Who’s Checking the Government’s Numbers?
With all the fancy number crunching going on in Washington, it’s hard to give the government any leeway when it comes to creative accounting practices. I’m not calling anyone a liar; however, I do have a hard time believing them. Below are examples that cause me to be skeptical, at best. Read along and see if you agree.
Image via
The much heralded Cash for Clunkers program was originally a $1 billion dollar program that quickly became a $3 billion expenditure. The idea was to spur the sale of fuel efficient car while taking gas-guzzlers off the road. This sounds good in theory, but it appears as if little thought was given to what affect this would have on sales in the ensuing months when new cars were being rolled on to showroom floors. So sales in late July and the full month of August were above expectations but actually cannibalized sales in September, October and beyond.
Industry sources estimate the cost for each car moved as a result of this incentive was in access of $24,000. Was the remove of the clunkers from the nation’s highways really worth spending that kind of money? How many buyers would have bought cars without the incentive? Shouldn’t advertising and promotion be the responsibility of the auto makers and the dealers rather than the government?
And, as if this isn’t bad enough, the mortgage bailout numbers are more disturbing because the dollars are bigger. The cost of the mortgage modification program is estimated to be $75 billion and designed to protect those who are facing foreclosure. Critics predict these houses will be lost anyway, since many of these troubled homeowners can’t afford to sustain their payments. And, even with reduced monthly outlays, they will still be upside down in terms of equity. Such a shakeout will further suppress home prices and delay economic recovery. This hurts pre-boomers (those born between 1930 and 1945) more than the general public, because lower home values could adversely affect our retirement plans.
While all this is going on, we are seeing the government sector grow in terms of number of employees and the salary and benefit packages of these so-called “public servants” is also on the rise. At the same time, Congress voted to up their salaries because of cost of living increases while Social Security benefits are frozen for the next two years or more.
If these situations don’t bother pre-boomers, consider the fact that Medicare is under attack to the tune of a $500 billion reduction in spending – dwarfing all the other ridiculous spending many times over.
For anyone who thinks the health care bills ready to be merged by the House and Senate will come in on budget and insure more people without affecting access to and the quality of care, I have a bridge I’d like to sell you. If you buy it from me instead of letting the government get involved, you’ll get a better price and it won’t cost the tax payers a dime. Just check out the numbers, you’ll see.
All cash for clunkers did was destroy 690,000 running cars, and cost taxpayers, used car dealers, the poor and charities that rely on car donations a lot of money