Quotulatiousness

January 30, 2013

Sequestration cuts must be more likely to happen because the sob stories are getting traction

Filed under: Economics, Government, Media, USA — Tags: , , , , , — Nicholas @ 11:53

Tad Dehaven thinks the upsurge in horror stories about what sequestration will do to the US economy means it’s more likely that those cuts will actually take place:

The odds that $85 billion in “unthinkable, draconian” sequestration spending cuts will go into effect in March as scheduled are looking better. The odds must be getting better because, as if on cue, the horror stories have commenced.

A perfect example is an article in the Washington Post that details the angst and suffering being experienced by federal bureaucrats and other taxpayer dependents over the mere possibility that the “drastic” cuts will occur. You see, the uncertainty surrounding the issue has forced government employees to draw up contingency plans. Contingency plans? Oh, the humanity!

[. . .]

I certainly believe that Washington’s bouncing from one manufactured fiscal crisis to the next is detrimental to the economy, but my sympathy lies with the private sector – not the federal bureaucracy. It’s the private sector that has been suffering under the constant uncertainty surrounding federal tax and regulatory policy. And let’s not forget that there is no public sector without the private sector – the former existing entirely at the latter’s expense.

Yet, what follows in the Post article is boo-hoo after boo-hoo without the slightest regard to those who are paying for it or whether the whiner’s agency could use some belt-tightening

January 11, 2013

Public choice theory is neither Left nor Right

Filed under: Bureaucracy, Economics, Government — Tags: , , , , — Nicholas @ 00:01

In his obituary for the late James Buchanan, Radley Balko debunks the meme that public choice theory — of which Buchanan was one of the founding fathers — is by nature anti-left:

The discrepancy struck me at the time, and has stuck with me ever since. Buchanan’s work is often seen on the right as a critique of the left’s faith in public service. He showed that like everyone else, public servants tend to serve their own interests, not necessarily the interests of the greater public good. When a new federal agency is created to address some social ill, for example, there’s a strong incentive for the employees of that agency to never completely solve the problem they’ve been hired to solve. To do so would mean there would no longer be a need for their agency. It would mean layoffs, smaller budgets, even elimination entirely. In fact, there’s a strong incentive to exaggerate the problem, if not even exacerbate it. The agency itself is never going to get blamed for the problem. So exaggerating it helps the agency argue for more staff and a larger budget. (Thus, Milton Friedman’s axiom, “Nothing is so permanent as a temporary government program.”)

It doesn’t even need to be a deliberate thing. When your livelihood, your self-worth, and your career depend on things looking a certain way, there’s always going to be a strong incentive for you to see them that way.

Conservatives have always bought into public choice theory when it comes to paper-pushing bureaucrats. But when it come to law enforcement, they often have the same sort of blind faith in the good intentions and public-mindedness of public servants that the left has for, say, EPA bureaucrats. But public choice problems are as prevalent in law enforcement as they are in any other field of government work. And you could make a strong argument that it’s more important that we recognize and compensate for the incentive problems among cops and prosecutors because the consequences of bad decisions can be quite a bit more dire.

If we reward prosecutors who rack up convictions with reelection, higher office, and high-paying jobs at white-shoe law firms, and at the same time provide no real sanction or punishment when they break the rules in pursuit of those convictions, we shouldn’t be surprised if we start to see a significant number of wrongful convictions. If we reward cops who rack up impressive raw arrest numbers with promotions and pay raises, and at the same time don’t punish or sanction cops who violate the civil and constitutional rights of the people who live in the communities they serve, we shouldn’t be surprised if we start to see a significant number of cops more interested in detaining and arresting people than in protecting the rights of the citizens they encounter on their patrols. We can certainly hope that a sense of civic virtue and veneration for justice will override those misplace incentives, but it would be foolish — and has been foolish — for us to rely on that. Incentives do matter.

Any time I link to an article, it’s assumed that I suggest you read the whole thing. In this case, it’s a very strong recommendation that you read the whole thing.

November 27, 2012

Coyne: Carney’s departure is probably for the best

Filed under: Britain, Cancon, Economics — Tags: , , — Nicholas @ 10:27

Aside from the ousting of Toronto Mayor Rob Ford, the other big story in Canadian media yesterday was the announcement that Bank of Canada governor Mark Carney will be leaving to take over the Bank of England next year:

Inevitably, there are mixed feelings: satisfaction that a Canadian civil servant should be held in such regard abroad; annoyance that a foreign power should feel entitled to raid our highest offices, as if we were their farm team; gratitude for his service; disappointment that he did not finish his term.

On balance, however, the departure of Mark Carney as governor of the Bank of Canada, to take on the same position at the Bank of England, is probably for the best. It will of course be a great loss: he is largely deserving of his exalted reputation. That’s the point: he was becoming too big for the Bank. His ambitions were known to stretch beyond it; his persona was starting to overshadow it. Rock stars and central banks make an uncomfortable fit.

[. . .]

But ultimately, it’s the institution that counts, not the man. The Bank is steeped in talent, and any successor will be able to draw on the same organizational strengths as Carney. And Carney’s own outsized talents, it must be said, were beginning to present a problem, or at least might have. Politically savvy, a natural communicator, possessed of a certain glamour (at least by central banker standards), and young enough to harbour ambitions beyond his current office, it was perhaps inevitable that he should excite speculation about his future plans, without ever intending to.

All the same, it was unhealthy that talk began to turn to the possibility of him running for Liberal leader, and unhealthier still that this was not more firmly squelched, sooner. I’ve no reason to believe he ever seriously considered doing so, but it would have been a terrible business if he had. It is unusual enough for a governor to leave one country’s central bank for another. But for a governor to resign to lead the party seeking to replace the government he had lately served? I do not think the people who were urging this course upon Carney thought this through.

Update: At the Telegraph, Iain Martin reminds Carney’s sudden horde of fans that he’s merely mortal.

Is there any stopping Carney-mania? Those of us who 24 hours ago couldn’t have identified Mark Carney, even if he was wearing a T-shirt emblazoned with “I’m the Governor of the Canadian Central Bank” in 110pt type, now stroke our chins and swap our best Carney insights. He was voted the most trustworthy Canadian in a poll conducted by Readers Digest (Canada). He has four children. He paid $800,000 for his house in Ottawa, apparently, although he undertook $95,000 of improvements. Did they extend out the back or convert the attic? I don’t know, yet. And Canada didn’t have a banking crisis, you know. Only it did, in the 1990s, and the recovery and reorganisation put it in place afterwards left it in good shape ahead of the much bigger financial crisis which hit the US and the UK particularly hard. And Canada knows how to regulate its banks, only that wasn’t actually Carney’s job. This is most of what we know so far.

[. . .]

Now Carney is hailed as “the world’s greatest central banker”. None of this is to knock the Canadian for a second. He seems like a sensible, pragmatic fellow with a good record. It is also pleasing to see a fresh face, someone not from the revolving door cast-list of the British establishment. Although it is worth remembering that he is from the new global establishment, via 13 years at Goldman Sachs and subsequent sessions on panels at Davos.

The UK certainly needs this appointment to work out, but the new arrival deserves continuous scrutiny from sceptical parliamentarians and, yes, from a (hopefully) free press. After all, Mark Carney is a banker, not a magician.

July 22, 2012

QotD: The magical transformative powers of government service

Filed under: Government, Humour, Quotations — Tags: — Nicholas @ 00:05

Folks in the government seem to believe that government service is magic and transformative. They tend to view the citizenry they rule as made up of imbeciles and rubes who can’t be trusted to think for themselves. Yet even though they themselves are uplifted from that same crowd of rubes, they think that their governmental position qualifies them to sort out what folks should be buying and doing and saying from what they shouldn’t. Is the electoral process mystical? Does cronyism imbue its beneficiaries with some dark art? Does civil service stamp a lightening-bolt scar on your forehead? I can’t say. When I was with the government, my feelings of superiority were premised on callow youth and sheltered upbringing, not upon my government salary. I must be a born muggle.

Ken White, “You Knew I Was Going To Write About This”, Popehat, 2012-07-17

June 25, 2012

No innovation can survive the bureaucratic process

Filed under: Bureaucracy, Cancon, Government — Tags: , , — Nicholas @ 10:44

A story that won’t surprise anyone who has ever worked in a large bureaucracy is still eye opening — even Scott Adams’ Dilbert characters have it easier to get their suggestions implemented:

It was the summer of 2010, and the Treasury Board Secretariat (TBS) was about to launch the Employee Innovation Program — kind of like the employee suggestion drop box by the water cooler.

Except, nothing like it at all, as TBS employee Anna Bevilacqua was about to discover.

[. . .]

The employees who answered the call for creativity had to follow several rules, including: An employee could not make a suggestion without his or her boss’ approval; and proposals that might lead to a change in TBS policy would be rejected.

Managers tracked the proposals using a spreadsheet that noted the date and exact time a proposal was received, whether an individual or team of workers made the submission and the date it was received by a committee of three TBS managers.

The program designed to cut waste was taking shape. A bloated, forbidding shape.

[. . .]

Four managers formed a “Sub-Committee for Initial Triage” to conduct a “pre-screening” of the proposals. The selection process would be guided by a flow chart with text inside parallelograms and rectangles connected by arrows.

[. . .]

Bevilacqua needed to complete an “implementation framework” document. If she failed to “clearly define objectives, benefits, deliverables, exclusions, assumptions, responsibilities, estimated costs and timelines,” if her plan did not identify possible “slippage in target dates,” if it did not use a “risk log” or a “risk mapping approach,” it could die in Phase Two.

She and the other applicants were warned: “A wrong plan is worse than having no plan at all.”

[. . .]

The vetting and revising and perfecting continued. Each surviving proposal was screened by the Treasury Board’s chief information officer, deputy chief financial officer and chief financial officer.

[. . .]

The months of meetings, memos and emails confirmed her idea was a no-brainer. Her plan would be put into action.

A congratulatory note was vetted by three people before it was sent to her.

Then, the extensive trail of TBS paper — nearly 550 pages obtained by the Star through Access to Information legislation — ends in late 2010.

The employee who suggested this had already retired before the suggestion was implemented — and it was implemented outside the suggestion program anyway. The final line of the article sums it up perfectly: “Not one employee has received a cash award.”

H/T to Andrew Coyne:

https://twitter.com/acoyne/statuses/217238022482169857

June 24, 2012

Conrad Black: Don’t blame Canada

Filed under: Cancon, Economics, Europe, Government — Tags: , , , , , , — Nicholas @ 08:45

In his weekly column at the National Post, Conrad Black refutes Jose Manuel Barroso (who appeared to refer to Prime Minister Harper as a “nobody” recently) that the European crisis was made in North America:

Stephen Harper is absolutely correct to refuse to contribute to World Bank assistance to Europe. The reward for the consistently intelligent fiscal management of Canada by both governing parties for more than 20 years should not be to assist rich countries that ignored our example and the warnings of their own wiser statesmen until the wheels came off the Euro-fable in all four directions.

The president of the European Commission, Jose Manuel Barroso, made the point at the G20 meeting in Mexico last week — in, as he thought, a reply to Harper’s comments on Europe’s self-generated economic and fiscal problems — that the current economic crisis originated in North America. That is not entirely true. It originated in the ill-starred fiscal and social policies of most European countries, and the tinder was set alight by bad financial, social, fiscal and regulatory policy in the United States.

Margaret Thatcher, Angela Merkel, and even Gerhard Schroeder, as well as a number of Austrian, Dutch, and Scandinavian leaders all warned that Europe could not continue to guarantee employment to all job-holders as a steadily shrinking percentage of Europeans worked and the public sector share of GDP rose, infused with the steroids of over-bountiful social democracy. Most countries of Europe today are like the little pigs who didn’t build their homes from weather-proof materials.

Furthermore, it is no rejoinder to Mr. Harper to complain about the Americans. It would be no less logical to blame the floundering of Dalton McGuinty’s Ontario on booming Texas, since both jurisdictions are in North America. In the same line of reasoning, I would like Newfoundland’s involvement in the drug wars in Mexico fully examined.

June 8, 2012

The only two political classes that matter

Filed under: Economics, Government, Politics — Tags: , , — Nicholas @ 09:06

James Miller in the National Post:

Nineteenth century political theorist and former U.S. congressman John C. Calhoun once wrote, “…the necessary result, then, of the unequal fiscal action of the government is to divide the community into two great classes… to divide it into tax-payers and tax-consumers.”

Throughout history, this is precisely how the dynamic between government and the people has played out. Politicians make careers out of redistributing wealth. Persistent inflation and the running up of public debt have proven that governments are incapable of spending within their means. Retaining elected office hinges too much upon buying votes.

With the post-war boom years came increasing amounts of tax revenues. This was all too enticing for politicians to pass up. Entitlement programs were created to ensure a steady supply of votes. Mr. Moore is correct in alleging that younger generations were thrown to the wolves for these promised benefits as they had no say in the matter and are now forced to foot the bill.

At the same time, millennials themselves have been fooled through years of pervasive government and nanny-state decrees into not only expecting entitlements but also misunderstanding the value of prudence. Living standards only rise when the majority of the public produces more than it consumes. This age-old lesson has been slowly forgotten with years of the expansionary welfare state and popular economic theories which favour consumption. When youth are made to believe the most important rule in all economics is “in the long run we are all dead,” is it any surprise when financial discretion takes a back seat to overindulgence?

May 29, 2012

The fuzzy good intentions of equalization and the bad results

Filed under: Cancon, Economics, Government — Tags: , , , , — Nicholas @ 10:07

Peter Holle in the National Post, outlining the economic distortions of federal equalization payments in the recipient provinces:

Equalization, viewed critically, does no favours to either the funding or recipient provinces. After 50 years, outside transfers constitute an ever larger portion of the economies in have-not provinces. In an otherwise globally-oriented, market-driven world, Canada’s equalization program has encouraged the development of locally-oriented, public-sector driven economies.

Here are just a few ways that equalization provides incentives to harmful policy, stunting economic growth in the jurisdictions the policy means to help.

  • Inflating the public sector: Equalization has allowed recipient jurisdictions to create disproportionately larger public sectors because someone else is paying the bill. Manitoba’s public sector, for instance, employs 103 people per 1,000 residents, compared to a Canadian average of 84.
  • Politicizing spending. The external funding from equalization has allowed local politicians to build up vote-buying infrastructure with little political cost, by disconnecting taxation from benefit. Quebec’s $7-a-day daycare, and university tuition at less than half the Canadian average, would be unworkable without $7.4-billion in annual equalization subsidies from the rest of Canada.
  • Incentives for higher taxes. A path-breaking study by the Atlantic Institute for Market Studies showed that equalization rewards recipient provinces for imposing high and damaging tax rates, which deter private-sector investment and job creation. Manitoba, the only have-not province in Western Canada, has the highest income taxes in the region, and also has the lowest rate of private-sector investment.
  • Artificially inexpensive hydro power. By excluding the true value of renewable hydro energy revenues from the calculation of revenue capacity, the equalization formula rewards Manitoba and Quebec for charging artificially low domestic electricity prices. Below-market prices, in turn, encourage consumers to use more resources that otherwise would be conserved in response to accurate price signals.

May 21, 2012

Will privacy be on one of the things that differentiates the rich from the rest?

Filed under: Britain, Bureaucracy, Government, Media — Tags: , , , , — Nicholas @ 09:23

Brendan O’Neill in the Telegraph:

Is privacy being turned into a privilege that only the moneyed and the well-connected may enjoy? Two striking stories in the news last week suggest that it is.

In the first story, it was reported that activists and hacks are heaping further pressure on Mark Zuckerberg to improve the privacy settings on Facebook, so that they might update their statuses and post photos of their social shenanigans without having the world and its mother peering over their shoulders. In the second story, we were told that social workers, backed by much of the media, are calling on the prime minister to get rid of “red tape” so that they might more easily interfere in — I’m sorry, intervene in — so-called problem families. There are a lot of damaged families out there, the social workers hinted, and thus we need to rip up some of the rules governing when it is and isn’t okay to stick our snouts into their business.

That these two stories could appear in the same week, and not be considered contradictory, suggests we have a pretty screwed-up attitude to privacy today. Indeed, sometimes the very same members of the political and media classes who believe that their private lives must remain absolutely private will think it is perfectly logical that other people’s private lives — the lives of Them — should be thrown open to state snooping.

April 18, 2012

Why do we even bother calling them “life sentences”?

Filed under: Cancon, Government, Law — Tags: , — Nicholas @ 09:13

According to a recent Globe and Mail article, among the civil service jobs at risk in the government’s cutbacks are 26 convicted murderers who’ve been paroled and are paid to minister to another 2,280 paroled murderers (numbers from the 2010-11 report).

The Globe and Mail has learned that one of the many federal programs that will be cut in its entirety is LifeLine, a program aimed at helping people with life sentences — or “lifers” — successfully re-integrate into society once they’ve been paroled.

At a starting salary of about $38,000, the program hires and trains successfully-paroled lifers to mentor other lifers who are still incarcerated or who have been recently released on parole.

[. . .]

Under the Criminal Code, offenders serving a life sentence for murder may be considered for parole after serving 15 years of their sentences. Offenders serving life sentences for first-degree murder can be eligible for day parole after 22 years and full parole after 25 years.

March 29, 2012

Federal budget highlights (and lowlights)

Filed under: Cancon, Economics — Tags: , , , , , — Nicholas @ 15:26

My local MP also happens to be the federal Minister of Finance, who got his moment in the spotlight today as he unveiled the government’s 2012 budget. The media folks who were in the budget lock-up are just starting to publish their reports on the “wins” and “losses” as they see them in the new budget.

Initial Tweets concentrated on these headline-friendly moves:

  • Old age pension eligibility will rise to 67
  • Civil service will shrink by 19,000 positions
  • Coinage change: we’re abandoning the penny (they cost 50% more to make than they’re worth, and we didn’t make it up in volume)
  • Return the budget to balance by 2015-2016 and begin running a surplus after that
  • Pravda The CBC, our government-owned TV/radio network, will see a 10% cut in funding

I’ll update this post as new information gets published.

Update: John Ivison at the National Post calls it “A grand vision of still-big government”:

For a government that has forsworn the vision thing to this point, Budget 2012 is Obama-esque in the audacity of its hope for the future.

“We see Canada for what it is and what it can be… Today we step forward boldly, to realize it fully — hope for our children and grandchildren; opportunity for all Canadians; a prosperous future for our beloved country,” said Jim Flaherty in his speech to the House of Commons, boldly going where no Conservative Finance Minister has gone before — save perhaps Sir George Foster, who served Sir John A. Macdonald.

Mr Flaherty summoned up Sir George in his speech, quoting the need “for long vision, the fine courage of statesmanship and the warm fires of national imagination….Let us climb the heights and take a look forward.”

If the rest of the contents fail to live up to that level of rhetoric, they do at least amount to a serious attempt to move beyond the naked bribery of budgets past.

Paul “Inkless” Wells calls it “Harper’s very political budget”:

Revolution, ladies and gents! Light the torches! In his December year-end interviews, Stephen Harper used the term “major transformations” a half-dozen times. He made fun of earlier majority prime ministers. They let the bureaucrats put them to sleep! For years! No chance of that happening to Harper. Major transformations, coming right up.

Fast forward to this afternoon. “We will eliminate the penny,” Jim Flaherty told the Commons. It was literally the first new policy measure he announced. “Pennies take up too much space on our dressers at home.”

Now you know why Trudeau and Mulroney and Chrétien were such snoozers. It was the pennies. Weighing them down all day. Cluttering their dressers at night. Pennies wear a guy down. Harper, the Interac Prime Minister, will be fleet of foot, full of vim, and ready for —

— major transformations? No. I don’t have a searchable electronic text of Flaherty’s speech, but I do not see the word “transformation” anywhere in it. The rhetoric is altogether more reassuring. “The reforms we present today are substantial, responsible, and necessary,” he said, and “We will stay on course,” and “We will maintain our consistent, pragmatic, and responsible approach to the economy,” and “We will implement moderate restraint in government spending.”

From the Budget overview itself, a welcome change to Canadians who shop in the United States:

Every year, Canadians take some 30 million overnight trips outside of Canada, often returning with goods purchased abroad. Modernization of the rules applied to these purchases is long overdue. Economic Action Plan 2012 proposes the most significant increase in the duty- and tax-free travellers’ exemptions in decades. The travellers’ exemption allows Canadians to bring back goods up to a specified dollar limit without having to pay duties or taxes, including customs duty, Goods and Services Tax/Harmonized Sales Tax, federal excise levies and provincial sales and product taxes.

The Government proposes to increase the value of goods that may be imported duty- and tax-free by Canadian residents returning from abroad after a 24-hour and 48-hour absence to $200 and $800, harmonizing them with U.S. levels. This measure will facilitate cross-border travel by streamlining the processing of returning Canadian travellers who have made purchases while outside Canada. This change will be effective beginning on June 1, 2012. It is estimated that this measure will reduce federal revenues by $13 million in 2012–13 and by $17 million in 2013–14.

Campbell Clark at the Globe and Mail says the budget marks a strong change in the government’s formerly pro-military stance:

The Harper government is slashing spending on Canada’s international presence, with deep cuts to the military, aid and diplomacy.

It marks a reversal to the Conservatives long-ballyhooed policy of beefing up the military: It’s no longer just slowing the growth of Defence spending, but cutting it back, and delaying billions of dollars in capital spending on military hardware for seven years.

[. . .]

In fact, neither the budget nor the host of government officials attending a lockup to explain it provided a figure for the Defence budget for the coming year, and in the years affected by the cuts. Officials said that information was not being presented on budget day.

Still, it was clear that the impact will be deep. Since 2006, the Harper government has touted year-over-year increases for military spending, even when it announced two years ago the growth would be slowed. Now it’s cutting.

By 2014-15, more than $1.1-billion a year will be lopped off the regular Defence budget. But that’s not all. In addition, $3.5-billion in capital spending — the sums the military uses to buy equipment like planes, ships, trucks, tanks and weapons — will be put off until seven years from now, so that the government can save an average of $500-million a year.

Hmmmm. Slowdowns in major equipment purchases? I wonder if we’re about to get a Defence White Paper. We’re probably overdue for one of those…

March 7, 2012

Veterans Affairs to face disproportionally big cuts in federal budget

Filed under: Bureaucracy, Cancon, Economics, Military — Tags: , , , , , — Nicholas @ 10:32

That’s what Sean Bruyea thinks. Here’s his piece in the Globe & Mail:

Prime Minister Stephen Harper calls enlisting in the military the “highest form of public service.” Why then is Veterans Affairs, the department which cares for the Canadian Forces when its members are injured, facing the largest proportional cuts of any other public-service department?

The budget axe has been looming over all federal departments. The current “strategic and operational review” is a euphemism for reigning in a federal public service that is out of control. In the last 10 years, the core public service has grown by 34 per cent (versus 12 per cent at Veterans Affairs) and total government program expenses have swelled by 84 per cent (versus 67 per cent at Veterans Affairs).

Perhaps most galling for Canadians who have passed through two recessions in two decades and have seen no real growth in their earnings, public service salaries have increased by 22 per cent over and above inflation.

Few could credibly argue against the need for Ottawa to be managed better.

February 21, 2012

First it was the “he-cession”: now it’s the “she-cession” in Ontario

Filed under: Bureaucracy, Cancon, Economics, Government — Tags: , , , , — Nicholas @ 11:47

Frances Woolley in the Globe & Mail Economy Lab says that the next phase of Ontario’s recovery from the 2008 recession will disproportionally fall on women:

Men were hit hard by the 2008-9 economic downturn, with losses of construction jobs (98 per cent male), transport jobs (90 per cent male), and manufacturing jobs (70 per cent male). Male unemployment rose so quickly that people began to talk about a “he-cession.”

Three years on, a tenuous “he-covery” seems to be under way – male unemployment rates fell last year, and the percentage of men with jobs rose.

Now it’s the ladies’ turn. Ontario’s Drummond Report calls for deep cuts to financial, administrative and secretarial jobs throughout the public service. Strictly speaking, the report recommends cutting costs; automating, streamlining and consolidating the delivery of services. Yet administrative costs equal administrative jobs — jobs that are, 8 times out of 10, held by women.

The bulk of Ontario government spending goes to MUSH — Municipalities, Universities, Schools and Hospitals. Overall spending cannot be reduced substantially without making cuts in these areas. There are about 280,000 teachers and professors in Ontario, and 65 per cent of them are female. The Drummond report recommends larger class sizes for elementary and secondary school teachers, and “flexible” teaching loads for university professors. Yet more students per teacher mean fewer teaching jobs. Just as a downturn in the construction sector leads to male unemployment, a downturn in the teaching sector leads to female unemployment.

February 13, 2012

Der Spiegel: Is it too late to save Greece?

Filed under: Bureaucracy, Europe, Government, Greece — Tags: , — Nicholas @ 08:48

The Greek civil service is overstaffed, and has lots of quirky habits, proving the old adage that there’s nothing as permanent as a “temporary” government program:

One of Greece’s purported saviors is a short, rotund, 72-year-old man named Leandros Rakintzis. He was once a respected constitutional judge on the country’s highest court, the Areopagus. Since 2004, he has been the head of a government agency that is the first of its kind for Greece. Rakintzis is Greece’s general inspector of public administration.

His body twitches and shakes with delight as he talks about his successes and discoveries. For example, he discovered that on weekends, hospitals admit elderly people who require nursing care or are confused because their children bring them there so that they can take a few days of vacation. This, of course, drives up healthcare costs.

[. . .]

Rakintzis has stories to tell that take place throughout Greece, and some are downright unbelievable. For example, the government agency that was created to manage a bid to make Greece’s second-largest city, Thessaloniki, a European cultural capital in 1997 is still humming away. Its employees are supposedly working on winding down the major event and settling up the accounts — 13 years later.

How many people work there? “I don’t know. Not even the government knows that,” says Rakintzis. He adds, in an almost threatening tone: “Not yet.” Rakintzis and his staff are now in the process of investigating about 4,000 government offices and agencies in similar situations.

[. . .]

Greece has more than five times as many civil servants per capita than the United Kingdom. The country’s inflated government apparatus consumes tens of billions of euros a year. It’s money the Greek state doesn’t have — and actually never did. Greece’s gross domestic product is only slighter higher than that of the German state of Hesse and is just one-tenth the size of Germany’s total economic output.

January 12, 2012

QotD: When a figure is too high to be repaid, it won’t be repaid

Filed under: Bureaucracy, Economics, Government, Quotations — Tags: , , — Nicholas @ 15:31

It’s hardly news anymore that public-sector pension promises will be made good (or not) on the backs of taxpayers, but I still think that the average private-sector packmule has no idea of the amount they’re going to have to pony up to vouchsafe the various municipal, state, and federal pension promises. The amount required over the next several decades beggars the imagination. In fact, the amount is preposterous: there’s no way the money is ever going to be paid out as promised. Even if it were mathematically possible (which it isn’t), taxpayers would revolt over the massive increases that would be required. If I were a public-sector worker, I’d be making a point of saving every dime of my own money that I could, because that fat public sector pension is unlikely to ever be paid out in full. (And I’m not even getting into the healthcare benefits, which are even more onerous than the pension benefits.) Basically, the bedrock truth is this: money that can’t be paid out, won’t be, no matter what agreements were signed or what the courts say.

Monty, “The Daily DOOM”, Ace of Spades HQ, 2012-01-12

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