The Mohair subsidy. The AmTrak subsidy. The Ready to Learn TV Program subsidy. What all of these federal subsidies (and scores more) have in common is that they are on the specific list of federal programs that Republicans are proposing to eliminate to cut the debt and preserve America’s fiscal integrity.

Hey, with the U. S. national debt increasing by $4.1 billion each day, we are faced with national bankruptcy—which has aroused the Republicans from their lethargy. They will agree to raise the debt ceiling if the politicians will agree to restrain their spending appetite by making specific cuts.

What specific suggestions for cuts has President Obama made? Almost none. It doesn’t count to talk about future savings from possible cuts in national defense, or alleged savings from Obamacare. It’s all in the future, and we don’t know if any of it will happen.

For the president to make no suggested cuts in our bloated federal budget is astonishing. Let’s take the more than $100,000,000 annual subsidy to Amtrak as one example. Amtrak is expensive and inefficient, which is no surprise. The first transcontinental railroads—the Union Pacific and the Central Pacific—were built in the 1860s and they ran about $60 million (in 1869 dollars) in debt in building costs, and both went bankrupt (the Union Pacific several times) before the end of the 1800s. By contrast, the Great Northern Railroad, which went from St. Paul to Seattle was built with no federal subsidies and never went bankrupt. The subsidies to the Union Pacific and Central Pacific made them dependent on the government, and helped lead to their downfall. Thus, if the federal subsidies to transcontinental railroads failed when first tried in the 1800s, why should we be surprised that AmTrak loses money every year now. And what does this tell us about the huge subsidies President Obama has planned for high-speed rail?

Why is the president failing to join the current debate? Why is he offering almost no specific cuts?

(more…)

All across the land, it would seem that there is but one story to be written regardless of the locale – and budget cuts are that story.  For years, rational legislators and commentators have warned American voters, and those legislators that have thrown economics to the wind, that spending beyond our means will lead to government meltdowns – and so it is today.

Here in California, during the recent State of the State by California Governor Jerry Brown – remarkable only for its brevity – Brown demanded more tax increases to “solve” the State’s now perennial budget crisis.  In doing so, he decried politics as usual but demanded policies as usual.  California has become the tax and spend capitol of the world (outside of Washington DC) and its budget next year will feature a $7.65 billion in debt repayment alone – more than it spends on public universities and more than the overall budget of 21 states.  By comparison, Wisconsin’s $137 million deficit seems quaint compared to California’s $20 billion+ deficit.

Brown also falsely claimed in his State of the State that no one was giving ideas on where else to cut and that if Republicans (and voters) didn’t go along with his tax hikes, he would cut deeper into education.  Brown didn’t offer to cut the state bureaucracy – he threatened to cut education funding – as Democrats are wont to do in order to scare voters.

(more…)

Once again Democrats with the help of a few soft minded Republicans have passed a massive spending bill to help keep state and local governments from having to make the tough decisions it will take to balance their budgets.

According to the Associated Press:

The $26 billion measure would help states ease their severe budget problems and – advocates said – stop the layoffs of nearly 300,000 teachers, firefighters, police and other public employees.

Where have we seen this before? Oh yeah… the Stimulus Bill. Remember that massive spending program that was supposed to stimulate the economy and create jobs? But what it mostly did was plug holes in state and local government budgets.

For example, in California stimulus spending was reported to have saved around 100,000 jobs. But a closer analysis found that 90% of those were government jobs; this at a time when the Golden State has actually increased the number of government jobs.

The sad part is that because the funding was for only one year, many of those jobs are on the chopping block this year. Not so fast! Here come the liberals to the rescue.

(more…)

From the New York Post:

You know the old saying: “Everyone loves a charade.” Well, it seems that the Census Bureau may be playing games.

Last week, one of the millions of workers hired by Census 2010 to parade around the country counting Americans blew the whistle on some statistical tricks.

The worker, Naomi Cohn, told The Post that she was hired and fired a number of times by Census. Each time she was hired back, it seems, Census was able to report the creation of a new job to the Labor Department.

Below, I have a couple more readers who worked for Census 2010 and have tales to tell.

But first, this much we know.

Each month Census gives Labor a figure on the number of workers it has hired. That figure goes into the closely followed monthly employment report Labor provides. For the past two months the hiring by Census has made up a good portion of the new jobs.

Labor doesn’t check the Census hiring figure or whether the jobs are actually new or recycled. It considers a new job to have been created if someone is hired to work at least one hour a month.

(more…)

Based on the Recovery.gov data, more than two third of the 594,754.3 jobs “created or saved” with the stimulus funds were “created or saved” in the Department of Education (see chart).  Basically, what the administration meant by shovel ready projects was funding for your next door teacher.

Now, let’s recap some of findings and news of the previous weeks.

1. Most jobs are created in the Department of Education

2. In 2009, for the first time ever, more public-sector employees (7.9 million) belonged to a union than did private-sector employees (7.4 million) despite there being five times more wage and salary workers in the private sector.

3. A third of all union jobs are in Education

4. 33 percent of the education industry is unionized

5.  The union boss, Andy Stern, was appointed to be on the president’s debt commission.

It all makes sense, doesn’t it?

(more…)

Last week, the Huffington Post (here) was all over this  new study showing that low-income workers got hit more severely during the recession than high-income workers (low-income workers suffer an over 30 percent unemployment rate, workers making about $138,000, only a 3.2 percent.)

The data in this study, which turned out to be quite misleading, certainly makes for nice populist headlines. But it is hiding the true debate that we should be having. And that’s not that low-skill workers are vulnerable to recession (duh) but that public-sector employees still have jobs and private employees don’t.

Look at the data:

In this chart, I compare seasonally adjusted unemployment rates across segments of the economy, dividing these segments using the super-categories designated by the Bureau of Labor Statistics. The chart compares the unemployment rates in January of 2009 (blue) with the unemployment rates in these same sectors a year later (yellow). (FYI, the difference would be even more dramatic if I had used not seasonally adjusted data)

In both years, the unemployment rate within the government has been small relative to the level of unemployment within the entire economy, and particularly so relative to the private sector.   In the course of a year, government employment has decreased by 296,000 jobs to 4.3% unemployment; during the same period, employment in the private, non-agricultural, sector has decreased by 2.3 million jobs to 11.1%. (And if you look at not seasonally adjusted unemployment data, the lose of private jobs reached 3.1 million and the lose of public jobs is roughly 70,000. That’s quite a gap.)

(more…)

As bad as Ebenezer Scrooge was, at least he didn’t fire Bob Cratchit right before Christmas.  I can’t say the same for the St. Louis Dept of Health.  Animal Control Officer, Keith Gladney was fired on December 23^rd, less than 48 hours before Christmas Day.

Regular readers of Big Government will recognize the sur name of this unfortunate soul who finds himself unemployed just as the holidays are upon us.  Yes, Keith Gladney is the brother of Kenneth Gladney, the man who was assaulted by leaders of the St. Louis SEIU outside of Rep. Russ Carnahan’s Town Hall for Health Care on August 6, 2009.

Considering the fact that government work seems to be the only growth industry in this economy Keith probably thought he was in a stable job, serving diligently for the Animal Control agency, a division of the St. Louis Dept. of Health.  And, considering he was just given a positive job performance rating as recently as October, it must have come as a heartbreaking shock to learn of this Dickensian turn of events just he was preparing for his Christmas.

So, what changed between September and today?  What could have been the reason for Mr. Gladney’s termination? (more…)

On Friday, in the name of holy transparency, the White House released the list of jobs created or saved with the stimulus funds. Now, let’s assume that the government can create jobs even though it can’t. Let’s assume that “job saved” is not the lamest excuse for government spending I have heard in my life time as a budget analyst. And let’s look at what this data means.

The White House claims that 640,329 were created or saved. That, by the way, is way less than what Christina Romer claimed would be created. Last week, she mentioned 1.4 million during a Joint Committee hearing. Remember.

First, $159 billion has been spent so far. That’s $248,273 per job.

However, when you look at some specific contracts that were awarded you find that some jobs were created or saved at an insane cost to taxpayers. For instance, $1,359,633,501 were awarded to CH2M WG IDAHO LLC, in WA to create 2,183 jobs. That’s $622,827 per job. That’s not as bad though as the  $258,646,800 awarded to the Brookhaven Science Associates, LLC in NY, to create 25 jobs. That’s over $10.3 million per job.

I would be happy with one of these jobs.

(more…)