• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Morning Bell: Why Liberals Love Government Waste

    Yesterday, the Government Accountability Office (GAO) released a 345-page report detailing 34 major areas of wasteful government spending that Sen. Tom Coburn (R–OK) says could save the federal government $100 billion or more every year. Conservatives jumped on the news, with House Majority Leader Eric Cantor’s (R–VA) office releasing a statement:“That is why House Republicans are hard at work cutting spending and getting our fiscal house in order – we need to prevent taxpayer dollars from being wasted and put Washington on a budget so we begin to live within our means and get people back to work”

    Liberals, however, greeted the report with polite applause but then predicted nothing would come of it. Why is the left so uninterested in eliminating wasteful government spending? Why can’t progressive politicians agree to cut programs that even the GAO identifies as duplicative or ineffective? The answer can be found in the left’s reaction to two reports issued in the last weeks, one by bailed-out Goldman Sachs and the other by failed stimulus architect Mark Zandi.

    On February 23, Goldman Sachs released a report purporting to show that the $61 billion in cuts in the House fiscal year 2011 spending bill would reduce economic spending by up to 2 percent this year. Not to be out done, Zandi released a report on February 28 purporting to show that the same $61 billion in cuts would cost 700,000 jobs through 2012. In stark contrast to the GAO report on wasteful government spending, liberals on Capitol Hill broadly promoted the findings of these two studies as proof that the House budget would harm the economic recovery.

    But wait: How can the Zandi and Goldman studies claim that the spending cuts in the House budget will harm the economy if they came out before the GAO study identifying wasteful government spending? What if all, half, or just some of the spending cuts in the House budget are simply cuts to government waste? Surely these facts would change the outcome of Goldman’s and Zandi’s computer simulations, right? Wrong. The Goldman and Zandi reports have absolutely zero relationship to the real world. They both assume that all government spending, no matter how wasteful or duplicative, not only helps the economy grow but does so by large multipliers. This is the exact same thinking that led the Obama Administration to claim that their $1 trillion stimulus would keep unemployment below 8 percent when in fact unemployment rose to 10.1 percent. The Heritage Foundation’s Brian Riedl explains why government spending does not stimulate economic growth:

    Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another.

    Congress cannot create new purchasing power out of thin air. If it funds new spending with taxes, it is simply redistributing existing purchasing power (while decreasing incentives to produce income and output). If Congress instead borrows the money from domestic investors, those investors will have that much less to invest or to spend in the private economy. If they borrow the money from foreigners, the balance of payments will adjust by equally raising net imports, leaving total demand and output unchanged. Every dollar Congress spends must first come from somewhere else.

    Conservatives believe that the federal government should have limited powers and that—beyond providing for the common defense and enforcing contracts— government should stay out of economic affairs as much as possible. Conservatives believe most federal spending is suspect and should be cut if it has not proven to be effective (such as on programs like COPS, FEMA fire grants, and Head Start). Progressives, on the other hand, see the federal government as a giant jobs program so that any cut to any federal program, no matter how ineffective or wasteful, would be a harm to the economy. If we are ever going to tackle our nation’s true budgetary problems—spending on the entitlement programs Medicare, Medicaid, and Social Security—we must first defeat the misguided idea that all government spending cuts are bad for the economy.

    Quick Hits:

    UPDATE: An earlier version of this post attributed a quote to Cantor’s office that was actually from Sen. Coburn. The quote from Cantor’s office is now correct.

    Posted in Ongoing Priorities [slideshow_deploy]

    74 Responses to Morning Bell: Why Liberals Love Government Waste

    1. Ken Jarvis - Las Veg says:

      There are NO Liberals

      ONLY those that Brag about being Cs

      and the REST OF US.

    2. Ken Jarvis - Las Veg says:

      3-2-11 FROM – Ken Jarvis – LVKen7@Gmail.com

      Today in the WSJ a letter from Charles – I am one of the Richest people in the world – Koch.

      He and his brother are spending TON$$$, for WHAT?

      What do they expect to gain?

      I am sure it was only a slip but he forgot to mention – 3-1-11

      The GOP want to CUT SPENDING – BUT FIRST –

      The US House of Representatives today overwhelmingly approved the $725 billion military appropriations bill for 2011, by far the largest single military spending bill in the history of mankind.

      and entitlement programs, even though these account for about three-fourths of all federal spending.

      ===

      2 changes that would save Soc Sec forever -

      1. Remove the Pay-in-Cap

      So, ALL pay on EVERY CENT THEY EARN.

      2. Add Soc Sec to Income from Investment Profit.

      That way – Soc Sec would Last Forever.

      ===

      Ben C. Ann Arbor, MI on March 1st, 2011 at 2:43pm said:

      “A CEO, a teabagger and a union member are sitting at a table with a plate of a dozen cookies. The CEO reaches over and takes 11 cookies then looks at the teabagger and says, “Look out, the union guy wants a piece of your cookie”.

      Ken – who paid for the cookies? Who provided the job for the union worker? The Tea Party People will pay for there own cookies assuming they have any money left over from being “Taxed Enough Already.”

      *** Ben – HERE IS HOW IT WORKS.

      Tax is a ONLY a Percentage –

      If a person is employed, or RICH

      they pay a tax.

      Tax the RICH – THEY have the $$$.

    3. Cincinnati OH says:

      If government spending (and borrowing) crowds out private sector borrowers and drives up interest rates and the cost of borrowing money to finance growth, who benefits. Goldman Sachs and similar too big to fail banking entities.

    4. Mike, Chicago says:

      Progressives hate waste more than the "freespending conservatives do, especially when the waste is for things like unjust wars that cost $1.2 trillion/year. We'd much rather see waste in programs that benefit society, not hasten it's end. http://www.commondreams.org/view/2011/03/01-7

    5. Jim Delaney says:

      Maybe we can get to that $200B cut by those incremental 2-wk CR extensions of about $4B+ each extensions PLUS by including the balance in next year's budget proposal.

      So far, I give Boehner fairly high marks. He's negotiating a political mine field, but, so far, is doing so rather deftly and, more importantly, with that rarest of commodities known as PRINCIPLE.

      My take is this: no matter the political price (for we must remember we're currently outgunned in the Senate plus Obamaist entitlement types and other Progressive adherents will not vote for GOP cost-cutters), serious cost-cutting must be accomplished with vigor, courage and without retreat. Let the political chips fall where they may. For if this attempt to curtail gov't fails, it's pretty much all over anyway. And, you know what? In the end, I honestly believe thinking Americans, still barely a majority, will support the GOP at the polls, rewarding them for living up to their fiduciary responsibility.

    6. Susan, Michigan says:

      Why is it so difficult for the left to understand Economics. If I can understand it, anyone should be able to. If you're taking money from me to pay for someone else, I am not going to have as much. What is so difficult to understand about that principle? The jobs Zandi has mentioned that will be lost, are government jobs that we don't need in the first place. So while I won't have to pay for those government jobs, I will be able to have more money to spend in the private sector causing MORE jobs to develop. It's not difficult to understand at all.

    7. West Texan says:

      Of course big government social progressives love waste. It's all about creating an economy driven by debt. And it all started with none other than Alexander Hamilton and his dream of a new world royal court. Who cares where the money goes as long as it grows debt, the left's favored crop. Therein is the difference between today's bleeding heart liberals (communist wannabes) and free market conservatives (American patriots).

    8. paul,the villages fl says:

      Medicare and social security are not entitlements.We paid for them and continue to pay for them.The real entitlement is that elected officials get such a retirement benifit after they leave office and the things they receive in addition to their salary while in office. They should be subject to the laws they pass, the same as we are. All earmarks should be elimilated and special wavers be stopped for everyone.All foreign aid should be stopped.When we are so far in debt why are we supporting other countries when we can't even support ourselves.Why are we letting radicals who want to destroy us come into our country and have deminstration.

    9. Mary Baumgartner, Mi says:

      I agree 100% that something must be done regarding the out of control spending by the Democrats. We need a majority of Republicans in the Senate too so that we can fix this country before it's too late.

    10. Spiff, USA says:

      A very scholarly assessment on "Why Liberals Love Government waste" , but a simpler explanation would by found by substituting the word that describes Liberals – Freeloaders! They offer nothing for the good of all, but take from all for no good! They prosper from the labors of others, very much as a parasite, or cancer cell, does.

      Spiff

    11. STEVE says:

      Why do Conservatives act like these duplicities in Government just came into existence? Why don't we determine which need to be eliminated, take action and stop wasting time blaming the Libs, Just do it!

    12. DanJ says:

      Wow. I love liberal economist math. Base on thier logic, if instead of cutting $61B we increase by $61B that will create (not save or create – actually create) 700,000 new jobs!

      And if we spend (or is it invest?) $600B, we'll create 7,000,000 new jobs!!

      And if we spend $787 billion we'll create over 9,000,000 new jobs!!!

      Wait a minute. Obama and the Democrats did spend/invest much more than $787B and we still have less jobs now than we had when they approved the spending.

      Why is this so hard for Zandi, Goldman Sachs and the Libs to understand?

    13. Oscar Brown, Jackson says:

      Our Republican House is doing what it can to bring spending under control.

      Let"s keep encouraging them to stand fast. In the Senate, Rand Paul had a great idea: start at $500 Billion and if you can end up with $200 Billion or even less, you've trimmed that much this time, and it's just the beginning.

      Force the Democrats to defend their wasteful and duplicate spending, and do not let up.

      We must be more persistant than they. And patient. And committed.

    14. bigfootbob, Californ says:

      Start with the teacher's unions that have indoctrinated three generations in phony economics.

    15. Barbara, Charleston, says:

      This article highlights some important differences between liberals and conservatives that go to the very heart of some of our country's problems. Liberals want to depend on government to solve their problems while conservatives want more independence from governmental intervention and regulation. I don't spend a lot of my time arguing with my very passionate liberal friends because they tend to substitute passion for reasoned argument. They believe strongly that they are right and it doesn't seem to make much difference to them when the world doesn't work the way they believe it should–they still cling to their beliefs and often more insistently and loudly. I applaud The Heritage Foundation for taking a principled and well-thought-out stand on today's important issues. If we don't alter the direction our country is going in we will lose much of what made America a great country in the past.

    16. Eric, Coplay, PA says:

      Another DUH! moment. If people in the public sector make more money and less real product than the private sector, then reducing the public sector in favor of the private sector will increase the total number of people employed and the amount of real product produced. It's so obvious even a caveman could figure it out, but perhaps not a politician with an advanced degree.

    17. R Holland, Chandler, says:

      Goldman Sachs will never get a penny of my money. Stupid idiots!!!

    18. Pete Stroempl of For says:

      The response from the Democrat policians is non-sensical. The argument that eliminating these duplicate Federal jobs will harm the economy is equivalent to arguing that breaking windows is good for the economy. Both duplicated Federal jobs and an economy dependent upon breaking windows is equally destructive. Both approaches wastes scarce economic resources; and thereby fail to bring improvements to our way of life. Shame on those defenders of Federal duplication and waste of resources. These folks support foolishness.

    19. RUTH SC says:

      We have all pulled in our belt buckles, to ride out the crunch, why is our g'ment not doing the same? If there is any program, that is being duplicated, then it must be returned to the general fund. There are so many programs that do not work, and so many who take advantage of these things, "because they are there", why do we keep people who have under the table incomes that are being used by those who get assistance? I know if they are looking they can find out this information, even if they hired spies or used the tattle tale system with rewards, they would stop a lot of wasteful spending. Some think I just want to take away the freebies, I want the people who need, not want these programs. I know so many people who just take because it is there, it should be investigated and stopped. Just think of the jobs that could be created, to save millions of taxed dollars, at least money would go back into legal systems and taxed as real incomes.

    20. Roger TN says:

      This is but the tip of the iceberg. Expectmore.gov is a group that grades existing programs and many of them that have been in existence for decades rate an "F". Until we can consolidate all like functions under one hear for budgeting, our chance of surviving is low. Eliminate all programs deemed to be failures, eliminate entire cabinet functions, USDA, Dept. of ED, Interior, while we are at it. Look at the template in 1922 for a picture of how to accomplish this. There will be pain for the displaced government employees, but nothing that the general population is not enduring at this time.

    21. Ben C. Ann Arbor, MI says:

      Added to the above is the fact that the Treasury borrows the money from the Federal Reserve (which we all know is a private bank) which charges the Treasury interest. The IRS was created to generate funds to repay the Federal Reserve. The ugly nature of the banking system in the United States (and world) is coming to the surface. Its a vicious cycle that is destroying us. Get rid of the Federal Reserve and return control back to the Federal Government where voters will hold it accountable. Not a perfect system but better than what we now have in place.

    22. Lloyd Scallan (New O says:

      Most of conservative attempts to explain why "liberals" think and do what they do, muddles any clear explanation. It's really simple! Liberals, progresssives, leftist, and Democrats have an agenda to end capitalism and the American way of life. They want a fully controlled government society, i.e. socialism/communism. That's it! We all must recognize that the left will do or say anything to get their agenda shoved down our throats. That includes the lies,

      distortions, and deceptions Obama and his ilk in the national media are using.

    23. Robert, North Richla says:

      Ah, the entitlement programs. Thanks Conn, because no one wants to talk about the entitlement programs (including John Boehner), which also include: TANF, food stamps, section 8, WIC, CHIP, plus those block grants that allow the states to set up their own bogus welfare programs under names like community development. During the last 4 years, over 75% of Americans have faced real cuts in income, along with drastic increases in the cost of living (where we have to include food and energy while the FED doesn't). And yet, our 104,000,000 welfare recipients have not seen one single cut, and in most cases, their benefits have increased! We could easily cut $ 200 billion from these wasteful programs (and still provide a safety net), and we would not have to layoff one single teacher.

    24. Jim --New Haven, Ct. says:

      Here's the problem. Americans have become polarized to the point that the "other side's" ideas are worthless. Unfortunately, this is true of the left's continuing ideology of expecting government to "create" prosperity. If this philosophy is not turned around in the next election cycle, we are doomed as a nation.

      Our debt, if not addressed, will bury us. If government at all levels can't wrest control away from the unions, chaos will occur. Cities and states are broke and can't honor or fund the obligations incurred by spineless politicians.

      Taxpayers outnumber(for now) union parasites. They have to insist that teachers and other union members pay more than a token part of their health and retirement costs.Just like their counter parts in private employment.

    25. Herrmann Glockler says:

      Editors.

      I believe you are overlooking a big reason why liberals in government will never be exited about cutting government waste, and it is not a very difficult one to understand.

      Liberal politicians see everything in terms of retention of political power, and cutting government waste means a reduction of both government employees and dependents on government largess.

      These two groups that will be affected by budget cuts will reduce the number of reliable voters for Democrats

    26. George Colgrove, VA says:

      "Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another."

      -Brian Riedl, The Heritage Foundation

      This is all there has to be said on the matter. It is clear and consise. Anything a fed or a liberal would say is obfuscation to support growing an out of control behemouth.

      This is a question on how many feds does it take to screw in a light bulb? Let them answer the question, we would end up with thousands of people for various reasons. If if they cannot come up with good enough reasons, they will write the regulations to force thier desired number.

      They would have multiple agencies for various the light bulb types for which each agency would need to have an investigation team to determine if it is their bulb and fill out extensive forms, a dispatch team to go out to repair the bulb, a waste recovery team to throw the bulb out, not to mention multiple administrative teams to take care of filing, purchasing, personnel, payroll, IT, public relations, disclosure and so on.

      We conservatives would simply say one fed, one ladder and one bulb.

    27. Daver (Ft Worth) says:

      I'm very disappointed!!

      The Heritage reports are always so well thought out and logical–but not today!!

      The money for these programs will come from "Obama's stash" and as such won't need to result in further taxes, layoffs of federal employees, debt to our grandkids or even reductions in the pension or insurance benfits paid to the mis-treated federal workforce.

      Get your facts right.

    28. John Olofson, Graeag says:

      Of course, I agree with this! Except when you address "entitlements." When you label Social Security as an entitlement it (Social Security) takes on the color of a handout. I paid, dearly, for my Social Security. Further, I resent the lie for the last 2 years that there has been no inflation. No inflation, that is, BY NOT INCLUDING THE RISE IN PRICES OF FOOD AND ENERGY!

      IT IS TIME THAT HERITAGE DISCERN THIS DIFFERENCE (between entitlements and Social Security) and start educating politicians accordingly. If you don't, I won't have enough left, after buying food and gasoline, to pay my Heritage dues!

    29. LibertyAtStake, Alex says:

      "Every dollar Congress spends must first come from somewhere else."

      If you villify Peter, and you are in bed with Paul, you don't care. Paul demands more, round up Peter again. Thank God we have Scott this time.

      d(^_^)b
      http://libertyatstake.blogspot.com
      "Because the Only Good Progressive is a Failed Progressive"

    30. Peter Schaefer, Wash says:

      The failure of Goldman and Zandi is far more than the fact that the "…reports have absolutely zero relationship to the real world." It is true that liberals seem to subscribe to the make-work mentality of Keynes who believed paying one team to dig ditches and another to fill them in was appropriate. Even granting the assumption that this is true (its not but we can play the thought game) what happens when the crisis is over? Do we fire all the guys with shovels? We aren't getting into that question, but it was asked by Governor Otter in Idaho last year. If he takes the Fed's dough and hires all these teachers and cops, who pays down the road? Who pays their salaries, pensions, health care, the rent on the space for their offices, etc. for the next 20 or 30 years? Or does he fire them when the crisis is over, just making another one?

      We seem to forget that the only productive jobs are created by the private economy which is fueled by private investment. This is not an argument for an atavistic economy; we will always have regulated market economy and we will always transfer wealth from the rich to the poor. And public services are necessary to facilitate a modern, private economy but how much is too much? Just arguing over budget levels seems to miss the point. Redundancy is self-evidently a waste of money. But the objective is the same today as Locke asserted 300+ years ago; how many public employees are needed to protect our lives, defend our property and insure our choices about where and how to live and work? We should decide that first, and then worry about numbers.

    31. Mike, Nevada says:

      That's all very easy to say unless you happen to be one of the employees layed off due to a budget cut. Most citizens see these issues on the personal level and don't give much, if any, thought to macro economics. Until individuals in America magically learn to sacrifice for the greater good they will continue not to care about what they see as lofty, obscure, and even ideological "theories".

    32. Skip ONeill says:

      Liberty is earned and every dollar in debt we go, we are eroding that liberty.

    33. jlo, Montana says:

      All your points are right on. Government waste needs to be tackled, as do entitlement programs such as Medicare, Medicaid, and Social Security. It's curious, however, and somewhat disappointing that military spedning was left out of the article. We don't know how much wasteful spending the military is responsible for because the military does not provide financial reports to the GAO, to Congress, or to anyone else. This, in and of itself, seems incredible to most people. If we're truly to look after the American taxpayer and our national prosperity, ALL government programs need to be evaluated and appropriate cost reductions taken to bring federal spending and debt under control.

    34. Norm Klevens says:

      With previous examples and this article, I am convinced Liberals, when in power, love to spend other people's money. However when they do not hold the purse strings, spending is not okay. So spending, running high deficits, calling people out; bloody, racists etc, military trials, holding terrorists at Gitmo and the Patriot Act are all okay if one is a Liberal. Cutting spending by a poultry 61 billion [and that is in doubt after the speaker's comment yesterday] will cost 700,000 jobs ? Saddling future generations with debt will hurt our grandchildren, but that is okay, as long as that union teacher gets her money today. These greedy people [not the Chrysler bond holders] have no core, no principles; they believe in one thing – themselves. Greedy ? I hope more Americans can see that the president sides with the unions. Public employees deserve respect – yes they do, but so do all tax payers. It is clear where this country is headed when reducing spending is bad with a debt the size of ours. Wake up.

    35. Leon Lundquist, Dura says:

      Economics 101. People keep what they Create, accumulate property and retain the freedom to do with it what they will. Economics in one word: Create! Two words: Produce Something! Three: Markets Benefit Everyone! How simple do you want it?

      How can something so simple become incomprehensibly complex? And destructive? The answer is the History of Economics, but the truth of economy remains simple. It works because it is true. All the rest is waste and theft! Hidden by false complexities. "Up is down!" say the forecasters. Do you believe them? People believe utter nonsense! If you had no money at all you would still have Economics, the real thing. What you learn in Business School is how to steal power and cover your ass! With Statistics you can lie convincingly, take too much and give too little! And, importantly, get away with it. You might add zero value to an enterprise and be paid more than anyone! Actually come in, wreck things and walk away with a fortune! Wow! That's sorcery!

      Don't get me wrong, genuine entrepreneurs add value all day long! What I am talking about is the corruption of Economics to this furthest imaginable extent! Where somebody who has never produced a single valuable product in their entire lives, someone who has contributed nothing but trouble can win the game! You wonder how this sorcery is done? It starts with money, this kind of deception can't be done without money. Without money we would not have the benefits of civilization, so it isn't money's fault. Money is a substitute for Power, the power to hire, the power to organize and the power to deceive.

      In fundamental Economics the man's products prove the man. No deception is possible. "This is a great man, no doubt! Look at all the good he has done!" Creation is clean and seen. Add money to the scene it will multiply the good man, the great man will be greater. The downside is worthless idiots can hide behind their money. Evil people can falsify themselves. I've said evil is empty, this is what I mean, but with money evil can appear to have Power. It is an enormous fact the evil person cannot improve, cannot Uncreate, so reason and bargaining never works with them. Trouble is, evil people get their wishes too. That's the problem. Money is real Power, but if you look at it, it all comes down to belief. Trust! Market Evaluations! Assessments! Big as they are, Industrial Giants exist at the whim of Consumers.

      If you actually knew what Money was? You could steal it above People's heads! Gosh! Don't you know? The Progressive Plutocrats have done it non stop for a hundred years! Wasting our Capital makes their Capital more valuable! More rare! Wash your cash back and forth across the Markets, nobody wins but the Plutocrats! It isn't a real Market, the buyers never touch real products. It is Market Manipulation on behalf of powerful thieves! The example is Income Tax. But lets go to Over Criminalization, to Over Regulation and Nationalization of American Industries! (Communism is an Unconstitutional Form of Government.)

      I wish the Markets were untouchable, perfectly free. Combine the Plutocrats with the Government? Bend over America! Here it comes again! Well! Guess what? We really don't have to take it! We can Create our way out of our Economic Slavery. Don't sell. Don't panic! Do not resort to violence. Build up something of real value and own it outright! As a Producer you get 100%! As a wage earner you get 5%!

      If everything Government did with its ten million Laws were counted as Cost? We are talking crazy waste of money on complexity alone. It will cost you a million dollars to prove the sky is blue! They wrote these Omnibus Bills to be incomprehensible. The Demo's say "We are the only ones who know what it means!" See? "Pay us!" The unreadable size of the Bill is demolition of Representation! By definition!

      Are we going to continue to let Obama redefine our Government by his acts? Oh how I wish I were exaggerating! Bankruptcy has always been on the List of what we'd call 'destruction.' Destroying America is exactly the right word. This is destruction by deception practiced well above the People's heads. All of America has become Redefined because the Progressive Socialists got away with it! Unbelievable High Crimes! They got away with it because the Crimes were too unbelievable! Like, for example Wisconsin Dems refusing Representative Government, not taking the majority rule.

      The Progressive Strategy worked! Imagine a President doing the opposite of a voted Congressional Intent! That is a howling High Crime against our Constitution in the very definitions! The Green Junk Agenda, the Junk Market Agenda, the Junk Medical Agenda, all exploit American ignorance to the hilt! You'd think Obama was a Sorcerer! With so many sophisticated lies!

    36. Carol, Chicago says:

      I agreed with every word – wholeheartedly. However, Medicaid is not an entitlement. Unlike Social Security and Medicare, Medicaid recipients do not pay taxes specifically for their own medical care. Instead, they are granted medical care they could not otherwise afford based on general taxation of Americans with higher incomes. That is fine with me. Of course if they came up with less bureaucratic systems, for example giving vouchers to Medicaid recipients specifically for medical care, the costs would be reduced by as much as 25 to 50%. The problems with Medicare and Social Security are a very different story and are due completely to government mismanagement that, in the private sector would border on the illegal. Americans pay 14.4% of their earnings for every year that they work directly into funds that the government is supposed to use to support their medical costs and income after retirement. The government spends this money on anything else it wishes, and then suddenly announces a financial crisis, tries to blame entitlements, and wants to cut pay outs. Imagine if a private company did that.

      Although it is true that it goes against human nature to save for the future, especially throughout 40 years of working, if Americans were required by the government to put these payroll deductions, now confiscated by the government with every paycheck, into their own safe, interest bearing accounts, virtually everyone would have substantial savings at retirement to allow their own support. Just go to an online calculator for compounding interest and you will see. Basically for every $100 invested monthly in a safe instrument at 6% interest (which was the average over the last several decades), you have $200,000 in 40 years. Now you have nothing unless the government decides to give anything they choose to you (someone making $48,000 a year – about the national average, would have collected $800,000 after 40 years (assuming 1.5% of the 11.5% deduction went to a national pool for disability and survivor benefits). At 6% interest that would yield $48,000 a year! (Same thing if you make only $12,000 a year, you end up with $200,000 and interest yields $12,000 a year.) When you die whatever is left could be split -half to the government to fund ongoing Medicare and Social Security, half to your heirs specifically to fund their social accounts. For Medicare at $48,000 you have $200,000 and will keep accumulating interest of $12,000 from which you could buy insurance (but would also be subsidized). In both cases contributions of a portion of the funds from the wealthier should be distributed to lower income workers in need. The government does not want us to understand any of this. And, of course, if they want to keep interest rates at less than 1% they will be right – we will be able to borrow but never own and therefore always be dependent.

    37. Ron W. Smith, Provid says:

      What better target than wasteful spending? We all agree. The first step toward fair reduction of anything regarded as wasteful is open discussion/debate designed to inform everyone of (1) what is being considered as wasteful, (2) why it is being called wasteful, and (3) what the unintended consequences could be once the spending is reduced or eliminated. At all costs, avoid strictly partisan decision-making. Every prepared person should have a chance to participate as long as that participation is not duplicative.

      Having said that, let me nominate a broad area presently skirted by politicians as though radioactive: spending on national security. Since we spend more than the rest of the world combined on that collection of five–now over $1 trillion a year–waste is there in abundance. Secretary Gates has pointed out possibilities in national defense, but there are more there, not to mention to plenty more in homeland security, nation building, foreign aid designed to secure the cooperation of other countries, and veterans affairs. Any foreign policy that creates the necessity for spending $1 trillion a year is the result of choices made that surely may both be questioned and subject to revision, hence a panoply for the cutters.

      That the Heritage Foundation chooses to limit governmental powers to defense and enforcing contracts looks conveniently to be a direct route for cutting all else. Here, too, open discussion and debate among those prepared to contribute should be accepted as appropriate. I'm available.

    38. Karen Chionio, Estes says:

      I LOVED this article! (3/2/2011) until you once again named Social Security, et.al. as 'entitlement programs'. As a person close to retirement, I have contributed to this retirement fund for almost 50 years. I know that if I live a long time, I might receive more than I put in. However, does this mean that we call all insurance policies 'entitlement programs'? I've also paid taxes for almost 50 years, most of which have gone into programs for which the recipients have paid nothing. Now I would think THESE programs are what you should call 'entitlement programs'. Please remember there is a difference.

    39. KC - New Mexico says:

      I find it hard to believe that any intelligent politician would accept reports from bailed out organizations such as Zandi and Goldman. Cutting the size and spending issues of the current administration will take some tough decision making and leadership. The professional politicians need to forget about 2012 elections and do what is right for this country.

      Not everyone will be happy about the cuts in funding but we can no longer give it all to those who have needs. We can no longer be held hostage to the governmental unions – they need to be dissolved. We could use some of the wasted money that is funding the rest of the world. Raising taxes should not be considered as well – from the government to the local level.

    40. Frank, Florida says:

      Very, very sad if liberals INSIST on continuing government wasteful spending. Amazing. Cutting government waste would HURT the economy (especially during times of a fiscal crises)? Should we then hire millions of people to sit at a desk and stare at the walls all day long & do nothing? What a great "stimulus" to economy that would be!! We could reduce unemployment to ZERO!!

    41. Blair Franconia, NH says:

      Right now, there's a move to cut $4 billion from the budget. The BIG PICTURE? It's

      actually more like $61 billion. The Senate, under Harry Reid, doesn't want $61 billion in cuts. Why? Because they want to "invest" in expensive things we can't afford right

      now like high speed rail, which we don't have the dedicated trackage for, and high speed internet, which we don't have the money for. Let companies like Microsucks, I

      mean Microsoft, Apple, and Dell,for example, provide high speed internet. As I told asked my sister yesterday, "Where are we going to get the money? From China?" I

      doubt if China will provide us with the money.

    42. Chris Baker, Califor says:

      Actually the government should stick to it's enumerated powers and politicians should learn to keep their promise to uphold and defend the constitution instead of being it's worst enemies. They should start by abolishing all the unconstitutional programs and agencies. That would eliminate any deficit spending and very soon the debt as well. Once they started paying down the debt, a huge amount of capital would become available for real investing, not the fakery indulged in by the current people running things, that businesses would prosper, employment would skyrocket and things would, for the most part, be wonderful. It wouldn't be so good for lazybones and moochers though, they might actually have to work for a living. It would also get "charity" back where it belongs, in private hands where it could actually go to truly needy people.

    43. David Bess, Carson C says:

      The private sector always does it better, cheaper and more efficient than government. The government needs to get out of the way with their obstructive rules, regulations, entitlement programs and taxes. The private sector needs the freedom to grow and flourish for they are the only creators of real jobs and real wealth.

      There are billions, if not trillions of dollars available by just opening up the petrolem industry in this country. A million new, good paying jobs, and most within America. Then there's manufacturing, mining, agriculture, steel mills, the list goes on and on. The oportunities are limitless. But accomplishing this task will be a long and hard fought battle. But the battle must be fought and won if we're not to be the next third world country.

      It is time not only to look at cuts in government spending but to cut the strangle hold the government has on the private sector through regulation, environmental constraints, taxes and fees. This country was built by the private sector. People and companies that through hard work, technological advances, risk and investment created jobs and wealth. The government dosen't understand this and couldn't accomplish it if they did.

      The federal government was built to provide a common defense, common currency and interstate trade. Nothing else, that was left to the states and the people. Less government, less regulations, and less taxes is the only sure way to create new jobs and wealth for America.

      The "evil" corporations and companies are for the most part owned by the American people through their investments into stocks and bonds. Harming these entites harms all of the small investors. So by taking on private industry the result is that you are also harming the American people themselves.

      You owe this to future generations. We have managed to take the greatest country that has ever existed and destroy its values, traditions, and ethics, the basic fabric that created America.The government must be controlled and the people set free to prosper.

    44. toledofan says:

      The premise of creating wealth by redistribution is a myth that the Democarts can't understand or don't want to because if they did then they wouldn't get elected. The liberal systems, world wide are crumbling, and they are all based on redistribution of wealth, that's a code name for taxes, fees or whatever charges the government want to employ to get more money. So, wasn't it Obama himself that said he was going to find the waste and eliminate it, wasn't he going to cut the pork, and wasn't he the guy who said his administration would be the most transparent? Well, one thing we know for sure, whatever he says the actions don't match the words but we also know they were never serious about anything other than spending more of what we don't have.

    45. Gilbert Mauk, Scotts says:

      Even the most liberal of liberals must understand that spending money you don't have will lead to a bad end. How can we reach these people with rational commentary that will enable them to see the obvious? They seem to reject most fact based arguments such as the ones you offer in this article.

    46. Carol,AZ says:

      TO: Carol & Leon:

      Thank you Both of your posts;

      both are exceedingly intelligent, insightful, and has reinforced my own feelings regarding the systematic trashing of, free enterprise in America.

      The system, is the impetus, for all state-of-the -art research and developement that changed the modern world as we know it.

      Leon, I understood every word of your brilliant delineation.

      For me, you nailed it.

    47. William Darling, Lon says:

      Why is it, in this atmosphere of cutting spending, that no one looks back on the Grace Commission report done during the Reagan administration? The report documented how, in those days, and those dollars, implementation of the recommendations of the Commission would have been saving as much as $1,000,000,000 per year by 2000. Had we done that then, we wouldn't be where we are today, IMHO.

      The simple fact is that no Congress has the courage or the commitment to those whom they purport to represent, to follow through on all these issues that have existed for a long time but have never truly been acted upon.

    48. Charles Nystrom, Sum says:

      :It is not productive to offer reasoning and facts to support your arguments. To Conservatives they are superfuuous and for Liberals an affront.

      The point is, 25% of the current Federal Government function could be removed and not missed, except for the cost savings. No arguments or facts needed. Think the EPA, EDU Dept, Energy Dept, HUD, etc. None is essential. All casue serious damage to our economy and moral fiber.

      But the resulting massive layoffs must be offset with private sector jobs. And that means restoring our manufacturing.

      So let's stop talking and CUT!

    49. F.D. O'Toole, N says:

      I recall that the Grace Commission in the 80's came up with a huge volume of waste and potential cuts called the Grace Report. Congress is probably still using the shredded paper to heat their fireplaces.

      In addition, I agree with the comments about Social Security. For those of us who paid into it for 50 years, it is criminal to talk about cutting it now. But you and I know that the Federal Government can do anything it pleases. And it pleased them to spend the funds collected from the employee and employer, and any interest that accrued on those funds over 50 years…so they spent it, and it's gone. Too bad for the old folks.

    50. Bobbie says:

      Head Start could easily go back to what it use to be. Private daycare centers. Where the parents (not government) have a choice, where the parents (not government) are in control and the parents (not government) are aware of the curriculum where the provider (not government) determines the cost, where the benefit is the day care provider, parents and children, NOT GOVERNMENT and their highly suspected, socialist curriculum indoctrinated… starting at age three.

      Free Market enterprise.

      Because things of great cost are free to some, nothing should be free to anyone. This helps mature the mind to make responsible choices. Personal accountability builds integrity and taking advantage wouldn't be inherent as it seems to have become.

      I agree to the removal of government in every area we the people of various nationalities and countries, have been, can and should be expected in this country, to do for ourselves.

    51. Ben C. Ann Arbor, MI says:

      Ken – thanks for your explanation. I now understand that I should stop working and rely on the government to avoid paying taxes. Pretty simple picture – let someone else provide for me and not be responsible for my personal welfare. Since this is working so well in Detroit it should work really well in Ann Arbor. Hmmmm – what if we all did this?

    52. Lou, PA says:

      Since when has the left wing hijacked the term "Progressive"?? Their socialistic programs certainly represent NO "progress" to me. And Heritage buys into this by calling the Liberals "Progressives." Stop giving the left wing this type of support!

    53. Dave, MI says:

      "Congress cannot create new purchasing power out of thin air."

      That's true, but the Federal Reserve sure can!

    54. Roger M. Derby, Memp says:

      One of the casino operators in Las Vegas explained it very succinctly. "The bigger the handle, the greater the skim."

      Empire building in Washington DC is second only to getting your congressman reelected for the "Civil Servants" that actually run the place. The more people you boss, the higher your grade.

    55. Bob, Texas says:

      The requirement to pass economics 101 should be mandatory before any elected representative’s vote could be counted. That is the only hope for an effective government of the people, by the people.

    56. Russ Brown says:

      I often wonder why something is not said about the Department of Education. The Federal Government has no value in promoting education. That is each States responsibility. Different States have different needs. If you shut down the Department of Education,it would save billions of dollars.

    57. Searcher, Virginia says:

      The title of this article embodies the message: Liberals love government waste because they love themselves above all others.

    58. KC - New Mexico says:

      Ken Jarvis – you keep forgetting – you can tax the rich till there are no more – then what are you going to do? That is the problem with entitlement thinking. It is time to get out there and earn what you get!

    59. Old Dog says:

      News Flash! Progressives declare White, Black.

    60. Mike, Chicago says:

      Cut food stamps, school lunches, and other forms of public aid and make almost everyone pay some taxes ( cut EITC) and our debt will go down.

    61. Tom, Texas says:

      I get a kick how everyone thinks this mess we are in is a Democratic problem. Its a politician problem makes no difference what party. They are all fiscally irresponsible.

    62. Ronald Bell Springie says:

      insanity is doing something that don't work and do it again, and again,with the same results, same problems , same culprits, and expect change, from no change, Governments rely on the gullible, spread the propaganda, collect and spend, ain't good enough, now its spend and take it.

    63. doctordave says:

      The wast in government is another vote for the Democrats, who hold people hostage to their worthless government jobs. Counting the days before retirement, where they will be able to collect retirement, they will then seek other employment, sometimes back in the same gravy train. Keep them on the rolls. They know how to hide out.

    64. Ray says:

      OK! If we want to mant fegeral buget cuts then we must start at the heart.

      All elected officials should have term limits. The president term is set to 2 terms.

    65. Ray says:

      Ok! if we want to balance federal spending then we have to start at the heart.

      The predident is set to a limit of 2 terms. So elected officials congress and senators should be also limited.

      The reason senators and congress members are elected is to represent their consituents. Not their largest financial contributors.

      The legal working American citizens contribute for social security, retirement pension, medicare, medicade, welfair and pay for private medical insurance Then so should congress and senate members.

      When was the last time legal American workers got a wage increase? Well congress and senate members almost yearly get pay and pension increases.

      Also since the American workers don't get golden medical insurance, travel benifits and lots of time off congess and senate should not get these extra benifits. .

      Why do they say we would make better pay back in civilain life.Well then they should have not picked a job that requires them to represent their constituents.

      Why are they more intrested in lining their pockets with tax payer money, business contractor contributions, passing pork barrel spending etc..

    66. Heritage member greg says:

      I hope with all my heart that the republicans have the fortitude to stand their ground and demand that the dems and president obama sign onto the cuts that will save this country or go ahead and shut the goverment down. if they don't make thecuts the goverment will fail anyway and that would bealot harder to fix than the budget not to mntion repairing our reputation on the world stage. as a social security recipient (my only income) i would still support a shut down to save the country!!!!!

    67. HawkWatcher says:

      Chris Baker, Cali has it correct. To stifle the whimpering and succeed at this policy, Congress needs to start with the difficult task of selling the American people on a raise.

      Congress: "Federal tax witholdings from paychecks will go down every time we return powers to the states and people." They need to sell the unemployed on a job. "Federal taxes and regulations on business are being lowered and relaxed, and jobs will come as a result." They need to sell the liberals on cutting spending. "We will do the people's work. Read the numbers, shut up, and sit down."

      I know…wishful thinking…but if we elect the right Senators and President, entirely possible in 2012. I'm going to spend as much as the law permits to help make it happen, just as every patriot should.

    68. Alan Clune, Newark, says:

      Perhaps the reports of 700,000 jobs lost is accurate. If those jobs are funded within the federal, state and local bureacracy, and those who directly support those bureacracies, then that may be the case. Of course, those jobs aren't contributing much of value–except in the minds of the wealth redistributionists (a.k.a., Obama and his fellow travellers). The real problem will be what to do with these displaced emloyees, many of whom have been drones for so long that they have few skills or aptitudes that would be of value in the marketplace–at least, not at their current pay grades. Pardon this harsh assessment, but a lifelong-career in civil service may have colored my thinking.

    69. Peter Weickgenant, B says:

      They talk about 700,000 jobs that will be lost, but where did these jobs come from? Wasteful government bureaucracies that hire people to work them. So the jobs eliminated should not have been there anyway. Sad for the worker, but shame on the people that that increased the govt, to create the job.

    70. Steve S. California says:

      Listening to Zandi and Goldman about economic policy is like taking driver's ed from the drunk that ran your car into the wall totaling it and making you sustain injuries which will take years to heal. Also, how do you consider a program which you were forced against your will to participate in an entitlement program? Shame on you for falling for that weak line from folks who not only don't participate, but screwed the program into the ground by taking it out of trust in the first place. Too bad not one politician out there has the backbone to even suggest putting it back where it belongs. Oh, I know, let's do private sector stuff, like require the state to contribute $57 for every $1 contributed by the individual, just like Wisconsin. Worked great, right?

    71. Pingback: Why voters act like morons | Amerika: New Right, Conservationist, Traditionalist, Deep Ecology and Conservative Thought

    72. Pingback: » Sunday Weekly Summary MySquawk

    73. Earl, QUEENS, NY says:

      In reality, the GOP House budget cuts are like petty cash compared to the trillions in deficits by BHO and his democrats!! As long as national security and defense, social security and other vital services continue, what’s wrong with shutting down the government?? In fact, if the government needs to shut down until 1/20/2013 (hopefully the end of this error!!), then good, let it be!! The GOP can campaign on it in 2012, and make it clear to voters that America can no longer afford the democrats’ big government and out of control spending!! It’s also frustrating that so many democrats lie by saying conservatives/republicans want people to starve, and many republicans are too timid to stand up and refute the democrats’ lies!! In reality, the GOP is not against safety nets or helping those truly in need of temporary assistance. And even IF it were, let’s get the facts straight!! The democrats label the GOP as the party of the rich, along with the myth that the GOP wants to take from the poor to give to the rich. How can that be true?? GET REAL!! Whether you earn $15,000 or over a million, it is YOUR MONEY which you EARNED!! As for the drones and moochers, how can they accuse others of taking away that (handouts) which they never earned in the first place?? Likewise, how often do you hear drones or moochers thanking us for the fruits of our labor which we were forced to hand over to them?? LOL!! NO WAY!! All the drones/moochers do is demand more handouts!! Why should these economic hitchhikers and freeloaders be entitled to what we work for?? As for the GOP, if they cannot or will not fight the leftwing socialist democrats, they need to be defeated in next year’s primaries!!

    74. ted says:

      All these imagination web or blog sites have one major problem with government waste. The problem is after you find and isolate the at most 5% waste what is the answer to that 95% that is not waste. Trust politicians to contract out to private contractors for state work. Who is going to control those contractors when they start sticking us, the politicians?

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×