New Treasury data busts the myth of government “inefficiency”

Jeremy Mohler

Jeremy Mohler Writer, Meditation Teacher

Turn on Fox News and you’ll hear about “red tape” and government “inefficiency” more times than you can count. You might hear about it on MSNBC too.

We live in the era of “small government.” (Well, except when it comes to the military, prisons, and controlling women’s bodies.) But recent numbers from the U.S. Treasury beg to differ.

In 2008, the mortgage giants Fannie Mae and Freddie Mac were facing collapse until taxpayers bailed them out. Ten years later, they continue to be extremely profitable for the Treasury under government control, amassing $88.3 billion so far and reducing the amount the government has to borrow each year.

Whether we should keep control of Fannie Mae and Freddie Mac is up for debate. But the fact remains: they are far from inefficient. Some even believe government control is a big reason why mortgage rates remain low.

Meanwhile, private debt collectors hired by the Internal Revenue Service (IRS) are collecting just a small fraction of the debt they are assigned, all the while leaving taxpayers vulnerable to scams and exploitation. New data from the Treasury’s inspector general show that the four contractors have taken in a mere $1.3 million as of May 2018, just 1 percent of the $4.1 billion they were assigned last year.

Over and over again, privatized tax collection has failed. The IRS has hired contractors three times since 1995, each time resulting in poor management and negative returns. The only thing the contractors have been efficient at is hounding delinquent taxpayers by phone, even ignoring federal law in collecting from people living in disaster zones.

The government isn’t automatically good at doing anything and everything, but neither are corporations. It’s time to bury the myth of government inefficiency. What matters more, anyway, is democracy, whether we have a say in how a public good or service that we all pay for is managed. And corporations certainly aren’t good at that.


Reposted from Medium

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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A Friendly Reminder

A Friendly Reminder