Wasteful Spending

Intervention comes in all shapes and sizes: U.S. spent over $32 million in failed soy farms in Afghanistan

Afghanistan soy farmers

Interventionism is pretty bad. Disguising it as economical jumpstart measures with honorable goals is just as bad.

You might be used to referring to intervention solely as policies related to military involvement overseas, but often enough, the U.S. government involvement in the economical lives of other nations is linked to what the government officials, not entrepreneurs or seasonal investors, see as a viable project.

Because knowledge regarding prices and production is dispersed, meaning that not all agents are fully aware of all conditions signaling when it’s time to invest and produce, and when it’s time to lay low, government officials often miss the mark in a big way when attempting to determine what kind of interventionist policy they want to embrace next.

The United States government has ignored these lessons too many times in the past, but most recently, its brutally foolish assertiveness has cost taxpayers $34 million.

Over the past four years, the U.S. has been investing in a campaign to change how Afghans eat, and a major part of the project is associated with aiding the country by helping its farmers to grow soy.

Top taxpayer dollars were used to sustain an effort that involved getting the U.S. into growing soybeans in Afghanistan in the hopes that the crops were a viable commercial crop that would also help Afghans to fight some of its malnourishment issues. Soybeans, some U.S. officials thought, will raise the level of protein in their diets and lead to an agricultural jumpstart, helping the struggling country’s economy to flourish.

Unfortunately, the project was doomed from day one. The first 2011 crop failed. Any other harvest after that also failed to produce enough soybeans, making the project impossible to be carried out.

7 Reasons Why Kevin McCarthy Shouldn’t Replace Eric Cantor

John Boehner, Kevin McCarthy, and Eric Cantor

Republicans were jockeying for position to move up on the ladder before Eric Cantor (R-VA), who lost his primary bid in a shocking upset on Tuesday night, announced that he would step down from his post as House Majority Leader at the end of July.

But with the leadership election scheduled for Thursday, June 19, several names are being kicked around to replace Cantor, among them is current Majority Whip Kevin McCarthy (R-CA).

Yeah, no. That’s a terrible idea.

McCarthy has been in lock-step with Cantor, who endorsed him yesterday, and Speaker John Boehner (R-OH). He’s essentially the status quo. Nothing will change in the House if McCarthy becomes the next Majority Leader. It would be a politically tone deaf move for House Republicans to choose a carbon copy of Cantor to lead their conference.

And here are some reasons why.

Contrary to what Pelosi says, there are plenty of budget cuts to be made

It might not come as a shock to some of you, but the Treasury Department has announced that, unless Congress increases the country’s borrowing limit, it will no longer be able to pay its bills.

This announcement follows comments made by Rep. Nancy Pelosi (D-CA) concerning the efforts of Republican members to restraint government spending. According to the House Minority Leader, the conservative push for any cuts to the federal budget is pointless.

Pelosi stated that “it’s really important that people understand” that there’s no more cuts to make to the federal budget, which has increased to $3.8 trillion this year, as opposed to $1.9 trillion per year up until 2001.

What Nancy Pelosi doesn’t seem to understand is that the American people can no longer afford to cover the expenses of a series of programs that could indeed be trimmed. With that in mind, experts at the Competitive Enterprise Institute decided to make a list of several programs that could be cut or trimmed to give Congress, and especially skeptics such as Nancy Pelosi, an idea of where they can start if they are indeed willing to ensure the American people are no longer forced to foot a bill they never signed up for.

According to the institute, about $1.2 billion could be saved if Congress took aim at the Energy Department’s Office of Energy Efficiency and Renewable Energy. The EERE’s goal is to offer training, resources and funding toward “business, industry, universities and others” who are willing to focus on increasing the use “of renewable energy and energy efficiency technologies.”

House passes Farm Bill without reform, makes subsidies permanent

After a embarrassing defeat last month and despite a veto threat from the White House, House Republican leaders were able to save some face yesterday by passing the Federal Agriculture Reform and Risk Management Act (FARRM Act), otherwise known as the “Farm Bill.”

The vote was close, 216 to 208, with every Democrat voting against the measure because food stamp funding was separated from the bill for the first time in several decades. Twelve Republicans voted against the measure because they say it spends too much and didn’t offer any real reform.

While separating food stamps from the Farm Bill — which accounted for nearly 79% of the $940 billion measure that the House voted down last month — does substantially bring down, the $202 billion proposal passed yesterday by the Republican-controlled House, according to The Hillcuts less in subsidies than the bill passed by the Senate.

Expect the Farm Bill to cost a lot more than advertised

With pressure in the Senate to pass the Farm Bill this week (they approved cloture this morning) and showmanship killing any consideration of further amendments, things aren’t looking good for reformers. This leaves taxpayers on the hook for an expanded crop insurance program with incredibly few taxpayer protections built in.

The Senate lauds this as progress, claiming $24 billion in savings over ten years. But a simple breakdown makes it clear that these supposed savings will never be realized. Luckily, the American Enterprise Institute has a great infographic presenting the numbers as they are likely to look over the next ten years. Instead of finding $24.4 billion in savings, the AEI graphic shows $31.2 billion of increased spending, which they rightly term a “bait-and-switch” for the taxpayer.

So where do these costs come from? The answer is the Agriculture Risk Coverage provision, a proposed “shallow loss” program that would make up the difference for revenue not covered by crop insurance. The program works with crop insurance to guarantee revenues, basically ensuring farmers 89 percent of their average revenue over the last five years. So if prices fall or your yield decreases, ARC will smooth over the difference.

No More Tanks: Army Tells Congress to Stop Spending

Abrams tank

Whenever people call for cutting the military budget, the usual response goes something like  ”How can you keep the Army from getting the equipment it needs to fight wars?” Well, the problem with that response is highlighted today by this story from ABC:

Lawmakers from both parties have devoted nearly half a billion dollars in taxpayer money over the past two years to build improved versions of the 70-ton Abrams.

But senior Army officials have said repeatedly, “No thanks.”

It’s the inverse of the federal budget world these days, in which automatic spending cuts are leaving sought-after pet programs struggling or unpaid altogether. Republicans and Democrats for years have fought so bitterly that lawmaking in Washington ground to a near-halt.

Yet in the case of the Abrams tank, there’s a bipartisan push to spend an extra $436 million on a weapon the experts explicitly say is not needed.

“If we had our choice, we would use that money in a different way,” Gen. Ray Odierno, the Army’s chief of staff, told The Associated Press this past week.

Why are the tank dollars still flowing? Politics.

Keeping the Abrams production line rolling protects businesses and good paying jobs in congressional districts where the tank’s many suppliers are located.

If there’s a home of the Abrams, it’s politically important Ohio. The nation’s only tank plant is in Lima. So it’s no coincidence that the champions for more tanks are Rep. Jim Jordan and Sen. Rob Portman, two of Capitol’s Hill most prominent deficit hawks, as well as Democratic Sen. Sherrod Brown. They said their support is rooted in protecting national security, not in pork-barrel politics.

House GOP to bring back earmarks?

After taking control of the House of Representatives in a wave election in 2010, House Republicans decided to extend their moratorium on earmarks, a controversial budget tactic that allow members to insert pet projects in spending bills without so much as a committee hearing or vote.

But before the GOP took control, Rep. Eric Cantor (R-VA), who would later become House Majority Leader, suggested that the moratorium on earmarks may only be temporary, which would be a slap in the face to fiscal conservatives and Tea Party activists that helped the GOP come back to power. Cantor was quick to amend his remarks, but it looks like House Republicans have learned little. Reuters notes that they are considering resuming the practice of earmarking:

The huge federal transportation bill was in tatters in early March when Representative Mike Rogers of Alabama posed a heretical idea for breaking through gridlock in the House.

In a closed-door meeting with fellow Republicans, Rogers recommended reviving a proven legislative sweetener that became politically toxic a year ago.

Bring back earmarks, Rogers, who was first elected to Congress in 2002, told his colleagues.

Few members of Congress have been bold enough to use the “e” word since both the House and Senate temporarily banned the practice last year after public outcries about Alaska’s “Bridge to Nowhere” and other pork barrel projects.

But as lawmakers wrestle with legislative paralysis, there are signs that earmarks - special interest projects that used to be tacked onto major bills - could make a comeback.

Washington Post uncovers earmarks used near lawmakers personal property

The practice of earmarks has come under scrutiny in recent years and some members in both chambers have pushed for bans on the practice because of the propensity of their colleagues to use them for less than noble purposes. The House of Representatives did enact a moratorium, though it doesn’t seem to be all that effective.

Some say that restricting earmarks is unconstitutional because it cuts in on congressional spending authority in Article I, Section 8. Others say that earmarks represent a fraction of the budget and eliminating them does nothing in the way of restoring fiscal responsibility. The former has some merit, but we know how James Madison, the Father of the Constitution, felt about spending for pork projects. It’s hard to see that he would find funding peanut research meets any constitutional litmus test.

The latter is true; however, earmarks are the epitome of what is wrong with Washington, DC. Yes, reforming entitlements and cutting spend elsewhere is incredibly important, but earmarks are a symbolic part of the battle. If we can’t cut this fraction of spending out of the budget or reform the earmark process, are we naive enough to believe that we can reform entitlements?

Back in 2006, at the height of the discussion about ethics in Congress, Rep. Jeff Flake (R-AZ) explained that earmarks are the “currency of corrpution.” Not only were members using them to steer business to donors and friends, they were being used by leadership of both parties to sway votes on legislation.

High Speed Idiocy

Since President Obama took office, the phrase “high speed rail” has become the buzzword for just about anything. Supposedly, it will stimulate our economy, reduce carbon emissions, and make cats and dogs live in perfect harmony. There’s just one problem I foresee with the President’s grand ambitions. I can’t find to many people interested in riding the damn thing.

High speed rail will cost the taxpayers billions of dollars. An entire infrastructure has to be put in place to support it as standard railways can’t handle the speed these trains can generate. That means more eminent domain seizures. That means less money for things people expect from government, be it law enforcement or welfare. That means years of construction with little to show for it prior to the grand unveiling.

For many that’s not that big of a deal. They’re willing to wait for something if it’s pretty awesome. They’re even willing to spend tax dollars for it. The question is, will it be worth a damn?

One of the knocks on Amtrak is best summed up by my trip to Manhattan, Kansas several years ago. I needed to actually get to Kansas City where a friend would pick me up. Taking Amtrak was going to take longer than a bus, and cost me more than taking a plane. There was no incentive to take a train at all, especially since a large chunk of that time period was a lay over.

In theory, high speed rail should solve that. The train moves faster after all. But the question is, will there be enough trains? A large part of my reason to not take a train - despite a desire to actually travel that way for once - was due to a very long lay over. The reason for that was because there isn’t enough traffic to justify more trains. So far, there’s little reason to assume high speed rail will have more travelers and therefore more trains running.

10 Things We Get For Our Tax Dollars - Cynical Version

In my political science class we were discussing the issue of taxation. In order to better understand the issue and to balance out a lot of the negativity we inherently have towards taxation (which isn’t a bad thing) we discussed what we (personally and as a society) actually get in return for our taxes.

I decided to make a “cynical” version of the list we thought up in class. So here are ten things we get from taxes:

1 ) Drug Prohibition - Billions spent each year on making sure no one uses drugs that are “too dangerous” for us. Thank you nanny state! Except for the fatal flaw in this argument: marijuana is illegal yet more harmful substances such as alcohol and tobacco are legal. Not to mention the war on drugs is a complete and utter failure.

2 ) Overpaid Government Officials - It’s a well-known fact that city planners, parks and recreation directors, and many others in government are paid “comfortable” salaries sometimes even more than $100,000. Not only that, but many government officials have guaranteed pensions backed by the state. While people work long hours in the private (productive) sector who have to deal with 401K’s and actually saving and investing for retirement, these government officials have it made!

3 ) The Federal Reserve - Ah yes, the Federal Reserve who claims their existence is necessary to “maintain a strong currency,” have been doing just the opposite. As the dollar loses its value slowly but surely and bubbles have rocked our economy into deep recessions many times since its inception, it’s unfortunate this entity receives tax dollars from the private sector.

4 ) Foreign Aid - None of that money goes to waste, right? It all goes directly to the needy in the most efficient manner, no corruption involved! Right…


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