Tag: Budget

Unleashing the Power of the Private Sector

It turns out that putting Medicaid under private management in Iowa has tripled the price increases compared to previous years.

The private sector is to the efficient administration of healthcare what Ebola is to French kissing:

The average cost of insuring an Iowan on Medicaid has climbed nearly three times as fast since the state hired private companies to manage the program, when compared to the previous six years, new state figures show.

Since fiscal 2017, the first full year of privatization, the per-member cost of Iowa’s Medicaid program has risen an average of 4.4 percent per year, according to the non-partisan Legislative Services Agency. In the previous six years, the per-member cost rose an average of 1.5 percent per year, the agency said.

The new cost figures come amid continuing controversy over whether Iowa should have hired private companies to run the $5 billion program. The shift’s supporters said it would slow growth in health care spending on the more than 600,000 poor or disabled Iowans covered by Medicaid.

The Legislative Services Agency compiled the new cost increase figures from past budget reports published by the Department of Human Services, which oversees Medicaid.

………

The Medicaid cost increases for this fiscal year are partly driven by an 8.4 percent raise the Iowa Department of Human Services agreed last month to give the two managed-care companies running the program. That raise, which includes state and federal tax dollars, will send $344 million more to Amerigroup and United Healthcare this fiscal year, which runs through June 2019.

So, spending millions of dollars on private management don’t end up saving money.

Hoocoodanode?

Pennsylvania Pushes Back Against Hedge Fund Looting

The State Treasurer has taken a look at the hedge funds, and the state are moving to simpler financial instruments, which have far lower fees, and actually perform at least as well.

Of course, low fee funds don’t have the money to spend on political donations, so I do wonder how long it will be until the state legislature starts pushing back over this:

Pennsylvania Treasurer Joe Torsella last month told the world he’d pulled the state’s money — or at least the slice he oversees — “out of all so-called hedge-fund investments, resulting in [over] $14 million in annual fee saving.”

The claim sounded familiar. I looked it up, and sure enough Torsella had announced back in April 2017 that he was moving $2.4 billion in state funds away from private investment managers into a “passive investment strategy, saving an estimated $5 million per year in fees.”

The 2017 purge was against “actively managed” stock investors. This fall’s move, dumping nearly $500 million out of hedge funds, was “the next installment,” Torsella spokeswoman Ashley Matthews told me.

This was smaller than the stocks move (just one-fifth of the assets), but also bigger (almost three times the fee savings).

The move reflects Torsella’s long-held position to put more state pension money in low-cost index funds while avoiding high-fee hedge funds.

Through a company called Aksia, a “fund-of-funds” manager hired under Torsella’s predecessor Rob McCord, Pennsylvania employed more than 50 hedge funds — such big firms as BlackRock D.E. Shaw, and Philadelphia’s PFM, as well as more obscure investors in a web of hedging strategies — to invest a slice of Pennsylvania families’ Tuition Assistance Program (TAP) money.

What does the record show? Since 2013, Aksia and its funds were paid more than $100 million by the Pennsylvania treasury — $15 million a year — in fees and shared profits (“carried interest”), for managing that not-quite-$500 million.

How’d they do? According to Treasury data, after paying those fees, the hedge funds returned an average of less than 4 percent a year over those 6½ years. That is less than the college savings plans’ long-term target for all investments, which is 6 percent a year.

This is an unalloyed good.

First it means that the taxpayers of the state of Pennsylvania are no longer being ripped off, and second,  it represents a claw-back of power and money from Wall Street.

Pelosi Backs Down

After ignoring progressive concerns over her drug price bill Pelosi has cut a deal with the Progressive Caucus to strengthen the bill.

I still do not think that the bill is strong enough, but it’s good that progressives in Congress were sufficiently disciplined force the Speaker to do the right thing:

Speaker Nancy Pelosi (D-Calif.) reached a deal with progressive leaders on Tuesday night to avert a showdown over her signature bill to lower drug prices.

The deal with Reps. Pramila Jayapal (D-Wash.) and Mark Pocan (D-Wis.), the co-chairs of the Congressional Progressive Caucus, will include two changes that progressives have been pushing for over the course of weeks.

Those changes are to increase the minimum number of drugs subject to negotiation under the bill from 35 to 50 and to restore the implementation of Jayapal’s amendment, which would extend protections against drug price spikes to people on employer-sponsored health insurance plans, not just those on Medicare.

The deal prevents a showdown on Thursday when the bill will come to the floor for a vote. Progressive leaders had been contemplating a rare full-scale rebellion against Pelosi, thinking of blocking a vote on the drug pricing bill by trying to vote down a procedural motion.

What a Surprise

Won’t you look at that: Amazon is coming to NYC anyway – *without* requiring the public to finance shady deals, helipad handouts for Jeff Bezos, & corporate giveaways.

Maybe the Trump admin should focus more on cutting public assistance to billionaires instead of poor families. https://t.co/BbqhXbB9MM

— Alexandria Ocasio-Cortez (@AOC) December 6, 2019

Well, what do you know, after Amazon’s subsidies were threatened, and the company took its marbles and went home, Amazon just brought its marbles back:

Rep. Alexandria Ocasio-Cortez suggested the Trump administration “focus more on cutting public assistance to billionaires instead of poor families” after news broke Friday that Amazon was expanding its presence in New York City without the state giving the company billions in tax incentives.

The decision by the online giant to lease 335,000 square feet of office space in Manhattan and employee 1,500 employees in the consumer and advertising departments was first reported by the Wall Street Journal.

The announcement came roughly 10 months after Amazon announced it was ditching its widely condemned plan to locate a second headquarters site in Long Island City, Queens—a plan for which New York state would have given the online giant nearly $3 billion in tax incentives.

Ocasio-Cortez was among that plan’s most vocal critics, asking at the time, “Why should corporations that contribute nothing to the pot be in a position to take billions from the public?”

In a Twitter thread Saturday morning, the New York Democrat said that Amazon would now be “bringing work without the welfare.” Ocasio-Cortez also countered the Republican talking point that the city was losing out on thousands of jobs.

What a surprise.  Subsidies don’t make a difference.

And Amazon dot com is the biggest welfare cheat in the nation

The Most Evil Bureaucracy in Government

Matt Stoller is on this.

He is talking, of course about one of the (many) misbegotten spawn of the Clinton administration, the Office of Information and Regulatory Affairs (OIRA) which among other things, literally assigned a price to raping children in prison. (adults too)

This is just one of the abominations, coal ash comes to mind, that these people have been hip deep in:

Today I have a treat for you, an issue of BIG written by an anonymous government lawyer buried deep in the bowels of American bureaucracy. One of the reasons Americans are losing faith in our political institutions is because laws passed by democratically elected officials increasingly don’t matter. One of my favorite regulators, Rohit Chopra at the Federal Trade Commission, said explicitly, as a sort of challenge to the commission, that “FTC orders are not suggestions.”

Of course, laws and regulators that affect the powerful are increasingly suggestions, and that’s why we’re in a political crisis. This anonymous lawyer is going to lay out one of the key institutional mechanisms by which economists and corporate interests wreck our ability to actually have laws take effect once they’ve been passed.

His explanation of how bureaucracy works will show that we should be paying attention this Wednesday to an obscure nomination of a corporate lawyer, Paul J. Ray, to be head of an agency of economists, the Office of Information and Regulatory Affairs, or OIRA. Because OIRA is where power really lives in Washington. It’ll be interesting to see if any Senators show up; Democratic Presidential nominee Kamala Harris is on the relevant Senate committee.

Why Congress Couldn’t Outlaw Prison Rape

Prison rape is one of the most horrifying and abhorrent practices in American culture. Prison rape is pervasive, a form of soft torture so extensive it is the butt of endless jokes in popular culture (as John Oliver noted in a long segment on how Hollywood jokes about the practice). In 2003, Congress unanimously passed the Prison Rape Elimination Act, a bill directing the Attorney General to issue regulations detecting and eliminating prison rape in Federal jails. In 2012, Erich Holder finally did so.

Congress gave discretion to the Attorney General, but because of an obscure regulatory agency, Holder didn’t have the final word. Instead, the Department of Justice was required to conduct an extensive cost-benefit analysis of its proposed rule and submit it to a small group of economists in the White House for their thumbs up on whether the Attorney General would be allowed to finalize the rule.

This group of economists is located in an obscure agency called the Office of Information and Regulatory Affairs, or OIRA, staffed at the time by a close friend of Obama, legal legend Cass Sunstein. Most agencies wishing to put out a must draft an extensive Regulatory Impact Analysis (RIA) detailing the costs and benefits of the rule, justify the need for the rule to OIRA, and make any changes OIRA economists demand. In this instance, technocrats issued a 168-page RIA questioning how much money the rape victims would be willing to pay to avoid rape, or how much they would be willing to accept in exchange for being raped. (The estimates were $310k to $480k for an adult victim, and $675k for a juvenile victim, for the ‘highest’ form of sexual assault.)

In the end, the regulations put forward were cruel and weak, exempting immigration facilities and putting “tight restrictions on inmates who report rape.” It also removed the requirement that prisons actually *do* anything except have a plan to reduce prison rape. Failure to execute on the plan meant they’ll need another plan.

………

The Regulatory Impact Assessment is here, if you want to to go through the cost/benefit analysis of prison-based sexual assault. Or you can just read a key paragraph, which details the amount it is ‘worth’ per victim.-

They also did their best to stop Congressionally mandated regulations for backup cameras (backing over your own kids), coal ash, favored vapes, etc.

OIRA has the authority to do all of this because of Executive Order 12,866, which was signed by President Clinton in 1993 “to reform and make more efficient the regulatory process.” Every president since Clinton has reaffirmed E.O. 12,866, often with their own “twist;” Obama emphasized that agencies should “consider…values that are difficult or impossible to quantify,” and Trump has put in place a regulatory budget. Regardless (especially since OIRA never took consideration of values impossible to quantify seriously), E.O. 12,866 has the end result of elevating economists above scientists and public health experts and giving economists a veto over all health, safety, and environmental regulations.

This may be worse than Clinton’s crime bill, devastation of the social safety net through “Welfare Reform”, and the repeal of Glass Steagall.

The good news is that OIRA is established by executive order, and so can be shut down by executive order.

Unfortunately, the only candidate likely to do this is Bernie Sanders.

Read the whole article for more horror stories about how OIRA has monetized the public good.

Ireland’s Economy is Based on Tax Evasion

This probably applies to even a greater degree to Luxembourg.

This is why they, and 10 other nations, torpedoed a proposal to add transparency in transnational tax avoidance:

Twelve EU countries, including Ireland, have blocked a proposed new rule that would have forced multinational companies to reveal how much profit they make and how little tax they pay in each of the 28 member states.

The proposed directive was designed to shine a light on how some of the world’s biggest companies – such as Apple, Facebook and Google – avoid paying an estimated $500bn a year in taxes by shifting their profits from higher-tax countries such as the UK, France and Germany to zero-tax or low-tax jurisdictions including Ireland, Luxembourg and Malta.

Ireland is one of the biggest beneficiaries of the current rules. The country hosts corporate offices that collect revenue and profits generated by many multinational companies across the EU bloc. Ireland allows global technology companies to pay corporation tax at rate as low as 6.25%, compared with 19% in the UK.

Ireland’s decision to vote against the proposed directive – which would have forced companies to report their revenues and profits on a country-by-country basis – came as the Irish tax-and-spending watchdog warned that the country’s economy could collapse if there was a global clampdown on tax avoidance.

The Irish Fiscal Advisory Council (IFAC) warned on Thursday that the country’s economy has become so reliant on taxes paid by multinationals that half of all of corporate taxes paid in the nation come from just 10 global companies. The firms are not named, but they are believed to include US technology giants Apple, Facebook, Microsoft, Dell, Google and Oracle.

Other countries that have set themselves up as low-tax environments helping to shelter the profits of the world’s biggest companies were also among those that voted against. They include Luxembourg, Malta, Cyprus, Latvia, Slovenia, Estonia, Austria, Czech Republic, Hungary, and Croatia.

………

The vote came more than three years after the European commission promised to expose multinational corporations’ tax avoidance measures following the Panama Papers revelations. The proposal would have made country-by-country reporting mandatory for companies with an annual turnover of more than €750m.

Elena Gaita, a senior policy officer at anti-corruption charity Transparency International, said: “It’s an outrage that member states have once again put the interests of big business above those of citizens.

………


The IFAC said corporation tax receipts had risen to account for one in every five euros of tax collected by the Irish government. It warned that between €2bn-€6bn (£1.7bn-£5bn) of the €10bn total corporate tax take is what it calls “excess”. “In other words, beyond what would be expected based on the economy’s underlying performance and historical and international norms.”

The budgetary watchdog said the Irish government had become increasing reliant on corporate tax receipts, which rose to a record €10.4bn last year, more than double the amount collected in 2014. “The reliance on these volatile receipts leaves the government vulnerable to changes to the global tax environment, including the Organisation for Economic Co-operation and Development’s (OECD) base erosion and profit shifting initiative,” IFAC said.

The OECD is trying to force big-tech companies, such as Facebook, Amazon and Google, to pay more tax in countries where they actually sell their products and services.

Ireland’s corporate tax rate is 12.5% but it charges only 6.25% for profits linked to a company’s patent or intellectual property.

Ireland’s tax base is based on tax evasion and money laundering. So is much of its economy.

Celtic Tiger, my ass.

Today in Hack Journalism

The New York Times uncritically reports on a study that shows that a wealth tax would slow down the economy.

The study assumes that none of the money collected will be spent on other programs, so this tax, like ANY tax will have a contractionary effect.

It’s only a few paragraphs down that they mention this.

It’s called burying the lede:

Senator Elizabeth Warren’s proposed wealth tax would slow the United States economy, reducing growth by nearly 0.2 percentage points a year over the course of a decade, an outside analysis of the plan estimates.

The preliminary projection from the Penn Wharton Budget Model, which was unveiled on Thursday in Philadelphia, is the first attempt by an independent budget group to forecast the economic effects of the tax that has become a centerpiece of Ms. Warren’s campaign for the Democratic presidential nomination.

The assessment found that if the tax raised as much new federal revenue as Ms. Warren intends, and if the proceeds went toward reducing the federal debt, annual economic growth would slow from an average of 1.5 percent to an average of just over 1.3 percent over a decade.

The model did not assess growth effects from Ms. Warren’s spending plans, which critics said undercut its findings. Economists who favor Ms. Warren’s plan said the analysis did not accurately account for the economic boost from programs she would fund with the tax revenue, including universal child care, increased education funding and student loan forgiveness.

Instead, it assumed that the tax revenue would be used to reduce the national debt, a move that encourages growth in the Penn Wharton simulation. Had the Penn Wharton model factored in the money’s going into programs rather than paying down debt, it most likely would have produced an even larger drag on growth from the wealth tax.

So, their model calls upon the austerity fairy in order to make their numbers.

This analysis is complete bullsh%$, and the report is even more cow excrement.

Still Cheaper than the F-35 Mistake Jet

The Snake-And-Alligator Border Moat: A Budget Analysis

Defense One

Someone ran the numbers of Trump’s suggested border moat with various reptiles, and came up with, “$2.5 billion in set-up costs, plus annual operating costs of $1.8 billion.”

By comparison, the F-35 is expected to cost US$1.508 trillion through 2070, 64 years, or about $23½ billion a year.

Personally, I want Sharks with frikken lasers, or at least some ill-tempered mutated sea bass.

This is What Pay-Go is Supposed to Do

Remember when Dems put PAYGO in the rules package and people like me (who raised hell) were told not to worry because it would be waived off as necessary to pass important legislation? https://t.co/Pd97gv8sqq

— Stephanie Kelton (@StephanieKelton) July 18, 2019

I’m always that Pelosi’s insistence on Pay-Go rules was profoundly self destructive.

I used to believe that this was a short-sighted policy driven by a need to appeal to the inside the Beltway pundits for whom deficits are important whenever Democrats take power.

I increasingly believe the affection of Pelosi, and the rest of the Democratic Party establishment for Pay-Go is more about having an excuse for not doing the right thing, because they don’t want to do the right thing.

Case in point, Democrats using Pay-Go to gut funding on community health centers:

Several Democratic lawmakers are accusing members of their own party of advancing a plan that would have the effect of cutting health care services for millions of Americans in poor and rural parts of the country — a charge fiercely denied by the package’s supporters.

Rep. Frank Pallone Jr. (D-N.J.), chair of the House Energy and Commerce Committee, is pushing a bipartisan plan that would provide flat levels of federal funding for hundreds of community health centers nationwide, at about $4 billion for the next four years. A similar plan is advancing in the Senate with the support of Sen. Patty Murray (D-Wash.), the top Democrat on the Health, Education, Labor and Pensions committee.

Lawmakers face a September deadline for the community health centers, after which their funding would begin to expire, likely leading to steep cuts.

Pallone said the plan would provide the security of the longest guaranteed funding commitment ever secured by the clinics, averting the September cliff. But flat funding would not keep pace with medical inflation, likely forcing the community health centers to serve about 4 million fewer people annually by 2023 than they do now, said Leighton Ku, professor of health policy at George Washington University’s Milken Institute School of Public Health.

There is always money for a free for the next bloated defense program, but when you want to provide poor people with basic healthcare, we must be fiscally responsible.

The neoliberal consensus of the Democratic Party leadership is bad politics and bad policy.

Reality, Bitches, Kansas Edition

We all know that Sam Brownback promised that his radical program of slashing taxes would unleash an economic powerhouse.

Rather unsurprisingly, it turned into a complete sh%$ show, with Kansas’ budget, economy, and infrastructure turning into a complete sh%$ show.

Well, now that he has been replaced by someone who is ……… well ……… sane, Kansas’ economy and budget have made an impressive turn-around:

Residents of one midwestern state can be forgiven if they have a feeling they are not in Kansas anymore. The Sunflower State finishes a respectable No. 19 overall in this year’s CNBC America’s Top States for Business rankings. That is a 16-place jump from 2018, making Kansas this year’s most improved state.

One year ago Kansas was still nursing a hangover from a disastrous tax-cutting experiment by former Republican Gov. Sam Brownback, who slashed individual income-tax rates and eliminated taxes on “pass-through” income from certain businesses. Even though a bipartisan super-majority of the state legislature had repealed the Brownback program over his veto in 2017, the state was still dealing with a residual $351 million revenue shortfall for fiscal 2018, according to the Center on Budget and Policy Priorities. In addition to its No. 35 overall ranking last year, Kansas finished a dismal No. 45 in the Economy category.

This year the full force of the repeal has taken effect: The state is running a budget surplus. In addition to the 16-point improvement in its overall ranking, Kansas rises 16 points in the Economy category.

“We are returning to our roots as a very progressive, thoughtful, forward-looking state,” Gov. Laura Kelly, a Democrat, told CNBC in an interview. Kelly was elected last year as part of the backlash over the Brownback plan.

Delusiona economics are a cruel mistress.

Totally F%$#ing Evil

The Trump administration’s plan to reduce poverty in the United States is to redefine poverty so far down that starvation won’t count as poverty:

In early May, the Office of Management and Budget announced that it was seeking public comments on a proposal to change how inflation and the consumer price index are calculated, and, by extension, how poverty rates in the United States are estimated.

………

Now, however, the Trump administration looks set to head off in the exact opposite direction. It has come up with a proposal to measure inflation by a “chained consumer price index,” which will most likely take millions of people who were previously considered by the government to be living in poverty, and declare that suddenly, magically, they are no longer poor.

The chained consumer price index is a particularly cautious way of measuring inflation: On a monthly basis, it tries to factor in how people change their consumption patterns in response to price spikes or changes in technology. If, for example, car prices significantly increased, but in response, vastly more people used public transport and thus weren’t as impacted by the industry-specific inflation, it would factor that in and reduce the price increase’s overall impact on the inflation rate.

In theory, that’s all well and good — except for the fact that poor people tend to be less flexible in their spending patterns than more affluent Americans. In recent years, economists have found that poor people actually experience higher rates of inflation than do those with more disposable income. If gas prices go up, for example, a middle-class American might choose to counter that impact by purchasing a hybrid or electric car; a poor person likely won’t have the down-payment or the monthly income needed to purchase a new vehicle and will thus be stuck with the old gas guzzler.

Of course, this is also something that the Obama administration proposed, only to retreat when  opposition to this scheme exploded, so while it’s completely evil, it’s by no means unprecedented.

Finding the Way (Again): Building the Air Force’s New Century Series

Mike Pietrucha thinks that the USAF needs to return its development and procurement programs to the mid 1950s, when it developed the 5 frontline Century Series fighters.

  1. Senior Staff (Major or higher) exempted from up or out.
  2. No rotation out until full production procurement, defined as 25% of the original order, is complete. 
  3. A prohibition on such staff working for defense contractors for 10 years after leaving the service. 

This would make decades long product development cycle a career killer, it would prevent program changes as management rotates in and out, and it would incentivize some alacrity, and time is (taxpayer) money.

Also, the perfect is the enemy of good enough:  It makes no sense to bankrupt ourselves in an attempt to completely overmatch any potential opponent.

We are spending more on defense than the next seven countries combined, and our roads are falling apart, our schools are underfunded, healthcare is unaffordable for much of the population, and life expectancy is falling in many regions.

We cannot afford our bloated military or our bloated weapons anymore.

    Let the Looting Begin

    At the core of the failure of the California High speed rail project is costly and largely incompetent consultants:

    When California shifted its bullet train plan into high gear in 2008, it had just 10 employees to manage and oversee design of the largest public construction project in state history.

    Consultants assured the state there was little reason to hire hundreds or thousands of in-house engineers and rail experts, because the consultants could handle the heavy work themselves and save California money. It would take them only 12 years to bore under mountains, bridge rivers and build 520 miles of rail bed — all at a cost of just $33 billion.

    State officials followed that advice, and for the next several years, development of the nation’s first high-speed rail line was overseen by a minuscule government staff.

    Now, more than a decade later, that decision has proved to be a foundational error in the project’s execution — a miscalculation that has resulted in the California High-Speed Rail Authority being overly reliant on a network of high-cost consultants who have consistently underestimated the difficulty of the task.

    ………

    But significant portions of this work have been flawed or mismanaged, according to records reviewed by The Times and interviews with dozens of people involved in the project. Despite repeated warnings since 2010 about weaknesses in its staffing, the rail authority believed it could reduce overall costs by relying on consultants and avoiding a large permanent workforce. But that strategy has failed to keep project costs from soaring. Ten years after voters approved it, the project is $44 billion over budget and 13 years behind schedule.

    A reckoning may be coming very soon, however.

    Gov. Gavin Newsom recently told The Times that he would be taking aim at the consultants when the rail authority sends a major project update to the Legislature on May 1, including a detailed plan on building a partial operating system from Bakersfield to Merced for $16 billion to $18 billion.

    “I’m getting rid of a lot of consultants,” Newsom said. “How did we get away with this?”

    But actually reducing the role of consultants will be problematic because they have become cemented into place.

    ………

    The rail authority’s consultants are hardly household names, but they are politically powerful and made major contributions to support the 2008 political campaign for the bullet train bond. They have staffed their ranks with former high-level bureaucrats, and their former executives have occupied key government posts.

    ………

    To be sure, consultants are a routine part of many state construction projects. In California, however, high-speed rail is in a league of its own when it comes to reliance on outside staffing.

    ………

    “If you depend on consultants to know what you are doing, then you are in real trouble,” said Bent Flyvbjerg, an Oxford University professor who has studied high-speed rail projects around the world. “A good balance is where the owner is not outsourcing all the knowledge. A bad balance guarantees a bad outcome.”

    Brian Kelly, chief executive of the rail authority, acknowledges that “the balance needs to be remedied.”

    Gee, you think?

    It turns out that corruption is why we cannot make things in the United States anymore.

    Mandy Reese Davies Applies

    Bill Gates hates Alexandria Ocasio-Cortez’s tax plan, to which the obvious rejoinder is, “Well, he would say that, wouldn’t he?”

    Bill Gates says he’s fine with the idea of higher taxes for the rich, but plans like the one being championed by Alexandria Ocasio-Cortez, which target the top income brackets, are too extreme—and could encourage the wealthy to hide their money in offshore accounts.

    Gates, in an interview with The Verge, didn’t mention Ocasio-Cortez or her well-publicized tax proposal directly by name, but his focus was clear. While the Microsoft co-founder and world’s second richest man agreed the U.S. could be “more progressive,” he downplayed “extreme” proposals, such as the freshman representative’s plan to raise the top tax rate from 37% to 70%.

    “I believe U.S. tax rates can be more progressive. Now, you finally have some politicians who are so extreme that I’d say, ‘No, that’s even beyond,’” Gates said. “You do start to create tax dodging and disincentives, and an incentive to have the income show up in other countries and things. But we can be more progressive without really threatening income generation—what you have left to decide how to spread around.”

    Bill Gates made his money in one of the most heavily subsidized industries on earth (copyright and patents are subsidies), and somehow any meaningful tax reform needs to be opposed, because some rich pig will find a way to avoid the taxes, so we have to try something else ……… And the next thing, that won’t work either ……… Rinse, lather, repeat.

    Mo Money, Mo Money, Mo Money

    Despite the fact that the F-35 technically entered service last year, it is still not combat ready.

    The block 4 upgrade is supposed to get it there (maybe) and now we discover that the price tag for this will run into the billions:

    Lockheed-Martin Corp.’s F-35 jet, the world’s costliest weapons program, just got even costlier.

    The estimated total price for research and procurement has increased by $22 billion in current dollars adjusted for inflation, according to the Pentagon’s latest annual cost assessment of major projects. The estimate for operating and supporting the fleet of fighters over more than six decades grew by almost $73 billion to $1.196 trillion.

    ………

    Instead, the increase reflects for the first time the current cost estimates for a major set of upgrades planned in coming “Block 4” modifications, according to the report.

    ………

    But the long-range cost estimate for operating the fleet from 2011 to 2077 was problematic even before the latest independent Pentagon cost projection of an increase to $1.196 trillion. By contrast, the F-35 program office’s latest estimate declined by about $8.5 billion to $1 trillion.

    Block 4 is a major upgrade, and includes integrating new weapons beyond its current meager loadout, (including European weapons and the short range Sidewinder), adding electronic warfare capabilities, and adding the ability for the F-35 to communicate with legacy aircraft.

    Note that even with this upgrade, the cannon will still not work properly, and the vaunted ALIS maintenance program is still (at best) marginally operational, so the term “combat ready” is a bit of a stretch.

    For only a few tens of billions of dollars, which could otherwise be used to rebuild aging infrastructure, educate citizens, and provide healthcare.

    The F-35 is an exercise in what James Tiberius Kirk would call, “The illogic of waste.”

    Another Stopped Clock Moment

    [UPDATE: I did not look at the date on the article.  It was from over a year ago, but he is looking at cutting its budget again this year.]

    In Trump’s latest budget request, he is cutting the funding to the National Endowment for Democracy by ⅔.
    Seeing as how the NED is, and always been, little more than a front group for CIA, this is a good thing:

    Thank you, President Trump! Finally you have made a foreign policy recommendation that is logical, overdue, and in the long-term interest of the United States. Congress will probably reject it, but you deserve credit for making the effort.

    Trump’s budget for the coming fiscal year proposes to gut the National Endowment for Democracy by cutting two-thirds of its budget. The endowment is one of the main instruments by which the United States subverts and undermines foreign governments. In a less Orwellian world, it might be called the “National Endowment for Attacking Democracy.” Cutting the budget would signal that we are re-thinking our policy of relentlessly interfering in the politics of other countries.

    That kind of interference is the National Endowment’s mission. Whenever the government of another country challenges or defies the United States, questions the value of unrestrained capitalism, limits the rights of foreign corporations, or adopts policies that we consider socialist, the Endowment swings into action. It pours over $170 million each year into labor unions, political factions, student clubs, civic groups, and other organizations dedicated to protecting or installing pro-American regimes. From Central America to Central Asia, it is a vivid and familiar face of US intervention.

    President Ronald Reagan established the program in 1983, following years of scandals that tarnished the Central Intelligence Agency. Soon it took over many of the tasks that the CIA used to perform. When the United States wanted to interfere in the Italian election of 1948, for example, the CIA did the job. Decades later, when Washington sought to push its favored candidate into the presidency of Nicaragua, our instrument was the National Endowment for Democracy. More recently, it has sought to influence elections in Mongolia, Albania, Bulgaria, and Slovakia. “A lot of what we do today was done covertly 25 years ago by the CIA,” one of the organization’s founders explained during the 1990s.

    ………

    Because its job is to shape the course of other countries, the Endowment has become a darling of Washington’s regime-change crowd. Shortly after ordering invasions of Afghanistan and Iraq, President George W. Bush pushed to double its budget. That made sense, because bombing and organizing “peaceful” revolutions are two ways of achieving the same goal: forcing countries to bend to our will. Both reflect our insistence on judging foreign governments, deciding which may survive and which must be attacked.

    Leaders of the Endowment include some of our country’s most militant interventionists. One of its board members is Elliott Abrams, who helped direct anti-Sandinista projects in Nicaragua during the 1980s and was later convicted of lying to Congress about the Iran-Contra affair. Another is Victoria Nuland, who as assistant secretary of state in 2016 flew to Ukraine to encourage protesters to overthrow their government.

    The US efforts at regime change have been a constant source of misery for their targets, and a constant source of blow-back for US foreign policy goals.

    The only thing wrong about reducing the budget of the NED by ⅔ is that it’s not been completely defunded.

    Wrong

    It looks like the usual suspects are trying to sell a bloated defense budget as being a net job creator.

    In this case, it’s Peter Navarro, assistant to the president and the director of the Office of Trade and Manufacturing Policy, and in his New York Times OP/ED, he extols how, “the Trump defense budget is helping to create good manufacturing jobs at good wages.”

    Those jobs cost on the order of 10 times as much, and at the end of they day, we have nothing.

    To quote Ike Eisenhower, these tanks, and guns, and bombs are “A theft from those who hunger and are not fed, those who are cold and are not clothed.”

    You could get 5-10 times the number of jobs spending money on repairing our decaying infrastructure, or by working on projects to get new less polluting power on the grid, or on healthcare and early education.

    But that, of course, is socialism, so flushing money down a Desert Tan toilet it is, I guess.

    I Will Use Their Tears to Season My Supper

    New York City real estate brokers, despondent over it becoming more for them to profit off money from drug dealer, despots, and corrupt businessmen are saying that the so called “Pied-a-Terre Tax” is “class warfare” on their clients:

    High-end real estate brokers in New York worry that foreign second-home buyers are feeling under assault from all sides and may end up going elsewhere. Already wary of President Donald Trump’s anti-immigrant rhetoric, they now see a planned tax on absentee owners as a swipe from the political left.

    “The international buyer has basically gone away over the past two years,” said real estate broker Martin Eiden at Compass, who sells about $50 million of residential property a year. “There’s only so much that people will take — they’ll either go somewhere else or they’ll just get a hotel room.”

    The proposed tax would apply to properties above $5 million owned by non-residents. Governor Andrew Cuomo says the state needs it to pay for transit fixes. Mayor Bill de Blasio says the rich should pay more, especially those who pay no income taxes while full-time residents bear the costs of services that make New York City so attractive to foreigners and out-of-staters.

    These people are paying enormous amounts of cash for properties where they spend a week a year because they are laundering money.

    It makes no economic sense otherwise:

    Properties over $5 million would be subject to the tax surcharge, starting at 0.5 percent of the home value to a maximum rate of 4 percent on homes above $25 million. A part-time owner of a $10 million unit, for example, would have to shell out an extra $45,000 a year.

    These guys blow more money than that on a birthday party.

    They object to the tax because they want to be worshiped, and taxes are antithetical to this.

    F%$# them.

    From the Department of “About F%$#ing Time”

    They aren’t calling it that, of course, they are calling it a “Tax on non-resident owners,” but basically, it’s money laundering: (The London property market even more so)

    Pressure to find revenue to finance a $40 billion fix for New York’s subways, buses and regional commuter rail has sparked renewed city and state interest in a tax on wealthy non-residents who own luxury city apartments.

    New York Governor Andrew Cuomo’s budget director, Robert Mujica, jump-started the idea Wednesday in a statement that totaled up potential revenue sources for regional transit funding: $15 billion from congestion pricing, $5 billion from Internet sales, and $2 billion from yet-to-be-legalized cannabis. The so-called “pied-à-terre tax” on non-resident owners could raise as much as $9 billion, Mujica said.

    ………

    Mayor Bill de Blasio has preferred a millionaires’ income tax on city residents. Since that proposal hasn’t received support in the legislature, the mayor said Thursday he could back the luxury-apartment tax.

    ………

    The proposal has been opposed by the Real Estate Board of New York, the trade group for an industry that accounts for more than 30 percent of the city’s tax revenue. The board has said it would harm the city’s economy by suppressing investment, cutting jobs and lowering demand for high-priced apartment towers.

     Mandy Rice-Davies applies to the statement by the Real Estate Board of New York, “Well, they would say that, wouldn’t they?”

    If there is a sure fire way to destroy your community, it is pandering to realtors, developers, and bankers.

    Lockheed Martin Lobbyists Are Completely Losing Their Sh%$

    The Air Force Chief of Staff is examining the first new F-15 buy in 19 years, and Lockheed-Martin and its Evil Minions are having a major freakout

    I cannot imaging why Lockheed-Martin would be worried at the prospect of the US Air Force making a purchase of an aircraft that is cheaper to buy, cheaper to operate, flies farther, carries more, can have a back-seater who can handle things like SEAD and jamming, and has been continuously modernized over the years because of foreign sales.

    A full month before the scheduled rollout of the Trump administration’s fiscal 2020 budget request, Boeing’s F-15X has provoked a fierce intellectual clash over the future of U.S. airpower strategy and priorities.

    Advocates of the U.S. Air Force’s current plan to resume F-15 orders after a 19-year hiatus say it is an overdue response to an urgent requirement for quickly and affordably recapitalizing an aging air superiority fleet, while at the same time adding a comparatively flexible weapon system that can be adapted in the future to play a host of new roles, including perhaps electronic attack.

    But critics see wasteful spending on the latest version of a fighter originally designed in the late-1960s, at the expense of buying faster and what they assert are more relevant Lockheed Martin F-35As. Some critics also invoke the prospect of the F-15X causing an acquisition “death spiral” for another advanced stealth aircraft, snaring the Air Force’s program of record to buy 1,763 F-35As in the same budgetary trap that sharply curtailed original plans to order 132 Northrop Grumman B-2A bombers and 750 Lockheed Martin F-22s.

    ………

    The debate has placed Lockheed Martin in an awkward position. Although Lockheed executives generally support more spending on F-35 production, they also seem unwilling to contradict Air Force Chief of Staff Gen. Dave Goldfein, who has stated that F-15X funding won’t come at the expense of planned F-35 purchases. It is a point that CEO Marillyn Hewson emphasized on the fourth-quarter earnings call in late January.

    ………

    The Air Force is interested in buying a single-seat F-15CX and twin-seat F-15EX, the source says. Except for a two-place canopy and second cockpit in the F-15EX, both Air Force models would be identical.

    The configuration is defined by the Air Force’s demand to limit costs, especially for nonrecurring engineering. So the F-15X models are based exclusively on already fielded technology, including strengthened wings and large area displays funded by the Qatari Air Force, plus conformal fuel tanks, a digital fly-by-wire control system, APG-82 active, electronically scanned array radar and the Eagle Passive Active Warning Survivability System (EPAWSS) introduced by the Royal Saudi Air Force. The U.S. Air Force also is integrating the APG-82 radar on F-15Cs and F-15Es.

    ………

    For example, the combination of a strengthened wing and fly-by-wire flight controls expand the flight envelope, yielding a dogfight performance somewhere between the raw power offered by the F-15C and the nimble agility at high angles of attack of the F-22.

    ………

    Other important details involve the weapons options. The Saudi air force has integrated the AGM-88 High-speed Anti-Radiation Missile (HARM) on the F-15SA, so that becomes a new option for the Air Force fleet. The combination of the AGM-88, EPAWSS and the F-15’s inherent ability to generate large amounts of electrical power create intriguing possibilities. The Air Force retired its last tactical escort jamming platform in 1997, but the Navy has continued to perform the mission of jamming air defense radars with the Boeing EA-18G. The idea of a radar-jamming and -suppressing “Wild Weasel” version of an F-15EX could create a long-term role for the two-seater, operating alongside strike packages of F-35As.

    I don’t think that this will go anywhere, Lockheed-Martin has meticulously spread subcontractors around crucial Congressional districts, and even if it outperforms the F-35 in 90+% of conflict scenarios.

    Still, this promises to be entertaining.