Misplaced Priorities

I was listening to a story on NPR this morning about the financial crisis in California. Their state budget gap is $24 billion and as usual, kids and the truly needy among us will be the hardest hit. In these situations, the government ends up making decisions that are pennywise and pound foolish.

For example, California is considering closing its poison control center for a savings of $6 million. The center gets over 2,000 calls per day, mostly from parents, concerned about something their child just ingested. Most calls end with simple wait and see or do it-yourself advice. Without this service, ALL of these parents will likely end up in an emergency room somewhere at a HUGE cost to parents and society. The government saves $1 on one side of the equation and the citizens will spend $20 on the other.

In the midst of this fiscal crisis, what really irks me is the 10,000Lb gorilla that no one ever discusses: Our insane military budget. We spend over $1 trillion per year on “defense”. Global military spending hit a record high in 2008, led by the US. Our annual military spending is roughly equal to the rest of the world combined, while the US and its close allies account for 2/3 of global military spending. No wonder we don’t have money for anything else.

One of my saddest days as an adult was at a tax update class for CPAs back in the 80s. It was sad because at the time, I didn’t have the guts to speak up. I was young and there were 40-50 other CPAs in the class. The instructor was giving an update about the fiscal situation in Washington DC and said something to the effect that there was no funding available for any domestic needs because the government was broke. I remember thinking how dishonest all of us were accepting this pathetic nonsense. All of were financial experts. The government had plenty of money but was spending half of all our funds on weapons and war. The same is true today.

It is time for us to speak up about this awful waste. No one disputes the need for a strong defense but we could do that with ½ the budget freeing up $500 billion annually for domestic services. Maybe a little of that can keep California’s poison control center open.

Taxes, AIG bailout and more

I was going to blog about taxes so I started researching the federal budget and looking for an image to post.  

I really wanted to discuss the residential energy-efficient property credit, which was extended through 2016 and which generally covers solar electric, solar water heating, fuel cell property, small wind energy and geothermal heat pump property.  I also wanted to discuss the non-business energy property credit for insulation, exterior windows, exterior doors, furnaces, water heaters and other energy-saving improvements to a main home which was not available in 2008 but returns in 2009.

However, the AIG bonus hysteria got in the way of a deeper discussion on taxes. 

First, I don’t believe anyone is worthy of a multi-million dollar income and lifestyle while we have needy children in our midst.  That is one of my beliefs and values.  I think billionaires are evidence of a flawed system.

While I’m opposed to the whole Wall Street bailout and the more than $9 TRILLION spent on this fiasco to date, what gets me is the missing perspective on the AIG bonuses.

AIG Bonuses = $165,000,000 ($165 million)

Missing Cash in Iraq = $12,000,000,000 ($12 billion – 73x more)

Official cost of Iraq war to date = $656,100,000,000 ($656.1 billion – 3,977x more)

Wall Street bailout to date = $9,400,000,000,000 ($9.4 TRILLION – 56,970x more)

The AIG bonuses amount to 2/1000^th’s of the cost of the bailout!

FYI:  Missing from the "official" cost of the bailout is government guarantee and insurance programs like the FDIC ($1.5 trillion), FHA ($.3 trillion) and the Federal Reserve ($7 trillion).