Fun Facts About Free Government Pork

Here are some Fun Facts about Free Government Pork

United States Senator Mary Landrieu, Chair of the Senate Homeland Security and Governmental Affairs Committee Disaster Recovery Subcommittee, added an amendment to the 2009 American Recovery and Reinvestment Act that created an arbitration panel to mediate disputes in Public Assistance projects from hurricanes Katrina and Rita. The American Recovery and Reinvestment Act is colloquially know as the "TARP" legislation. The arbitration panel awarded 474 million to Charity Hospital in New Orleans, which was damaged by hurricane Katrina in 2005. The Federal Emergency Management Administration, FEMA, initially estimated damage to the hospital at 124 million and offered to pay 150 million for repairs.

Fun Facts About Free Government Pork - Rent Reduction

The YWCA of Greater Los Angeles received $82,071,434 from the 2009 "TARP" legislation. The majority of the award, 81.9 million dollars, was specifically intended to be used for "rent reduction". Job creation was reported to be 'zero.'

This award affects the 34th Congressional District, represented by Congresswoman Lucille Roybal-Allard. Roybal-Allard is a Democrat who sits on the House Appropriations Committee.

http://stimuluswatch.org/2.0/awards/view/31090/this-is-a-multi-year-lease-as-authorized-by-the-american-recovery-and-reinvestment-act-of-2009-which-specifically-states-that

Fun Facts About Free Government Pork - HP Scanners

The USDA (United States Department of Agriculture) in Cincinnati, Ohio, was awarded $22,644 to purchase 17 Hewlett-Packard scanners, which were shipped to multiple locations.

Job creation was reported by the recipient as "helped retain 3 sales FTE's and the hiring of 1 customer service temporary FTE". FTE stands for "Full time Equivalent".

The recipient of the funds is listed as "Government Acquisitions, Inc., Cincinnati, OH 45202". According to their web site, the company is "an IT solutions provider and trusted adviser to the Federal Government." Assuming that the scanners were marked up 50% from the wholesale price, $11,322 went to pay for the hardware and $11,322 went to job creation and 'saving'. $11,322 / 4 = $2839 per job that was created or saved. Assuming $50,000 per year per sales job, each sales job was 'saved' for 20 days.

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Comments 23 comments

DanDnAZ profile image

DanDnAZ 6 years ago from Phoenix, AZ

GREAT HUB!!! Love the math.


Dave 6 years ago

Looks like we're in the wrong business!


Tom Whitworth profile image

Tom Whitworth 6 years ago from Moundsville, WV

Nobody else except the Government is allowed to spend money anymore. They print it, they seize it, they spend it!!!!!!


nicomp profile image

nicomp 6 years ago from Ohio, USA Author

@DanDnAZ: Thanks.

@http://creatingsawdust.com/: Yep. We need to be all up in their business.

@Tom Whitworth: But they are creating jobs!


breakfastpop profile image

breakfastpop 6 years ago

Terrific hub. I am buying a printing press and following in the government's footsteps!


nicomp profile image

nicomp 6 years ago from Ohio, USA Author

@breakfastpop: Silly. Don't BUY the printing press. Apply for a grant!


ehern33 profile image

ehern33 6 years ago

Great hub! I wonder how much they will pay for a toilet seat? The government is so full of it they better get some more, they are going to need it.


jiberish profile image

jiberish 6 years ago from florida

What's life without a little pork? All those millions of jobs that were created and saved mostly by the pork, and of course the 43 Czars. With trillions of dollars of debt, what's a little pork? Most unemployed would appreciate some scraps. POP would probably get the grant because she would be creating or saving one job!


ecogirl333 profile image

ecogirl333 6 years ago

Scary


lovelypaper profile image

lovelypaper 6 years ago from Virginia

Ain't it great how they're spending our money?


TheCreditTruth profile image

TheCreditTruth 6 years ago from Pittsburg, PA

80,000,000 Dollars and no jobs created? That kind of stuff drives me crazy.


nicomp profile image

nicomp 6 years ago from Ohio, USA Author

@TheCreditTruth: But they meant well?


drbj profile image

drbj 6 years ago from south Florida

What we need is an anti-TARP movement that uses the same acronym but have it stand for Truth About Redistributing Patronage. Wanna join?


nicomp profile image

nicomp 6 years ago from Ohio, USA Author

@drbj: As the ocean said to the sand: "shore!"


Ben Zoltak profile image

Ben Zoltak 6 years ago from Lake Mills, Jefferson County, Wisconsin USA

I enjoy your specifics nicomp, few people will delve in that deeply. I wish I could be a politician, I could spend for a living, somehow I think I could find the motivation to be a solid spender of other people's money.


My Esoteric profile image

My Esoteric 4 years ago from Keystone Heights, FL

Just a note, TARP stands for Troubled Asset Relief Program, not ARRA or American Recovery ...

TARP was a Bush-era program passed in Oct 2008 to stop the total collapse of the American financial market. ARRA was passed in Feb 2009 to provide stimulus to the economy to get it growing again after the near depression. There were four main features that were supposed to put $$ back into the economy: 1) extend unemployment - a direct stimulent, Republicans and Democrats, but not Conservatives like that one; 2) a tax rebate for the middle and lower income groups, a partial stimulant, Republicans, Democrats, and some Conservatives like that one; 3) funding to the States to retain teachers and first responders to keep money flowing in the economy, most Republicans and Democrats, but not Conservatives liked this piece; and finally 4) the part your hub addresses, funding projects of one sort or another to promote job creation more or less directly (the rest were indirect by simply pumping money into the economy), moderate and liberal Democrats and Republicans liked this idea as did most conservative and liberal economists, all other conservatives hate it.

For example, the lease you mention to the YMCA was to allow them to keep their doors open so as to continue to provide job training in conjunction with the Job Corp, among other things. You may or may not think this is a good thing, I am debating it myself, but it is not totally rediculous.

You other example needs more discussion, so I will come back for that.


nicomp profile image

nicomp 4 years ago from Ohio, USA Author

@My Esoteric : Good info. Thanks!


My Esoteric profile image

My Esoteric 4 years ago from Keystone Heights, FL

Your welcome, Nick. As promised, here is part 2, the fairly innocent and wasteful sounding $22K spent by USDA on buying computers to help keep some 3 FTEs and a temp employed. Here is the backstory. It was really three contracts for $110K to help the same four people, so you might want to adjust your numbers to reflect that; you wont lose any of your meaning doing so, it still comes out looking like a rediculous waste of stimulus $$; and it still may be given that there are so many other things that could have been done with the $100K. Nevertheless consider the following.

Assume for arguments sake that without this purchase by the USDA CIO office, the four people would have been laid off along with the other 10 million people who already had lost their jobs by Sep 2009.

Now, lets set up some facts surrounding the situation. Using your $50,000 per person, that means the gross salary of the four was $200,000.

- Assuming they had a marginal tax rate of 15%, that means they probably had an effective tax rate of, say, 10%, or $20,000 per year in income taxes they paid

- That would also be about $29,000 in payroll taxes the company and individuals would be paying as well plus assorted unemployment taxes and worker's comp taxes, insurance premiums etc.

- Unemployment payments, if they quit working, would be what ... 50% of their previous wages, or $100,000 a year for a period of more than a year, if they can't find more work (50 people for every available job then)

I hope you can see where I am going with this. If the government spends a $11o,000 now for equipment it probably needs to buy at some point in time anyway, what happens? Four people are able to continue to work for a period of time (not just from this $110,000 but from other sales as well, presumably) and will continue to pay taxes to the government as will the company (in addition to the payroll taxes, there will be the taxes on profits they have to kick-in as well); this is at least $49,000 the government gets back in taxes, so the bill is down to $69K from $110K.

Continuing this logic, say the gov't doesn't spend the $11oK and the people are laid off, what happens. $49K+ in tax revenues are lost and potentially $100K in unemployment costs will now be incurred that otherwise would not have been.

So, if my boss had ask me to do an analysis of whether or not it made sense to make this grant, as an economic analyst, doing a top-level anaysis, my initial answer would be yes. Would it be the best among other alternatives? Well, I would have to see the other alternatives.


nicomp profile image

nicomp 4 years ago from Ohio, USA Author

Regarding the copier salespeople, I'll stick with my numbers because I took them directly from the USDA web site. You are still fuzzy on Opportunity Cost: the money redirected from taxpayers to keep those people working for a relatively short period was no longer available to be spent by the people that earned it. That can't be ignored. Your analysis is also flawed because you are considering only the lesser of two evils: there's no good reason for the federal government to support those folks if they do lose their jobs. It's hardly fair to take money from a hard-working family in Kokomo to fund short-term employment for copier salespeople in Cincinnati.


My Esoteric profile image

My Esoteric 4 years ago from Keystone Heights, FL

Mine were from the same site, there were two other grants for the same purpose that supported the same four people, I just added them together.

The "no good reason ..." part is a philosophical issue that separates conservatives from progressives and comes down to the interpretation of the phrase "provide for the general Welfare". General Welfare means two entirely different things to you and me; but in any case, it is a side issue here because you aren't taking money from the dude in Kokomo, you are borrowing it and adding it to the national debt.

The theory is that if the stimulus works as intended, then the revenue received in increased taxes will more than offset the money borrowed so your family in Kokomo is not even part of the equation, especially if the stimulus as the desired outcome. Even if it doesn't, it still comes down to the "greater good" argument that is the basis of our society.

Opportunity Cost is not what you define it as, btw. Opportunity Cost is what you forgo by making one choice over another. The "opportunity cost" of buying those 3 packs of cigarettes a day for a year is the income stream I would have received if I had invested that money instead.

In your example, the opportunity cost doesn't exist because nobody isn't redirecting any money from taxpayers to keep the sales people working, it is being borrowed instead with 49 cents of each dollar borrowed being paid back in the form of taxes because the person stayed employed and another $1 in unemployment cost that was avoided because they stayed employed as well.

Another way of looking at it is that the opportunity cost of not buying those computers at that point in time is $1.49 for each $1.00 not spent. This strange outcome is the sum of the 49 cents in lost tax revenue and the $1.00 in unemployment benefits that must be paid.


nicomp profile image

nicomp 4 years ago from Ohio, USA Author

Giving tax money to copier salesmen in Cincinnati to save their jobs for 6 months is in no way providing for the General Welfare. That is a textbook definition of specific welfare.

It's also arbitrary. Why did those specific salespeople receive funding while I did not? Why weren't they funded for two years? How can even the most liberal Liberal consider that to be 'fair?'

By this logic, no one needs to have a job: the federal government can cover us all.


nicomp profile image

nicomp 4 years ago from Ohio, USA Author

"The theory is that if the stimulus works as intended, then the revenue received in increased taxes will more than offset the money borrowed so your family in Kokomo is not even part of the equation,"

You're still ignoring Opportunity Cost.


My Esoteric profile image

My Esoteric 4 years ago from Keystone Heights, FL

I answered you about Opportunity Cost, your version doesn't even apply here. Clearly you think it does, please show me how with some examples.

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