• Tag Archives Bureaucracy

  • Everything You Need to Know about Government, in One Story

    Posted on by Azrael 1 Comment

    Everything You Need to Know about Government, in One Story

    Every so often, I run across a chart, cartoon, or story that captures the essence of an issue. And when that happens, I make it part of my “everything you need to know” series.


    I don’t actually think those columns tell us everything we need to know, of course, but they do show something very important. At least I hope.

    And now, from our (normally) semi-rational northern neighbor, I have a new example.

    This story from Toronto truly is a powerful example of the difference between government action and private action.

    A Toronto man who spent $550 building a set of stairs in his community park says he has no regrets, despite the city’s insistence that he should have waited for a $65,000 city project to handle the problem. 
    Retired mechanic Adi Astl says he took it upon himself to build the stairs after several neighbours fell down the steep path to a community garden in Tom Riley Park, in Etobicoke, Ont. Astl says his neighbours chipped in on the project, which only ended up costing $550 – a far cry from the $65,000-$150,000 price tag the city had estimated for the job. …Astl says he hired a homeless person to help him and built the eight steps in a matter of hours. …Astl says members of his gardening group have been thanking him for taking care of the project, especially after one of them broke her wrist falling down the slope last year.

    There are actually two profound lessons to learn from this story.

    Since I’m a fiscal wonk, the part that grabbed my attention was the $550 cost of private action compared to $65,000 for government. Or maybe $150,000. Heck, probably more considering government cost overruns.

    Though we’re not actually talking about government action. God only knows how long it would have taken the bureaucracy to complete this task. So this is a story of inexpensive private action vs. costly government inaction.

    But there’s another part of this story that also caught my eye. The bureaucracy is responding with spite.

    The city is now threatening to tear down the stairs because they were not built to regulation standards…City bylaw officers have taped off the stairs while officials make a decision on what to do with it. …Mayor John Tory…says that still doesn’t justify allowing private citizens to bypass city bylaws to build public structures themselves. …“We just can’t have people decide to go out to Home Depot and build a staircase in a park because that’s what they would like to have.”

    But there is a silver lining. With infinite mercy, the government isn’t going to throw Mr. Astl in jail or make him pay a fine. At least not yet.

    Astl has not been charged with any sort of violation.

    Gee, how nice and thoughtful.

    One woman has drawn the appropriate conclusion from this episode.

    Area resident Dana Beamon told CTV Toronto she’s happy to have the stairs there, whether or not they are up to city standards. “We have far too much bureaucracy,” she said. “We don’t have enough self-initiative in our city, so I’m impressed.”

    Which is the lesson I think everybody should take away. Private initiative works much faster and much cheaper than government.

    P.S. Let’s also call this an example of super-federalism, or super-decentralization. Imagine how expensive it would have been for the national government in Ottawa to build the stairs? Or how long it would have taken? Probably millions of dollars and a couple of years.

    Now imagine how costly and time-consuming it would have been if the Ontario provincial government was in charge? Perhaps not as bad, but still very expensive and time-consuming.

    And we already know the cost (and inaction) of the city government. Reminds me of the $1 million bus stop in Arlington, VA.

    But when actual users of the park take responsibility (both in terms of action and money), the stairs were built quickly and efficiently.

    In other words, let’s have decentralization. But the most radical federalism is when private action replaces government.

    Reprinted from International Liberty

    Editors Note: Since this article was originally published, the local government tore down Astl’s $500 stairs, citing “safety standards,” and plans to replace it with a $10,000 set.


    Daniel J. Mitchell

    Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

    This article was originally published on FEE.org. Read the original article.


    📂This entry was posted in News and Politics 📎and tagged

  • The Taxpayers are Funding America’s “Shadow Bureaucracy”

    Posted on by Azrael Comment

    The Taxpayers are Funding America’s “Shadow Bureaucracy”

    As Ronald Reagan pointed out many years ago, Washington is a company town. But rather than being home to a firm or industry that earns money by providing value to willing consumers, the “company” is a federal government that uses a coercive tax system to provide unearned wealth to various interest groups.

    And the beneficiaries of that redistribution zealously guard their privileges and pay very close attention to any developments that might threaten their access to the public trough.

    Government Looking out for Itself

    Federal bureaucrats are particularly concerned whenever there is talk about spending restraint.

    They get lavishly compensated compared to folks in the private sector, so they definitely fret whenever something might happen to derail their gravy train.

    A recent segment on a local station in Washington, DC, focused on their angst, and I provided a contrary point of view.

    The Bureaucracy Keeps Growing

    Needless to say, my friends who work for the federal government generally don’t agree with my assessment. Some of them even sent me an article from the Washington Post that claims the number of bureaucrats hasn’t changed since the late 1960s.

    They claim this is evidence that the bureaucracy has become more efficient.

    But they’re wrong. The official federal workforce may not have changed, but research from the Brooking Institution reveals that this statistic is illusory because of a giant shadow bureaucracy.

    George Will’s latest column is about this metastasizing hidden bureaucracy, referencing author John J. DiIulio Jr. and his study on government growth:

    …government has prudently become stealthy about how it becomes ever bigger. In a new Brookings paper …government expands by indirection, using three kinds of “administrative proxies” — state and local government, for-profit businesses, and nonprofit organizations. Since 1960, the number of state and local government employees has tripled to more than 18 million, a growth driven by federal money: Between the early 1960s and early 2010s, the inflation-adjusted value of federal grants for the states increased more than tenfold …“By conservative estimates,” DiIulio writes, “there are about 3 million state and local government workers” — about 50 percent more than the number of federal workers — “funded via federal grants and contracts.” Then there are for-profit contractors, used, DiIulio says, “by every federal department, bureau and agency.” For almost a decade, the Defense Department’s full-time equivalent of 700,000 to 800,000 civilian workers have been supplemented by the full-time equivalent of 620,000 to 770,000 for-profit contract employees …the government spends more (about $350 billion) on defense contractors than on all official federal bureaucrats ($250 billion). Finally, “employment in the tax-exempt or independent sector more than doubled between 1977 and 2012 to more than 11 million.” Approximately a third of the revenues to nonprofits (e.g., Planned Parenthood) flow in one way or another from government.

    When you add it all together, the numbers are shocking.

    “If,” DiIulio calculates, “only one-fifth of the 11 million nonprofit sector employees owe their jobs to federal or intergovernmental grant, contract or fee funding, that’s 2.2 million workers” — slightly more than the official federal workforce. To which add the estimated 7.5 million for-profit contractors. Plus the conservative estimate of 3 million federally funded employees of state and local governments. To this total of more than 12 million add the approximately 2 million federal employees. This 14 million is about 10 million more than the estimated 4 million federal employees and contractors during the Eisenhower administration.

    Eliminate the Waste 

    In other words, the federal budget has expanded and so have the number of people with taxpayer-financed jobs.

    By the way, there’s nothing theoretically wrong with a government bureaucracy using non-profits or contractors. And that was the point I tried to make in the interview.

    I don’t care whether the Department of Agriculture or Department of Education is filled with official bureaucrats or shadow bureaucrats. What I do care about, however, is that they are part of an agency that should not exist.

    And the same is true for the Department of Energy, Department of Labor, Department of Transportation, Department of Veterans Affairs, and Department of Housing and Urban Development.

    Republished from International Liberty.


    Daniel J. Mitchell

    Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

    This article was originally published on FEE.org. Read the original article.



    📂This entry was posted in News and Politics 📎and tagged

  • Federal Paperwork Wastes Equivalent of 13,000 Lifetimes 

    Posted on by Azrael Comment

    Federal Paperwork Wastes Equivalent of 13,000 Lifetimes

    We finally have an update on what the federal government thinks about its paperwork.

    Federal reports are chronically late.

    It had been two years since the White House Office of Management and Budget released its annual federal paperwork burden survey, the Information Collection Budget of the U.S. Government, when the 2015 and 2016 editions finally appeared in December.

    In another recent example, the White House regulatory benefit/cost report to Congress, which appeared the day before Christmas Eve 2016, was the latest ever by two months.

    In the meantime, it has been possible to track paperwork hours on an OMB database, as well as with the RegRodeo tool at American Action Forum.

    But how nice to see the official publication, and the commentary, at last!

    In its new 2016 Information Collection Budget of the U.S. Government (encompassing fiscal year 2015 data), the Office of Management and Budget, estimates that 9.778 billion hours was required to complete the federal paperwork requirements (from 22 executive departments and six independent agencies that have been historically subject to survey, see p. 7).

    9.7 billion hours of paperwork took up the equivalent of 13,953 full human lifetimes.

    The vast bulk of that, 7.357 billion hours, is attributable to the Treasury Department (lots of tax compliance).

    The overall total is up from 9.453 billion hours in FY 2013 (and up from 8.783 billion in 2011, and from 7.4 billion in 2000).

    Some compliance hours attributable to the Dodd-Frank law and its affiliated agency paperwork and certain other federal activities are not included in the primary Information Collection Budget tally. Rather, they are exiled to an appendix on the last page of the ICB, along with a few other agencies whose compliance-hours exceed a one-million-hours threshold.

    But at least OMB includes them, recognizing their significance. If we include these eight agencies, another 87 million hours get added to the tally (see p. 49). Expect growth in these categories, and their playing a greater role in future editions of the ICB unless regulatory liberalization occurs.

    Can You Imagine?

    How does one visualize 9.778 billion hours? Few can, but there’s this. An 80-year human lifespan is 29,200 days. That’s 700,800 hours, as this animation shows.

    That means the December 2016 OMB report’s 9.778 billion hours of paperwork took up the equivalent of 13,953 full human lifetimes. That’s up from the 13,488 in fiscal year 2013 depicted in the last edition of this report.

    I didn’t include here the hours posted in the appendix, and I guess I’m being generous in saying everyone lives 80 years (it’s 78.8 years on average), which would make paperwork “cost” more lives. And this is paperwork only, not other compliance costs, tasks, duties, restrictions, directives, and mandates. Presumably, those subject to paperwork would say the federal government underestimates it.

    Assuming $40 an hour, we’re looking at over $391 billion in paper-shuffling costs alone.

    How do you like to spend your finite 700,000 hours? Probably not on paperwork.

    The OMB does not provide annual cost estimates for of all these hours, but did allow in a prior edition (2011) of the Information Collection Budget that “if each hour [then 8.783 billion] is valued at $20, the monetary equivalent would be $176 billion.” OMB does present the cost savings some agencies claim, in a “Burden Reduction Initiatives” section.

    The Progressive Policy Institute echoed the same $20 cost figure in When Paperwork Attacks! Five Ideas for Smarter Government, noting that the figure would, at that time, position “paperwork” at number five in the Fortune 500 based on “revenues” equivalence. A corresponding cost figure for the newer 2016 report would be $195 billion (9.778 billion hours times $20).

    With respect to OMB’s dollar cost number, one must wonder when was the last time a lawyer or compliance officer was hired for $20 per hour. An earlier installment of this roundup a couple of years back noted the salaries of compliance officers in the banking field and referred to environmental compliance complexities and the high salaries in that field. If one assumes $40 an hour, we’re looking at over $391 billion in paper-shuffling costs alone, let alone compliance with and economic/social impacts of the underlying rules and regulations generating the paper in the first place.

    Other hourly labor cost estimates give extra perspective. The National Federation of Independent Business conducts a survey of members with respect to paperwork compliance costs, where numbers vary depending upon the type of requirement. Meanwhile, the Bureau of Labor Statistics notes the following mean hourly wages for basic categories one might regard as relevant in keeping up with complex federal paperwork. All exceed the $20 floated by OMB.

    • Human Resources Managers: $56.29.
    • Accountants and auditors: $36.19.
    • Compliance officers: $33.26

    I’ve noted that tax compliance accounts for most paperwork. Later I’ll take a look at that, which is important since tax reform is a major priority of the 115th Congress.

    Reprinted from Competitive Enterprise Institute


    Clyde Wayne Crews

    Wayne Crews is vice president for policy and director of technology studies at the Competitive Enterprise Institute.

    This article was originally published on FEE.org. Read the original article.



    📂This entry was posted in News and Politics 📎and tagged