The world’s economic leaders have finished up their G20 summit in which they together decided to do different things for their economies. Europe will cut spending, while the US will increase spending. Of course the US will only keep spending if the public supports such a measure. Mounting pressure due to negative attitudes towards government spending has made the mid-term campaigns of incumbent democrats more difficult. Tea-baggers and fiscal conservatives may yet take back some of the House and Senate and put a stop to spending.
And it’s no wonder, the government sucks not only at spending money, but collecting it too. Case in point: the IRS. I feel sorry for the IRS. I’ll be it’s a madhouse every time Congress is in session. No doubt they’ll pass another tax break or increase that makes their job that much harder. The homebuyer tax credit apparently made their job really hard. More than $27 million in fraudulent claims were filed in 2008 alone. People taking the homebuyer credits included people in jail for life, and people that bought their homes before the credit was available. On top of that, more than 10,000 people claimed credits for homes that someone else already got the credit for. In one instance, 67 people claimed the same house. Even IRS employees were found to have made fraudulent claims on the homebuyer credit.I don’t blame the IRS for not catching these. I blame Congress for making the code so complicated that the IRS could never catch all the frauds, even with double the budget, resources, and agents.
If that weren’t bad enough, the government really sucks at spending money too. I won’t go into too many details, but the Heritage Foundation found dozens of great examples of poor spending choices by our government. Here’s another link in a slideshow format. I don’t agree that all of these were wasteful, and acknowledge that some are taken out of context; but some of these look really bad are were the result of porked bills and poor planning. Here are some of my favorites:
- $123 billion was wasted annually over the last 5 years on projects that didn’t benefit the intended parties
- Almost half of all government credit card purchases are improper or fraudulent. Including gambling, mortgage payments, $167/person meals for USPS employees
- Former House speaker Dennis Hastert collects $40k/month for work expenses, despite being employed today as a lobbyist
- Some federal employees refuse to fly coach, costing us $100+million a year in upgrades
- DOD wasted $100 million on unused flight tickets when they were refundable
Admittedly, these were cherry-picked. However there is no way a private sector employee would get away with such things. They have controls in place to catch wasteful spending. Sure stuff slips through the cracks, but nonetheless our government has not fostered an atmosphere where employees realize they’re spending OUR money when they do such things. There is no feeling of guilt here.
Now in full disclosure, the Heritage Foundation is a conservative thinktank. But much of this spending has happened on conservative watch and Hastert himself is a Republican. I think they, like me, really have a problem with wasteful government spending. This is why I’m concerned about the government’s ability to actually stimulate our economy. Sure they can spend money, they do it better than you or I could ever hope to. But if the money isn’t spent properly and strategically, it won’t help anyone. So until the government can figure out how to spend and collect money, I suggest they take a back seat.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
