Different River

”You can never step in the same river twice.” –Heraclitus

September 23, 2005

Tom DeLay and Budget Fat

Filed under: — Different River @ 6:13 pm

Last week, (former?) fiscal conservative Tom DeLay (R-TX) apparently said there is no fat to cut in the federal government’s budget:

House Majority Leader Tom DeLay said yesterday that Republicans have done so well in cutting spending that he declared an “ongoing victory,” and said there is simply no fat left to cut in the federal budget.

Now hearing someone like Tom DeLay say something like that is kind of like hearing Ted Kennedy say he’s had enough alcohol to drink, or like hearing Bill Clinton saying he’s had enough … never mind. Anyway, that is so out of character I normally would have thought he was joking, as in, “Nope, there’s no fat left to cut in the federal budget — and the Air Force has all their pigs fed and ready to fly!”

But apparently — and frighteningly — DeLay seems to be serious:

Mr. DeLay was defending Republicans’ choice to borrow money and add to this year’s expected $331 billion deficit to pay for Hurricane Katrina relief. Some Republicans have said Congress should make cuts in other areas, but Mr. DeLay said that doesn’t seem possible.

“My answer to those that want to offset the spending is sure, bring me the offsets, I’ll be glad to do it. But nobody has been able to come up with any yet,” the Texas Republican told reporters at his weekly briefing.

Well, if Tom DeLay needs help finding the fat to cut in government, I’m here to help. For starters, if he wants to cut fat, we could start with milk fat. Here’s a program I think we could cut:

§ 7981. Milk price support program

(a) Support activities
During the period beginning on June 1, 2002, and ending on December 31, 2007, the Secretary of Agriculture shall support the price of milk produced in the 48 contiguous States through the purchase of cheese, butter, and nonfat dry milk produced from the milk.
(b) Rate
During the period specified in subsection (a) of this section, the price of milk shall be supported at a rate equal to $9.90 per hundredweight for milk containing 3.67 percent butterfat.

So, here we have a government program whose sole purpose is to spend money in order to increase prices. The Secretary of Agriculture is directed to buy enough milk, butter, and cheese that the market price increases to a specified level — per unit of fat. (Talk about “fat in the budget”!).

And what happens when the price gets that high? Ordinary people pay more at the grocery store for milk and milk products than they would if there were a free market with supply and demand determining the price.

Of course, since the price is higher than it would be, more people are too poor to afford milk. But don’t worry, they have another couple of programs for that, too — Food Stamps and WIC.

These are basically programs in which the government pays artifically inflated prices for food for poor people who can’t afford it because other government programs made the prices artificially high.

In other words, the government is taxing you and using the money to buy milk and pour it down the drain, for the express purpose of making it more expensive for you to buy with whatever money you have left after paying taxes. And for those people who really don’t have enough money left, they tax you more so those people can pay those increased prices.

And of course, there’s nothing unique about milk and milk products — I just picked that because it is literally, rather than merely figuratively, “fat in the budget.” There is also plenty more programs very much like this — they are called “price support” programs, and they exist for corn, grain sorghum, soybeans, barley, oats, wheat, mustard, safflower, sunflower, canola, flaxseed, rapeseed, rice, and cotton, and maybe some others I missed.

It is a huge program to use taxpayer dollars to increase prices, for the benefit of a small group (farmers). It is wasteful on its face, since they destroy most of the food they buy, and it is a direct transfer of wealth from everyone who’s not a farmer (or poor enough for food stamps) to everyone who is a farmer. (The poor don’t necessarily benefit, since without the higher prices they might not need food stamps and the like.) And farmers are not necessarily poor; some of them are rich and some are corporations. And this does not necessarily aid the farm workers;the aid goes to the owner of the land, whether that person or company is actually a farmer, or just an investor.

I have never once heard a single rational justification for this program. Can you imagine if this sort of program were in existence for, say, cars? Imagine: “The Secretary of Transportation shall support the price of automobiles produced in the 48 contiguous States through the purchase of cars, trucks, cans, and SUVs … at a the price of automobiles shall be supported at a rate equal to $20,000 per ton of gross vehicle weight.” And imagine then that the government buys millions of cars a year, crushes them and puts them in a huge dump, and then gives “car stamps” to poor people, since someone earning the minimum wage can’t afford to pay $75,000 for a car. The rest of you have to pay that artificially increased price — and by the way, through your taxes you also have to pay for all the cars the government buys and crushes, and those are paid for at the artificially increased price also.

If Tom DeLay needs to be told this, he’s completely lost his marbles. Of course, the article has further evidence of that as well:

Asked if that meant the government was running at peak efficiency, Mr. DeLay said, “Yes, after 11 years of Republican majority we’ve pared it down pretty good.”

The government is running at peak efficiency? Quick, tell the FAA they need air traffic control at all the pig farms!

UPDATE: Mona Charen has more comments.

Exposing Hypocrisy

Filed under: — Different River @ 5:39 pm

Attorney and former appelate law clerk Stuart Buck said this more concisely than I could have:

While the standard Democratic line is that Roberts didn’t “answer enough questions,” or that he didn’t answer them fully enough, or that he didn’t take a firm position on specific cases (read: abortion), etc., etc., this is all just a smokescreen. If Roberts had given a perfectly clear answer to the effect that he would vote to overrule Roe at the first opportunity, the Democrats would certainly not respond by saying, “Now that we have a clear answer, we’ll be happy to vote for you.” To the contrary, all of the talk about “not enough answers” really means “not enough answers that explicitly affirm the Democratic Party position.”

You mean it wasn’t Bush’s fault?

Filed under: — Different River @ 4:50 pm

Well, we finally found a member (well, until he resigned yesterday) of the mainstream media who does not thing that Hurricane Katrina is George Bush’s fault. He does, however, have an alternative that is nearly as crazy:

POCATELLO – To the rest of the country, Scott Stevens is the Idaho weatherman who blames the Japanese Mafia for Hurricane Katrina. To folks in Pocatello, he’s the face of the weather at KPVI News Channel 6.

The Pocatello native made his final Channel 6 forecast Thursday night, leaving a job he’s held for nine years in order to pursue his weather theories on a full-time basis.

Since Katrina, Stevens has been in newspapers across the country where he was quoted in an Associated Press story as saying the Yakuza Mafia used a Russian-made electromagnetic generator to cause Hurricane Katrina in a bid to avenge the atomic bomb attack on Hiroshima.

There is the loony left, and then there is the loony loony.

Thanks to Clayton Cramer for the pointer.

The Economics of Hurricane Relief

Filed under: — Different River @ 2:31 pm

As usual, Steven Landsburg puts things in the right perspective (Thanks to Arnold Kling for the pointer):

Before we spend $200 billion on New Orleans disaster relief, can we just pause for about three seconds, please? That should be long enough to divide one number by another. The numbers I have in mind are, on the one hand, $200 billion, and, on the other hand, 1 million people—the prestorm population of the New Orleans area, broadly defined.

Two-hundred billion divided by 1 million is 200,000. For the cost of reconstructing New Orleans, the government could simply give $200,000 to every resident of the region—that’s $800,000 for a family of four. Given a choice, which do you think the people down there would prefer?

Based on Stephen Moore’s assumption that the money would be divided between 500,000 families rather than 1,000,000 individuals, Clayton Cramer did a slightly different calculation:

[A] lot of that money is going to be spent on levee repair, bridges, public buildings, so the $400,000 per family is a little misleading. Nonetheless, think of the kind of money we are talking about with this relief program. That’s enough money that the interest payments would come to $1666 a month per family forever–without ever touching the principal.

(Emphasis added.)

That is assuming a 5% interest rate, also. I wonder if that is more or less than the average welfare payment in Lousiana, including the value of food stamps, rent vouchers, and the like. (I could look it up, but I’m too busy with work right now.)

But what would people actually do with all that money? Landsburg:

I’m guessing most of them would take the cash. I can’t prove that, but I think I can make it plausible: If your city were demolished, would you prefer to have it rebuilt—with someone else making all the decisions about how it gets rebuilt—or would you prefer to collect $800,000 in cash and move your family elsewhere?

Or, I might add, use all that money to rebuild in the same place — if you want to. As Landsburg adds:

Even after paying out all that cash, there would still be some tidying up to do, like rebuilding the interstates—but that accounts for a small fraction of the projected $200 billion. A lot of the other funds are earmarked for rebuilding infrastructure that’s local to New Orleans. But if you hand out big buckets of cash, most of that rebuilding is no longer necessary—some families will leave the area, and the ones that remain can, if they wish, tax themselves to re-create urban amenities—just as people do anywhere else.

It’s expensive to rebuild the levees. If enough newly enriched people choose to remain, there’s enough of a tax base to do the job—and if too few remain, then rebuilding the levees would be a bad investment anyway.

In other words, give the people the money, and let them decide whether, and how much, to rebuild. I’m sure people in New Orleans know better than (say) the Congressman from Oregon what should be rebuilt and how in New Orleans. Coyote Blog has an alternative idea, similar to Landsburg’s:

Cafe Hayek points out that Rep. Earl Blumenauer wants to make sure that New Orleans is rebuilt with a strong urban planning vision. Since Mr. Blumenauer represents Portland, Oregon, the city beloved of planners that has been planned into having some of the highest priced housing and worst traffic of any city of its size in America, I presume he wants something similar for New Orleans (Portland was also the city that thought it had solved global warming).

Here is my urban plan for New Orleans: Every person who owns property can build whatever the hell they want on it. If other people want something else built on that property, and value this outcome enough, they can buy the property from its owner. This novel concept is called “private property rights” and falls under the broader category of what are called “constitutionally protected individual rights” or even more broadly, “freedom”. It is a concept that used to be taken for granted in this country and but now is seldom even taught in schools.

For the property owned by the government, well, they are going to build whatever dumb***t thing they want to on it anyway, so I’ll just root for their choice to be fairly inexpensive. We here in Phoenix built a half-billion dollar stadium for the for-god-sakes Arizona Cardinals that is used for its core purpose 3 hours a day for 8 days a year. It couldn’t be worse, could it?

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