Friday, July 13, 2012

Stupid Government Tricks, or How to Crash and Burn

As our country rushes toward the fiscal cliff, consider the following

Government officials don’t appear to understand how to apply basic mathematics to budgeting 

From a Wall Street Journal article on the recent bankruptcy of Stockton, CA: debt financing is not the city’s main cost driver. That would be labor costs, specifically retirement benefits. The city has a little over $300 million in general-fund backed debt, but an $800 million unfunded liability for pensions and retiree health benefits…Pension costs are about 40% of what the city pays on worker salaries and are also growing. The average firefighter costs the city about $157,000 a year in pay and benefits and can retire at age 50 with a pension equal to 90% of his highest year’s salary plus nearly free lifetime health benefits.” Read more here WSJ subscribers access full article here

Government employees make billions of dollars in mistakes, with most of that cash never recovered 

“Overpayments are a rampant problem in the unemployment insurance system. The federal government and states overpaid an estimated $14 billion in benefits in fiscal 2011, or roughly 11% of all the jobless benefits paid out, according to reports from the U.S. Labor Department…The Labor Department estimates that roughly half of its overpayments are recoverable, but falls far short of recouping that much. Historically, only about a quarter of the estimated ‘recoverable’ overpayments have actually been recovered, said Gay Gilbert, administrator in the Labor Department's Office of Unemployment Insurance.” Read more here

And some elected officials think that banning the use of food stamps to pay for tattoos and porn constitutes “humiliating poor people”
“Massachusetts Democratic Gov. Deval Patrick has vetoed the state legislature’s attempt to ban the use of EBT cards — or food stamps — to purchase items such as tattoos, porn and jewelry… ‘I’m not going to do anything that makes vulnerable people beg for their benefits. This notion of humiliating poor people has got to be separated from how we make a program, and frankly separated and disposed of, from how we make a program work and work well,’ Patrick said…”   Read more here

Maybe we should concentrate instead on using our votes to humiliate the elected federal employees who allow such nonsense to continue

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