Redefining the "Waste" in Waste, Fraud and Abuse

Politicians love to talk about getting rid of waste, fraud and abuse and pundits get all starry eyed when this term is mentioned but, in my view, most of what is mentioned is just fraud and abuse. A $1000 hammer is waste but more specifically it's really just abuse, maybe fraud.

Waste is anything that doesn't pass a cost-benefit analysis. If the "social" benefit isn't enough to justify the taxes collected and spent then that is waste. Or if a department or program continues to not be able to meet its goals and we continue to pay for it, that is waste.

For example, the Department of Education has been around forty years. That seems like plenty of time for it to justify its existence. Yet, every year we spend more and more without moving the needle on student achievement. That is waste. Eliminating waste would mean eliminating the Department of Education.

For some reason, liberal economists have a hard time with this concept. They believe if you just have the right people who perform the right tweaks, then it will work. But the evidence suggests otherwise. And experience suggests that the pendulum swings of politics will guarantee that who you think is the right person will not always be at the helm.

Instead, they should begin to follow the evidence. Apply the analysis. End those departments and programs that don't work and you won't have to make it your personal mission to educate people on the awesomeness of raising taxes through semantic magic.

Polishing Ron Paul's 10% Solution

Ron Paul has been out lately promoting a 10% solution. Basically, what this means is that you are given the option of "opting out of the system" and in return you pay a flat 10% of your income.

Now, some people, like MSNBC's Ed Shultz, have derided Paul because their small minds can't comprehend what Paul my actually mean. Though, to be fair, I'm not sure Ron Paul is sure what he means. He admitted it was a rhetorical question, I think more in the vein of a thought experiment than actual workable policy. So, let's clean it up.

First, specify that it is an option to opt out of the welfare/entitlement system. This means no direct subsidies to that person. They would still have access to public roads, Mr. Schultz, because that's paid for through the gas tax. CIA, FBI, FDA, military would still apply to this person because they are still paying taxes.

Second, we have to untangle these entitlements out of this person's life. Entitlement taxes are no longer withheld and all employer tax contributions are now captured by the employer, immediately raising their income.

Third, the taxpayer has the option of opting out of their employer's health insurance package and capturing that value for their income. This is because these benefits only exist because of federal tax policy.

The combined effect of two and three would dramatically raise income. In my own personal experience, the combined loss to income from federal withholdings and taxpayer subsidized employer health insurance was just shy of 30%. A giant bite.

Fourth, the 10% tax bill would come with no deduction. No business deductions, charitable deductions, home mortgage interest deduction, etc.. Reducing a tax bill to zero would exacerbate the debt problem, so you would have to pay.

Fifth, we would need a comprehensive immigrant work visa program to make up for any revenue shortfall, especially in the short term with baby boomers retiring. Unlimited work visas with the "opt out" option already attached. Immigrants would work, pay 10%, and receive nothing.

There is probably a lot of stuff I'm missing but I think this would be a good start. It's definitely something I would do.

Why Public Monopolies Stink - Part 84332876

My tap water tastes like wet dog.

Tax money wasted.

Have to use more money to buy water at grocery store. Thanks Stinkadena.