
Blues, and half of them have turned off the radio.

Posted by: jlw at March 1, 2011 5:10 PM
Comment #319417

Jlw,
I thought the same. It’s just not a priority. Being against government waste, fraud, and abuse is kind of like being in favor of Apple Pie and the Fourth of July, or liking puppies. It really isn’t news compared to, say, the fraud that went into the multi-trillion meltdown of the financial sector in 2007 & 2008. You’d think conservatives would demand a lot of rich people be tried and jailed, yet it never, ever happens.

Posted by: phx8 at March 1, 2011 5:19 PM
Comment #319419

phx8,

You said, “You’d think conservatives would demand a lot of rich people be tried and jailed, yet it never, ever happens.”

Who’s been in charge of the justice department for the past two years? Wouldn’t these folks be the ones that would lead the charge in trying these people?

It seems if you want to point fingers at someone for all the rich people that haven’t been tried that they should be pointed at those who would have had the means and opportunity to do so. You can fault the Bush administration for not starting investigations, and I’ll agree that is one of many mistakes that he made. However, that mistake could have been corrected by now. Why hasn’t it been?

The only thing that I can think of is that those that have the means and opportunity to conduct such investigations have no motivation to do it. Is there another plausible explanation that I’m missing? Could it be that an substantial portion of those rich folks slipping the noose are also Democrat donors?

Posted by: Rob at March 1, 2011 5:37 PM
Comment #319422

The Obama administration definitely deserves blame for not pursuing the people at S & P & Moody, as well as the financial people at the various firms that created and sold those securities, and the bankers and insurance people who bought them, thereby failing to practice due diligence.

Obama also let Bush & Cheney and others go without being investigated for war crimes. Bush just cancelled a trip to Switzerland. They will arrest him as a war criminal if he lands in that country.

We see this again and again in American politics. We saw it when Ford pardoned Nixon. We saw it when the Democrats did not impeach Reagan over Iran Contra. Moving on ‘for the good of the country’ without administering justice & punishing wrongdoers frees wrongdoers to do it again and again.

Posted by: phx8 at March 1, 2011 6:08 PM
Comment #319433

It is indeed a black mark on the Obama administration for not pursuing more vigorously criminal indictments and civil actions against those in the financial sector that engaged in outright fraud, gross breeches of fiduciary duties, SEC regulatory violations, etc.

Granted, it is in many cases difficult to prosecute due to de-regulation and the sheer complexity of financial transactions. However, lets put this in perspective. In the aftermath of the Savings and Loan collapse of the late 80s there was over 1,000 high level criminal prosecutions and more civil actions. In this debacle, the greatest since the Great Depression, there has been not one successful criminal prosecution. The only civil action of any significance was against Goldman-Sachs which was settled.

Why have there been no prosecutions? knowingly selling “liar loans” cobbled together as legitimate investment instruments is not fraud? The simple answer is that the financial sector has captured the regulatory, criminal justice and political system. It has been able to do so because it literally has become too big to fail. It provides an enormous amount of capital inflow into the United States. Better to have immoral giants competing in the international markets than less competitive moral eunuchs. The economy of the US has become dependent upon the financial system. It is more than simply political contributions. Nobody wants to upset the apple cart regardless of party. They know we need them. Their arrogant payment of extraordinary bonuses during and after the government bailout is highly telling.

Posted by: Rich at March 1, 2011 7:57 PM
Comment #319440

I was going to start this post by speaking for conservatives, but I don’t think I can, I can only speak for myself.

I’m staunchly conservative fiscally, and libertarian socially, and I speak for everyone in my (similar) circles who thinks the CEO’s and managers of every bank that took bail-out money should have been hounded incessantly to prove and (if necessary) bring justice down upon those that profited from the meltdown. As should Obama’s tax-cheat Timothy Geitner and dozens of others in his cabinet.

The problem is that no one cares and the electorate has yet to experience enough pain to wake up to what the welfare state has already cost, and is continuing to cost our nation. It speaks more to the (former) health of our nation that even under this level of duress, there are still decent jobs for one out of five of us… the “poverty” level has become so affluent that, in Alaska at least, if you are married and have two kids, you can make up to $74,000 a year as a family and your kids STILL get free medical and dental (totally free) you get food stamps, WIC coupons, for $36 you get a free cell phone with unlimited text and minutes for three (yes three) years. You get gas coupons, discounts on a whole host of other services like auto maintenance and an internet connection to your home.

And yet, you are still considered “poverty level.”

So what’s the difference between a billion and a trillion to anyone that gets all this free stuff while the free keeps flowing? What does it matter to them if at our current commitment level, Jesus could have spent $750,000 every hour from his birth until this minute and not spent it all? No one gives a damn as long as the free keeps flowing, but I say buckle up.

Do your research. I predict it is all coming down on our heads in the next year. Last fall China began offloading US treasuries like they were on fire. As anecdotal evidence, last year in January my wife and I made our usual Alaskan sojourn down to Mexico and as usual, anyone would take dollars. Any store, any restaurant, any pharmacy. THIS January, a mere 12 months later, we could only find one pharmacy in our little paradise that would take dollars, and he ONLY because his sister was a bank branch manager in Guadalajara. NO restaurants, and no grocery stores would take dollars.

“Solamente pesos, no gracias, no gracias.”

I could go on and on at the signs, but everyone suffers from normalcy bias, and the arrogant notion that “our economy can’t collapse because then the whole world economy would collapse.”

With deficits in the trillions, and growing faster and faster, it’s only a matter of time before the global reserve currency gets taken from us, as we took it from the British (Sterling) in the 60’s. On that day, every dollar we print can no longer be shielded from inflation because the countries of the world will not have to first buy US dollars before they can buy their oil - as they have to now. Every dollar we print to cover our debts will devalue everything else and the government will HAVE to raise taxes to ridiculous levels and literally shut off services to keep from imploding.

Don’t think it can happen? I understand, most people don’t. They’re the same people who don’t care about fraud, waste and abuse - or the difference between 13 billion and 13 trillion.

It’ll never happen… you’re paranoid… you don’t have a degree in economics… I’ve heard it all in the last month while trying to encourage my friends to take precautions and legally move their money to assets that the US government can’t freeze or confiscate.

That and having six months worth of food in the crawlspace and a manual water pump down the well casing - lol.

If I’m wrong, at least I’ll make some money on silver, but if I’m right, I’m sure not going to feel bad about the people who called me crazy.

Posted by: Yukon Jake at March 2, 2011 12:59 AM
Comment #319443

“… the “poverty” level has become so affluent that, in Alaska at least, if you are married and have two kids, you can make up to $74,000 a year as a family and your kids STILL get free medical and dental (totally free) you get food stamps, WIC coupons, for $36 you get a free cell phone with unlimited text and minutes for three (yes three) years. You get gas coupons, discounts on a whole host of other services like auto maintenance and an internet connection to your home.”

Yukon,

Nonsense. You are either grossly mistaken or are being deliberately deceptive. A quick check of income eligibility guidelines for federal and state assistance for Alaska residents debunks your claim that a a family of four with income of $74,000.00 annually would be eligible for food stamps, WIC, free child medical and dental, gas coupons, etc.

Posted by: Rich at March 2, 2011 8:56 AM
Comment #319446

Yukon Jake-
May I suggest that having your poor dwell in deeper poverty doesn’t necessarily do good for the economy?

Anecdotal evidence does not overcome empirical, by the way. That we can still get China and other places to take on our debt at current interest rates, which are really fricking low, indicates that your visions of capital flight from the United States are unfounded.

But, I would agree that current budget conditions are unsustainable. But I would say that one has to attend to the feedbacks in this case. You have to recognize that a poor economy makes for a poor fiscal situation. If the austerity policies make for a weaker economy, they defeat their own purpose. Only when an economy is strong enough to absorb cuts and higher taxes will we be able to sustain both economic growth, and the shrinking of debt and deficit. Austerity is like surgery. If the patient is too weak, the harm from the surgery will overcome the benefit.

Wait to operate on the patient until it is stronger.

Posted by: Stephen Daugherty at March 2, 2011 10:53 AM
Comment #319503

Rich,
You are correct, I was mistaken. What I was saying was from a news report I watched last fall, and misremembered. The cumulative value of all of the available benefits to a family of 4 would increase their effective earned income (not including the taxes one WOULD pay if they earned $74k per year) from the poverty threshold TO $74,000.

I had that backward, my error, but my point still stands.

Until people feel the “pain” of this extravagant level of welfare spending personally, they will continue to suckle the government teat - as they CERTAINLY do here in Alaska and around the country.

I don’t feel it’s wise to make fiscal policies based on the exception to the rule (people that genuinely need a helping hand) and the VAAAAST majority of people who are on the welfare bandwagon and just making sure “they get theirs.”


Stephen,

If you are a doctor with a surgical opinion on America, my second opinion on your advice:

Wait to operate on the patient until it is stronger.

Not if I believe the current therapy is actually killing the patient. The only way America survives and thrives is with a dramatic swing BACK to personal responsibility and accountability. Negative savings rates are ubiquitious nowadays. Almost ANYONE can find some government funded program to take advantage of, and I think that’s a personally, fiscally, and nationally destructive path. The creation of the welfare state placed us on this path to complete apathy where no one cares anymore.

I don’t believe charity contributions aren’t down because the economy is down, I believe they’re down because people are tired of all of the FREE the government doles out from our tax dollars. I know I am.

And what’s most depressing is the notion that a lot of my conservative friends have that congressmen like John Boehner will bring in the budget AXE, when he’s already showing that he won’t. I almost spit out my sandwich the other day when he talked about “sweeping reforms starting with a dramatic 5% decrease in EVERY COMMITTEE’S budget. Which will save the American Taxpayer over 100 million dollars a year. Wow… what progress. Cuts like that applied to my personal finances would mean that if all my little discretionary bills and fees totaled $2,000 a month, I would have to walk the hard road along with John Boehner and make do with $1999.94. Laughable if it weren’t our tax dollars.

It almost HAS to come crashing down in order to wake people up to the sickening level of corruption in government.

And yes China still “holds” a mountain of our debt, but they are “selling” off our debt now by the billions - and that IS empirical evidence.

Posted by: Yukon Jake at March 3, 2011 1:46 PM
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