Government Waste

Government WasteGovernment Waste• Notable Quotes:

By the continuing process of inflation, government can confiscate secretly and unobserved the wealth of its citizens. There is no more subtle way to overturn the existence of a society than to debauch the currency. It engages all the processes of economic law that comes down on the side of destruction in a manner that not one person in a million can diagnose. --- John Maynard Keynes

Government WasteGovernment Waste

• Notable Quotes:Notable Quotes:A Democracy can last only as long and until a A Democracy can last only as long and until a majority of the people discover they can vote majority of the people discover they can vote themselves largess or large gifts out of the themselves largess or large gifts out of the public treasury and then they will continue to public treasury and then they will continue to elect politicians promising the most. And the elect politicians promising the most. And the end result will be a fall of that democracy due end result will be a fall of that democracy due to economic ruin and chaos. -- Alfred Fraser to economic ruin and chaos. -- Alfred Fraser TylerTyler


• Notable Quotes:Notable Quotes:

I place economy among the first and most I place economy among the first and most important virtues and public debt as the greatest important virtues and public debt as the greatest of dangers. We must make our choice between of dangers. We must make our choice between economy and liberty, or profusion and servitude. economy and liberty, or profusion and servitude. If we can prevent the government from wasting If we can prevent the government from wasting the labors of the people under the pretense of the labors of the people under the pretense of caring for them, they (the people) will be happy.caring for them, they (the people) will be happy.

--- Thomas Jefferson--- Thomas Jefferson

Government WasteGovernment Waste• Experience should teach us to be most on our Experience should teach us to be most on our

guard to protect liberty when the government’s guard to protect liberty when the government’s purposes are beneficent. Men born to freedom purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty are naturally alert to repel invasion of their liberty by evil minded rulers. The greatest dangers to by evil minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding. zeal, well-meaning but without understanding.

--- Louis D. Brandeis--- Louis D. Brandeis

U.S. Supreme Court JusticeU.S. Supreme Court Justice

Government ControlsGovernment Controls

• In November, 1994, OSHA Regulators In November, 1994, OSHA Regulators ordered a Kansas City bank to install a Braille ordered a Kansas City bank to install a Braille keypad at a cost of $5,000, on its drive-keypad at a cost of $5,000, on its drive-through automatic teller machine.through automatic teller machine.

• A Boise, Idaho plumbing company was fined A Boise, Idaho plumbing company was fined $7,875 when company workers rescued a $7,875 when company workers rescued a fellow worker. They did not shore up the fellow worker. They did not shore up the collapsed trench or don hard hats before collapsed trench or don hard hats before pulling the worker to safety.pulling the worker to safety.

Government ControlsGovernment Controls• Thousands of regulations mandate how we Thousands of regulations mandate how we

conduct virtually every aspect of our lives. conduct virtually every aspect of our lives. The code of Federal regulations totals The code of Federal regulations totals 131,803 pages. Conservative estimates 131,803 pages. Conservative estimates put regulatory compliance costs in excess put regulatory compliance costs in excess of of

$500 Billion and is expected to rise to $900 $500 Billion and is expected to rise to $900 Billion by the year 2000Billion by the year 2000..

Source: Tax Action Analysis, Economic Scorecard (Second Quarter 1996)Source: Tax Action Analysis, Economic Scorecard (Second Quarter 1996)

Cost of Government DayCost of Government Day

• The Cost of Government Day:The Cost of Government Day: is the day of is the day of the year on which the average American has the year on which the average American has earned enough in gross income to pay off all earned enough in gross income to pay off all his/her direct and hidden taxes (total federal, his/her direct and hidden taxes (total federal, state, and local government spending plus state, and local government spending plus the costs of regulation). This year, the costs of regulation). This year, the Cost the Cost of Government Dayof Government Day is on July 3rd. The is on July 3rd. The average American spends more time working average American spends more time working for the government than for themself.for the government than for themself.

The Cost of Government DayThe Cost of Government Day• The following breakdown gives us the real cost of The following breakdown gives us the real cost of

Government:Government:

1. Your Own Time: 181.4 Days (49%)1. Your Own Time: 181.4 Days (49%)

2. State, Local Tax & Regulations: 51.2 Days2. State, Local Tax & Regulations: 51.2 Days

(14%).(14%).

3. Federal Regulations: 40.3 Days (11%).3. Federal Regulations: 40.3 Days (11%).

4. S.S./Medicare: 31.4 Days (9%).4. S.S./Medicare: 31.4 Days (9%).

5. Other Federal Programs: 32.1 Days (9%).5. Other Federal Programs: 32.1 Days (9%).

6. National Defense: 15.5 Days (4%).6. National Defense: 15.5 Days (4%).

7. Interest on National Debt: 14.1 Days (4%).7. Interest on National Debt: 14.1 Days (4%).

Source: Source: Newsletter of the Institute for Policy Innovation Newsletter of the Institute for Policy Innovation (May/June 1996)(May/June 1996)

Government Waste Examples:Government Waste Examples:

• Health and Human ServicesHealth and Human Services

- A four year drug study on sexual - A four year drug study on sexual behavior which included studying how behavior which included studying how horses masturbate. Cost: $200,000.horses masturbate. Cost: $200,000.

- An eight year study wherein quail were - An eight year study wherein quail were castrated as a part of the research of castrated as a part of the research of sexual behavior. Cost: $333,000.sexual behavior. Cost: $333,000.


• Health and Human Services:Health and Human Services:

- A four year study of the nasal cavities of male - A four year study of the nasal cavities of male hamsters during intercourse. Cost:hamsters during intercourse. Cost:

$200,000.$200,000.

- A thirteen year study in which rats were given - A thirteen year study in which rats were given hallucinogens such as LSD to see how they react hallucinogens such as LSD to see how they react when “startled.” Cost:when “startled.” Cost:

$1,200,000$1,200,000..Source: Coalition: National Foundation for Effectivee Treatment Programs and Source: Coalition: National Foundation for Effectivee Treatment Programs and Citizens Commission on Human RightsCitizens Commission on Human Rights


• $1 million for brown tree snake research, a reptile found $1 million for brown tree snake research, a reptile found only in Guam that is not life threatening to humans.only in Guam that is not life threatening to humans.

• $15 million for research and development of electric $15 million for research and development of electric automibiles, on top of $75 million Congress has spent on automibiles, on top of $75 million Congress has spent on electric car research over the past two years.electric car research over the past two years.

• $9.7 million for the Jacksonville (Florida) Automatic $9.7 million for the Jacksonville (Florida) Automatic Skyway Express extension project that one Skyway Express extension project that one Transportation Department official says has turned into Transportation Department official says has turned into an expensive “amusement ride.”an expensive “amusement ride.”

• $1.2 million in research funds for the potato industry $1.2 million in research funds for the potato industry even though USDA requested no funds for it.even though USDA requested no funds for it.


• $395,000 For Rice Modeling at the Universities of $395,000 For Rice Modeling at the Universities of Arkansas and Missouri. Uncle Ben and not Uncle Arkansas and Missouri. Uncle Ben and not Uncle Sam should be funding this research.Sam should be funding this research.

• $3 million for shrimp aquaculture in Hawaii, $3 million for shrimp aquaculture in Hawaii, Massachusetts, Mississippi and South Carolina.Massachusetts, Mississippi and South Carolina.

• $3.7 million for wood utilization research in six states $3.7 million for wood utilization research in six states on top of the $35 million that has been spent on such on top of the $35 million that has been spent on such R&D since 1985.R&D since 1985.


• Medicare and MedicaidMedicare and Medicaid- In 1997 both programs cost over $550 billion and is - In 1997 both programs cost over $550 billion and is expected to rise at a rate of 20%expected to rise at a rate of 20%

- Medicare, over the last 5 years, has had average - Medicare, over the last 5 years, has had average increases in costs of 13%, three times the rate of increases in costs of 13%, three times the rate of inflation.inflation.

- Medicare covers 35 million people and cost $226 - Medicare covers 35 million people and cost $226 billion in 1997.billion in 1997.

- Doctors fees account for 30% of total costs- Doctors fees account for 30% of total costs

- Fraud accounts for 20-30% of total costs- Fraud accounts for 20-30% of total costs


• Farm Subsidies:Farm Subsidies:There are 2.2 million farmers in the U.S. Half There are 2.2 million farmers in the U.S. Half of them are full-time and less than 500,000 of them are full-time and less than 500,000 run ongoing commercial farms. The 0-92 run ongoing commercial farms. The 0-92 program pays farmers not to work, not to program pays farmers not to work, not to plant. The farmer receives 92% of their plant. The farmer receives 92% of their deficiency. This plan has put 61 million acres deficiency. This plan has put 61 million acres to “sleep” -- the equivalent size of the states to “sleep” -- the equivalent size of the states of Indiana and Ohio. Cost to us: $30 billion.of Indiana and Ohio. Cost to us: $30 billion.

Government WasteGovernment Waste• Milk Subsidies:Milk Subsidies:

In 1983 the dairy farmers received $5 billion in In 1983 the dairy farmers received $5 billion in milksubsidies.milksubsidies.

In 1985 Congress passed the Dairy Termination In 1985 Congress passed the Dairy Termination

Program which paid dairy farmers to kill their Program which paid dairy farmers to kill their cows for a price of $2,000 per head. Average cows for a price of $2,000 per head. Average check to dairy farmers was $128,000. The check to dairy farmers was $128,000. The theory was that this would reduce the supply theory was that this would reduce the supply and eliminate price subsidies.and eliminate price subsidies.


• Milk Subsidies (Continued)Milk Subsidies (Continued)Results: Price of beef dropped and cattlemen lost Results: Price of beef dropped and cattlemen lost

$25 million. The government had to pay out $1.8$25 million. The government had to pay out $1.8

billion more above the subsidies for the termination. billion more above the subsidies for the termination. What happened to milk production?What happened to milk production?

It went up in 1985 from 140 billion pounds to 146It went up in 1985 from 140 billion pounds to 146

billion pounds.billion pounds.

Source: Source: Government Waste from A to ZGovernment Waste from A to Z, by Martin Gross, by Martin Gross

Government WasteGovernment Waste• Farmer Loans:Farmer Loans:

The Farmers Home Administration has a portfolio The Farmers Home Administration has a portfolio of $56 billion. Has doubled in the last 5 years. of $56 billion. Has doubled in the last 5 years. There are 2,200 offices nationwide.There are 2,200 offices nationwide.

This organization writes off about 20% of it’s loans This organization writes off about 20% of it’s loans annually, thus resulting in a cost of over $10 billion. annually, thus resulting in a cost of over $10 billion. Federal aid to the farmer is not a food Federal aid to the farmer is not a food

production project but a giant social program to production project but a giant social program to keep the family farmer on the farm.keep the family farmer on the farm.


• The Social Security Ripoff:The Social Security Ripoff:1. Suppose you began working in 1930 at the 1. Suppose you began working in 1930 at the age age

of 20 and retired in 1975:of 20 and retired in 1975:- Between 1937 and 1949, maximum S.S. tax - Between 1937 and 1949, maximum S.S. tax was $60/year or a total of $780. was $60/year or a total of $780.

- Between 1950 and 1965, maximum S.S. tax - Between 1950 and 1965, maximum S.S. tax was $348/year or a total of $3,432. was $348/year or a total of $3,432.

- Between 1966 and 1975, maximum S.S. tax - Between 1966 and 1975, maximum S.S. tax was $1,649/year of a total of $14,841. was $1,649/year of a total of $14,841.


• Social Security Ripoff (Continued):Social Security Ripoff (Continued):During your lifetime you would have contributed During your lifetime you would have contributed approximately $19,000.approximately $19,000.

- In 1976, your benefit would have been $6,552- In 1976, your benefit would have been $6,552..

- In 1977, your benefit would have been $7,416.- In 1977, your benefit would have been $7,416.

- In 1978, your benefit would have been over - In 1978, your benefit would have been over $8,000.$8,000.

In three years you would have received everything In three years you would have received everything you put in plus more.you put in plus more.


• Social Security Ripoff (Continued):Social Security Ripoff (Continued):2. Ida Fuller, the first Social Security recipient, retired in 2. Ida Fuller, the first Social Security recipient, retired in

1940 after paying a total of $44 in taxes. By the 1940 after paying a total of $44 in taxes. By the time she died in 1975, she had received nearly $21,000 in time she died in 1975, she had received nearly $21,000 in benefits.benefits.

3. The Social Security System is bankrupt. It currently 3. The Social Security System is bankrupt. It currently has $400+ billion in Treasury General Fund IOUs. A has $400+ billion in Treasury General Fund IOUs. A Court decision dating back to 1937 has established that Court decision dating back to 1937 has established that Treasury debts to a government trust fund need not be Treasury debts to a government trust fund need not be honored. honored.


• Social Security Ripoff (Cont.)Social Security Ripoff (Cont.)

4.4. By 2070 the annual flood of red ink from By 2070 the annual flood of red ink from

the S.S. system will be $7 Trillion.the S.S. system will be $7 Trillion.

5. An average 36 year old wage earner today will 5. An average 36 year old wage earner today will receive $52,132 per year when he retires receive $52,132 per year when he retires (couple). The same contributions in a (couple). The same contributions in a private annuity would yield a return of private annuity would yield a return of $58,664 plus the principal at death.$58,664 plus the principal at death.

Source: The National Tax FoundationSource: The National Tax Foundation


• The Social Security Ripoff (continued)The Social Security Ripoff (continued)

6. In 1997 average real income for house-6. In 1997 average real income for house-

holds headed by someone older than 65 was holds headed by someone older than 65 was 27% higher than it was for similar house-27% higher than it was for similar house-

holds in 1980. In contrast, younger holds in 1980. In contrast, younger households gained just 11%.households gained just 11%.

7. Social Security reduces national income 7. Social Security reduces national income by approximately 6%by approximately 6%


• Government Aircraft:Government Aircraft:- 1,200 private airplanes with pilots, airfields, and - 1,200 private airplanes with pilots, airfields, and mechanics. There are 100 different varieties of mechanics. There are 100 different varieties of aircraft. Purpose: to fly government executives of aircraft. Purpose: to fly government executives of various departments around the country. Cost of the various departments around the country. Cost of the aircraft was $2 billion, depreciation of $200 million aircraft was $2 billion, depreciation of $200 million per year, annual upkeep of $800 million. In addition, per year, annual upkeep of $800 million. In addition, government agencies lease another 5,000 planes at government agencies lease another 5,000 planes at a cost of $100 million per year.a cost of $100 million per year.


• The 89th Government Airlift Wing:The 89th Government Airlift Wing:The 89th transports government bureaucrats, The 89th transports government bureaucrats, congressmen, senators, military brass free of charge. congressmen, senators, military brass free of charge. This includes the Presidents two 747 flying palaces, This includes the Presidents two 747 flying palaces, which cost taxpayers which cost taxpayers

$410 million. The 89th has 6,000 employees taking $410 million. The 89th has 6,000 employees taking care of 25 planes plus 19 helicopters. The planes care of 25 planes plus 19 helicopters. The planes make only 800 flights per year. Without Airforce Ones, make only 800 flights per year. Without Airforce Ones, the cost of the planes plus depreciation is over a half the cost of the planes plus depreciation is over a half billion dollars per year. Cost per flight is $25,000 per billion dollars per year. Cost per flight is $25,000 per person, per flight.person, per flight.

Government Waste

• The Great Frigate Giveaway:The Great Frigate Giveaway:During the first six months of 1996, the Pentagon gave away During the first six months of 1996, the Pentagon gave away four more Navy frigates - 2 to Turkey and one to Egypt and one four more Navy frigates - 2 to Turkey and one to Egypt and one to Bahrain. The ships are valued at $104 to $140 million each. to Bahrain. The ships are valued at $104 to $140 million each. It’s business as usual at the Pentagon. Since 1990, the It’s business as usual at the Pentagon. Since 1990, the Pentagon has given $7 billion in “excess” military equipment Pentagon has given $7 billion in “excess” military equipment away - including 39 frigates, 5 guided missile destroyers and 13 away - including 39 frigates, 5 guided missile destroyers and 13 tank landing ships. It’s considered cheaper to give it away than tank landing ships. It’s considered cheaper to give it away than to store or scrap it. These ships can and likely will be used to store or scrap it. These ships can and likely will be used against American service personnel in the next Persian Gulf against American service personnel in the next Persian Gulf crisis.crisis.


• Shadow Government Consultants:Shadow Government Consultants:1. Consultants are hired by all major government 1. Consultants are hired by all major government departments at a cost of $1,000 per day.departments at a cost of $1,000 per day.

2. While the government agencies have 15,000 2. While the government agencies have 15,000 full-time lawyers on payroll it still uses enormous full-time lawyers on payroll it still uses enormous amounts of $150-200 an hour legal help.amounts of $150-200 an hour legal help.

3. Total cost for consultants is around $20 billion 3. Total cost for consultants is around $20 billion per year.per year.

Government Waste-PensionsGovernment Waste-Pensions

• The Hastings Keith CaseThe Hastings Keith CaseKeith retired from Congress in the early 1970’s. He currently gets Keith retired from Congress in the early 1970’s. He currently gets

four federal pension payments that total more than $115,000.four federal pension payments that total more than $115,000.– $73,896 from his congressional pension$73,896 from his congressional pension– $17,103 from a military pension (5 years active duty + $17,103 from a military pension (5 years active duty +

reserves)reserves)

– $14,748 from social security$14,748 from social security– $9,630 from a CIA widower’s pension$9,630 from a CIA widower’s pension

*Federal pension funds presently have an *Federal pension funds presently have an unfunded liability of more than $500 billion unfunded liability of more than $500 billion that will have to be paid by us “just us.”that will have to be paid by us “just us.”

They Know Where You Are: IRSThey Know Where You Are: IRS

• The IRS is using records obtained from other federal The IRS is using records obtained from other federal agencies, state and local authorities, private agencies, state and local authorities, private organizations, and the media to compile profiles of organizations, and the media to compile profiles of individual taxpayers.individual taxpayers.

• Every time you fill in any kind of form, a request for a Every time you fill in any kind of form, a request for a bank loan, a cable-TV application, anything you put bank loan, a cable-TV application, anything you put your S.S. number on you send personal information your S.S. number on you send personal information about yourself to the IRS.about yourself to the IRS.

• Information about your credit history, what you eat, the Information about your credit history, what you eat, the type of car you drive is already contained in dozens of type of car you drive is already contained in dozens of databases scattered throughout cyberspace.databases scattered throughout cyberspace.

They Know Where You Are: IRSThey Know Where You Are: IRS

• By consolidating the sources and making them available By consolidating the sources and making them available online to agents across the country on a need-to-know online to agents across the country on a need-to-know basis, the IRS hopes to upgrade its search engine from basis, the IRS hopes to upgrade its search engine from the level of a tricycle to that of a Ferrari.the level of a tricycle to that of a Ferrari.

• Such intelligence is normally brought to bear upon one’s Such intelligence is normally brought to bear upon one’s enemies, not friends, taxpayers, and citizens.enemies, not friends, taxpayers, and citizens.

• The IRS will use the information “exempt from The IRS will use the information “exempt from notification.” That means that the IRS needs no notification.” That means that the IRS needs no permission to acquire the information, and, even if the permission to acquire the information, and, even if the information is incorrect, they need not correct it.information is incorrect, they need not correct it.

Source: New York Post, October 16, 1995.Source: New York Post, October 16, 1995.

GreenerGreener and and Cleaner Cleaner All the All the TimeTime

• Nearly all objective measures show the U.S. Nearly all objective measures show the U.S. environment is improvingenvironment is improving

• Air Quality:Air Quality:

-Carbon monoxide emissions have dropped 14.9% since the U.S. -Carbon monoxide emissions have dropped 14.9% since the U.S. began measuring in 1974.began measuring in 1974.

-Nitrogen dioxides have dropped 33.8% since 1975.-Nitrogen dioxides have dropped 33.8% since 1975.

-Volatile Organic Compounds (VOCs) that form smog-Volatile Organic Compounds (VOCs) that form smog

have dropped 24.4% since 1970.have dropped 24.4% since 1970.

-Sulfur dioxide in the air has been reduced by 54.5%-Sulfur dioxide in the air has been reduced by 54.5%

since 1970.since 1970.

-Lead emissions have dropped by 97% since 1970.-Lead emissions have dropped by 97% since 1970.

GreenerGreener andand Cleaner Cleaner

• Water Quality: Water Quality: – Water quality has improved by over 27% Water quality has improved by over 27%

since the first earth day in 1974.since the first earth day in 1974.

• Land Use:Land Use:– Each year, new growth of U.S. timber, by volume, Each year, new growth of U.S. timber, by volume,

has far exceeded harvest since 1980. Currently, has far exceeded harvest since 1980. Currently, timber harvest represents only 60% of new growth. timber harvest represents only 60% of new growth. Soil erosion due to farming is also slowing in the Soil erosion due to farming is also slowing in the U.S. Yearly soil loss has dropped by almost 25% U.S. Yearly soil loss has dropped by almost 25% since 1982.since 1982.

Greener Greener andand Cleaner Cleaner• Toxic Chemicals:Toxic Chemicals:

– According to the EPA, the release of toxic chemicals According to the EPA, the release of toxic chemicals by industry has dropped by 34% since 1988.by industry has dropped by 34% since 1988.

– There is still concern about the number of species There is still concern about the number of species listed as threatened or endangered since 1980. listed as threatened or endangered since 1980. There are more than 800 plants and animal species There are more than 800 plants and animal species on these lists. Question: Would one not expect this on these lists. Question: Would one not expect this if evolution is true. Only the strong survive in a if evolution is true. Only the strong survive in a Darwinian world. So what’s the big deal?Darwinian world. So what’s the big deal?

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Government Waste