The Washington Post is full of so many stories about government failure these days, it’s hard to keep up.
Today, on page A19 we learn about a Small Business Administration subsidy program that has a 60-percent default rate. On the same page, we learn that the U.S. Postal Service will lose $7 billion this year.
Benjamin Franklin said: “In this world nothing can be said to be certain, except death and taxes.” I would add a third certainty: cost overruns at the Pentagon. The Government Accountability Office recently reported that the Pentagon’s space program is facing multi-billion dollar cost overruns and multi-year delays.
The U.S. Department of Energy recently awarded $2.4 billion in stimulus money to develop and manufacture electric vehicles. The ostensible purpose of the government’s effort is to set the nation on a path toward more environmentally friendly transportation. But as the USA Today notes, electric cars might not provide the environmental benefits that proponents cite:
I haven’t followed the controversies surrounding Valerie Jarrett, a senior advisor to President Obama. However, her tenure as the CEO of a company that received federal money to run a public housing project deserves further scrutiny.
The Washington Examiner reports on projects funded by the economic stimulus package passed earlier this year that most taxpayers will find either dubious or objectionable.
The federal government is running $1 trillion deficits, but that hasn’t slowed down the government’s corporate welfare gravy train. As a microcosm of the business subsidy problem, I happened to notice in an Ohio newspaper that the U.S. Department of Commerce is footing the bill for the Youngstown/Warren Regional Chamber to fund a 16-day junket to China and Taiwan.
A new NBER study from two Harvard economists analyzed substantial fiscal policy changes and the economic consequences in twenty-one OECD countries from 1970-2007. Their findings are at odds with the approach of U.S. policymakers who insist that the government can tax and spend the country back to prosperity.
In a 1997 study, economist Robert Higgs persuasively argued that “the New Deal prolonged the Great Depression by creating an extraordinarily high degree of regime uncertainty in the minds of investors.”
According to a new report from the Federal Reserve Bank of San Francisco, the Federal Housing Administration has “revived” the subprime segment of the housing market. Thanks to FHA lending, “the share of borrowers with FICO credit scores lower than 660 has returned to just higher than 20 percent, the same share as when subprime securitization peaked in 2006.”
Policymakers considering the creation of a health insurance “public option,” or even an expansion of Medicare, should remember that government health programs already wear a bullseye when it comes to fraud and abuse. According to a report on CNN.com, organized crime has found a cash cow in Medicare and Medicaid.
