Massive government subsidies to Amazon.com and other internet retailers

This piece in the WSJ explains how the government has gotten around regulations put in place to stop them from unfairly competing against private companies.

A Citigroup analysis finds each box [Amazon ships] gets a $1.46 subsidy. It’s like a gift card from Uncle Sam. . . . 

Other companies, such as UPS and FedEx , compete with the Postal Service to deliver packages. Lawmakers, to their credit, wanted a level playing field between the post office and its private competitors. The 2006 Postal Accountability and Enhancement Act made it illegal for the Postal Service to price parcel delivery below its cost.  

But with a networked business using shared buildings and employees, calculating cost can be devilishly subjective. When our postal worker delivers 10 letters and one box to our home, how should we allocate the cost of her time, her truck, and the sorting network and systems that support her? What if the letter-to-box ratio changes? 

In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.

For years Amazon and other companies that sold over the internet didn't pay sales taxes.  Here is a National Conference of State Legislatures report in 2014.

Main Streets all across America are looking to Washington to close a loophole that gives online-only retailers an unfair advantage over their Main Street competitors. 

This unfair advantage costs local communities jobs and tax revenue and creates significant unfairness in the marketplace for businesses and consumers alike. 

NCSL advocates for passage of e-fairness legislation because it levels the playing field for local businesses, which are the economic backbones of our communities that provide employment and tax revenue to fund vital services. As sales taxes account for over a third of revenues for most states, including over half of tax collections for six states, the inability to collect taxes that are legally owed constrains states’ options to reform their tax code elsewhere. This includes lowering tax rates or requiring states to raise certain tax rates to fund necessary government services. 

How Did We Get Here?Two Supreme Court rulings (Bellas Hess and Quill) cite concern that collecting sales tax for multiple states would be too difficult. As it is now, the Supreme Court ruled that states can only require retailers to collect state taxes in territories where they have offices or stores. 

How Is it Affecting States?States lost an estimated $23.3 billion in 2012 from being prohibited from collecting sales tax from online and catalog purchases. With nearly every state still facing budget shortfalls, this revenue could help fund police, school teachers and other much-needed programs. . . .

Are public libraries obsolete?

Philadelphia spends about $50 million per year on public libraries (much more if you count the rental value of the land that they are on).  Lake County Florida (discussed below) apparently spends about $1.1 million on their public library system.  From the Orlando Sentinel:

Chuck Finley appears to be a voracious reader, having checked out 2,361 books at the East Lake County Library in a nine-month period this year. 

But Finley didn't read a single one of the books, ranging from "Cannery Row" by John Steinbeck to a kids book called "Why Do My Ears Pop?" by Ann Fullick. That's because Finley isn't real. 

The fictional character was concocted by two employees at the library, complete with a false address and drivers license number. . . . 

The goal behind the creation of "Chuck Finley" was to make sure certain books stayed on the shelves — books that aren't used for a long period can be discarded and removed from the library system. 

 George Dore, the library's branch supervisor who was put on administrative leave for his part in the episode, said he wanted to avoid having to later repurchase books purged from the shelf. He said the same thing is being done at other libraries, too. . . . 

the Lake County library system receive a percentage of their funding based on circulation levels. . . .

It will be interesting to see what the true usage rate is for books at public libraries.  Only then could we determine if public libraries in their current form make sense.  Possibly public libraries might just end up being some computers set up for people to look at.

Obama administration scrapped 16 aircraft that cost US taxpayers $500 million for $32,000, apparently didn't consider alternative

From Reuters:

A U.S. government watchdog agency is asking the Air Force to explain why it decided to destroy 16 aircraft initially bought for the Afgan air force and turn them into $32,000 of scrap metal instead of finding other ways to salvage nearly $500 million in U.S. funds spent on the program. 

John Sopko, special inspector general for Afghanistan reconstruction, asked Air Force Secretary Deborah James to document all decisions made about the destruction of the 16 C-27J aircraft that were stored at Kabul International Airport for years . . . 

"I am concerned that the officials responsible for planning and executing the scrapping of the planes may not have considered other possible alternatives in order to salvage taxpayer dollars." Sopko said in a letter to James that was dated Oct. 3 and released Thursday by his office. 

Sopko also asked if any other parts of the planes had been sold before they were destroyed by the Defense Logistics Agency. 

Sopko's office has been investigating the matter since December 2013 after numerous non-profit groups and military officials raised questions about funds wasted on the planes. . . .

Your tax dollars at work: US Forest Service spends money telling us how to roast marshmallows and what we should be eating on those camping trips

Can't people look up on the internet how to roast marshmallows?  Yes, they can.  Indeed, posts exist that even have pictures to show you how to do it.  In case you didn't know it, you can find out how to roast marshmallows over a candle or a toaster oven or a regular oven.  But in case all the many posts aren't enough for you or you can't find enough information on what we should be eating, the Obama administration has decided it should spend our tax dollars on writing up things such as this:

Now, let’s get to the marshmallow basics. Use a roasting stick of at least 30 inches in length. The degree a marshmallow is roasted runs the gamut, from the barely cooked, light caramel-colored outer layer to the flaming marshmallow that contains a gooey interior wrapped by a crispy, blackened shell. From there, most people graduate to s’mores and rarely move on. 

But there are some innovative ways to roast the little white treats that can help cut down on the amount of sugar intake by the kids, thus making bedtime a little more doable.
Think fruit. 

Even if the kids – including us older ones – insist on more traditional s’mores, there are some healthy tricks. Grill thin slices of pineapple and substitute chocolate for the sweet, warm fruit. You will still get a tasty treat but by substituting with fruit, it is healthier – as long as you watch the amount of marshmallows used. If you want to cut down even more on calories, try using slices of angel food cake instead of graham crackers. 

You can also get a little inventive and move away from s’mores. 

Grab a small bag of chocolate or peanut butter chips – or a combination of the two. Take a banana and slice one side open, exposing the fruit but leaving the peel intact. Slice the banana, add a few chocolate chips then top with tiny marshmallows. Or substitute the chips for blueberries from the local farmer’s market. Place the banana in aluminum foil and wrap tightly. Place the foil-wrapped fruit next to but not on the flames. Wait five to 10 minutes or enough time for the chips and marshmallows to melt. Open and enjoy with a spoon. . . .

Obama administration can't account for how $619 billion was spent

Even by the Federal government standards, not being able to account for $619 billion is a lot of money.  From Fox News:

The Obama administration failed to properly account for how it spent nearly $619 billion, according to a watchdog audit of the main federal website meant to track where taxpayer money is going. 

The report from the Government Accountability Office picked apart the website USASpending.gov, and the agencies feeding information to it. 

The database of government spending and contracts was created out of a 2006 transparency law, but the GAO found it continues to have serious problems. The Department of Health and Human Services was the worst offender, during the 2012 period GAO examined. 

“Although agencies generally reported information for contracts to USASpending.gov, they did not properly report information on assistance awards, totaling nearly $619 billion,” the GAO reported. . . .

Last year Government gave $100B to people likely not entitled to receive them, congress thinks that the waste is greater

So much for Obama controlling waste and fraud.  From Politico:

By its own estimate, the government made about $100 billion in payments last year to people who may not have been entitled to receive them — tax credits to families that didn’t qualify, unemployment benefits to people who had jobs and medical payments for treatments that might not have been necessary. 

Congressional investigators say the figure could be even higher. 

The Obama administration has reduced the amount of improper payments since they peaked in 2010. Still, estimates from federal agencies show that some are wasting big money at a time when Congress is squeezing agency budgets and looking to save more. 

“Nobody knows exactly how much taxpayer money is wasted through improper payments, but the federal government’s own astounding estimate is more than half a trillion dollars over the past five years,” said Rep. John Mica, R-Fla. “The fact is, improper payments are staggeringly high in programs designed to help those most in need — children, seniors and low-income families.” . . .

With all the corruption and unnecessary deaths in the Veterans Administration hospitals, it is interesting to see who has touted it as the big success story

With even the Obama administration admitting that 27 veterans have died because of the waiting list scam, Democrats even having a hard time with the VA now.  But a few years ago, while these problems were festering, liberals were pointing to the VA as the example that we should all follow.  As to the Obama administration's explanation On Sunday’s “Meet the Press,” NBC News chief Pentagon reporter Jim Miklaszewski claimed, “You have a VA that is overwhelmed and under-resourced,” John Merline points out that was incorrect. 

Paul Krugman in 2011 wrote of the VA’s “huge success story”:

Multiple surveys have found the VHA providing better care than most Americans receive, even as the agency has held cost increases well below those facing Medicare and private insurers…the VHA is an integrated system, which provides health care as well as paying for it. So it’s free from the perverse incentives created when doctors and hospitals profit from expensive tests and procedures, whether or not those procedures actually make medical sense. . . . Yes, this is ‘socialized medicine’… But it works, and suggests what it will take to solve the troubles of US health care more broadly. . . .

Nicholas Kristof of the Times wrote in 2009:

Take the hospital system run by the Department of Veterans Affairs, the largest integrated health system in the United States. It is fully government run, much more “socialized medicine” than is Canadian health care with its private doctors and hospitals. And the system for veterans is by all accounts one of the best-performing and most cost-effectiveelements in the American medical establishment. . . .

Uwe Reinhardt of Princeton wrote in the pages of the Times:

Remarkably, Americans of all political stripes have long reserved for our veterans the purest form of socialized medicine, the vast health system operated by the U.S. Department of Veterans Affairs (generally known as the V.A. health system). If socialized medicine is as bad as so many on this side of the Atlantic claim, why have both political parties ruling this land deemed socialized medicine the best health system for military veterans? Or do they just not care about them?  . . .

Ironically, President Obama now explains that the current problems are nothing surprising, with the VA’s issues go back years:

[A]ll of us, whether here in Washington or all across the country, have to stay focused on the larger mission, which is upholding our sacred trust to all of our veterans, bringing the VA system into the 21st century, which is not an easy task….  caring for our veterans is not an issue that popped up in recent weeks. Some of the problems with respect to how veterans are able to access the benefits that they've earned, that's not a new issue.  . . .

Click to make the screen shot from the website from when Obama was president-elect larger.

"Obama family 'costs taxpayers $1.4BILLION per year'," Even Obama's dog costs over $100,000 a year, expenses exploited for political ends

Could Obama cut government costs by setting an example and trimming his own waste?  From the UK Daily Mail:

. . . Barack Obama and his family cost the taxpayer $1.4billion per year, according to a recently published book. 

By contrast, the British Royal Family costs less than $60million each year. . . .  

Two of the principal costs of the the Obama presidency - and any other presidency - are staffing and security, according to Robert Keith Gray's book Presidential Perks Gone Royal. 

When it comes to keeping the First Family safe, few would dispute that it is worth paying a high price to keep the President safe from harm. . . . 

Moreover, much of the money spent on Mr Obama's family goes to perks such as entertainment and household expenses. 

For example, the White House contains a movie theatre which is manned by projectionists 24 hours a day in case one of the family feels like a trip to the cinema. . . . .

Obama EPA head doesn't fire employee who stole $900,000 from government

From Politico:

The former senior EPA adviser who stole $900,000 from taxpayers while posing as a CIA agent pleaded the Fifth on Tuesday morning — shortly before House members expressed outrage upon learning that he’s still due to get his government pension. . . . 

Both Republicans and Democrats on the panel called themselves dumbfounded by the news. 

“Still month after month the American taxpayers are going to pay” Beale, said Rep. Jason Chaffetz (R-Utah). He said he wants to see EPA Administrator Gina McCarthy come before the committee to answer for why she didn’t immediately fire Beale after becoming aware that he was receiving unearned bonuses and had stayed on the payroll even after holding a retirement party. 

“What does it take to actually get fired in this federal government?” Chaffetz railed. . . .

Why did congress pass a bill giving $174,000 to deceased senator's widow?

Can't members of congress get their own life insurance if they want it?  In addition, with Lautenberg already being worth over $57 million and being 89 years of age, it is doubtful that he would have thought that purchasing such insurance would be worthwhile.  But why should taxpayers come up with this payment?  From The Hill newspaper:

The short-term spending bill passed by the House today includes a $174,000 payment to the widow of former Sen. Frank Lautenberg (D-N.J.), who died in June at the age of 89. 

Notwithstanding any other provision of this joint resolution, there is appropriated for payment to Bonnie Englebardt Lautenberg, widow of Frank R. Lautenberg, late a Senator from New Jersey, $174,000," the resolution states in Section 134. 

Citizens for Responsibility and Ethics in Washington (CREW) highlighted the inclusion of the language in a Friday post on its website, which asked why Congress would be "throwing money at a multimillionaire." 

CREW said Lautenberg's assets were estimated to exceed $57 million in 2011. "How is this a top funding priority?" the group asked. . . .

Is California's $70 billion high-speed train obsolete before it is even built? A colossal waste of money?

With California and US taxpayers on the hook for $70 billion to build a train across the state starting this year, Elon Musk might have already made it a waste of money.  The government would have a slower, more costly way of moving people that few would want to use.  Musk isn't promising to make this system operate, but he is arguing that it could be done.  From Bloomberg Businessweek:

Almost a year after Elon Musk, chief executive of Tesla Motors (TSLA) and SpaceX, first floated the idea of a superfast mode of transportation, he has finally revealed the details: a solar-powered, city-to-city elevated transit system that could take passengers and cars from Los Angeles to San Francisco in 30 minutes. In typical Musk fashion, the Hyperloop, as he calls it, immediately poses a challenge to the status quo—in this case, California’s $70 billion high-speed train that has been knocked by Musk and others as too expensive, too slow, and too impractical. 

In Musk’s vision, the Hyperloop would transport people via aluminum pods enclosed inside of steel tubes. He describes the design as looking like a shotgun with the tubes running side by side for most of the journey and closing the loop at either end. These tubes would be mounted on columns 50 to 100 yards apart, and the pods inside would travel up to 800 miles per hour. Some of this Musk has hinted at before; he now adds that pods could ferry cars as well as people. “You just drive on, and the pod departs,” Musk toldBloomberg Businessweek in his first interview about the Hyperloop. . . .

Massive Obamaphone fraud continues

Here is one reporter for National Review who received three different Obamaphones, essentially tripling the telephone time that she receives free from taxpayers

Confession: You’re paying my phone bill. 

In the past month, I have received three shiny new cell phones, courtesy of American taxpayers, that should never have fallen into my hands. 

The Federal Communications Commission oversees the so-called Lifeline program, created in 1984 to make sure impoverished Americans had telephone service available to call their moms, bosses, and 911. In 2008, the FCC expanded the program to offer subsidized cell-phone service, and since then, the expenses of running the program have soared. In 2012, the program’s costs had risen to $2.189 billion, up from $822 million before wireless carriers were included. As of June, there were 13.8 million active Lifeline subscriptions. . . .

Here is a story from MSN Money:

The so-called Obamaphone project has a noble goal to help low-income Americans pay for mobile phones, allowing them to have contact numbers for job interviews or to access emergency services.  

But now conservative activist James O'Keefe is alleging that the program is prone to fraud. Undercover cameras taped salespeople telling applicants for phones under the Federal Communications Commissions' Lifeline program that once they get a device, they can do whatever they want with it, including selling it.  

One employee at a Stand Up wireless location in Philadelphia looked the other way when an undercover actor said he was going to sell the phone for heroin. "Hey, I don't judge," the employee said.  

At another location, a saleswoman in an outdoor tent operated by Stand Up Wireless told an actor to take the phone to a pawn shop to find out its worth. One undercover actress told a salesperson at a TerraCom store that she wants to sell the phone to buy an "awesome pair of shoes." . . . 

Up until recently those applying for the plan weren't even asked to show that they were eligible.  From the WSJ:

Until last year, FCC rules didn't require carriers to certify to the FCC that subscribers were eligible. Consumers could self-certify, and in many states documentation wasn't required. 

Carriers said many of the disqualified subscribers simply didn't reply when asked to prove their eligibility. They also said the FCC rules on self-certification, and the absence of a national database of participants, made it hard to keep ineligible people from signing up. 

The FCC said it is investigating allegations that some Lifeline providers violated the rules, though it declined to comment on that probe. Carriers that don't properly confirm eligibility can be fined up to $150,000 for each violation for each day of a continuing violation, up to a maximum of $1.5 million. In egregious cases, a carrier could lose its ability to participate in the program. . . . 

Daily Caller piece: "Obama’s spending failure"

My piece starts this way:

According to President Obama, cutting government spending will “certainly slow our recovery.” Over and over again, he has described the sequester’s threatened $85 billion cut in spending out of a $3.8 trillion budget as “devastating.” But that represents a mere 2 percent cut in spending. Obama frightens people by pretending that the $1 trillion cut takes place right away rather than being spread out over 10 years. 

Sounds like more of the same. During the 2008 presidential campaign, Obama continually promised to “cut net spending” and make government smaller. The stimulus was promised not to “raise projected deficits beyond a short horizon of a year or at most two.” Yet, now during the fifth year of Obama’s presidency, we are told that we can’t cut spending, that we need even more government “investments.” . . .

Massive 41% fraud in government free cell phone program

41% fraud?  And this from the FCC.  Might the real rate be even higher?  From the WSJ:

The U.S. government spent about $2.2 billion last year to provide phones to low-income Americans, but a Wall Street Journal review of the program shows that a large number of those who received the phones haven't proved they are eligible to receive them. 

The Lifeline program—begun in 1984 to ensure that poor people aren't cut off from jobs, families and emergency services—is funded by charges that appear on the monthly bills of every landline and wireless-phone customer. Payouts under the program have shot up from $819 million in 2008, as more wireless carriers have persuaded regulators to let them offer the service. 

Suspecting that many of the new subscribers were ineligible, the Federal Communications Commission tightened the rules last year and required carriers to verify that existing subscribers were eligible. The agency estimated 15% of users would be weeded out, but far more were dropped. 

A review of five top recipients of Lifeline support conducted by the FCC for the Journal showed that 41% of their more than six million subscribers either couldn't demonstrate their eligibility or didn't respond to requests for certification. . . . .

Big surprise: Despite years of subsidies, solar energy industry collapses when subsidies cut

So much for the claim that all the solar energy industry needed as a jump start.  From Fox News:

The solar industry got a huge boost during President Obama's first term when the stimulus package threw billions of dollars in subsidies at solar power companies in hopes of dramatically increasing production. Generation has increased in that time -- but now federal, state and local incentives are being slashed, leading some to conclude the future of solar power in the U.S. is dimming.  

"The fundamental problem is it's not economically sustainable," said Todd Myers of the Washington Policy Center, a think tank in Washington state.  

Federal stimulus incentives have run out and are not being renewed. States are also slashing their solar power subsidies. Oregon recently cut its solar business tax credit by 99 percent. And utilities all over the country are complaining about lost revenue.  . . .  

"Everywhere you go, solar energy requires massive subsidies, which eventually blow a hole in the federal or state budget, and then are dropped," said Myers. "Solar is a bad way to go."

Obama tired of hearing about cutting spending

Remember the numbers about how health insurance premiums for many individuals are soaring under Obamacare?  Or Obama's promises to cut "net government spending"?  Well, how is that working out for you Mr. President?  From the WSJ:

The president's insistence that Washington doesn't have a spending problem, Mr. Boehner says, is predicated on the belief that massive federal deficits stem from what Mr. Obama called "a health-care problem." Mr. Boehner says that after he recovered from his astonishment—"They blame all of the fiscal woes on our health-care system"—he replied: "Clearly we have a health-care problem, which is about to get worse with ObamaCare. But, Mr. President, we have a very serious spending problem." He repeated this message so often, he says, that toward the end of the negotiations, the president became irritated and said: "I'm getting tired of hearing you say that." . . .

Government subsidies keep being thrown away on green investments

Apparently, Delaware and the federal government have a lot of extra money to throw away.  From Fox News:

Delaware taxpayers appear to be getting soaked twice under a deal in which the Democratic governor loaned $21.5 million to a hybrid electric carmaker to set up shop in the state. The company has yet to produce a car in Delaware, and taxpayers are footing the electric bill for the idle plant.  

The deal was enthusiastically announced in 2009 by Gov. Jack Markell and Vice President Biden -- formerly Delaware's senior senator -- as a way to bring as many as 2,500 green jobs to the state. But California-based Fisker Automotive Inc. has since suffered a series of setbacks that have compounded its shaky financial situation.  

"It has not worked out the way he had envisioned," Markell spokeswoman Cathy Rossi acknowledged Monday in a statement to FoxNews.com. "We didn't know and couldn't have known about the underlying technical and financial problems."  

Delaware reportedly has paid at least $400,000 in utility bills since about April, when Fisker halted operations and laid off dozens of workers at the 142-acre, Wilmington-area facility. Markell staffers told The News Journal the payments are part of the grant deal and necessary to at least keep Fisker's small-scale operation on life support. . . . .  

However, in February the U.S. Energy Department stopped disbursements on Fisker's $529 million loan because the company purportedly failed to meet production and sales goals on its electric plug-in sedan, the Karma.  . . .

Remember that in 2008 Obama promised to cut "net government spending," to make government smaller

Remember also that the stimulus was supposed to be temporary?  Will Obama ever return government spending back to where it was when he became president, let alone to where he said it should be when he became president?

And I believe there's further unnecessary spending in government that we can eliminate. But we can't simply cut our way to prosperity. Cutting spending has to go hand in hand with further reforms to our tax code so that the wealthiest corporations and individual can take advantage of loopholes and deductions that aren't available to most Americans and we can't keep cutting things like basic research and new technology and still expect to succeed in the 21st century economy. So we're going to have to continue to move forward in deficit reduction but we have to do it in a balanced way, making sure that we are growing, even as we get a handle on our spending. . . .

What is it with the Obama administration and these extravagant conferences for government bureaucrats?

From The Hill newspaper:

The head of Human Resources for the Veterans Affairs Department resigned after an inspector general’s (IG) report found that the agency spent $6.1 million on two weeklong conferences. 

The 142-page IG report investigated about $762,000 in “unauthorized, unnecessary, and/or wasteful expenses” during two conferences held in Orlando, Fla., that included $49,516 to produce a parody video of the late-Gen. George S. Patton. . . . 

Federal government program to subsidize hiring costs so much to run that states aren't taking the Federal money

Boy, this is a surprise.  A Federal government program is so costly that despite the subsidies states don't want to touch it.  From the WSJ:

Under the federal law, states were invited to submit ideas for "re-employment demonstration projects"—initiatives that motivate companies to hire people who are collecting unemployment checks. The government plans to initially pick 10 winners and reward those states with waivers to federal unemployment-insurance and labor allows, allowing them for the first time to fund programs out of their own unemployment-insurance trust funds. 

But seven months after the federal law was passed—with bipartisan support as part of the tax relief act—many states say they won't apply because they don't have the funding to set up and comply. This situation has surprised some original sponsors and frustrated some employers. . . . 

But Larry Temple, executive director of the Texas Workforce Commission, says the state isn't planning to pursue the program, because the cost has since become clear—hundreds of thousands of dollars, he estimates, compared with $100-per-job seeker it spends now. "We're going to have to shut down our program," Mr. Temple says. "We have run out of money." . . . .