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The Sequestration Debate Misses the REAL Issue

George Washington's picture




 

With sequestration set to go into effect in a few days, everyone is talking about it (via Google trends):

Sequestration means across-the-board cuts in government spending, split 50%-50% between the military and domestic spending.

As this post will show, the hypocrisy surrounding the sequestration debate is stunning.

For example, president Obama says that sequestration is the GOP’s fault. But Bob Woodward and YouTube reveal that Obama supported sequestration from day one.

And Dems obviously want to slash military spending and protect domestic programs, while the GOP wants to slash entitlements and leave military spending as is.

But the whole sequestration debate misses the bigger picture: Tremendous savings can be wrung out of both military and domestic spending without reducing services to either.

Military Wasting Bucketloads of Money on Non-Defense Costs

BusinessWeek and Bloomberg point out that we could slash military spending without harming our national security. Specifically, we could slash boondoggles that even the generals don’t want:

A devastating series by our colleagues at Bloomberg News shows that “the defense budget contains hundreds of billions of dollars for new generations of aircraft carriers and stealth fighters, tanks that even the Army says it doesn’t need and combat vehicles too heavy to maneuver in desert sands or cross most bridges in Asia, Africa, or the Middle East.”

BusinessWeek also notes that redundancy wastes a lot of money:

“One need only spend 10 minutes walking around the Pentagon or any major military headquarters to see excess and redundancy,” former Defense Secretary Robert Gates said in September at an event organized by the Center for Strategic & International Studies in Washington. He should know. As defense chief in 2009, he culled 20 weapons systems he thought unnecessary or too expensive, including the F-22 fighter. One place to start thinning the bureaucracy: the staff of the Joint Chiefs of Staff. That office has more than tripled in manpower, to 4,244 in 2012 from 1,313 in 2010, according to the Pentagon’s annual manpower report. (Fewer bureaucrats means fewer memos and fewer meetings. Win-win-win.)

American Conservative goes on to give a list of cost-cutting measures which will not undermine national security.

So why doesn’t Congress trim the fat? Because politicians want to bring home the pork. As BusinessWeek notes:

Why is sensible military budgeting so difficult? Because lawmakers, including small-government Republicans, protect defense business in their home states with the ferocity of Spartans. Even if the Pentagon offered up the cuts we’ve outlined here, Congress would almost certainly reject them. The senators and representatives don’t have the political courage to face voters and tell them that the republic simply does not need the weapon under construction in their hometown.

American Conservative reports:

The cuts to the Pentagon budget will be only 7% or some $40+ billion, not the $500 billion they bandy about! Anyone who confuses the (unlikely) ten year cut with next year’s cut is just promoting lies. A good example is the Wall Street Journal editorial, “The Coming Defense Crackup,” warning that the cuts would create the smallest navy since 1914. It intentionally confuses next year’s cut with the consequences of 10 year cuts.

 

Ok, but when every smart bomb and missile hits its target, why does one need as many shells as the old battleships where most shots missed? During the Korean war the Air Force tried futilely for months to bomb a bridge over the Yalu River. Today destroying a bridge takes one cruise missile from a hundred miles away. In Washington we find all the big media opposed to cutting defense spending, waste and all, even the Washington PostPolitico, usually a leftist paper, publishes articles also intentionally confusing 10 years of cuts with a one year cut. Today’s congressmen can’t oblige future congresses on what they will spend; defense apologists use the 10-year number to try to stop the sequestration for one year, 2013. All the big Washington newspapers are full of costly ads from defense contractors.

Of course, this just scratches the surface.

In reality, the military wastes and “loses” (cough) trillions of dollars.  See this, this, this, this, this, this, this, this and this.

The Secretary of Defense acknowledged in May 2012 that the DOD “is the only major federal agency that cannot pass an audit today.”  The Pentagon will not be ready for an audit for another five years, according to Panetta.

Republican Senator Tom Coburn also notes that the Department of Defense can reduce $67.9 billion over 10 years by eliminating the non-defense programs that have found their way into the budget for the Department of Defense.

And Coburn documents abusive wastes of taxpayer dollars, including:

  • A $100,000 Defense Advanced Research Projects Agency strategy planning workshop including a session entitled “Did Jesus die for Klingons too?” that entailed a panel debating the implications for Christian philosophy should life be found on other planets
  • A DOD and Department of Agriculture co-produced reality cooking show called “Grill It Safe
  • DOD-run microbreweries

In addition, the defense department spends huge sums securing our access to oil.  In 1991, the Government Accountability Office estimated that – between 1980 and 1990 – the US spent $366 billion to defend oil supplies in the Middle East.   America was not fighting any major wars – in the Middle East or elsewhere – at the time.

George W. Bush, John McCain, Sarah Palin, a high-level National Security Council officer, Alan Greenspan and others all say that the Iraq war was really about oil.  Nobel prize winning economist Joe Stiglitz says that we’ll end up spending $3-5 trillion spent on the Iraq war alone. See this, this and this.

Indeed, most of our wars are fought for petroleum resources.

Security experts – including both hawks and doves – agree that waging war against Iraq and in other Middle Eastern countries weakens national security and increases terrorism. See this, this, this, this, this, this, this and this.

So why is our defense spending so high?  Because war and defense spending – as President Eisenhower warned so long ago – is a feature, not a bug … which makes the rich even richer.

American Conservative reports:

[The war-monger's] big government program is unending wars, imperialist foreign policy, and ever expanding Homeland Security.

 

***

 

The money is not all for defense. At least half is for attacking other nations, as Ron Paul called it the defense/militarism budget. Roughly half goes for defense, the rest is for military adventures abroad, most of them quite unnecessary, indeed counterproductive as they just create more enemies for America. Look at Turkey where 90% of the population used to support America; now 85% oppose us. Obviously if we attacked fewer foreigners we could do with much less spending. Firing 250,000 bullets for each dead guerilla can get expensive. As also paying  $400 per gallon to get fuel to the front lines.

Any lingering doubts about whether we can cut defense costs without undermining our national security can be dispatched with a few facts:

The American government has directly been supporting Al Qaeda and other terrorist groups for the last decade.  See this, this, this, this and this.

 

(Remember, if there aren’t scary enough enemies in real life, we’ve got to create them.  Oops … did I say that out loud?)

 

And the American government lies – and even kills its own – to justify new wars.

 

Top American economists say that endless war has ruined our economy.  It benefits a handful of elites, while levying a tax on the vast majority of Americans.

 

Congress members – part of the super-elite which has made money hand over fist during this economic downturn – are heavily invested in the war industry, and routinely trade on inside information … perhaps even including planned military actions.

 

No wonder the American government is making the state of war permanent, and planning to unleash new, widespread  wars in the near future.

Government Squandering Taxpayer Money on Unnecessary Domestic Expenses

All of the top independent economists and financial experts (and many bankers) say that we’ve got to break up the big banks to save the economy.

Instead, the government has thrown trillions at the big banks to artificially make them appear profitable.

The bailouts are continuing non-stop … to this very day (and see this).

Indeed, the government chose the big banks over Main Street, the average American … or the economy as a whole.  And see this and this.

As such, the government has sucked trillions out of the real economy by pushing policies which destroy jobs (sorry … Obama doesn’t care), redistributed wealth upwards from the broad economy to a handful of the very richest (which trashes the economy .. and Obama is even worse than Bush), and destroyed savers and Main Street.

In other words, we have thrown many trillions of dollars at the banks, and then sucked trillions more out of the real economy.

As we noted recently:

The central banks’ central bank – the Bank for International Settlements- warned in 2008 that bailouts of the big banks would create sovereign debt crises … which could bankrupt nations.

 

That is exactly what has happened.

 

The big banks went bust, and so did the debtors. But the government chose to save the big banks instead of the little guy, thus allowing the banks to continue to try to wring every penny of debt out of debtors.

 

Treasury Secretary Paulson shoved bailouts down Congress’ throat by threatening martial law if the bailouts weren’t passed. And the bailouts are now perpetual.

 

Moreover:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

  • A lot of the bailout money is going to the failing companies’ shareholders
  • Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”
  • The Treasury Department encouraged banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)

And as the New York Times notes, “Tens of billions of [bailout] dollars have merely passed through A.I.G. to its derivatives trading partners”.

 

***

 

In other words, through a little game-playing by the Fed, taxpayer money is going straight into the pockets of investors in AIG’s credit default swaps and is not even really stabilizing AIG.

Moreover, a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. Indeed, the Fed bailed out Gaddafi’s Bank of Libya, hedge fund billionaires, and big companies, but turned its back on the little guy.

 

A study of 124 banking crises by the International Monetary Fund found that propping up banks which are only pretending to be solvent often leads to austerity:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

 

Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.

 

***

All too often, central banks privilege stability over cost in the heat of the containment phase: if so, they may too liberally extend loans to an illiquid bank which is almost certain to prove insolvent anyway. Also, closure of a nonviable bank is often delayed for too long, even when there are clear signs of insolvency (Lindgren, 2003). Since bank closures face many obstacles, there is a tendency to rely instead on blanket government guarantees which, if the government’s fiscal and political position makes them credible, can work albeit at the cost of placing the burden on the budget, typically squeezing future provision of needed public services.

In other words, the “stimulus” to the banks blows up the budget, “squeezing” public services through austerity.

 

Numerous top economists say that the bank bailouts are the largest robbery and redistribution of wealth in history.

 

Why was this illegal? Well, the top white collar fraud expert in the country says that the Bush and Obama administrations broke the law by failing to break up insolvent banks … instead of propping them up by bailing them out.

 

And the Special Inspector General of the Tarp bailout program said that the Treasury Secretary lied to Congress regarding some fundamental aspects of Tarp – like pretending that the banks were healthy, when they were totally insolvent. The Secretary also falsely told Congress that the bailouts would be used to dispose of toxic assets … but then used the money for something else entirely. Making false statements to a federal official is illegal, pursuant to 18 United States Code Section 1001.

Given the above – and the fact that we no longer prosecute the big white collar criminals – we no longer have a free market economy … we have fascism, communist style socialism, kleptocracy, oligarchy or banana republic style corruption.    As such, the machinery of capitalism – which could generate enough prosperity to dig us out of this budget deficit – has been broken.

Indeed, fraud caused the Great Depression and the current financial crisis.  The government could easily close the budget deficit by clawing back bonuses and ill-gotten gains from every Wall Streeter who committed fraud.

Moreover, the government has encouraged American companies to move their facilities, resources and paychecks abroad. And some of the biggest companies in America have a negative tax rate… that is, not only do they pay no taxes, but they actually get tax refunds. If we want to stop the budget deficit from spiraling out of control, we should stop the “giant sucking sound” which is shipping prosperity abroad.     (And a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. More here and here.)

Finally, the current banking system is set up so that the government has to pay trillions of dollars in unnecessary interest costs to the big banks to “create money” and expand the money supply.   To understand this crazy system, read this.

The Bottom Line

The bottom line is that the entire “sequestration” debate misses the real issues and the true sources of our budget deficit:

  • Unnecessary military projects
  • Redundancy in arms and personnel
  • Costs which have nothing to do with defense
  • Waste and fraud in military spending
  • Wars for oil
  • War profiteering
  • Endless bailouts for the big banks
  • Economic policies which are destroying the real economy
  • Crony capitalism
  • Failure to enforce the rule of law, including clawing back ill-gotten gains
  • Shipping jobs and prosperity abroad
  • Paying trillions in unnecessary interest costs due to a faulty banking system
 

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Tue, 02/26/2013 - 11:06 | 3277495 moneybots
moneybots's picture

535 frauds in congress.  The voters choice is to vote for a republican fraud or a democrat fraud.

Tue, 02/26/2013 - 10:39 | 3277358 akarc
akarc's picture

Constantly amazed. GW's post is excellent. However what is amazing is  how the comments in so many posts devolve into an Obama, jew, liberal, Union, socialist hate fest peppered with references to stupid conservatives.

AND THEREIN LIES THE BIGGEST POINT BEING MISSED!

And that is that Corporate, Bank and political corruption has been moving in this direction for many years. Since and before Reagan. None of which could occur without congressional, department of justice complicity and the aquiesence of the American public.

Check out the history of Monsanto corporation as an example. Many many years of fucking people over considered just a cost of doing business?  What about Apple, GE and the others.  What about all the companiea doing busines with Iran in violation of the sanctions?

Do you honestly think that the political ideology squables between left and right mean shit to any of these people? These peopple adhere to the priciples of one party, "GREED"! And they manipulate the shit out of us to perpetuate their agenda!

It has "trickled down" from the federal government to the smallest local bueracracy. Communities that embraced redlight camera laws made possible by the by the corporate lobbyists (and google Goldman Sachs role in this), made legal by state governments and actively employed by local municipalities (in Florida before it even became legal) as a cash cow. Don't pay your red light ticket? We will take your fucking house!

THE POINT IS:

We the people get bogged down in our personal bias and spend so much time fighting over shit that is none of our business, hollering about constitutional rights while at the same time willing to violate the constitutional rights of others, and do absolutely nothing about the insanities in GW's post.

How do I know this? Because to date no one has, when every conceivable oppurtunity to do so has already presented itself.

Do not worry about watching your back George. Yeah the governement fer sure watches you as they watch everybody else. And are comfortable knowing that for the most part the public will meekly bitch from their fucking knees!

I do applaud your efforts though and reiterate a past comment stating if you open the eyes of one you have done a great service.

AKA rc

http://www.bigbendbikersforfreedom.com/

Tue, 02/26/2013 - 11:35 | 3277635 OccupyTVstations
OccupyTVstations's picture

George,

Lots of great facts again, but I am starting to doubt your sincerity to change our government for the better. It seems that one could classify your posts as a greatest hits of the banksters... look at all the shit we got away with- but do you ever write up ideas for potential solutions?

If you truly want progress, then please address the bottleneck of all our problems- the media, and how we can take it back. Secondarily, the cointelpro types that join every protest group, occupy camp, etc to steer them away from media action.

If we took back a single tv station, we could read this article aloud on the air... and then the masses would know. Wisconsin had 100,000  strong at the capitol building, a one hour walk from 3 tv stations, which we could have surrounded and made a real difference by getting the truth broadcast to millions, and the truth would have gone viral. Phony elections to 9/11 truth could all come out, if we just take back the media- starting with one tv station. Instead we had Michael Moore and John Nichols speak to the crowd, "calm down, focus on a recall election."

And the cointelpro traitors win again...

Aside from a large protest crowd changing the media... it could also be a single person... a daughter that talks to her anchorman dad... gets him to break ranks live on air. Some of you might recall how the Ukraine (CIA sponsored?) revolution started with a sign-language interpreter on their tv news signing, "these are all lies."  One person can make a difference....

Please George, will you write at least one post that's full of proactive ideas on how we can stop these bastards.... like my personal fav- a team of special forces goes to the Caymans, cuts the power, uses wireless jammer to block all transfers.... then they go bank to bank, all $32 trillion is confiscated... then distributed Robin Hood style to the whole world... the Rothschild, Rockefeller bodyguards etc see this, and turn on their masters.... wtf- you gotta dream, right?

Tue, 02/26/2013 - 11:59 | 3277769 OccupyTVstations
OccupyTVstations's picture

Sorry, forgot about the geeks.

 

Wouldn't it be ironic if, despite all our tough guys in the armed forces, the saviors of America and the world turned out to be a high school geek?

Recently the Emergency Broadcast system was hacked in Montana, Michigan and New Mexico!

http://www.eweek.com/networking/zombie-attack-warnings-broadcast-after-e...

(I read the title and was jumping for joy), only to broadcast a Zombie Alert.  F$#%!  They could have played the third tower falling, Condi telling America the title of the Aug 6th Memo was "Bin Laden Determined to Attack Inside the United States", Rummy telling us how they lost $2.3 Trillion.... so much could have been played to alert the sheeple (in that broadcast range).... no more zombie crap, next time expose the robosigner MBS CDS Bailout & "Settlement" superscam... Go Geeks Go!

Wed, 02/27/2013 - 12:43 | 3282091 Mrmojorisin515
Mrmojorisin515's picture

sometimes i don't think half the people on this site read the articles, they just post.  I feel like piggy in lord of the flies

Tue, 02/26/2013 - 10:24 | 3277306 torabora
torabora's picture

When I "worked" for the US gov we called it "rape and murder" meaning killing time and fucking off.

Tue, 02/26/2013 - 10:13 | 3277276 kaiserhoff
kaiserhoff's picture

The essence of government is force and abuse. 

Everything else is commentary.

Tue, 02/26/2013 - 09:43 | 3277170 blindman
blindman's picture

Time To Stop Monsanto And The US Supreme Court

Posted on February 25, 2013 by Ilargi
http://maxkeiser.com/2013/02/25/time-to-stop-monsanto-and-the-us-supreme...
.
and see comment section...daddy warbucks

Tue, 02/26/2013 - 09:40 | 3277164 Old Poor Richard
Old Poor Richard's picture
  • DOD-run microbreweries

OK, now you've done it--found my ox and gored it.  Cancelling one F-22 will fund 100,000 microbreweries.  Every platoon should have a 1-barrel system so they can create their own signature beer.  The ingredients needed for 30 gallons of beer costs about as much as 10 clips worth of rifle ammo.  Make beer, not war.

Tue, 02/26/2013 - 10:17 | 3277286 kaiserhoff
kaiserhoff's picture

Brewers grain can be used for livestock.  The net cost of making beer, is almost nada.

Tue, 02/26/2013 - 09:19 | 3277112 blindman
blindman's picture

Jimmy Cliff — Children’s Bread
http://www.youtube.com/watch?v=gdTI4InYRW8
.
http://www.youtube.com/watch?v=k-QyvCFBfPA
.
" they took the children's bread and give it to the dogs." j.c.
.
Time To Stop Monsanto And The US Supreme Court

TUESDAY, FEBRUARY 26, 2013 12:15 AM
http://www.theautomaticearth.com/Finance/time-to-stop-monsanto-and-the-u...
.
"..Reading about the case before it came before the court, I found Mr. Bowman's argumentation neither very strong nor very interesting. In fact, he might as well be on Monsanto's payroll. Mr. Bowman knew that many of the seeds he was buying were of Monsanto's Roundup Ready variety, and he had been buying these seeds at full price on previous occasions, even earlier the same year. Which is why he sprayed the late crop in question with another Monsanto product, the Roundup herbicide. The first reports are that the Supreme Court Appears to Defend Patent on Soybean.

"Why in the world,” Chief Justice John G. Roberts Jr. asked, “would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?"

I’ll get back to this, but one thing should be clear: People have spend time and effort, blood sweat and tears, throughout history, to improve seeds. Why would that stop with Monsanto? Because they spend money? Nobody ever had the idea that their improved seeds would be eligible for patents. Along comes the chemical industry, takes the seeds that have undergone all these generations of improvements, changes them a little bit, and voila! owns them outright. No, really.
" ...

Tue, 02/26/2013 - 09:18 | 3277108 Blue Dog
Blue Dog's picture

That was absolutely ridiculous. The government plans to spend $3.5 trillion while taking in $2 trillion and the author says that's doable if we cut fraud and waste. It's so idiotic that it's laughable. It belongs on The Onion.

Tue, 02/26/2013 - 10:05 | 3277251 Terminus C
Terminus C's picture

If you knew how to read you'd notice that fraud and waste account for nearly half of government spending...

basic math:  3.5/2=??

??<2

 

Tue, 02/26/2013 - 08:10 | 3276961 SmallerGovNow2
SmallerGovNow2's picture

I'm all for eliminating waste and fraud, but this is a mere pin prick in the bigger problem, the central nanny state.  You cannot change anything if you can not change that and get back to constitutionally limited federal government.  Chances of that happening?  0.0001%.

Tue, 02/26/2013 - 08:42 | 3277024 Slightly Insane
Slightly Insane's picture

Remember the Just say No to Drugs campaign?

 

I would recommend the dual word phrase "Just Shrug" as an effective, and perhaps the only way to fight this, (It's just a waste of time argueing with idiots).

Tue, 02/26/2013 - 08:35 | 3277012 bunnyswanson
bunnyswanson's picture

How about ending those wars, cowboy?  Is that off the table?

Or are you anxious for the hunger games to begin? 

by J. Lang Wood

Created on: August 03, 2012 Last Updated: August 06, 2012

The French Revolution, 1789 to 1799, was a period of dramatic change in the history of the country. New ideas came to the country because of France’s support of the American colonies. The nation was saddled with debt from many wars. Failed agricultural crops created hunger and resentment in some quarters of the society. The situation was ripe for an eruption of mob mentality that would overturn the political structure.

How The Revolution Began

With scarce food and a monarch that seemed weak and indecisive, France faced rising discontent among a number of groups. The middle class struggled under high taxes. The lowest classes saw few fruits of their labor and more difficult times. Meanwhile, the nobility and clergy enjoyed freedom from taxes and an easy life. The groups in power bickered amongst themselves until violence erupted. The people broke into the prison of the Bastille in Paris and released the prisoners. The bourgeoisie, or middle class, refused to compromise with the nobility and clergy and demanded a new constitution.

What Is Mob Mentality?

Usually, people make their own decisions based not only on their experiences in life, but upon their ideas about themselves. When people become part of a large group, a phenomenon called de-individuation occurs. People lose their individual identities and normal restraints. They easily take on the mood and ideas that leaders of the mob encourage. The anonymity of being in a group makes it easier to shed these normal constraints and engage in behaviors that would be unacceptable if one were working alone. Mob mentality tends to occur in large groups of like-minded people, when resources are scare and when emotions run high.

Events Go Out of Control

During the French Revolution, all three factors were present within the population. The methods of negotiating any solution to the peoples’ problems were absent, and violence erupted. The King and nobility became the targets of this violence, and many people were killed either by the angry mobs that roamed through the streets or by execution using the famous guillotine, a machine with a blade that quickly cut off the heads of prisoners. These events made the French Revolution one of the bloodiest in the history of civilized nations.

Taming the Mob

As with all mobs, the people’s desire for revenge was eventually replaced by their distaste for the constant bloodshed and chaos. A constitutionally monarchy was put into place, in which the people had more power over the decisions that affected them, but it was short-lived. War with other countries intervened, and Napoleon Bonaparte, a successful military leader, rose to power, which the French people admired and respected. Peace then returned to the nation.

Mob mentality had a significant effect on the events during the French Revolution. It is undeniable that some people took advantage of the discontent among the population to whip up violence against the nobility, and most Parisians were relieved when calm and order returned to their society.

Learn more about this author, J. Lang Wood.

Tue, 02/26/2013 - 10:03 | 3277246 SmallerGovNow2
SmallerGovNow2's picture

Ending useless wars and our current interventionist policy around the world is MOST DEFINATELY on the table Sir...

Tue, 02/26/2013 - 07:59 | 3276950 MickV
MickV's picture

It was obvious from the beginning that Obama was part of the Cloward Piven strategy of the Marxist Alinskyites to overload and crash the system, in order to rebuild it in their image. They break things in order to fix things---- duh (never let a good crisis go to waste).

The NWO Central bankers have muscelled in a domestic enemy foreign Usurper SPECIFICALLY to effect the dissolution of US sovereignty and its Constitution. Some here seem to think Obama is just another puppet, but they are wrong. GW is only a steam vent that dances around the real issue--- the Usurpation of the Presidency. Mass awareness of that fact is the first step in fighting back and reclaiming the Republic.

Obama was born British, of a British subject father--- no matter where birth occurred--- and as such is not a natural born Citizen and not eligible for the office. He is a clear and manifest domestic enemy of the Republic. That doesn't matter?????!!!!

 

SPEAK THE WHOLE TRUTH GW (or are you just a cog in the wheel)

Tue, 02/26/2013 - 06:34 | 3276879 Mediocritas
Mediocritas's picture

The government (as a whole) doesn't even care if spending is wasteful (I assure you that many individual government employees do and are pissed off about it, I used to be one of them).

Banks say "spend", captured governments say "how much?" The amount is dictated by the size of the private sector implosion (credit bubble collapse). All the Keynesian economists in Treasury care about is that spending occurs at all, thereby keeping velocity up and boosting the GDP number for the quarter. Doesn't matter if it's good spending or bad, GDP and velocity don't discriminate because they're flawed metrics.

I've worked for the government, I understand why government spending is often so terribly wasteful. The people who are on the coal face and know what they're doing, don't make the spending decisions. They're usually not even consulted. Spending decisions come from a small number of very disconnected people at a high level, people who are easily accessed and influenced by lobbyists. Huge amounts of red-tape also inhibit flexibility and innovation leading to massive amounts of money being wasted in administration.

I have a suggestion. If the govt is intent on spending (even though they shouldn't be : let the credit bubble collapse dammit), then how about just NOT making any decisions about where to spend. Instead, leverage many more minds by giving it out to citizens based on how much tax the citizen has paid in the past. This way, corporations that dodge tax will get nothing, honest citizens (and companies) that paid taxes will get some of it back, older taxpayers will get more (because they paid more) thereby helping to cover their health costs and retirement, and welfare scammers will get nothing.

Surely, letting tens of millions of current (and former) proven honest taxpayers (individuals and companies) decide where to allocate spending would be more economically productive than letting a few tens of thousands of government treasurers decide. It can't be worse, can it?

Tue, 02/26/2013 - 09:37 | 3277151 tip e. canoe
tip e. canoe's picture

Instead, leverage many more minds by giving it out to citizens based on how much tax the citizen has paid in the past.

that's actually a genius idea.    someone could actually run a platform on this idea.   seriously.

Tue, 02/26/2013 - 05:20 | 3276856 supermaxedout
supermaxedout's picture

When looking back I get the impression that Obama had really a plan when he came to office in the first time.  He of course realized, that he was a very powerless president at the beginning of his first term.  He was not part of the club and his role was to serve as a puppet of the real powerful people.

But at that time I had no idea that the president of the US was a puppet. I thought what is he doing? Or better why he is not doing anything to improve the catastrophic situation. Not to mention the fact that he was not powerful enough to close down Guantanamo.

The project he pushed forward was health insurance etc. I thought to myself at that time, ok that is important but there are many other much more urgent topics he should deal with.

But over time I think I understood why he prefered the project improving the  most pressing problem of the lower midle class. Which is financial catastrophy caused by sickness of a family member. He did it in my opinion for two reasons: First it secures him the votes of this population group especially the Hispanics which play an ever growing role in the elections. And second, this project for the lower middle class is necessary to have an alternative to the gigantic military budget.

In other words the people have a choice now. To reduce federal spending is unavoidable. Whether in the military budget or social security is the choice now. Bbefore there was the nothing the lower middle class was personally interested in. The military is interesting them a shit but they are highly interested in themes like affordable health insurance for everybody.    Ok, both sectors need public funding but the difference is, that a Dollar spent in the military produces much lesser jobs and tax revenues compared to a Dollar spent in a health care system.

So it looks like Obama had a great plan. I realized this in full, when Obama killed Osama Bin Laden (or whoever that old sick man was in Pakistan). For obvious reasons it was necessary that Osama had to be killed in order to take revenge for 9.11. Osama was the only popular reason why the US military is still operating in AfPak. So now he is dead, so now the boys can come home and AfPak can do whatever it wants. The US has other existential problems than AfPak to care for.

Last reason (but there are many others) why I believe that a new age has started. Obama won the internal fight within the Secret Services, Police and the Armed Forces. The hawkish Hitlary was stopped a day before to attend a meeting in Morocco of the "Friends of Syria" in early December 2012.  At this meeting the Brits (Cameron and Hague)  and their willing US helpers (opposition to Obama) had drummed-up many, many nations (all controlled or influenced by them) to build a front against Syria (which would have meant against Russia, China, Iran and others).  But then the unexpected happened Hitlary got headache and cancelled her attendance in Moroco. In other words the US simply didn't show up.  What a desaster, what a showdown. More or less at the same time in the US some top ranking military leaders stepped down out of a sudden. These occurings are a clear indicator that there was and is a fight for the real power in the US going on. 

And now the sequestartion comes and all hell breaks loose eventually. However, I have now a much better opinion from Obama. It looks that he is now really in power.  I wish him success in the transformation of the US from a fascistic military state to a civil society. Hopefully the evil forces in the US do not kill him. That would be the worst case not only for the US but for the world

Tue, 02/26/2013 - 08:17 | 3276974 SmallerGovNow2
SmallerGovNow2's picture

Obummer is a socialist, central planning dictating fool and you are demonstrating that you are as well...

Tue, 02/26/2013 - 08:57 | 3277063 bunnyswanson
bunnyswanson's picture

Barack Obama was hired and promoted to dismantle the USA social structure.  Legal barriers is the only thing stopping the land of the USA turning into a battle field.  Mentally deranged people have it in their mind that what is ours is theirs.  He'll then move to a seat on the UN and vote against intervention to help the US people who are being slaughted by the DHS house by house.

Americans are going to go the way of the Mayans if you people don't stop drinking that water.  (kosher perhaps may be the way to go for now, when you think about it). 

You must find out why no one is feeling alarmed when they may very well be in a position of being a chapter in a history book that is glossed over and deemed a small event in the big picture, done for the good of the children, main stream media is going to control how it plays out but how it really happens is turning each other in, robbing each others houses,

The end justifies the means.  Diabolical little club, elbowing their way into the crowd.  The debt of this country is beyond reckless policy, errors in projections, it is intentional, it has all been intentional. 

UN is going to come to the rescue and never leave.  Americans of all races will be faced with being citizens of bankrupt country with foreign forces on the ground.

You up for this?  It's going to happen if someone does not do something like phone the white house and every congressman and senator and representative to demand an explanation.  Do it simultaneously every hour every day, causing hte phone lines to be so busy, they shut down and never stop. they are the servants in place to prevent this.  They are public servants and must have phone lines.  This is a national emergency goddam it.

http://www.youtube.com/watch?v=VchlFuga-Dk (Michael Coffman PhD on Agenda 21)

http://www.youtube.com/watch?v=9MxMif1tBVk (Nancy Pelosi on Agenda 21)

 

Tue, 02/26/2013 - 07:37 | 3276923 IamtheREALmario
IamtheREALmario's picture

Huh ... can't say that I see any good in Obummer. Obummercare was passed, not so that people would get heathcare. It was passed to make sure the insurance companies, medical equipment manufacturers and drug companies get paid. It is a crony deal designed by insiders.

Syria reminds me of the Spanish Civil War where communists from all over the globe were brought in to fight the government and people.

Obummer has increased the drone strikes and opened overt and cover wars on more fronts. Obummer has not prosecuted one Wall Street fraudster and instead has instituted a series of false flag events designed to make gun owners criminals ... starting with Fast and Furious and most recently Sandy Hook. His agencies have been waging a war against anything that could create independence; small business, healthy food, private land ownership, small farms.

Obummer is a liar and a fraud. He speaks the words people want to hear, but his actions are always different. My guess is that he is still a piddly pawn of the money power that is conquering independent nations so that they can be enslaved by the BIS/central bank/IMF debt.

Tue, 02/26/2013 - 04:35 | 3276825 Tango in the Blight
Tango in the Blight's picture

Too bad you have a populace which doesn't don't give a damn about any of this. They'd only get up in arms if Kim Kardashian's latest show gets cancelled or if their favorite football team loses.

Tue, 02/26/2013 - 03:30 | 3276788 Peter Pan
Peter Pan's picture

When you consider that the yearly cost of the Iraq and Afghanistan wars were costing the equivalent of the yearly GDP of those countries, you come to realise that these wars have nothing to do with terrorists, principals or visions for the future.

The big problem is that too many people now rely on these expenditures for their jobs, profits and meeting expenses and if the rug is pulled from under them, we are going to see another massive hit to a dysfunctional economy.

Once you take into account the "over employment" in the defence area, the over population of the prison system and the massive surge in disability recipients, you then begin to understand how absolutely sick the system and its masters are.

Mon, 02/25/2013 - 23:46 | 3276504 tony bonn
tony bonn's picture

well said george...the fascist wall street imperialist military should be slashed in half....corporate welfare should be slashed 100%.....and some aspects of the welfare system burned....the whining of the welfare queens (ie military, corporations, lobbyists, bureaucrats is disgusting deceit)...

shutting down the cia would save a bundle as would closing of 100% of the foreign military bases including the ones in germany where germany is nothing but a costly colony of the usa.....

Mon, 02/25/2013 - 23:21 | 3276441 tip e. canoe
tip e. canoe's picture

A DOD and Department of Agriculture co-produced reality cooking show called “Grill It Safe

anyone watch Kitchen Nightmares?   i say we get Gordon Ramsay up in that motherfucker and clean house.

https://www.youtube.com/watch?v=La973SAyEeM

Mon, 02/25/2013 - 23:02 | 3276389 ejblues
ejblues's picture

I believe every organization (government, religious, private enterprises, etc), bar none, over time, becomes inefficient, wasteful, corrupt, mismanaged, excessively politically motivated, inwardly focused, on and on and on. Every bad attribute you can imagine/list. Only the final discipline of death through bankruptcy or revolution puts them through the necessary restructuring processes. For private for profit enterprises, there is (was) a free market to bring on that discipline (however, that has also virtually been wiped out, too .. a la , the big banks, but that is another problem). Historically, for government there seems to be no method other than recolution to bring on that process.

Government organizations (and those industires that are essentially government regulated/managed/owned industries ... including the military, education, health care are hopelessly corrupt and inefficent and overdue for major restructuring, primarily through cost reduction. Religious institutions are also hopelessly overdue for major restructuring (a la the Catholic Church), again, another story. I believe , the above mentioned institutions are so inefficent that they could easily take 25% cost reductions without even the slightest reudction in services; in fact, a 20% reduction might even improve their productivity and improve services.

The only question is ... how and when is this going to happen? Looks to me like we are in a long long long wait.

Mon, 02/25/2013 - 22:49 | 3276344 thewayitis
thewayitis's picture

It will cost more to get the fucking fraud and waste fixed. The added government manpower alone would cost Millions....

Tue, 02/26/2013 - 08:21 | 3276983 SmallerGovNow2
SmallerGovNow2's picture

Eliminate the programs and the fraud and waste is gone, problem fixed...

Mon, 02/25/2013 - 22:32 | 3276282 SillySalesmanQu...
SillySalesmanQuestion's picture

Thans for the great post GW. It says it all, all that has transpired over the last 5-6 years, and explains very succinctly why we are in this shitshow the goverment has created with magic pixie dust, fairy farts and flying unicorns shitting skittles.

Tue, 02/26/2013 - 08:23 | 3276986 SmallerGovNow2
SmallerGovNow2's picture

Thanks for the great post GW but you forgot the solution, return to the constitution.  There, fixed it for you...

Mon, 02/25/2013 - 22:17 | 3276246 Cabreado
Cabreado's picture

You were too nice, but, Bravo anyway.

Mon, 02/25/2013 - 22:16 | 3276238 Mark Noonan
Mark Noonan's picture

I believe you are being unfair tothe GOP when you claim that the GOP wants military spending to stay where it is - the main reason the sequester will happen is because the GOP is ok with the defense cuts.  GOPers would prefer to do it a different way, but everyone understands that Defense is, as far as that goes, just like any other Department - shot through with waste and fraud.  The bottom line is that a Defense Department which was entirely concerned with national defense would be able to provide us with a military instrument larger and stronger than we now have for less cost - we just haven't had anyone go in to Defense with the will or the guts to do it (the lesson in history in this is from "Jackie" Fisher in the Royal Navy in the first decade of the 20th century - as First Sea Lord he presided over reduced Navy spending and vastly more powerful British fleet). And if you're thinking Hagel is the man, think again:  he's not in any way equipped to differentiate between what is waste and what is necessary in Defense.

 

 

Tue, 02/26/2013 - 01:39 | 3276698 a growing concern
a growing concern's picture

They never thought it would actually come to pass.  You can't even talk about reducing the rate of budget expansion for the military unless you're a terrist, you know?

Mon, 02/25/2013 - 21:55 | 3276168 Bicycle Repairman
Bicycle Repairman's picture

A great article and I'll get right to the important question:

"Did Jesus die for Klingons too?”

Yes.  And no.

Mon, 02/25/2013 - 22:16 | 3276242 knukles
knukles's picture

If there is truly a God, is he sane?

Tue, 02/26/2013 - 09:39 | 3277161 Bicycle Repairman
Bicycle Repairman's picture

Yes.  And no.

Mon, 02/25/2013 - 21:53 | 3276160 tip e. canoe
tip e. canoe's picture
The Sequestration Debate Misses the REAL Issue

of course it does, G-Dub.   THAT'S THE POINT.

Mon, 02/25/2013 - 21:51 | 3276155 knukles
knukles's picture

As I've mentioned here before, many years ago the Congressional Budget Office made a fairly broad reaching analysis of Federal Expenditures and concluded that approximately 30% of the monies spent could only be properly characterized as fraud and theft.

30%

That's unacceptable.
As roughly 50% of every dollar spent is borrowed, and 30% of every dollar spent is pure waste, by simply cleaning up the illegal activities and waste, the deficit could be cut by 60% with no ill effects!

And people want to tax and spend more?

Fuck that attitude.

Mon, 02/25/2013 - 22:01 | 3276184 George Washington
George Washington's picture

Link, PLEASE ...

Tue, 02/26/2013 - 00:04 | 3276542 Uber Vandal
Uber Vandal's picture

I think this comes close to what knukles spoke of, from 11 years ago.....

https://mises.org/freemarket_detail.aspx?control=395

 

Tue, 02/26/2013 - 08:10 | 3276964 nmewn
nmewn's picture

Excellent post.

"The federal government practices what it calls “baseline budgeting,” whereby federal agencies announce that they wish to increase their budgets by, say, 10 percent a year, and if they only increase them by 5 percent that is called a 5 percent budget “cut.” There can be no better example of accounting fraud than calling a budget increase a cut.

The General Accounting Office, Congressional Budget Office, and other federal agencies also use “static analysis” when analyzing and reporting to the public on tax policy changes. That is, they assume that taxation has no effect whatsoever on economic behavior. So, if we have a $10 trillion economy, and impose a flat 75-percent income tax, these “authoritative” sources will announce that the IRS expects to collect $7.5 trillion in revenues, each year, ignoring several hundred years of economic theory and practice."

So there we have it. In two short paragraphs.

The difference between statists who believe in the perpetual growth of government at any cost and the reality of normal people being forced to pay for it.

Mon, 02/25/2013 - 22:19 | 3276251 Mark Noonan
Mark Noonan's picture

I dobut we could get to an exact figure without an audit - but my guesstimate is that about half of all government spending is waste, fraud or grossly inflated through mismanagement (we see again and again cases where something which should cost X to do ends up costing 2X by the time government gets done - the extra price being the various kickbacks and bribes government passes around). 

Mon, 02/25/2013 - 22:10 | 3276219 knukles
knukles's picture

Jeeez, George, I clearly remember the factoid but have no immediate remembrance of where or exactly when, except was a while ago.
Was also one of those newsies that came and went in a flash as if "somebody" didn't wish it to be seen.
I simply do not have a reference or link, sorry.

Mon, 02/25/2013 - 22:11 | 3276225 George Washington
George Washington's picture

Okay, thanks ...

Mon, 02/25/2013 - 22:30 | 3276272 nmewn
nmewn's picture

I distinctly remember Sherriff Joe saying there will be 10% waste in stimulus as "cost of doing business". This article (like knukles I'm past boring down rabbit holes on the intertubes to find it) confirms the waste statement.

"We know some of this money is going to be wasted," Biden said during a roundtable discussion in New York with business leaders aimed at promoting the two-year stimulus plan.

 

The package was approved by the Democratic-led Congress in February over the objections of most Republicans, who were concerned about the potential for wasteful spending and because it will add billions of dollars to U.S. deficit spending."

"There are going to be mistakes made," said Biden. "Some people are being scammed already."

 

"Our credibility depends on transparency" for how taxpayers dollars are used, he added."

http://www.reuters.com/article/2009/06/02/us-usa-biden-transparency-idUSTRE5516HE20090602

If my recollection is right and its 10% of 787 billion that's pretty damned close to the hysteria surrounding the "sequester". If knukles figure is right its a helluva lot more.

Point is, they were perfectly willing to allow/accept fraud & abuse as a consequence of their action, just a cost of "doing business", it is admitted. There will be ZERO fraud & abuse in NOT spending "tax payer" dollars in a sequester situation.

Mon, 02/25/2013 - 22:43 | 3276316 DaveyJones
DaveyJones's picture

"they were perfectly willing to allow/accept fraud & abuse as a consequence of their action"

you mean they have another purpose in life? 

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