Obama is Crumbling the American Dream

Barack Obama is once again pushing for another federal government boondoggle. No amount of debt is too daunting for this president. The Senate passed a transportation bill that is designed to fix the infrastructure problems our nation faces. The bill is held up in the House. I could have sworn that the 2009 $800 billion Stimulus Bill was supposed to solve that problem. But I digress.

I’ll tell you what is crumbling – the American Dream. The democrats in the Senate haven’t passed a budget in three years! They refuse to fulfill their constitutionally mandated obligation. In the meantime, Obama and his statist minions have piled up a record amount of debt and expanded the government bureaucracy by 23%. And they still aren’t satisfied.

The Democrats contend that this transportation bill will provide thousands of jobs in the construction, manufacturing and associated trades. But at what cost to the taxpayers? Is it in the country’s best interest to keep feeding this leviathan? How much money is this parasitic bureaucracy devouring as a percentage in dollars?

The Journal of Libertarian Studies published this report in 2004:

THE COSTS OF PUBLIC INCOME REDISTRIBUTION
AND PRIVATE CHARITY

Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.

In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator (www.charitynavigator.org), the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.

The study further states:

One implication of the high cost of government income redistribution comes into focus when costs are understood correctly as alternative opportunities forgone. If a government agency delivers only one-third of each dollar budgeted to it as subsidy to its target population, then it must be budgeted three dollars for each dollar so delivered. Assuming that the cost of collecting the tax revenues to be budgeted to redistributive agencies is zero, then for each dollar delivered to a subsidy recipient, whether in the form of rent subsidy, food stamps, welfare, prescription medicine, or whatever, the taxpayers who had earned that money productively in the market must be deprived of three dollars worth of the things they want.

This model is about redistribution of wealth through the welfare bureaucracy. I believe the same can be applied to other federal agencies and the teat squawkers who depend on taxpayer largess. If the 70/30 split is accurate, than I believe we can find more efficient means to provide our transportation needs.



Source: http://mises.org/journals/jls/21_2/21_2_1.pdf