FatCratz

Your record-breaking government

Congratulations! You have just notched another record... deficit.

April's deficit for the federal government was the largest ever on record for that month, $82.7 billion. Or, as we like to say around here at FatCratz, $82,700,000,000.00. 

Last year's deficit for April was only $20 billion, and forecasts for this year were for $30 billion. But the folks at club fed blew that mark out of the water.

April is usually a good month for the folks at the Treasury. Something to do with millions of Americans cutting checks to the Fed by the Ides of April to avoid penalties. But this April, remittances were down. Almost 10% of us are out of work (17.1% by the more comprehensive count), and it seems that unemployment benefits don't generate the same level of income tax revenue as salaries. 

And other records are set to fall. In the first seven months of the fiscal year we are $799.7 billion in the hole, and we are still on track to beat last year's record deficit of $1,400,000,000,000.00. The Obama administration is projecting a 2010 deficit of $1.56 trillion, though it's unclear whether they've set that mark high so they can claim to have created or saved a surplus on their projection.

Gotta love the Post:

The trillion-dollar-plus deficits are being driven by the effects of the recession, which has cut government tax revenue while driving up spending.

It seems that elected officials have nothing to do with spending.

Guess What Country Has Balanced It's Budget For the Last Ten Years

Canada.

Believe it or not, our neighbor to the north has been far more fiscally sound than the U.S. for over a decade. And they're balancing the books by cutting spending, not increasing taxes. Personal taxes are equal to the US; corporate tax rates are far lower than ours.

Check out these charts. The numbers are staggering.

The key statistic? Only 41% of all government spending in Canada occurs at the federal level. In the U.S. it is 62% and growing. The further one gets from the taxpayers--literally and metaphorically--the easier it is to spend their money without accountability.

Debt Day

As of Sunday, the federal government is spending more money for this fiscal year's operations than it is taking in. In other words, from now until September 30th, we'll be adding (at least) $9.7 billion to our  debt each day.

That's over over five months out of the fiscal year of spending money we don't have.

Of course, we're told such deficit spending is the key to getting out of a recession. But it's our tax money, and one must wonder whether we'd have gotten more bang for our buck had we been allowed to spend it ourselves.

I Want That Job

We all have a little FatCrat in us... Who, after all, if offered this job, could turn it down:

The Education Department will eliminate a Bush-era "education policy attaché" based in Paris -- the one in France -- whose annual salary, housing allowance and business expenses exceed $630,000.

The good news is that the position is being cut. The bad news is that it existed in the first place.

Bureaucrats can't be trusted to be frugal with other people's money. Not because they are evil, but because they are human. It's not a question of additional review or accountability or systems. It's the question of the inherent logic of the public expenditure. Bigger budgets are a sign of bureaucratic success, and the Department of Education has gone from $14 billion in 1980 to as much as $100 billion in this decade. Even if you correct for inflation and population growth, more than double.

The good news in this article is that it seems someone at the Washington Post is reading FatCratz (see our earlier post):

The Department of Homeland Security has started buying its supplies in bulk and -- to the surprise and delight of bureaucrats -- discovered it's much cheaper that way.

We'll take that as a complement, though it could also mean our humor is so obvious that even the Post can come up with it on their own. At least we beat them to it.

Memo to FatCratz: Buying in Bulk Saves Money!

Often, in the alternate universe that is the government workplace, solutions are more instructive than the problems they seek to address.

President Obama's first cabinet meeting focused on cutting $100 million* from the budget, resulting in the announcement that the Department of Homeland Security can save $52 million over five years by purchasing office supplies in bulk.

Buying in bulk saves money? This is truly groundbreaking news. I imagine once this gets out the retail industry will be transformed by massive stores selling 136 rolls of toilet paper in a single giant package. Think of the money Americans of every sort will save.

Seriously, though, were they getting their printer paper a ream at a time at the corner CVS? This is progress in the war on government waste?

*or about 15 minutes worth of government activity at the FY10 proposed spend rate of $9.7 billion/day.

$9,700,000,000 Per Day

Or the equivalent of 4,409,090 Toyota Priuses. That's what our federal government spends per day [per next year's budget target].

In three days, the U.S. Government could buy a year's worth of cars (13.2 million vehicles sold domestically last year).

Or, just continue on as business as usual.

Pigs Are Flying

Citizens Against Government Waste released their 2009 Pig Book today. It makes for delightful reading as you lick the stamp on your tax return.

Many legislators make a valiant defense of pork as the preferable way to spend taxpayers money. After all, either duly elected representatives decide what to spend money on, or unelected career civil servants. Why not the former?

The simplest answer to this line of reasoning is that rather than deciding the most prudent expenditure of limited resources, a committee of 535 is far more likely to defer the hard decisions and keep expanding the pie... and to guarantee that individual slices of that pie go to narrow, local interests. Such as:

$71,000 by Rep. Nydia Valezquez (D-N.Y.) for Dance Theater
Etcetera in Brooklyn for its Tolerance through Arts initiative. One
of the group’s ongoing projects is Angels and Accordions, which
according to its website is, “A site-specific performance/walking
tour of Green-Wood Cemetery... A cast of 30 angels, 10 accordions and a
classical music ensemble guide visitors through Brooklyn’s
historic Green-Wood Cemetery.”

$380,000 by Senate appropriator Lisa Murkowski (R-Alaska) for
construction of a recreation and fairgrounds area in Kotzebue.
That works out to $123.30 for each of Kotzebue’s 3,082 residents.
Perhaps the town should have used the approximately $350,000 it
spent on lobbying since 2000 for the fairgrounds, saving federal
taxpayers a bundle.

Of course, there are the usual billions of dollars in defense spending aggressively brought home to specific districts, but FatCratz has a soft spot in its heart for the small, boutique earmarks. Somehow, they capture the absurdity of the federal budgeting process.

More End-of-Budget-Year Follies

Remember, budgeted dollars in a government office are typically "use it or lose it." If you have money left at the end of the year, you have to spend it. Ergo:

I was working at XYZ when the end of the budget year rolled around. My computer had already been upgraded to a flat panel screen, but two additional ones were delivered to my work station. They were stored under my desk, and never used, at least not while I was there. I finally figured out this was because they had extra money to spend at the end of the year.

Imagine if you ran your household budget like this. After topping up at the gas station, you'd have to hose a few extra gallons of gas on the sidewalk. And then you'd go to the grocery store and buy a few extra gallons of milk, even if they wouldn't fit in your fridge. And then you'd buy a few extra pair of shoes, just to keep under your bed.

Because there is no mechanism to save, ever, the incentives are the exact opposite of real life. The less you spend, the less you get to spend in the future. The more you spend, the more you're given to spend in the future.

And we wonder why government spending is out of control.

FatCratz are on the Hill

For those of you outside the beltway, it is a very bad thing for a FatCrat to come in under budget. Money left unspent is not "saved," in the sense that the FatCrat can spend it next year. If it's left on the table, it's lost, or, in some instances, if it can be carried over, it still moves your budget baseline lower for the following year. Whoever sets the budget--Congress, OMB, agency or division heads--will presume you don't need as much money the following year to do the same work.

As a result, one of the rites of fall is end-of-fiscal-year budget blowout. If you got it, spend it.

I of course have many, but one I remember is at the end of the fiscal year when we had a lot of left over money in our budget the Congressman I was working for had us buy new T.V.'s, new DVD players, ridiculous amounts of office supplies, and office decor just to use up the money. None of this was needed and in fact we had just bought new t.v.'s the year before!

This is bad enough, but I'd love some better examples of this. I'm sure they exist. Or perhaps you know some tricks of the trade for funneling these dollars around so they can be spent later. That would be both entertaining, and helpful for other budget officers come the end of this fiscal year. FatCratz will face some major challenges spending all their appropriated money this year.

Note, importantly, that this example comes from the Hill. Hill staffers like to think of themselves as the watchdogs, but whose watching them? We are.