Government – The Only Recession Proof Business

As we continue to watch the health care debate go around you might have noticed many politicians perplexed at the idea that the public might not want a public option.

I submit, that it has nothing to do with President Obama, the current Congress, the Current House, nor the prior President, Congress & House.

The reasoning is analogous to the Sorites Paradox.  The paradox states it’s impossible to know exactly how many grains of sand it takes to become a heap, or once a heap, how many grains of sand must be removed to become a non-heap.  I submit we have finally built a heap.

With the bailouts, stimulus packages, rampant spending of the prior President and continued fiscal irresponsibility of this administration, combined with fiscal irresponsibility at state & local levels, people are rightfully frustrated.

& thanks to Cato, within a week, they have two brilliant demonstrations as to why:

Federal Pay Continues Rapid Ascent:

…Figure 1 looks at average wages. In 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $49,935 for the nation’s 108 million private sector workers (measured in full-time equivalents). The figure shows that the federal pay advantage (the gap between the lines) is steadily increasing….

Figure 2 shows that the federal advantage is even more pronounced when worker benefits are included. In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909….

& this, State and Local Government Employment Up Since Recession’s Start:

…With a prolonged recession now forcing state and local governments to actually cut or furlough some employees, it’s important to remember that they were adding government jobs at a time when it was clear to the rest of the country that the air was out of the economic bubble. ..

It seems the age old question about what business is truly recession proof finally has an answer.

Utopian Legislation

As I’ve noticed a seemingly increase in the number of bills being passed in the US system verging on or over 1000 pages, I started questioning whether this seems logical.

We know the tax code is so complex it now takes up 50K pages, which seems irrationally high & complex.

From a design or research point of view, the usual goal is to minimize everything to it’s simplest possible form without sacrificing the project itself.  As the saying goes, make it as simple as possible, but no more.

With that in mind, what if a law ere passed which tried to help prevent the overly complex legal system we currently have?  Allowing the average person to know if they are breaking a law and to be able to better participate in government decision making.

What if we tried to move the legal system where not one single CPA will agree with another CPA on the tax code, into a more simple system that the average person can be involved with?

I humbly propose this (though it’s not a fully formed idea):

First – all bills should use common language and structure so the average individual can understand.  If I have to make a flow chart diagram out of all the “if this, then that, else this” crap like they have in contracts these days, it gets dumped instantly. This is tough because defining common language isn’t easy.  So maybe this wouldn’t work.

Second though, as this can actually be measured, every bill has to be made available to the public for a length of time which allows the average person to be able to read and therefore opine on said bill. The numbers below are taken from several sources, though more research would be needed as I’m sure averages can be gathered about bills themselves.

Having said that, assuming an average person can red 200 words per minute, with about 30 minutes a night to read, and 1 hour over the weekend.  So they have 3 & ½ hours.

Therefore the average voter can read (200 * [60 * 3.5]) or 63,000 words a week.

Assume average words per page is around 400, allowing (63K / 400) or 157.5 pages a week.

So the current health care bill would need to be open to the public for at least (1000 / 157.5) or 6.4 weeks.

And this assume that the bill is completely self contained – if the bill has information that states something like

In US Code 34-20, page 87, paragraph 2, subsection 5, change the third word from “or” to “and”

Then you add the additional US Code pages to the calculation.  If US Code 34-20 is 1000 pages, the bill has to be available for an additional 6.4 weeks.

& lastly, executive summaries do not count.  The entire bill has to be available to the public for debate prior to passing new laws.

As most politicians act as if they don’t honestly think their constituents are smart enough to have an opinion on legislation, it will likely never happen…. But one can dream!

Stupid Is, As Stupid Does

I’m not sure exactly when the voting public will start going directly to Congress to ask them to please stop hurting the economy, but I’m hoping really, really soon.

As most people with a passing understanding of economics are aware, we have recently hit economic hard times due to a collapsing housing market.  This market collapsed because it needed to contract.  There is no such animal in this world that will continuously forever increase in price by double digits.

So the mere fact houses were doing that for years, showed us that inevitably, it will have to stop and contract back to reality.

There were a variety of causes, loose lending practices, GSE’s implicit backing of all loans, corrupt lenders, idiotic consumers, etc, etc, etc – IMHO though, the GSE’s are the main culprits as their implicit backing allows for all the other pieces to be put into place.

Even if you don’t agree with that statement, one should at least be able to acknowledge our politicians mistakes with respect to Fannie & Freddie and how it certainly helped the current economic landscape to develop.

& what does congress do about this?  Start  pushing other GSE’s, mainly FHA (Federal Housing Authority) to begin the same process over again.

That’s correct – our politicians are currently pushing FHA to make the same idiotic guarantees that Fannie & Freddie did, that helped cause the current mess we’re in.  It’s not like they can say they forgot what the real problems are – they know, and seemingly don’t care (here):

The demand for FHA mortgages has exploded during the past 14 months, increasing 314 percent nationally. In January and February alone, borrowers signed on for 670,000 FHA mortgages compared with 425,000 in all of 2007.

This has to be one of the most irresponsible moves in recent times.  It not only demonstrates a disregard for society as a whole, but also demonstrates most politicians’ apparent belief in the stupidity of the voting public.  Only with a belief that voters won’t out right reject the same corrupt politics, would anyone have the audacity to repeat the exact same mistakes in front of their bosses within side the same congressional session.

We’ll see if these politicians are correct in their belief in the phrase, “No one ever lost by underestimating the American public”… Or, maybe we’ll find out that in oppressive Iran, Iranians are more willing to protect their country from oppression and corruption than is the US public.

Trust Us!

For another obvious example of government malfeasance, the LA Times has an article discussing several projects that were given TARP money designated as “stimulus” that are doing everything except stimulating the economy:

…Millions of dollars are going toward bicycle lockers, bike paths, walking trails and a skate park, Coburn said. One town in North Carolina is using stimulus funds to hire an administrator whose job will be to procure more stimulus funds, according to the report….

One project mentioned is the $3.4-million construction of a 13-foot tunnel near Tallahassee, Fla., that will allow turtles and other wildlife to safely cross U.S. Highway 27….

I guess since they’ve proven themselves so trustworthy, we might as well hand over the entire financial and health care systems to the US government.

Read whole thing here.