Following are some government expenditures that didn’t make the headlines:
The story of our government picking ‘winners or losers’ is legendary. But how many of us have heard of L Capital Partners? This company was a startup formed by Jonathan Leitersdorf who held both British and Israeli passports. Leitersdorf was able to secure $96 million from the ‘Small Business Investment Company’ (SBIC), a unit of the Small Business Administration. The Federal government, acting as a venture capitalist, capitalized a venture capitalist! The company made bad ‘bets’ and the US taxpayers are stuck with the loss. The SBA budget shows that taxpayers will lose a total of $2.4 billion from the now defunct SBIC.
The Solyndra solar panel producer’s failure has received wide media coverage. In addition to Solyndra, companies by the name of “Abound Solar” and “Beacon Power” have also failed. They are three failures of the first five companies receiving guarantees from the $47 billion DOE guarantee authority.
Remember hearing about the spending abuses by the General Services Administration? The GSA’s Public Buildings Service spent nearly $823,000 on a conference at the M Resort Casino near Las Vegas. However, a lesser-known fact is that the GSA oversees the maintenance of 12,218 surplus real estate properties owned by the federal government (that’s taxpayers). This real estate is now conservatively valued at $15 billion of non-performing investment. Surplus buildings are located in all 50 states and Washington DC.
The Treasury Department recently announced that the loss resulting from the auto bailout has increased by 15% to $25 billion. The GM and Chrysler bailout cost $85 billion in 2009. GM shares are hovering around $21 but must be at $53 for taxpayers to breakeven.
It must have slipped by us that in June, Congress passed a $120 billion highway-funding bill. The transportation trust fund, financed with the 18.4? per gallongasoline tax has been dwindling while various highway and transit projects need money. The problem with this legislation is that it pays for only 27 months of spending with revenues and phantom ‘spending cuts’ over the next 10 years.
The Veterans Administration has a backlog of 920,000 claims, of which half are 125 or more days old. Meanwhile a 2011 VA conference near Orlando, FL is reported to have cost $5 million, including an 18-minute satirical film parody of a speech from the film ‘Patton’. Could that money have been better used to speed up claims settlements?
The Department of Health and Human Services had a 2011 advertising budget of $87.6 million. In partnership with the National Fair Housing Alliance, HUD has been running full and half page ads in the Wall Street Journal depicting a veteran in a wheelchair with an American Flag in full color in the background. The headline is, ‘Housing Discrimination is Illegal’. How many people that may have been subjected to housing inequity or racism read the Wall Street Journal? A full-page color ad in the WSJ costs more than $200,000 while a half page is only an economical $137,000.
The forgoing examples are a mere drop in the bucket of government wasteful programs and spending. Is it possible that investigations are curbed by the fear of losing votes? With the national debt at nearly $16 trillion and spending exceeding revenues by $1.2 trillion for the current fiscal year, we are a runaway train about to derail and overturn.
Thomas Alva Edison (1847-1931), one of the most prolific inventors of all time (1,093 patents), said this: “There is far more danger in public than private monopoly, for when government goes into business it can always shift its losses to the taxpayers. Government never makes ends meet – and that is the first requisite of business.”
Think he was maybe on to something?
