Economics

Coming Soon: "Billions of Dollars Being Wasted"

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The AP reports on a nascent Republican attempt to track wasteful and useless spending in the stimulus package.

It's a nice idea and one that the GOP really should have thought about more seriously when it controlled all branches of the federal government and wasted our money like a boatful of sailors drunk on Old Spice martinis on everything from an elective and poorly prosecuted war in Iraq to useless education programs to a prescription drug benefit for the wealthiest class of Americans and more.

But hey, better late than never, right? It's amazing how the threat of electoral execution has concentrated the Republican mind, innit? I suspect the party's newfound interest in reducing spending and the size of government will last precisely up to the moment when they regain the majority. As financial advisers will tell you, past performance is not a guarantee of future results. But in this case, we know that it is.

Anyhoo, buried in that the AP story is this passage, which is well worth reading beyond anything related to partisanship. It underscores among other things, the idiocy of ramming through massive and transformative legislation (Obama's own characterization of the stimulus package) without anything like proper oversight vaguely in place:

The self-described watchdog group Taxpayers for Common Sense says that under the new stimulus bill, "some federal agencies are seeing their budgets doubled or more. Coupled with the demand for speed, it is easy to foresee billions of dollars being wasted."

In many places the federal government lacks the resources it needs to prepare the way for efficient contracts, said Stan Z. Soloway, president of the Professional Services Council, a trade group for government contractors.

"We have a shortage of engineering skills, a shortage of cost-and-pricing skills," said Soloway, a former deputy undersecretary of defense. The Obama administration is taking well-meaning steps to oversee the spending, but some irregularities are inevitable, he said, and people should try to learn details before jumping to conclusions of fraud.

More here.

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  1. Yup, like I said yesterday, Only thing left out of the Stimulus package was a bottle of Vaseline for all Americans for the “big one” we are about to take!

    RT
    http://www.anonymity.eu.tc

  2. The anonymity spammer is Gary Gunnels?

  3. Vaseline is a byproduct of oil refining – and as such is designated ‘UN-GREEN-BAD’

    We suggest you use such ‘GREEN-GOOD’ products as eucalypse oil, saliva, and the sweat of the working man.

  4. “It’s a nice idea and one that the GOP really should have thought about more seriously when it controlled all branches of the federal government and wasted our money like a boatful of sailors drunk on Old Spice martinis on everything from an elective and poorly prosecuted war in Iraq to useless education programs to a prescription drug benefit for the wealthiest class of Americans and more.”

    That is a fair point Nick. Considering that fact, why didn’t you point out the same logic in 05 and beyond when Democrats who actually voted for the war started to object to it? Maybe I am wrong and if I am, please find the postings that show I am, but I don’t recall you or Reason ever saying that Democrats who voted for the war in Iraq had no standing to criticize it later? Yet, Republicans who voted for their own pork barrell spending, now seem to have no standing to criticize the same kind of spending later. How does one follow the other? Is it the case that only Republicans lose credibility in your eyes and Democrats never do no matter how hypacritical their positions?

  5. like a boatful of sailors drunk on Old Spice martinis

    Deodorant is used in cocktails? Where the fuck do you people drink?

  6. It’s certainly true that when the GOP had the majority, the Democrats were arguing for even more spending on most of those issues, including No Child Left Behind (which garnered more Democratic votes than Republican) and especially on the prescription drug benefit. The Democrats may have occasionally made comments about the size of the deficit or of entitlement spending, but most complaints came that spending wasn’t enough, and the position in every case was to expand entitlements and spending even more.

    Still, there was a reasonable case to be made that the Democrats strategically “had to” be the party of spending more than the Republicans because of their coalition. The idea would be that with the Democrats in power and the Republicans in opposition, the Democrats would be free to restrain the rate of growth of spending without having to worry about Republicans making the sort of attacks that the Democrats would make about draconian cuts.

    However, that argument, while seemingly plausible, so far has failed. While it seems rhetorically nicer to have the Democrats in charge and the Republicans calling for less spending rather than the Republicans in charge and the Democrats calling for even more spending, when it comes to the actual spending plans, so far the Democrats are spending more than the Republicans ever did.

    So Bush sent in a budget with $3 trillion in overall spending? We’re on track for a budget with a $2 trillion deficit, if TARP II and this mortgage plan get adopted.

    There still, I think, is somewhat of a reasonable case for divided government (we see how Bush finally vetoed say, a farm bill, once the Democrats won Congress), but that doesn’t explain why far more Reason contributors favored President Obama to Senator McCain, even though it was clear that the Democrats would hold Congress. McCain had even opposed the prescription drug bill, opposed both farm bills, opposed the energy bills, etc. But people don’t *really* care about spending compared to things like “temperment.”

  7. John Thacker,

    The time to have a divided government was now before the damage got done. Suppose the Dems get kicked out in 2010. What happens then? Lets say the Republicans really do get religion and try to do something about the deficit. The Dems will have succeeded in raising the domestic spending baseline something like 100%. That means when the Republicans try to go back to the good old days of say 2007, the Dems and the state run media will scream that the evil Republicans are cutting domestic spending in half. The fact that it is being cut in half after doubling in two years won’t matter. Further, even if the Dems lost control of Congress, they still could filabuster any budget and BO can always veto.

    From that position and with the entire MSM acting as an arm of the DNC, they could probably keep most if not all of the gains in spending they are getting right now. I would imagine they realize this and also think that there is a good chance they are going to get whacked in 2010 and are trying to get everything now. The “crisis” such as it is, is that the Dems know they might only have two years to do this. Even if they don’t lose control of Congress, chances are they will lose enough seats that buying off Republican Quislings like Spechter and Collins won’t be enough to break a filabuster anymore.

  8. John Thacker

    John McCain went out of his way to make himself the poster boy for bi-partisanship, and that makes libertarians very uneasy. We, here, follow politics a lot more closely than the vast majority of voters (or principled non-voters) and aren’t fooled by campaign promises easily, especially when they contradict the candidate’s record. There was therefore difficult to guage who, exactly, would be the lesser of two evils – which, in my opinion, is why you shouldn’t vote like that.

    I voted for Barr

  9. mmrrmrmrmrr

    *ThereIt was therefore…

  10. As financial advisers will tell you, past performance is not a guarantee of future results.

    But as any psychologist will tell you, past behavior is the best predictor of future behavior.

  11. Reinmoose,

    Even if McCain had been a Mancurian Candidate, could he have given the Left anymore than BO is giving them? McCain failed not because he was bipartisian, but because he failed to understand what a terrible idea TARP was. He failed to lead. He let the MSM and Washington conventional wisdom convince him that “something had to be done” rather than letting the FED use its powers and waiting and see how things shook out. When the TARP thing broke he was ahead in the polls. Then he ran to Washington and showed himself to be just as paniked as everyone else in Washington with no good ideas beyond spending until we are broke. BO in contrast did was he did best, which is sit around and do and say nothing of substance and let people think that makes him smart and cool.

  12. I wish we could trust voters to never try this socialism disaster again after it surely fails this time. Sadly, I think their past behavior leads me to believe they will repeat the same mistakes over and over and over again. Flopping between the two extremes all the time, every 6-8 years or so.

  13. “We have a shortage of engineering skills, a shortage of cost-and-pricing skills,”

    combined with

    people should try to learn details before jumping to conclusions of fraud.

    That’s beautiful. Basically, some former DoD guy is saying we don’t have people that know how (or if) stuff works, we don’t have people who know what stuff should cost, so when we pour billions down a rathole, it’s not fraud. We’re just incompetent! I love the up front warning. That’s good-faith bargaining, right there.

    I think I’ll keep my cushy engineering job in the oil industry. As cool as some defense work is, I don’t think I wanna be associated with those losers.

  14. T,

    The guy makes a good point. It is not easy to spend a trillion dollars. Yeah, you can give it away or let people steal it and spend it quick. But you can’t spend it quick and get it right. When the oil industry went into say the North Sea, did they decide to spend a couple hundred billion in one year? No, they had years of planning before they did one thing. BO thinks the government can do the equivilent of like 20 North Sea projects and spend all of the money in 2 years. DOD people are not losers or any different that any other industry. It is BO and Congress who are losers.

  15. Congress is obviously in the pockets of big alcohol, god I need a beer already.

  16. a shortage of cost-and-pricing skills

    What?

  17. “a shortage of cost-and-pricing skills

    What?”

    It means they don’t have enough contracting officials. For example, lets go out and weatherize a school. That is a good Obamalot project. Well, how much does it cost to weatherize a school? How much weatherization does this school need? How do I know that the contractor is not ripping me off? Is the low bid really the best bid or some crook lowballing everyone looking to take my money?

    Those are hard questions. Imagine the pain invovled in remodeling your house times a billion. It takes a lot of skills and knowledge to manage an infrastructure project. Not everyone has those skills.

  18. P Brooks,

    The bottomline is that it is not that easy to build shit. Look at Habitat for Humanity. All of these amateurs go out and build houses and in the end the houses either suck or the professionals have to go back and redo the amateurs work. It is not as simple as just signing a bill and deciding we are spending X billion dollars on “green technology” “rebuilding key infrastructure” or whatever such nonsense BO is putting out these days.

  19. Could Reason, at least, stop using the Orwellian term “stimulus package”? Its not a stimulus package, it is a spending bill, pure and simple.

    Concede the linguistic high ground to your enemies, and you have pretty well lost the war.

  20. If you really believe that we need a stimulus package–I mean, if you’re one of those left-wing nutcases like Martin Feldstein or Greg Mankiw–the point is to spend money, period. I agree with Marty and Greg that a payroll tax cut should have been included.

    The great thing about using tax cuts as stimulus is that no one cares if I waste my money. I can spend it all on porno, or “spinner” hubcaps, or rare baseball cards or whatever. Just as long as I spend it. So why should the government have to spend stimulus cash “wisely”? Go ahead and install solar energy devices that won’t “pay” for themselves in two hundred years! So what! It could be five hundred! That’s irrelevant.

    If you’re talking stimulus, the real question is, who can spend the money faster? The only argument against tax cuts is that people won’t spend the money. Shockingly, the argument that the government will only “waste” the money is beside the point.

  21. Alan,

    The argument against cutting taxes was that people would have used the money to save and pay off debts. That is the world we live in today; our leaders and alleged economic geniusus have convinced themselves that saving money is a bad thing.

  22. The difference between “stimulus” via tax cuts and via government spending is fundamental, Alan:

    (1) The pace of government spending – as we know, most of the current spending bill won’t be spent until after two years, too late to be “stimulative.”

    (2) What it is spent on makes a difference. Spending on consumer goods is stimulative, by definition. Spending on larger government bureaucracies increases the drag on the economy.

  23. Shockingly, the argument that the government will only “waste” the money is beside the point.

    Not really. If the government gave everybody a raise, and they all went and blew(!) it at “gentlemen’s clubs” and NASCAR races you’d have a point. Unfortunately, the government waste which is being funded will encourage massive misallocation of resources, especially human resources, and have a long term adverse effect on the economy.

  24. wasted our money like a boatful of sailors drunk on Old Spice martinis

    *exasperated sigh* Once again I am forced to point out that drunken sailors display far more fiscal discipline than members of congress from either party. Drunken sailors imbibe in the lowest priced, seediest waterfront bars and frequenly employ the services of Budget Rent a Girl? rathet than use the more expensive prostitution services.

  25. Deodorant is used in cocktails? Where the fuck do you people drink?

    After shave often contains ethanol. As does mouthwash. The U.S. Navy is dry afloat. It has an inordinate number of drunks. Add it all up.

  26. “Unfortunately, the government waste which is being funded will encourage massive misallocation of resources, especially human resources, and have a long term adverse effect on the economy.”

    The reality based community is really unfortable with the productivity wage identity. If the government jobs go to things that produce more value than the wages and resources put into them, then the money is not wasted.

    The problem of course is that, after you cover the easy basic government functions like courts, police, a military and so forth, the productivity of government jobs gets harder and harder to determine and more and more likely to be less than the wages paid for them.

    The whole debate about the spending package is just a rehash over the debate about centrally planned economies. Liberals have forgotten all the lessons learned in the failure of communism. Liberals honestly believe that the government can decide which jobs produce the most value and that therefore the spending is really an “investment” or like a real job in the private sector. If that were true, centrally planned economies would have worked. The problem with centrally planned economies was that the planners could never figure out what jobs actually produced the most value or even more value than their wages. As a result, people went to jobs and produced less then they were paid. In the market, those jobs will eventually go away. In a centrally planned economy, since the government has the ability to coercively tax, the jobs stay forever. What would up happening was that everyone went to work and got a paycheck but still wound up worse off every year.

    The same priciple applies to any government spending. The productivit of the job must be equal to or greater than the wages or the difference is nothing more than welfare. Liberals think that any job that does something and gets a paycheck is a real job. It is not. It is only a real job if you’re productivity is greater than your wages. What is going to happen with the spending package is that the government will take trillions that could otherwise be used productively and spend it on jobs that produce less value than the wages paid for them. They will just be transfering money, not creating any wealth.

    Try explaining that to a liberal. Things like the productivity wage identity and the broken window fallacy go right over their heads. In the end, they really beleive that the government can give them something for nothing.

  27. What is going to happen with the spending package is that the government will take trillions that could otherwise be used productively and spend it on jobs that produce less value than the wages paid for them. They will just be transfering money, not creating any wealth.

    Correction: that’s not just transferring money, that’s destroying wealth.

  28. The truth is that government has no idea how to implement this plan in an efficient way. There will be waste and corruption on a major scale. It’s good someone is going to keep up with it, and I agree the Republicans are a day late and a couple of trillion short, but let it be said full-throatedly that the Democrats will spend and waste on a record scale — and regardless of who did what before, they, the Democrats, are running this show. You know, it would be better to refer to them all as bonafide statists, using the primary definition of statism, and drop the useless comparisons which measure levels of badness. Republicans and Democrats are statists and they’re centrally controlling the economy. Of course there will be waste and fraud.

  29. True RC. Again, if governments could properly allocate resources, centrally planned economies would have worked. It is the same arguments that should have been settled by the Cold War. But whoever said leftist let reality get in the way of a good idea? Most of them don’t now or care if the spending will work. It is all about “doing something”. Politics for many on the left is just a vehicle for emotional catharsis as opposed to actually trying to make things better.

    In the end, the smarter ones really can’t deny that FDR made things worse. But that doesn’t faze them because they know that FDR made people feel better and feel like something was being done. Bizzarly, that, as opposed to results, is good enough for them.

  30. Concede the linguistic high ground to your enemies, and you have pretty well lost the war

    This is exactly how I feel. Every single time a socialist policy or attempt at policy is labeled liberal… it’s like a punch in the gut. How did we let that happen???

  31. John McCain went out of his way to make himself the poster boy for bi-partisanship, and that makes libertarians very uneasy. We, here, follow politics a lot more closely than the vast majority of voters (or principled non-voters) and aren’t fooled by campaign promises easily, especially when they contradict the candidate’s record.

    Uh, no. Quit the opposite. What you’re saying there is that you believed Sen. McCain’s campaign promises and rhetoric about being the “poster boy for bipartisanship,” and ignored his actual record of voting against the bipartisan farm bills (twice, including the Republican majority one), the bipartisan energy bills (twice, against with Republican majorities), and the bipartisan prescription drug benefit. He also has a record of voting against bipartisan “Buy American” clauses.

    There are indeed issues where McCain was pretty bi-partisan. But he also has a host of issues where he’s been willing to reject the bi-partisan consensus, especially where it involves spending. Not just rather piddling earmarks, either, but big ticket things like farm bills, ethanol, energy bills, and the prescription drug benefit that matter.

    Granted there are many other reasons for libertarians to dislike McCain (certainly McCain-Feingold, perhaps his cap-and-trade carbon stuff, and several other issues, like wanting to regulate boxing), and reasons for conservatives to dislike him (he’s too pro-immigration, he opposed a Constitutional amendment banning gay marriage).

    But if your entire objection to the Republicans was their fiscal record under Bush, and their willingness to vote for crap because Bush proposed it that they would’ve opposed under a Democrat, then McCain opposing all the worst spending programs of Bush and refusing to go along with bipartisan bills is meaningful.

  32. I suspect the party’s newfound interest in reducing spending and the size of government will last precisely up to the moment when they regain the majority. As financial advisers will tell you, past performance is not a guarantee of future results. But in this case, we know that it is.

    Republicans gained the majority in 92 and had a balanced budget by 98….looks like a more realistic stance would be republicans will give us fiscal responsibility for about 6-8 years after taking the majority….dems on the other hand will give you less then a day.

  33. When the oil industry went into say the North Sea, did they decide to spend a couple hundred billion in one year? No, they had years of planning before they did one thing.

    True enough. I just (last week) saw a project plan for an 80 day project that was 92 pages long. It literally had every single day broken down into 15 minute increments. Why? The company involved is spending just over a million dollars a day for 80 days and wanted to be goddamned sure everybody involved knew what had to happen. The project plan took longer to put together than the actual project will take.

    The government’s approach seems to be reminiscent of the underpants gnomes.
    1. Allocate funds.
    2. ?
    3. Stimulus!

  34. Sen McCain did NOT oppose all of Bush’s bad spending bills. He supported Bush’s war in Iraq and voted for every appropriation except one that included a timetable for Withdrawal.

    McCain also supported No Child Left Behind. And he lobbied Republicans in Congress to support TARP – the bank bailout. If he had won in 2008, Republicans would be divided over his stimulus program that he would undoubtedly come up with.

    Nonetheless, Republicans in opposition are opposing a lot of the bad stuff that the Democrats propose, and Libertarians – the permanent opposition – now have to applaud the unprincipled Republicans for being opportunistic in a way we like.

  35. Nonetheless, Republicans in opposition are opposing a lot of the bad stuff that the Democrats propose, and Libertarians – the permanent opposition – now have to applaud the unprincipled Republicans for being opportunistic in a way we like.

    Though they are doing the right thing, I feel no more reason to praise them for it than I do to praise Obama for not supporting the Fairness Doctine (it should be a fuckin given for anyone who swears to uphold the Constitution). This is just the first mile on the long road to absolution for the Repubs.

  36. “The government’s approach seems to be reminiscent of the underpants gnomes.
    1. Allocate funds.
    2. ?
    3. Stimulus!”

    A more accurate appraisal of the plan goes like this:
    1. Spend money
    2.?
    3.Growth!

  37. The USA is bankrupt and a great economic adjustment and shift is about to occur that will make the 1930’s Depression look like a cake-walk.

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