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A Desperate Idea

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America is in trouble. Unemployment hovers around 10 percent. We are trillions of dollars in debt. Enough money, in fact, that it becomes impossible to say that it is simply the result of the mistakes of a few. There is no one specific person whom we can blame. Being trillions of dollars in debt indicates prolonged poor judgment on the part of our elected officials, not the result of one congress, or one presidency. Each fiscal quarter seems to reiterate that we are not out of it yet.

With the banking collapse, America got closer to complete economic failure than anyone is truly willing to admit. And yet our politicians constantly bicker, point fingers, and shift blame. They barrage the American public with facts and figures, math manipulated to support whatever they are arguing today.

When Bush was in office, Democrats lamented that the government was wasting money on frivolous wars and unethical foreign policy ideals. Now that Obama is in office the Republicans bemoan the wasting of millions in art endowments, the teaching of evolution in schools, and universalized healthcare that will result in “death panels.”

Simply pointing the finger at one party, presidency, or congress is not the answer. No matter who gets elected, someone is wasting exorbitant amounts of money. And yet, we still have Americans who are starving, senior citizens who cannot get their meds, war veterans whose benefits are being cut, and God forbid we talk about the horrendous state of our education.

There is simply not enough money to go around. Not enough money to go around given our current spending system, rather. Not enough to feed, clothe, and support our own. But as recently as 2010, our budget mandated six hundred and sixty billion dollars to discretionary spending. A whole fifth of our budget is based on governmental discretion, unreported, unspecified spending that Congress has delegated as essential but fails to specify why, or even where, our money is going.

Therefore I propose we kill two birds with one stone by creating a government agency tracking exactly where our tax dollars are going. It will provide jobs to the unemployed middle class and supply a degree of transparency to an exasperated constituency.

Not to devolve into a debate over laissez-faire capitalism in conjunction with government oversight and the right balance therein, but between 1933 and 1936, President Roosevelt reinvigorated the economy with his New Deal. This plan for a government agency tracking every dollar and cent each American pays in taxes would be a modern version of that reinvigoration.

The major differences would come in the type and scope of the tentatively named New New Deal. FDR’s New Deal created government jobs and protocols that provided jobs predominantly to the industrial and farming sectors. However, our economy has evolved. Whereas we were once blue-collar factory workers, we are now dominated by white collar, better educated, middle management types. Our economy has shifted from production to oversight, from factory workers to accountants. Therefore, instead of hiring men and women to build a national highway system, we must hire the accountants to alleviate unemployment rates.

The second difference is scope. FDR made the government pervasive in our economy. This plan would not extend any government power. In fact, the only people benefitting would be the American public. The question arises, however; what of those unemployed who are under-qualified to work for a government agency? Those people were hit as hard, if not harder than the American middle class.

Recently McDonald’s, the restaurant chain, held a national hiring day hoping to fill fifty thousand positions nationwide. A million people applied to work for a fast food chain, some of them as nothing more than a fry cook making minimum wage. If there is a competition for such a low-paying job why should we focus on the white-collar individuals for this New New Deal? The answer is simple: to eliminate them from the job pool.

No, creating a government agency that would predominantly be hiring from the once-middle class will not directly employ those individuals who don’t have a college degree, or even a high school diploma. But it will eliminate the more qualified competition. And in an economy where jobs are scarce, and competition is fierce, a little hope is what is needed.

We exist in an information age. The average citizen can know more about a person simply by typing their name into a search engine in fifteen minutes than they could derive from two hours of face to face conversation. Even the government is advocating transparency, albeit of the citizenry.  Not to delve into the relative merits and constitutionality of the Patriot Act, but I would hazard to say that this current government knows more about its constituencies than any previous American government. Therefore it is hardly unreasonable to ask that the citizenry know as much about its government than ever before.

I am not asking to know which Congressman is having an affair, or posting shirtless pictures on Craigslist, although I seem to be getting that information anyway. I am simply requesting that I get a tax return with a report that specifies exactly what my money went to. Every dollar, every cent, where did it end up? Is it a case of ammunition to a soldier in Afghanistan? A month worth of pills to a senior citizen in Florida?

Maybe that level of specificity is too much to ask, but is asking for more budget transparency in our government too much? Especially given the pattern of poor fiscal decision-making they have exhibited in recent years? In the age of information, where knowledge is power, the American people know surprising little about where their tax dollars end up.

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About Austin

  • Maurice

    Austin – I have to ask the obvious. Do you know where money comes from? A government job does not help the economy. A government job is funded by private enterprise paying taxes. Saying a government job helps the economy is like paying your credit card bill with another credit card.

  • linda faulks

    There is no doubt that we should better build schoolrooms for “ the boy,” than cells and gibbets for “the Man” learn to get a degree from High Speed Universities article in few months and get a job

  • Jordan Richardson

    Cutting government jobs doesn’t help the economy either, Maurice.

  • Glenn Contrarian

    Looks like Maurice is one of those who don’t understand what government really is.

    Government, Maurice, ensures that business CAN make money. Government, Maurice, is an INVESTMENT in the nation.

    Now I realize that your head is exploding about now, but look around at ALL the economies of the world. Without exception the economies that have a high level of regulation and a relatively low level of corruption do MUCH better than economies with little or no regulation. In other words, in order to have an economy in good shape, you MUST have healthy regulation of that economy.

    Ever spent much time in a third-world nation? I have – I’m living in one right now. And every day I’m seeing first hand what happens when a nation doesn’t collect enough taxes to run a proper government. The Republicans want government “so small that they can drown it in a bathtub”…but what happens when there’s so little government? CORRUPTION, and lots of it.

    You want to complain about education? I’ve just spent two days talking with the principal over here telling her that the education system in the Philippines is BETTER than in America – and why is it better? Not because the schools in the PI are in truly crappy shape, not because the teachers in the PI are paid peanuts, but because the whole CULTURE here values education. The GOP tells you that it’s time to slice-and-dice the education budget, but that will NOT help our educational system. All it will mean is that our schools will be crappier, our teachers will be paid less, and we’ll STILL have a crappy education system…

    …because our CULTURE is not valuing education as it should!

    I know you hate the police, but as bad as the police are in America, they’re infinitely better and more trustworthy than they are over here! And if you get rid of them, what happens? Crime goes up, property values go down, economy goes down.

    I could go on for DAYS, Maurice – but the point is this: Higher taxes are the PRICE OF ADMISSION to live an first-world nation. If you want to pay little or no taxes, go to live in a third-world nation. You get what you pay for…and you DON’T get what you don’t pay for.

  • Maurice

    Glenn, I have spent time in Third World countries. As you know Italy is about to become a Third World country. Why? Because they could not control spending.

    Interesting that when I make these remarks here I get a lecture about the necessity of paying taxes. I will say it again. I never said I didn’t want to pay taxes. I never said taxes were too high.

    My thought is government is SPENDING too much.

  • Clavos

    A government job does not help the economy. A government job is funded by private enterprise paying taxes. Saying a government job helps the economy is like paying your credit card bill with another credit card.


  • Clavos

    A government job does not help the economy. A government job is funded by private enterprise paying taxes. Saying a government job helps the economy is like paying your credit card bill with another credit card.

    And again. This is so true, it bears repetition.

  • roger nowosielski

    If there is an economy to speak of, but we’re quickly approaching a time when the government will form the largest part of the economy — the welfare state assuming enormous proportions due to the failure of the business sector to deliver.

  • Clavos

    we’re quickly approaching a time when the government will form the largest part of the economy…

    Yet another sign of the imminent decline of America…

  • Baronius

    Terrible article. First off, there already is an agency that tracks spending, the OMB. Secondly, “discretionary” doesn’t mean “unidentified”. Except for some black budget programs, every item of federal spending is enumerated (if you can find it and figure it out).

    Also, I’ve got to say, you’ve really got your finger on the pulse of the Republican Party if you think that they’re complaining about the cost of teaching evolution.

  • Baronius

    One other thing. The tag on this article is “Staring down a growing national debt, it is time for new ideas.” That’s never true. When you’re in debt, the new ideas you come up with are going to be bad. That’s how all those “buy a house with no money down” plans sucker people in. If you really want to get out of debt, stick with the old ideas: sell stuff, work more, buy less, examine your budget, pay off as much of the principal as you can.

  • Dr Dreadful

    As Baronius notes, Austin doesn’t seem to understand much about how government works.

    Discretionary spending is there for a very good reason. If the federal government allotted every penny of its revenues to specific purposes then it would be paralysed. Suppose, to give a drastic example, a virulent disease were to wipe out a significant portion of the grain crop. If there were no discretionary funds at its disposal, the government would be unable to import emergency grain supplies from overseas and there would be severe food shortages and other economic repercussions.

    Or, to use a smaller-scale analogy, let’s suppose Austin’s mortgage interest rate were to suddenly increase and he couldn’t pay it because he’d already budgeted every penny of his income for other purposes and had no contingency fund.

  • Dr Dreadful

    As you know Italy is about to become a Third World country.

    That’s not going to happen.

  • Arch conservative

    Of course not Dread. Italy is too big to fail. So it will be up to those outside Italy to ensure that it doesn’t.

  • Roger B

    Wealth is created by the people who invent and make products, not the parasites who occupy the management, corporate and financial superstructure that encumbers the system and sucks an unreasonable amount of wealth out of the hard work of other people.

  • Jordan Richardson

    Geez, could you use more clichés?

  • Maurice

    This debt clock site is very interesting. Please take a moment to look at it and consider. Notice the numbers that are increasing and the numbers that are decreasing. Also as you move your cursor over the different fields the top field in the middle tells you the source. A great site.

  • roger nowosielski

    Fascinating. Only corporate assets are on the rise, not enough to compensate for steady decline in total assets.

  • Igor

    This illustrates the methodical redistribution of wealth from ordinary people to corporations: “…corporate assets are on the rise, not enough to compensate for steady decline in total assets.”


  • Maurice

    #19 Redistribution of wealth happens when government forcibly takes money from those that have earned it and gives it to those that have not.

    The government is not giving money out to corporations. In fact it is getting in the way of job creation. Boeing is currently wanting to create 1000 jobs but is being blocked by the NLRB. Gibson guitars was raided by the overly zealous EPA and is now considering moving production to India.

    Corporations, including the one I work for have taken drastic measures to cut expenses. The government needs to take drastic measures to cut its expenses and QUIT IMPEDING JOB CREATION.

  • Dr Dreadful

    Maurice, that’s all very neat and tidy, just as long as you can identify for us exactly who the various people are who have earned or not earned the money being “redistributed”.

    (Most of the world calls it “tax”, which is hardly a radical concept.)

  • Maurice

    #21 please click the link I provided in #17 and you can see all the relevant numbers.

    Once again. I never said I had a problem paying taxes.


  • Maurice

    In case anyone missed my point I would just like to point out that total debt per family is $661,000.


  • roger nowosielski


    Can’t you see we’re going down the tubes?

    Your next question ought to be — what brought it about?

  • One American’s Rant

    I have thought, for a long time now, that a huge part of the problem in DC is the partisan politics. Both sides spend too much of their time blaming the other party, regardless of the particular issue. Perhaps we should base of selection of candidates on their ability to work together, rather than on their promises or how much mud they can sling.

  • Maurice

    Roger – my personal opinion is the government guarantee of sub prime loans was the catalyst for our recession/depression.

    What is your opinion?

  • Igor

    What “government guarantee of sub prime loans” are you referring to? FNMA, perhaps?

    Whenever anyone advocates ¨Privatization¨ of some government function you need look no further than FNMA for an example of Privatization failure.

    FNMA was formed in 1938 by the New Deal for the purpose of providing a secondary market for home mortgages. The idea is to provide a market that bankers can sell their home mortgages into so they can realize immediate cash returns from their investments without having to wait 10 or 20 years for the mortgage to mature, and then re-invest money into new loans. No commercial entity was willing to provide that function. They did not want the business, so only a government agency could do it.

    FNMA was a success because it spread risk and it qualified loans. FNMA made a small profit every year to build a rainy-day fund.

    Financiers soon realized they´d made a mistake and clamored to get into FNMA and in 1954 FNMA stock went public so that private investors could profit from FNMA operations.

    But the operation of the company was government controlled until 1968 when LBJ privatized FNMA to get it off his balance sheet.

    FNMA became a privately owned and operated company with tax-payer backing! Sweet! Well, it was sweet for investors who soon began looting the American taxpayer and citizen by ¨privatizing the profits and socializing the risks¨, and you see the results.

    As part of it´s charter FNMA was shielded from financial oversight by the SEC. Sweet! Well, it was sweet for investors, but a disaster for taxpayers, as FNMA rolled up $4trillion in unsecured debt while the executives collected fat commissions and fees for doing it.

    Nationalize FNMA!

    Get rid of the management burden of serving the wrong master, and get back to it? original use.

    Might as well. You KNOW that you the taxpayer are going to pay for the historical crimes of it´s corrupt private owners anyway. Might as well exercise government and voter control over it.

  • Clavos

    Might as well exercise government and voter control over it.

    Makes sense. Instead of “corrupt private owners,” we’ll hand it over to the corrupt AND stupid AND inefficient government bureaucracy to manage.

  • Maurice

    #27 Please read the following which I pulled directly from Wikipedia:

    In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the CRA of 1977.[16] Because of the increased ratio requirements, institutions in the primary mortgage market pressed Fannie Mae to ease credit requirements on the mortgages it was willing to purchase, enabling them to make loans to subprime borrowers at interest rates higher than conventional loans.[16]
    In 1999, The New York Times reported that with the corporation’s move towards the subprime market “Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s.”[17] Alex Berenson of The New York Times reported in 2003 that Fannie Mae’s risk is much larger than is commonly held.

  • Igor

    I don’t know who wrote the wikipedia article (possibly one of the many apologists for rightist failures) but he has some facts wrong:

    1-FNMA does NOT make ANY loans. Not one. They buy loans from primary lenders such as banks.

    2- CRA has been around over 30 years, so it’s remarkable that only now have people started to blame it.

    3-FNMA is privately managed, though publicly financed, a very bad arrangement, not in the original charter but the consequence of making concessions to private lenders (who were AGAINST the concept when FDR created it back in the 30s).

    4-FNMA is a vivid example of the failure of Privatization.

    Even with FNMA (and little sister GNMA) failure, the vast majority of Sub-prime failure can be traced to private vendors, as I will show in a subsequent comment.

  • Maurice

    #30 please the read article.

    1 – where does it claim Fannie Mae makes loans?

    2 – what people are you referring to?

    3 – Government Sponsored Enterprises (GSE) are bad.

    4 – Fannie Mae is a good example of corruption within a GSE.

    You make many claims but fail to cite your source. Then you brush off my source. Please cite a source to refute mine.

  • Cannonshop

    Igor, I present a counter-offer to your Nationalizing screed.

    Break FNMA up as it should have been when LBJ privatized it, end the exemption from SEC regulations, and let the market work. GOVERNMENT created an Oligopoly without oversight, Igor, first as a monopoly with specialized advantages over normal investment houses, then, through Privatization, a GOVERNMENT protected near-monopoly with special defenses against the forces that private investment firms must contend with in order to offer the same kind of services.

    So, break it up under Sherman anti-trust and similar law, then end the special exemptions it enjoys from the rules.

    The damage wsa caused, in large part, by teh special protections and unique circumstances that FNMA enjoyed and could exploit, end the special protections and anticompetitive subsidies, and let the market work.

  • Cannonshop

    Further expansion through example, Igor:

    Ma Bell. If Ma Bell had been nationalized instead of broken up in the 1980s, we’d all still be using rotary phones, and the Internet would be science fiction.

  • Igor

    FNMA operated very well under government bureaucrats, it was privatization that lead it astray. How could it be avoided when personal greed was allowed to draw on public funds?

    It was the myth of Private Management being ALWAYS better than public management that allowed that to happen. I see that the myth is still strong in the minds of some people.

  • Igor

    Anyhow, FNMA played a small part in sub-prime problems.

    Michael Hudson in Daily Beast

    Wall Street, Not Fannie and Freddie, Led Mortgage Meltdown

    by Michael Hudson

    Ask many Americans who’s to blame for the nation’s economic mess, and two names come to mind: Fannie and Freddie.

    They see Fannie Mae and Freddie Mac as the villains of the financial crisis., the official website for Republicans in the House of Representatives, says flatly: “Fannie Mae and Freddie Mac were the main cause of the nation’s current financial turmoil.” Many critics, including Republican appointees to the federal Financial Crisis Inquiry Commission, blame the two government-chartered mortgage underwriters for pushing lenders to make riskier loans and leading the way into the financial crash.

    There’s a problem with this narrative: The numbers tell a different story, a Center for Public Integrity review finds.

    Government data show Fannie and Freddie didn’t take the same risks that Wall Street’s mortgage-backed securities machine did. Mortgages financed by Wall Street from 2001 to 2008 were 4� times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie.

    Tagging Fannie and Freddie as the primary suspects in the mortgage debacle diverts attention from bigger offenders and from policy decisions that helped create the climate for out-of-control lending.

    Some 6 percent of Fannie- and Freddie-sponsored loans made during that span were 90 days late at some point in their history, according to Fannie and Freddie’s regulator, the Federal Housing Finance Agency. By contrast, the FHFA says, roughly 27 percent of loans that Wall Street folded into mortgage-backed investments were at least 90 days late at some point.

    “The idea that they were leading this charge is just absurd,” said Guy Cecala, publisher of Inside Mortgage Finance, an authoritative trade publication. “Fannie and Freddie have always had the tightest underwriting on earth…They were opposite of subprime.”

    Fannie and Freddie, Cecala said in a telephone interview, didn’t start making a big move into riskier mortgages until the mortgage boom was already under way, and they were fighting to reclaim market share they’d lost to more aggressive Wall Street players. Even then, they were more cautious than Lehman Brothers and other investment banks. For example, just over 15 percent of Fannie- and Freddie-backed loans made in 2007 have been seriously delinquent, compared to nearly 42 percent of mortgages bankrolled by Wall Street, according to the FHFA.

    Tagging Fannie and Freddie as the primary suspects in the mortgage debacle diverts attention from bigger offenders and from policy decisions–such as deregulation in the mortgage market and on Wall Street–that helped create the climate for out-of-control lending.

    � Fannie and Freddie lost market share to Wall Street during the very time the mortgage market was spinning out of control. FHFA data shows Fannie and Freddie’s share of new mortgages fell from almost 55 percent in 2003 to less than 35 percent in 2006.

    � The loans that Fannie and Freddie purchased had consistently better risk characteristics than loans backed by Wall Street. For example, roughly 5 percent of loans originated from 2001 to 2008 and acquired by Fannie and Freddie had “FICO” credit scores of less than 620, a figure often used as a cutoff for labeling borrowers as subprime. More than 30 percent of Wall Street-bankrolled loans in the same period had FICO scores under 620.

    � As of September, Federal Reserve data show, 2.2 percent of Fannie- and Freddie-backed mortgages were in foreclosure, compared to 13 percent of all subprime mortgages, 11.3 percent of all Alt-A mortgages, and 2.9 percent of all prime mortgages.

    Fannie and Freddie, in other words, have outperformed the overall mortgage market. If they had been the real ringleaders of the mortgage debacle, the numbers would tell a darker story.

    When it comes to the lending spree that sparked the financial crisis, Fannie Mae and Freddie Mac were followers, not leaders. They were, at first, not-so-innocent semi-bystanders and, eventually, too-willing accomplices who followed Wall Street as it led the nation’s economy off a cliff.

    Michael Hudson is a staff writer with the Center for Public Integrity …

  • Cannonshop

    Igor, wall-street didn’t work under the same rules as FNMA-nobody does, because nobody else in that market had that agency’s protection from oversight.

    The multifailure of the SEC during the same time period is an example of Federal Failure, as much as it might be of risky investing.

    I would submit to thee, that Nationalization prior to the mortgage crisis, would not have affected it in the slightest, though I will submit that the press coverage would’ve been kinder to Fannie and Freddie under Federal control, than as ostensibly and cosmetically private entities, because the problem that caused it, was a failure in the rules generated by Congress, and signed into law by a President.

    It’s a fundamental flaw, Igor-Uncle Sam broke it, but Uncle Sam can’t FIX it-at least, by direct action.

    Glenn C. made the observation that Government creates the environment-yes, and it only creates a long-term beneficial environment when the rules are applicable to everyone equally, which is and was not the case with Fannie and Freddie and Wall Street.

    Government-sponsored monopolies only provide one long-term effect: they provide a ready source of money to fuel corruption, money often taken by Government at Gunpoint from the Taxpayer.

    Why were Wall St. banks taking higher-risk loans? because the lower risk loans were going straight to FNMA-because with Taxpayer Subsidies, FNMA could offer better rates to the mortgage sellers than ANY private house could-the Street was buying,effectively, what was left after the fat-cats got their share with taxpayer dollars.

    Do you UNDERSTAND THIS? Special rules, special exemptions, special subsidies, created a market where the truly private companies were placed, and kept, at a distinct disadvantage, against a “Private” firm that was only private in the most cockeyed way possible.

    It’s a fantastic example of Government sabotaging the Free Market.