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Thread: What is government waste?

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    Default What is government waste?

    What Is Government Waste?

    by Tom Schaller @ 4:05 PM
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    The new ABC/Washington Post poll will undoubtedly get a lot of attention for its findings about health care, Sarah Palin, the Tea Partiers, and whether or not Americans think Republicans should obstruct President Obama's agenda. But there's a little nugget in there--see question #28--that reflects a common and very durable finding about Americans' attitudes toward government spending: They believe that more than half of what the government spends--53 cents was the average answer--is "wasted." More than half!


    Maybe I need to get wasted before I try to unpack what, exactly, the belief that the US government wastes half of all its revenues really means. But before we get to what we don't know, here's what we do know, but I'm embarrassed to admit I had not know about until today: For the past two decades, though increasing slightly, this half-is-waste figure has remained more or less the same, ranging since 1991 between a low of 46 percent and a high of 56 percent in the ABC/Post poll. That means for the past twenty years--including all four combined terms of the Bill Clinton and George W. Bush presidencies and one year into Obama's term--on average Americans believe one dollar out of two raised and spent is wasted. Gallup polling over the same period echoes this finding.

    The possibilities for what makes government "wasteful" are many, but it seems to me waste can be reduced to three non-exclusive types:
    1. Ineffective spending: Spending on programs that do not work;

    2. Inefficient spending: Excessive spending or overhead/overpayment on programs that do work; and/or

    3. Inappropriate spending: Efficient and effective spending on programs that the respondents normatively view as something the government shouldn't be involved with in the first place.
    So, as an example of Type 1 waste, some citizens undoubtedly view certain welfare spending as ineffective because it doesn't eradicate poverty, while others view certain types of defense spending as ineffective because we have weapon systems to defend against threats more imagined than real. As a Type 2 example, even citizens who support welfare or defense spending probably think that red tape, high salaries and pensions and other federal employee benefits, complex billing protocols, duplication of effort, outright fraud (by government officials and/or programmatic beneficiaries) and other bureaucratic problems as inefficient overhead. Type 3 waste might be something that the government does effectively and efficiently, but citizens believe they shouldn't be doing, like subsidizing corporate marketing abroad in the eyes of liberals, or providing services to illegal immigrants for conservatives. Of course, a citizen who believes the government should not be involved in some policy area and thinks what the government spends on that policy isn't doing any good anyway and believes the feds are spending that money inefficiently, might view federal spending as wasteful on all three counts.

    What's infuriating is that pollsters do not plumb a bit deeper to get at the underlying causes behind these views. According to one recent Rasmussen Reports study, high government salaries--Type 2 waste--has something to do with it. But surely Americans can't believe that government waste is simply the result of too many overpaid workers leaning on their shovels or gossiping at the water cooler.

    I don't know about randomly-selected Americans, but I do know that undergraduates in my POLI 100 classes tend to think the government spends more on defense than it does and less on Medicare and Social Security than it does. In surveys, the median American thinks that we spend about 20 percent of the federal budget on foreign aid, and would like that amount reduced to about 10 percent--when, in fact, actual spending amounts to less than one percent. This may explain why some Americans foolishly believe that tort reform will solve our health care cost problem or that eliminating earmarks will eliminate our deficit problem, even though they will not. I know I'm going to sound like an elitist, but the fact of the matter is that most Americans have a very weak grasp of how the government raises revenues and what it spends those monies on.

    Given the misinformation or false perceptions, I think it safe to assume that Americans believe there's not just a lot of Type 2 waste--governments just being inefficient bureaucrats and all that--but a significant amount of Type 1 and Type 3 waste. That is, the believe the feds are doing a bunch of stuff not very well, or doing stuff well it shouldn't be doing at all, like sending more money abroad for foreign aid than it spends at home on Social Security, even though the ratio between OADSI and foreign aid, depending on the estimate, is somewhere between 30-to-1 and 50-to-1. I wish pollsters would ask whether and to what degree spending on Social Security or Medicare payments is wasted.

    And although the share of Americans who think we are spending too much on defense has been rising over the past decade, presumably in response to rising spending levels, I wonder how many Americans would categorize our defense spending as "wasteful." Even though we spend more on defense than all other nations combined--timeout: imagine how quickly Sean Hannity's head would explode if that were true of social spending--I suspect defense and security spending has a certain "inelastic quality" to it and, frankly, it's politically incorrect for respondents to say money spent on defense, and specifically the subset of funds spent directly on troops or veterans, is "wasteful."

    So where's all the "waste" in a federal budget that, in regular economic times, is about two-thirds comprised of Social Security, Medicare, defense and interest payments? I'd really like to know how Americans do the math on that 53 cents. Or maybe, on the other hand, I'm afraid to find out.
    Last edited by FUCK THE POLICE; 02-14-2010 at 12:57 AM.
    "Do not think that I came to bring peace... I did not come to bring peace, but a sword." - Matthew 10:34

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    Here's a follow up:

    Foreign Aid Spending Is Crippling Our Budget...NOT

    by Tom Schaller @ 2:39 PM
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    So I wrote a post yesterday about government waste in which I dared to suggest that some Americans may be confused about just what exactly our federal government spends its money on and in what amounts. I still cannot find any survey results in which Americans are asked to apply actual percentages to actual spending categories. But I have dug up some other, related findings.


    Before proceeding, let's establish some general baselines of actual federal government spending against which to compare what we do know about American perceptions. The above pie chart, taken from Wikipedia, breaks down spending into more than two dozen programs or cabinet agencies. But we can simplify this a bit by collapsing the eight largest chunks/wedges into three main categories:


    1. Welfare for seniors, 34 percent: Social Security and Medicare wedges.
    2. Defense, 22 percent (Defense and Homeland Security).
    3. Welfare for everyone else, 20 percent ( Medicaid, Unemployment Insurance and Health & Human Services.)
    4. Interest, 9 percent (Interest).

    First of all, Americans tend to think we spend too much on what they call "welfare," but which in fact limited mostly to category 3 above--welfare for non-seniors. A Kaiser survey conducted a while back (1995) clearly indicates a high level of suspicion toward "welfare" spending, but when asked to clarify respondents clearly meant programs like food stamps, TANF programs (formerly AFDC), Medicaid and public housing. Indeed, although about 90 percent of Americans viewed housing, AFDC and food stamps as welfare, only 30 percent defined Medicare and just 15 percent deemed Social Security "welfare."

    Of course, citizens pay into SSI and Medicare with their payroll taxes, but there is still a redistributive effect of spending by the government on these programs. Unemployment insurance apparently didn't even make the list, even though today it's about one dollar in every nine the feds spend. In any event, these definitions have meaning when it comes to budget-cutting. According to a Bloomberg poll two months ago, fewer than one in four Americans thinks we should cut Social Security or Medicare, despite the fact that more than a third of the US budget is spent on these two programs alone.

    The Kaiser results further confirm the apparently longstanding belief among Americans that we spend more than we actually do not only on foreign aid, but interest and defense. Though we can't get to actual percentages the way the Kaiser poll asked it, it's clear which parts of the budget Americans think constitute the largest or second-largest spending commitments. About 40 percent of Americans cited two of the following four items as being one of the government's top two expenditures: foreign aid (41%), welfare (40%), interest (40%) and defense (37%). Only if Americans defined welfare as inclusive of Social Security and Medicare would these views be accurate--with welfare thusly combined and defined easily ranking #1, and in which case defense would rank #2.

    But again, that's clearly not how Americans define "welfare," and even if they did it's difficult to explain how foreign aid ranks first. And it's clear that "foreign aid" isn't viewed as the effective function of our defense expenditures, or else defense would rank a lot lower.

    In any case, given the anxiety we hear about constantly in terms of government spending and deficits, how could all that "waste" be eliminated. Remember, with almost no public support for tinkering with Social Security or Medicare--heck, even Republicans are scare-mongering about cuts to Medicare, the fastest-growing federal program--we start with just two-thirds of the budget in play politically. Of that, clearly there is ample political will to cut welfare that's viewed as going to the so-called "undeserving" poor people. (If you want to understand why Americans hate such kinds of welfare, I suggest reading Martin Gilens book that addresses this question squarely: Amazon.com: Why Americans Hate Welfare: Race, Media, and the Politics of Antipoverty Policy (Studies in Communication, Media, and Public Opinion) (9780226293653): Martin Gilens: Books@@AMEPARAM@@http://ecx.images-amazon.com/images/I/419R6SQGBBL.@@AMEPARAM@@419R6SQGBBL.) But since unemployment insurance (to which workers also contribute) did not make the list of referents respondents cited when asked by Kaiser to identify welfare in terms of specific programs, 12 percent of that 20 percent should also be taken out of play, leaving just 8 percent of the budget as the "dastardly" kind of welfare.

    OK, so for the sake of argument, let's say the government immediately ceased payment of all that remaining 8 percent in "welfare" spending. According to the Bloomberg poll, there also seems to be growing frustration with Iraq and Afghanistan war spending, but that only accounts for about $130 billion right now--and that money is "off-budget" anyway. And while we might wish not to pay interest on our outstanding debts, that's simply not an option--and interest payments couldn't be categorized as "waste" anyway because they're simply debt-service. (I suppose there are some administrative costs to paying those debts--what I classified in the previous post as Type 2 waste--but there's basically zero efficiency savings to be found there.)

    So where's the rest of the "waste" that, in Americans' minds, adds up to half of what the government spends? You tell me, because I have no idea. But I do know this much: Given the perception that so much money goes to the so-called "undeserving poor" here at home as well as to foreigners through foreign aid, it's not surprising that people think government spending is wasteful. If half the budget--instead about one-seventh--actually went to such things, I could understand the sentiment.
    "Do not think that I came to bring peace... I did not come to bring peace, but a sword." - Matthew 10:34

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    I think that the average American really needs a much deeper understanding of the federal budget so that they aren't taken in by slimeball politicians offering magical panaceas to all of our fiscal ills. It completely and totally eliminates the possibility of any real solution being implemented.
    Last edited by FUCK THE POLICE; 02-14-2010 at 01:17 AM.
    "Do not think that I came to bring peace... I did not come to bring peace, but a sword." - Matthew 10:34

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    Big Gubmint's continuous growth is not dependent on an educated citizenry.

    Quite the opposite, as you have just shown.

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    The government isn't growing.
    "Do not think that I came to bring peace... I did not come to bring peace, but a sword." - Matthew 10:34

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    Quote Originally Posted by HUGO STIGLITZ View Post
    The government isn't growing.
    yes it is...the government sector has the highest amount of new job growth

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    That represents 4% waste, not 50%.
    "Do not think that I came to bring peace... I did not come to bring peace, but a sword." - Matthew 10:34

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    Quote Originally Posted by Yurt View Post
    yes it is...the government sector has the highest amount of new job growth
    As a long term trend, the federal government hasn't been outstripping the economy in terms of growth.

    State and local governments actually have been growing in size, though.
    "Do not think that I came to bring peace... I did not come to bring peace, but a sword." - Matthew 10:34

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    I think it safe to assume that Americans believe there's not just a lot of Type 2 waste--governments just being inefficient bureaucrats and all that--but a significant amount of Type 1 and Type 3 waste
    why does he assume that type 2 waste is not sufficient to come to the conclusion half is wasted?.......consider the Department of Education....no one is against providing an education for our children, right?......however there have been reports that as much as 40% of the Dept of Education funding never leaves Washington.....rather, it funds pure bureaucracy....none of which serves to advance any child's education.....at that point what's left gets forwarded to the states.....where in the capital it passes through another level of bureaucracy siphoning off another large portion of the funds.......then it arrives at a local school, where part of it is used to generate the forms and paperwork required to justify the existence of the two bureaucracies that burned up the largest portion of the funding......what's left gets spent on what someone in Washington thought might be helpful.......

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    This guy can't find examples of waste in the budget and questions the average guy's understanding? I think people who write such articles need a much deeper understanding of the federal budget.
    Leviticus 19:33 And if a stranger sojourn with thee in your land, ye shall not do him wrong. 34 The stranger that sojourneth with you shall be unto you as the homeborn among you, and thou shalt love him as thyself; for ye were strangers in the land of Egypt: I am the LORD your God.

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