Not Worth Mentioning Department

By James Kwak

I was trying to read “Path to Prosperity,” the House Budget Committee’s glossy version of its budget resolution, also known as the Ryan Plan. (Don’t ask.) On page 13, I found this:

“An inevitable consequence of the last Congress’s decision to ramp up spending so quickly was that billions of Americans’ hard-earned tax dollars were squandered.The Government Accountability Office (GAO) – the non- partisan agency that audits the government’s books – recently found between $100 billion to $200 billion in duplication, overlap, and waste in federal spending.”

I thought, “There probably was some waste, I wonder what the GAO found.” So I looked at the source cited in a footnote: a March 2011 GAO report entitled Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue. You can see where this is heading from the title of that report. It is specifically intended to “identify federal programs, agencies, offices, and initiatives, either within departments or governmentwide, which have duplicative goals or activities” (p. 1). The report was required by a statute passed in 2010. The first targeted area, for example, is this: “Fragmented food safety system has caused inconsistent oversight, ineffective coordination, and inefficient use of resources.”

What does this have to do with the supposed spending spree of the last Congress, you may ask? Nothing. Overlapping agencies are a problem that the federal government has suffered from for decades; every administration says it will do something about reducing government waste, but few do anything significant. The existence of both the SEC and the CFTC is the example best known to people who follow financial services.

The 2009 stimulus bill appears in the GAO report exactly four times. Once in the area of surface transportation, where ARRA helped solve the problem (a little bit); once as an illustration of another problem, where the IRS insufficient math error authority; once as a positive example of how a tax credit program could be converted to a grant program; and once in a footnote describing how potential benefits were calculated.

There are probably some good ideas in that report that could save billions or tens of billions of dollars. It would be good if the House leadership could look into what it actually says, instead of claiming it as support for an ideological claim about Democratic policies.

33 responses to “Not Worth Mentioning Department

  1. I think that a politician’s lies about their personal life can discredit him. I don’t think that the lies related to policy ever reach a “critical mass” where the person is no longer treated seriously. On the Media’s recent program on “death panels” is an interesting case study.

  2. I meant “his personal life.” sorry for noun-verb disagreement!

  3. It would be good if the House leadership could look into what it actually says, instead of claiming it as support for an ideological claim about Democratic policies.

    Oh, James, you’re such a kidder.

  4. I fervently wish that Professor Johnson and Mr. Kwak would address radical monetary reform: the U.S. must issue its own money rather than borrowing it at interest from the private banking system. And fractional reserve lending must be eliminated.

    How bad do things have to get before people start honestly discussing and advocating solutions that would really address our problems?

    Just how bad?

  5. Why do you think that they have not read the document?
    Are they more partisan than you are?

  6. jeff simpson

    If you read what Ryan wrote, it may well be that both of his statements were true. The implied link between the wasted amount of money and the stimulus is where the lie exists. Rotten….

  7. Two specific thoughts regarding the political economy of government agencies:

    1. It seems plausible that agencies naturally tend to grow. Since things like number of employees managed, scope of authority, size of budget, etc., are taken to be measures of importance, higher-level managers have an incentive to see the agencies they manage grow. The US government has consistently grown for many decades.

    2. It’s possible, even likely, that we _want_ to see some overlap between agencies. Which is better slight overlap or gaps in oversight? Not surprisingly, the conservative line, which in its most extreme would abolish many government agencies altogether, is pro-gap. But in the face of issues like agency capture, corruption and simple, innocent error, there might be good reason to see some overlap in some areas. We don’t want two agencies trying to build the same road, but we might want to agencies checking on the safety of nuclear power plants. Maybe not. But it’s not obvious to me that all overlap is bad.

    One thought on the irony of Ryan’s House Budget Committee whining about costs: This is the same Paul Ryan who’s now trying to cover his tail after being caught with two unidentified maybe-lobbyists, maybe-economists downing two $350 bottles of wine. How’s that for redundancy!

  8. How bad do things have to get before people start honestly discussing and advocating solutions that would really address our problems?

    Just how bad?

    Its abit more than you can actually imagine. Here is a simple introduction: The old guard always tows the line,[and the older, the more stubborn], and demands clean (non-linear) bills. That way, they always have it their way. Destroying one generation was not enough, if it takes committing 2 or even 3 totally to continue thier fountain of youth search, so be it. Again, by law, bonds get paid before cops, teachers, firefighters and a whole host of others. Mostly rich people in America own bonds, and refuse to be denighed by the/their law. Bonds will default after Aug 2nd and want to take down each and every one of the losers ahead of them. By increasing the limit we can pay bonds and then have the bond holders decide who should take the haircut to keep the public happy, (besides themselves of course). So it will get bad, it just a question of when.

  9. @Owen Owens…thanks for addressing my question. (Would that Johnson and Kwak might pay the same attention).

    I just want to make this perfectly clear: for the people I know, where I live, things are VERY BAD NOW.

  10. The bottom line is that the fed government spending is out of control. Take your pick on who is to blame and how we got here. The government can’t deliver on all it’s promises it has made on every agency, program and entitlement. The spending has been out of control a long time before the 2009 stimulus (spending bill) and it can’t be fixed with higher taxes.

  11. Hi Carla, we certainly agree on nationalizing the Fed, which is un-Contitutional on its’ face, and burdens the nation with un-necessary debt. This debt that doesn’t and shouldn’t have to be. We know on this board that the Fed was formulated as a private banking-cartel, and remains so to this day. Presidents of the USA have warned these relationships are more dangerous than standing armies

    Only the Congress has the institutional authority to control the money supply, yet it was an Act of Congress which established the latest incarnation of the central bank. As Edwin Griffin pointed out in his study of the Fed, THE CREATURE OF JECKYL ISLAND, the creation of debt-based currency is a hidden tax called inflation.

    The USD $$$ today is a tiny fraction of its’ worth when the Fed was established. Did the Congress of 1913 even bother reading the bill, or did it bogart responsibility, much like a more recent Congress did in NOT reading the ironically penned, “Patriot Act”?

    In any case, calling for the abolition of the Fed is likely to be interpreted as a radical or revolutionary idea by some in officialdom, and one wonders whether by mere dint of one’s advocacy, your information appears on a database of suspect Americans? :)

    When jokers are deciding important matters of state, too pre-occupied to do a conscientious job, this is the debacle we wind up with….a collapse, followed by stagnation, misery, and now, more misery on the way.

    @ Hugh Samson, I really like reading your posts, and you’re absolutely correct about #1., and with # 2. I believe you have touched on another important point, the NRC being a case in point.

    Why Fukushima can happen here (NRC not doing its’ job of scientific-objective regulating):

    http://www.fairewinds.com/

  12. “A Monopoly to a Duopoly”

    “once upon a time
    i dropped this once refundable…refudgable tin can in a gutter
    rollin…rollin along with the soft touch of a nudge from my restless gate
    kickin and thrashing it did go
    not knowing where its recycling thrist awaits
    one more kick for good luck sake…so i did
    rollin on its edge
    flippin and floppin was head over heal
    pounding the pavement
    finding its home in the gutter
    this tin can i kicked
    now tilted…but not by the sprinkling
    but by this fast thunderous deluge…a pounding of rain
    rollin and rubbin…its center spinning in a canal on a curb
    as if sharpened by a wet stone from heaven above
    sooner rather than later severed in half
    this kicking the can in the gutter thats found its way down the road
    but wait what does the procrasinator have to say
    mysteriously creased by the sun dried gutter
    a handle on both suddenly glimmers of dull
    as if a ghostly blacksmith striked but a death mark so it appears
    leaving but a flash point
    a shadow as dark as a scarecrow perched in a birch
    a scarr on the pavement below
    that of a charred remnant…but what to make of these strange evolved two tin cups
    this once tin can…i nudged and kicked down the road
    the road is of no use
    the tin can no more
    except for the twin beggards awaiting in the sewer
    toasting their misery in the comfort of others
    while the rats watch in utter wonder”

    Thankyou James and Simon

  13. @Don Vito, with a debt-money system, we will never get spending under control. Listen up: In our system, without debt, there is NO MONEY. If you want be a serf for the international private banking industry, be my guest. But don’t include me or mine, because we’re not taking that train.

    I’m just hearing on the radio (Marketplace, that bastion of commercial nonsense) that Italy will be the next to bite the austerity bullet.

    Maybe the Italians will teach Americans how to take to the streets….whaddya think, Don Vito?

  14. Moses Herzog

    I agree with commenter Pasquale that policy lies often do not reach as he says “critical mass”. Illiterate, uneducated whites who were probably lucky to make it through high school (95% of FOX news audience) will believe to their dying day there is a “death panel” right now, planning how to rob them of their beer floated liver and cigarette ash trashed lungs.

    The same as the uneducated whites watching FOX news believe President Obama is rubbing his hands evilly, with his devil horns he only exposes to advisers, planning how to expand “big government”. It is still extremely extremely important those Republican policy lies are pointed out and highlighted for those who spend too much time watching Oprah’s new cable channel or “Dancing With the Flakes” but still have the ability to read (the few times they choose to exercise that ability).

    I would like to point out here that Republican Eric Cantor is currently shorting U.S. Treasuries.
    http://www.huffingtonpost.com/2011/07/08/eric-cantor-conflict-interest-debt-limit_n_893354.html

    http://www.salon.com/news/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest

    What would have happened if a Democrat had pulled the stunt of shorting U.S. Treasuries at the same time he is participating in deficit talks??? Imagine what Rupert Murdoch’s FOX news would have said if Barney Frank had pulled the same stunt. It would have been on all 3 network evening news shows by now.

    Eric Cantor personally benefits from the failure of U.S. Bonds and the MSM is like “I didn’t see anything, did you see anything?? No I didn’t see anything.” It’s interesting to note that Eric Cantor worked as an intern for Tom Bliley. Yes, that Tom Bliley of Gramm–Leach–Bliley, the law that allowed large banks do screw the American taxpayer by trading credit default swaps.

    Here is also a doozy of a post related to raising revenues at blog “Deus Ex Macchiato” where he lifts a small part of Chrystia Freeland’s interview with Cornell Economist Robert Frank. I’m just going to copy and past the entire part “Machiatto” put on his blog, and pray it doesn’t make him or Miss Freeland angry:

    CHRYSTIA FREELAND: If the super-talented are getting super rewards, maybe in the past they were not getting the appropriate rewards. I mean, maybe this is really American capitalism working the way most Americans want it to work…
    CHRYSTIA FREELAND: People don’t work for money?
    ROBERT H. FRANK: They do work for money. So if you didn’t give them any money, they — but there’s this odd vision that if the forty vice presidents of a big corporation who want to be CEO faced a slightly higher tax rate, they’d all knock off on Friday and play golf in the afternoon. There are lots of reasons to want to be the CEO of a big company. After-tax pay is not the primary one among them.
    CHRYSTIA FREELAND: You don’t think you would have a sort of Atlas Shrugged-esque strike of the super-competent?
    ROBERT H. FRANK: Absolutely you wouldn’t see that. Let one of those forty vice presidents go on strike. The other thirty-nine will silently cheer. “That means my chances of moving up just went up a little bit,” they’ll say.
    Now of course we all know those 40 would go to golf anyway and bill the company, which is to say the shareholders, for that trip – team building you know – but that is beside the point. Let’s call those VPs bluff, tax them, and see how much more golf they decide play.

    Here is the original link at Reuters: http://blogs.reuters.com/chrystia-freeland/2011/07/08/the-winner-take-all-economy/

  15. . Moses, you sound too much like a die hard Keynesian. You know the ones that design things to break so the next guy can have a job, that facilitates the moving of jobs overseas to 1) Make products that don’t break or, 2) Make things that break, cheaper, so more profit can be absorbed by shareholders to spend here at home. I think it started with TV’s, the tv repair man is a by gone industry, then it moved to fridges and everything right up to cars. But the made in America spirit still has its roots in keeping people working, at any cost. And once over the falls, it returns with stimulus or the threat of economic collapse. A hostage taker at heart I believe, possibly a politician, or fat cat in over his head. Lets try saving money by NOT spending it foolishly, rather than continually making it, too buy the next broken down item, it only makes sense.

  16. I phoned up an old colleague today, who’s now retired, and has time to engage his discursive mind in many “deep” thoughts, ostensibly. His major thesis is this: what we’re witnessing is the ACTUAL COLLAPSE of capitalism, which can not possibly be expected to survive much longer, since it is based on Ponzi finance, undergirded by worthless paper assets, and so on.

    I just scanned headlines from several different newspapers across the USA and world, and the reports today are really grim. I tried to re-locate the hardships being felt in ST PAUL, MN, by a small restaurant owner, for whom business receipts are way down, following the government shutdown there, although many legislators are still collecting their pay. I failed to find it, but I wonder if my old pal is indeed correct….this thing is breaking apart in veritable HUMPTY DUMPTY EGG fashion, and all the men and horses in the KINGDOM, just can’t fix what’s irreparably busted and broke?

    Now, if it came to losing the farm, or instigating thermo-nuclear armageddon, which do you believe the real shakers and movers would prefer?

  17. This stuff makes me apoplectic. No one minds lying at all any more and no one minds saying something says something it doesn’t really say or citing reports that everyone reasonable has discredited. It doesn’t matter.

    There’s a fair fight to be had here. At the end of the day, it is about values so there is no 100% clear right and wrong. There are different ways of seeing the world, but you’d think we could have that fight honestly.

    But we can’t, because everyone is bought off. Everyone.

  18. @Woop: “In any case, calling for the abolition of the Fed is likely to be interpreted as a radical or revolutionary idea by some in officialdom, and one wonders whether by mere dint of one’s advocacy, your information appears on a database of suspect Americans? :)

    As that well-known radical, revolutionary economist Milton Friedman said “If you kill the Fed and don’t kill fractional reserve lending, you’ve done nothing.”

    And in response to your later comment, yes, Humpty Dumpty indeed. So let’s just get on with it.

    @Eat The Babies: are you bought off? I’m not. I don’t think Woop is. So that makes three of us.

  19. TY TY TY Carla :)

    I didn’t think I was bought off, either, or you, for that matter!! Deposits should be PAYABLE ON DEMAND, ALL DEPOSITS, Carla, absolutely agree with you. Certificates of Deposit are another matter, but checking and savings accounts, for sure. Griffin spends a great deal of energy covering this in his book, which I cited earlier, incidentally.

    In any case, what I returned here for is this: Tokyo market opens “sharply lower” Tuesday morning, there:

    http://economictimes.indiatimes.com/markets/global-markets/tokyo-shares-open-sharply-lower/articleshow/9193361.cms

  20. Facts are still facts. how you want to interpret them is a matter of upbringing/education/prejudice.

    that the Rich are stealing from the rest of us is simple to see. that the political party called by two names/Republican/Democrat in charge are responsible for abetting the Rich in this is not something that can be debated.

    some things are simply seen. others can be debated ad infinitum. that is the big difference here.

    while Rome burn, Nero fiddles. not much else changes.

    yes rioting in the streets would be nice for a change, rather than let the Elites go on unremarked.

  21. @Woop: what we’re witnessing is the ACTUAL COLLAPSE of capitalism…..

    One small correction, Woop. REAL (laissez-faire) capitalism in this country disappeared with the creation of the Fed (distortions of money supply and interest rates) and publicly-traded corporations run by managers, not owners (obsessions with share price and personal compensation and thus an incentive to cheat and to grow too big).

    So what we’re actually watching are the death throes of a mutant form of capitalism. Like most mutations, it has been a terrible mistake.

  22. Moses Herzog

    I certainly am no John Boehner fan, but looking at this more and more, it looks like Eric Cantor is the selfish basturd who is throwing the monkey wrench into the deficit negotiations. IF America defaults on its debt, I think we know exactly who to look at. Hint: His middle name is Ivan.
    http://www.latimes.com/news/nationworld/nation/la-na-cantor-boehner-20110712,0,2176610.story

    For reasons already stated above:
    http://www.salon.com/news/politics/war_room/2011/06/27/eric_cantor_conflict_of_interest

    http://blogs.wsj.com/washwire/2010/06/18/eric-cantors-investment/

    http://pfds.opensecrets.org/N00013131_2010.pdf

  23. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.

    This is where peoples energys should be invested, why on Gods green Earth should ANYONE profit from anothers loss? Its just plain wrong, and aught to be punished rather than rewarded. It can lead to all sorts of abuses, almost like a life insurance policy. The benificiary knows not who they are because they now have an interest in anothers death, the insurance agent/company has no interest in locateing a benificiary because they already have their money. Its just adds to the hugh number of legal scams at taking ones money, and then once you get enough, you are a professional advisor who can never get enough.

  24. James, nice one, but too easy. This is what the parties do to cast aspersions. They cite what they consider to be a respectable source to prove a point about the opposition. This kind of citation seems to appear everywhere, and, perhaps the most frustrating thing is that the media simply lets these kinds of disinformational statements stand unchallenged. Of course that is a sign that the media management is a part of the problem. Watch any news report about the current debate over increasing the debt limit, and you will find the Republicans saying “no new taxes or increases whatsoever” naturally. That’s the Norquist dogma (pledge) that they have signed on to. The Dems, meanwhile have not talked about “raising” taxes, but rather about tax reform to capture additional revenues. The Reps say, you can’t raise taxes in a recession on job creators, citing small business as the engine to create jobs (I agree), and the Dems have no plans to raise rates on anyone and tax reform would likely have no effect on people making less than a million a year, but this is the way the debate goes. The fact that Ryan makes some officiously bogus claim in his budget is no surprise. This is just SOP. Both parties do it at every opportunity, and the media goes along, and the public is left clueless, of course, that is except for the few who pay real attention.

  25. @Woop: the horses and men will also have a heck of a time when half of them are busy taking a SLEDGEHAMMER to ol’ Humpty because they think it will help their reelection chances. Make no mistake – the GOP has decided that continuing financial misery is good for their chances, and unless an awful lot of people stop mainlining Rupert Murdoch’s lie factory they’ll be right…

  26. Lady in Red

    Wow, guys.

    Work: fix my plumbing. Get a paycheck.

    Beyond all the crazy theories, is it more than this: and it is capitalism. …..Lady in Red

  27. @ Trouserman, of course, you are correct, and I have an article you may enjoy taking a look at:

    http://www.alternet.org/economy/151551/apocalypse_investors%3A_how_wall_street_bets_on_catastrophic_breakdowns_that_destroy_lives/

    hmmm….”black swan” investment opportunities. Why not follow up on potentially unusual and/or questionable securities transactions, just prior to the Gulf of Mexico disaster? I think I know the answer, anyway….

    @ Anonymous, I couldn’t agree with your observations any more than I do…and will only add, it’s pretty sad and disgusting what’s going on in the nation’s swamp district, DC. The GOPERS want Obama now to unilaterally raise the ceiling, so it can blame EVERYTHING on this man, who is really trying hard to govern under impossible circumstances, imo.

  28. @ Lady, I wil fix your plumbing, if you’ll feed Jack my dog, whenever you can. :))

    Anyway, great song by The Band!

  29. Not worth mentioning – other than just a wee-bit off the far side end with regard to Big Ben’s QE III ( maybe, always means-tested,… YES ?) mentioning today. Which by the way hadn’t really mysteriously rattled/ rocketed the markets upward, other than the fact that the timing chain was hours out of sync! Indeed, “The Bernanke Syndrome” strikes again! The,…”Hyde and seek-out Dr. Jekyll” has left the closet doors open? Wide open!
    Let’s summarize QE1…QE2…QE3,… shall we:

    QE I_____All monies directly to “Goal”…Wall Street Style —-. S & P 666 (2009-10) bottom,…walla S & P
    1296 ( a twofer) 2011 ?

    QE II____A Split,…50% US. Banks & 50% Foreign Banks,…made whole!

    QE III____A proportional bailout for ECB & the EuroZone PIGS @ 75% theirs, and a whopping 25% ours, To be divied up for the American’s soon to be out of work and the Mortgage Industry to mark to market banks foreclosures of what’s left to the Fed Inventory through GSE’s!

    QE IV____Wait for it,…? (JMHO)

    Thankyou James and Simon

    God Bless You,.. Julian Assange, and good luck :-))

  30. i would’nt storm the gates quite yet on Qe3, not yet fit to sail.

  31. Indeed,…”Not so Fast on GSE {(Gov’t Sponsered Enterprizes)(Fanie/ Freddie/ etc.)} Reform”____(3-1-2011)

    Ref:
    http://www.financialreformwatch.com/tags/gse/

  32. Judgement day for GSE’s will be an interesting one, so much to do between now and then though.