A Bulletin on Wasteful Government Spending
New Campaign -- End All Subsidies
When politicians spend our money wastefully, many of us resent having to pay taxes, even taxes that make us more efficient, such as a tax on land. Further, the more costly government becomes, the less “rent” -- the natural source of public revenue -- there is to go around. We trim, blend, and append three 2011 articles from: (1) The WasteBasket, Jan 7, on cuttable programs byTaxpayers For Common Sense; (2) DownsizeDC.org, Jan 10, on a new campaign by VP Perry Willis; and (3) Los Angeles Times, Feb 6, on fraud by P.J. Huffstutter.
by TCS, by Perry Willis, and by P.J. Huffstutter
Budget But Smorgasbord
The US Government deficit is $1.3 trillion -- needlessly.
We could simply halve the subsidies for the main commodity crops and save $26 billion over five years. The vast majority (90%) of these subsidies go to production of cotton, corn, soybeans, rice, and wheat, and most of these are large corporate agribusiness.
We can trim more than $2 billion in budget calories by not building new navigation locks on the Upper Mississippi River. Traffic has been stagnant or declining for years.
De-funding Alaska’s Bridge to Nowhere would save $300 million. Axing the Knik Arm Crossing to connect Anchorage to the sparsely populated area around Point MacKenzie would save $1.5 billion.
JJS: These lavish projects that cheat the majority in order to benefit a small minority hardly set the proper moral tone; indeed, they invite cheating -- which makes subsidy programs even more costly to taxpayers.
Farm insurance fraud is cheating taxpayers out of millions
Perpetrators falsely claim weather or insects destroyed their crops and cash in on a government-backed insurance program. Some don't bother planting at all. Others sell their harvests in secret and then file claims for losses, collecting twice for the same crop.
One North Carolina tomato grower, armed with a camera and a party-size bag of ice cubes, created a mock hailstorm in his fields and swindled the federal government out of $9.2 million.
These growers -- along with crooked insurance agents and claims adjusters -- are using the program to bilk insurance firms and the US government out of millions of dollars a year. Taxpayers are on the hook for many of those losses.
The cheaters, less than 1% of farmers, cost between $100 million to $200 million a year.
The federal government created the Federal Crop Insurance Corp. and in 1938 started selling policies to farmers to help them recover from the Great Depression. By the 1980s, the government was subsidizing farmer premiums to encourage participation.
Washington handed over the selling and servicing of these rural policies to a tight-knit group of insurance companies, with some lucrative incentives. Lawmakers agreed the US Treasury would still guarantee the riskiest policies. The government would also pay agents' commissions, cover some of the insurers' operating costs, and continue to subsidize farmers' annual premiums. Today, taxpayers cover about 60% of these premiums. Premiums, tied to the volatility of the commodity futures market, jumped in price. Agents' commissions, which are tied to crop prices and premiums, have tripled over the last decade.
Private insurers and their agents reap most of the benefits while the public still picks up the losses. In 2009, taxpayers shelled out nearly $4 billion to the 16 insurers involved in the program. Of that, $1.5 billion was paid in commissions to an estimated 15,000 insurance agents ($100k apiece). Meanwhile, taxpayers paid $1.7 billion to subsidize farmers' premiums.
To see the whole article, click here
JJS: How could our elected officials justify spending on such projects in the first place? Answer: “log-rolling”. You scratch my back (in cheating the public) and I’ll scratch yours. Makes me wonder if politicians should have the power to subsidize at all.
End All Subsidies!
Congress hears mostly from businesses wanting more subsidies. It hears rarely from taxpayers wanting to end subsidies.
Nevertheless, the new House of Representatives is adopting parts of our ideas, passing new rules that require . . .
* A 3-day waiting period before a bill can be voted to final passage
* All bills to cite their Constitutional authority.
More is needed so we've created a new "End Subsidies" campaign.
Subsidies are theft. Taxing everyone to profit a few is wrong, both morally and Constitutionally.
The phrase in its Preamble, "to promote the general welfare", clearly limits Congress to actions that benefit all citizens; otherwise it would be called the "special interest clause."
The Constitution requires that all citizens receive equal protection under the law, but subsidies violate this requirement by harming some citizens in order to benefit others.
To tell Congress your position, click here
JJS: Supporters of subsidies try to justify government handouts on the basis that the recipients need the money. Maybe some do need more money. But nobody would need a subsidy if we all got a Citizens Dividend, a share of “rent”, of all the money society spends for the nature it uses. That flow of money should morally be the commonwealth; sharing it is the essence of geonomics. Divvy up that stream of revenue fairly -- a la Alaska’s oil dividend -- and people would be so well off that the rationale for subsidies withers away.
Editor Jeffery J. Smith runs the Forum on Geonomics.
Who gets compensated? Who gets deceived?
In retaliation for subsidies to cotton growers
Residents to get what insiders got?
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