The federal government wants to sell some old buildings and vacant land. This is not a bad idea, so far as it goes. What it is not, though, is a plan for reducing the federal deficit — though in some quarters it has been embraced as such. That is ridiculous.
The proposed Civilian Properties Realignment Commission, modeled on the old Base Realignment and Closure Commission, which was charged with rationalizing our military-installation footprint starting back in the 1980s, would identify underused federal real-estate assets to offload, if buyers could be found. Federal holdings are a mess: George W. Bush was the first modern president to even order an accurate inventory of them to be taken. Federal waste in asset management is of course vast and deep — but neither vast enough nor deep enough to make much of a hole in the deficit if it is redressed. The Obama administration reckons that about $3 billion could be saved in the first year. (The real savings come from avoiding the cost of maintaining the buildings, not in generating revenue from their sale; i.e., these are permanent reductions in spending rather than one-time revenue gains, a fact that is to be celebrated.)
So, $3 billion saved: Cheers to that. In 2011, the federal government is spending about $3 billion every seven hours or so.
I am not opposed to finding efficiencies. Thrift is a great American virtue (or was once). But these sorts of penny-ante projects, which generate a lot of happy talk about belt-tightening and prudence and sobriety as often as not end up being a way to not talk about the serious budget reforms that must be enacted.
Our friends at the Heritage Foundation have identified a larger asset they’d like to see the government liquidate: its gold holdings. These are worth a couple of hundred billion dollars — real money, but still only a few months of this year’s $1.6 trillion deficit. As much as I’m for downsizing Leviathan and doing what it takes to reduce the deficit, I’d advise against selling off the gold: If the United States should ever need to rebuild its currency — say, in the wake of a dollar collapse from hyperinflation resulting from incontinent spending and the monetization of the resulting deficits (Crazy, right?) — some gold might come in handy, particularly since Standard & Poor’s and the big bond investors are not convinced that the “full faith and credit” of the United States is what it once was.
Repeat as necessary: Medicare, Medicaid, Social Security, and national defense is where the spending is. Raising taxes enough to cover that spending and stabilize the debt would mean an 88 percent increase in every federal tax — not just for “the rich,” but for everybody, according to IMF estimates. Raising taxes on the middle class to support Social Security and Medicare for the middle class is a shell game. You may as well just cut the benefits: essentially the same outcome, but more cleanly executed.
You are not going to balance the budget on tax hikes only on people you do not like. You are not going to balance the budget on pulling out of Afghanistan (wise as that might be) or on eliminating foreign aid (desirable as that is) or on shuffling Uncle Sam’s real-estate portfolio (prudent though that may be). You are not going to balance the budget on eliminating waste, fraud, and abuse.
There is a caveat to that last one: We spend most of our money (more than half) on entitlements and welfare, and those are rife with abuse. Prof. Malcolm Sparrow of Harvard estimates that net health-care fraud in the United States runs $100 billion to $500 billion a year, with a great deal of that paid out by the federal government. (Miami alone is estimated to account for $3 billion in Medicare fraud annually.) Peter Orszag has estimated that 30 percent of Medicare spending (which totals more than a half-trillion dollars a year) is wasted, largely through overpayment for services. Sen. Orrin Hatch has put combined Medicare-Medicaid fraud at $200 billion a year. For comparison, the Iraq War cost $140 billion in its most expensive year.
Getting a hold on entitlement fraud is not going to balance the budget, either, not alone, but it will do a heck of a lot more than a federal garage sale — and it’s something that should be done even if we were running a surplus.
—Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, published by Regnery. You can buy an autographed copy through National Review Online here.
Let's do it! It's time to bite the bullet before the bullet bites us. Trim everything across the board, everything. Cut back on the number of federal employees and make them pay into their retirement fund, and raise the age for their retirement (I don't know what that is right now -- it might be the same as the private sector.) Make welfare harder to get (including Medicaid). Cut food stamps back. Raise the retirement age for Social Security and raise the age to qualify for Medicare. I'll be affected, but why shouldn't I be affected? Aren't we supposed to pull together to save the country for our children? This is our battle. Our parents saved the world for democracy during World War II. It's our turn, and we don't have to fight a war to do it. (At least I hope we don't.) Keep up the good work, Mr. Williamson. We need this cold water of reality splashed in our faces.
Reply to this commentLinkReport AbuseI agree and disagree with this post. First and foremost, we must get the huge entitlement problem under control. Based on my specific family history, my grandparents and parents have averaged over 12 years years of receiving SS benefits (still counting). Based on my earnings and projected benefits, I would begin using house money after about 6-7 years of being in the system. While that is OK for me, it is not a sustainable system for our Country. We have to start now to get this mess under control. This is the elephant in the room and I do not see an easy fix. Everyone under 55 is going to have to get a haircut of some type. I for one, do not view my SS benefits as my old-age pension. Unfortunately, most people do. This is the fault of the pol's and the media. There has been absolutely no honesty on the part of these people.
We also need to look at the real estate holdings of our gov't. As pointed out, the real savings for us there is the long-term costs that are eliminated. Our gov't. holds millions of acres of forests, grazing lands, buildings and so forth. Has anyone ever done an analysis of what kind of return we are getting on those holdings? My bet is probably around 2-3%. For any real estate developer that would be a huge failure. I realize that we will never completely get the gov't. out of this business, but we need to have a little more accountability on this front. If BRAC is good enough for the military, why not the rest of the Feds?
Reply to this commentLinkReport AbuseWell said, Kevin.
It has taken decades to get our debt to the point that it is at. It will take decades to dig ourselves out.
However, we will never do so until we realize that EVERYONE has to feel some pain in order to get us back to fiscal health. You cannot just target one or two aspects of the nation (decided by age, wealth, political view or industry) and decide that THEY are the only ones who will pay for our excesses. Everyone needs to lose some benefit and pay a bit more to dig us out.
Cheers,
Reply to this commentLinkReport AbuseI want to live in a country in which old people have their health care paid for by taxes (unless they're rich old people, in which case they can take care of themselves). I want to live in a country in which poor people have their health care paid for by taxes. I want to live in a country in which old people get a modest government pension paid for by taxes (unless they're rich, in which case they can fend for themselves).
I think most Americans agree with me and will vote to tax everyone in order to produce the desired result. For those who don't agree with the majority, it will feel like coercion.
Reply to this commentLinkReport AbuseGee, if the federal gov't wasn't the 3rd party payer of Medicare and Medicaid wouldn't that drastically lessen the amount of money that taxpayers would have to cough up every year to cover 'waste, fraud and abuse'? Hmm, I wonder if anyone has ever thought of that? I wonder if anyone has ever thought through what happens when you have a system in which a 3rd party makes payments for services used by others?
Reply to this commentLinkReport AbuseDeborah,
Federal employees already pay into their retirement system. link External Link
MikeB,
Reply to this commentLinkReport AbuseLets stipulate that all those things you want are indeed good things, do you really think we are providing them in the most efficient way? How would you define 'rich'? How would you define 'poor'?
Kevin W.-- truth teller. But, a polite truth teller. Let's be honesy... Soc Sec and Medicare are Ponzi Schemes, even moronic DC Pols must have known that for the last 47 years-- the Pols are frauds, no better than Madoff. Medicaid has become the inner city Dem Pol substitute for outright welfare. Dept. of Def is a vital national service-- and everyone loves our 1M+ servicemen and women-- BUT, the post 9/11 explosion in Defense spending has to be rolled back significantly. Keep telling it like it is Mr. W, these giant spending programs have to be cut hard and fast-- otherwise national bankruptcy is the result. The Dems don't like cutting spending? Let's see how progressive Pols like bankruptcy.
Reply to this commentLinkReport AbuseTom, good question.
1. What percentage of waste, fraud and abuse is a result of (i) "upcoding" and (ii) unnecessary services?
2. What costs more: (i) an army of public bureaucrats administering health care payments or (ii) an army of private bureaucrats administering health care payments plus an army of advertisers competing for your buck?
I don't know the answers to these questions, but I suspect no one here knows them either.
Reply to this commentLinkReport AbuseMikeB:
Delta's ready when you are.
Reply to this commentLinkReport AbuseKevin, you make many excellent and noteworthy points. I completely agree with your assertion that dramatic entitlement reform is the only way to prevent crushing debt.
But, I also believe that all of the smaller program savings can add up into something important. This is a point that I is lost on government bureaucrats, and even on pundits, in the Beltway/NYC dyad. Every dollar spent on wasteful programs is a dollar that should either not flow into the deficit or not be taken from a taxpayer.
Just as the nickels and dimes matter in my household budget, the millions and billions matter in the government's budget. This is why I'm excited by Herman Cain's idea of horizontal and vertical cuts, which are common and effective in corporate America. First, you slash department by a similar percentage horizontally. Then, you take a deep dive into each vertical silo, looking for more savings.
It's not just entitlement reform. It's waste, fraud, abuse, and needless programs as well.
Reply to this commentLinkReport AbuseMikeB:
"For those who don't agree with the majority, it will feel like coercion."
No, Mike, it will be coercion. Not "feel like."
We're Americans. We don't exist at the sufferance of the state -- the state exists at our sufferance. We don't have to beg permission from the government to live our lives; much less do we have to beg permission from the class of permanent parasites living off the state -- even if they constitute 50%+1.
You want to build a cute little collectivist retirement scheme or health-care plan? Go right ahead. See who wants to join you. Leave me out of it.
Reply to this commentLinkReport AbuseNo, Mr. Williamson, that's not the way the document reads. You can't opt out. A law is a law.
Reply to this commentLinkReport AbuseMikeB -- interesting country you want to live in. Sounds like you want to move to France.
I am both old (over 55) and poor (unemployed), and I don't think other people should suffer because I have health problems. I also think that healthcare paid for by taxes is bound to be the most expensive kind because no one is taking responsibility for minding the budget. The recipient isn't paying and wants to live. The doctor isn't paying and wants to make money. The government is paying and has no real evaluation of whether charges or treatments are reasonable.
I'm not old enough for the government pension (assuming you mean SS) and I am optimistic about being re-employed soon. But if not, I can't understand why I should get free money and healthcare. I have paid taxes that went toward providing those things for others because I had no choice. While it is laudable to want people to have pleasant and comfortable lives, it is unethical to demand that everyone should contribute to support your goal. Nothing stops you from giving even more to charity. If others have to pay, why stop at a pension and healthcare? How about nice little vacations to Europe or Tahiti? Parties where Elton John sings the guest of honor happy birthday?
Okay, it is unfair to interpret your designated goals as being equivalent to wanting everyone to live the life of a wealthy person, but why limit what you are willing to support? Why not say you want everyone to live like a rock star? I suspect it is because you realize it is unaffordable for any nation to do this. The thing I don't think you make a case for is how the national interests are served by supporting people who were too foolish or unlucky to provide for their own needs. It's a charitable attitude, but one that should be supported by charity, not taxes.
Reply to this commentLinkReport AbuseMikeB:
The Constitution is not a charter for unlimited majoritarian government -- it is the opposite, a charter for limited government that establishes a large sphere of private life beyond the reach of your majorities. Nobody bled for the right to be pillaged by the bigger mob.
Reply to this commentLinkReport AbuseRimfrel: What I (and lots of others like me) consider to be the minimum requirements for the so-called "safety net" costs many times what is actually donated to charity each year. Go ahead and cost it out. There's a reason these social programs started up in the first place. The need preceded the program.
Reply to this commentLinkReport AbuseMr Williamson, but it is so. Call it pillage or whatever, but as long as legislation doesn't violate the Constitution, that legislation is . . . constitutional.
So, you can be a whack job who thinks "general welfare" applies only to the enumerated Article I Section 8 powers (in which case we have a hard time explaining FEMA, NASA, the Air Force, national parks, that statue standing on Bedloe's Island, eminent domain, etc., etc.), or you can acknowledge that Congress can leglislate for the general welfare as long as that legislation isn't otherwise unconstitutional.
Reply to this commentLinkReport AbuseThanks Mr. Williamson.
The entitlement culture and their enablers fueled, as Nietzsche said, by "slave morality" and their love of "Democracy" are alive and well!!!
What Fun!!!
Reply to this commentLinkReport AbuseMikeB - Two rebuttles:
1) You say the "minimum requirements for the "safety net" are greater than what charitable donations can provide." - The problem is that the provider of said safety net is the cause of the increased cost (an argument the Mr Williamson makes but you do not refute). So the problem is perpetuated by the creation of the solution. This seems to be a policy that lies somewhere between unwise and insane.
2) You make an argument that basically states "As long as its not unconstitutional it can be done." and "A law is a law" True. Now it may vary from state to state but I'm pretty sure even here in California its not illeagal for me to eat only cake and drink only Vodka but I fear this would have a detrimental effect on my future. If your argument breaks down in the face of a glib analogy; probably not a good argument.
Reply to this commentLinkReport AbuseMikeB:
Constitutionality is not the only criterion. I'm sure my friend Andy McCarthy could make an airtight case for the constitutionality of a law requiring us all to stand on our heads for 30 minutes every day (or against it; Andy's smart like that), but that doesn't make it legitimate.
You're making your ancestors ashamed of you.
Reply to this commentLinkReport AbuseMikeB: "There's a reason these social programs started up in the first place. The need preceded the program."
And the need will always be there. FDR was not interested in meeting a need, he was interested in getting himself reelected. Providing a retirement program was a popular way to do it at the time with a 12-1 worker-retiree ratio. Now, FDR's dead and we're at 3-1 ratio and stuck with his mess.
Who would voluntarily contribute 6.3% of their pay to a retirement fund that doesn't guarantee them anything? If I contributed the same amount to a 401K, what would that be worth when I retire? If I dropped dead at my retirement party I could at last leave it to my heirs. With SS, I leave zilch.
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