While there are those who, oblivious of the fastest collapse in US economic data on record [5], have pointed out that government tax receipts are rising with the implication being that the US consumer is doing quite fine thank you (and they are absolutely correct if by "consumer" they mean about 1% of the US population), what is rarely if ever discussed is that government expenditures are rising just as fast.
In fact as the following chart from the latest Treasury refunding presentation shows, the cumulative deficit through December in 2015 is just a fraction greater than last year, when government tax revenues were substantially lower.
[6]
So to understand where Uncle Sam spent all that extra cash it collected through various rising tax increases on the rich here is the full breakdown of the largest outlay categories for the US government in the first fiscal quarter of 2015 and 2014.
[7]
It will hardly come as a surprise that after being neck and neck a year ago with Social Security outlays, the spending on Medicare and Medicaid (HHS) has jumped substantially, and at over $250 billion in the quarter, is now the most cash demanding category courtesy of a demographically deteriorating America that is just a little bit older and whole lot fatter.
The bulk of the other spending categories were largely in line with the prior year, and the one outlier was interest on the debt (Treasury), which jumped to just around $125 billion for the quarter an increase of about 25% from a year ago, which is somewhat unexpected considering the average cost of debt continues to decline even if the total notional amount of US Federal Debt is now in the mid-$18 trillion range.
The one most interesting category was defense spending: a category despised by progressives even though at this rate spending on interest for the progressives' beloved government debt will soon eclipse defense. It is here that outlays actually dropped from a year ago, declining to just over $150 billion for the quarter. Which is surprising, because as Politico [8]wrote overnight, among the items funded by general taxpayer revenue were such discretionary expenses as hookers and blackjack, after a defense department audit founds that Pentagon employees used their government credit cards to gamble and pay for “adult entertainment.”
From Politico [8]:
The audit of “Government Travel Charge Transactions” by the Department of Defense Office of Inspector General, which is to be made public in coming weeks, found that both civilian and military employees used the credit cards at casinos and for escort services and other adult activities — in Las Vegas and Atlantic City.
The audit forgot to add that the employees were either ridiculously brave or dumb as a bag of hammers to assume that charging a hooker on your taxpayer credit card would pass unnoticed.
Actually make that dumb as a bag of hammers, because the expenditures did not just involve swiping you card (in the prostitute's magnetic card reader), but actually submitting the expense for reimbursement. And for the supervisors to figure out that the funds were spent on hookers, it means that the Pentagon lackeys wrote down just that.
A Pentagon official briefed on some of the findings stressed that the federal government did not necessarily pay the charges; holders of the cards pay their own bills and then submit receipts to be reimbursed for expenses related to their government business.
Actually make that really, really dumb, because "the official said that the employees may have used the government cards for gambling and escort services in order to shield the charges from spouses." In other words, if you got caught not only would you get fired, but you would lose half your assets following a very messy divorce.
Those taxpaying Americans wondering if this was a one-off event, will be delighted to know that their taxes are abused pretty much on a constant basis by the government's employees: "the Department of Labor’s Inspector General recently found that Job Corps employees charged nearly $100,000 to the government for hair cuts, clothing, and personal cell phone service. The Department of Homeland Security found that Coast Guard employees charged more than $12,000 at a one California coffee shop alone. Three employees were fired and two resigned last year at the Bureau of Land Management after they charged $800,000 worth of gift cards on their government credit cards."
On the other hand, the Keynesians among us will protest that this is perfectly normal and even legitimate theft: after all, how is the economy expected to grow if corrupt criminals don't spend, spend, spend. Especially if the money isn't theirs to begin with. Those same Keynesians will demand that instead of collecting taxes, the government should merely issue a quadrillion dollars in debt which will be promptly monetized by the Fed, with the proceeds used by every government criminal to hire hookers, do blow, gamble 24/7 and otherwise "boost" the economy.
In fact, that may well describe the Keynesian nirvana: surely it would explain why the real US economy is fast approaching a state of terminal collapse. Which is why expect the trend in declining defense spending not to persist.
As for that last question, whether anyone will be fired, here is the simple answer: of course not,
Because the review was an audit of the credit card system and not an investigation of particular individuals, the official said the likely result will be that the agencies and military branches most affected will be compelled to remind employees that the practice violates policy — and possibly the law. [T]he findings are expected to lead department officials to issue stern new warnings.
Because if criminal banks get away with a wrist slap and a harsh warning by their "regulators", why not criminal government workers?
