published Monday, September 27th, 2010

Lots of ‘free’ money!

Who doesn’t like the thought of “free” money?

But is any money really “free”?

Do you know where there is “free” money available? We don’t. In every case of so-called “free” money, somebody has to pay. “Somebody else”? Or “you”?

Lots of people like special grants from the federal government — if we personally, or our community, get them. But we are not quite so enthusiastic about grants, especially of large sums of money, if they are going “somewhere else” and “we” have to help pay for them.

Besides, where in the Constitution of the United States is there authorization for “free” local grants?

We thought about that the other day when there was a long list in the Times Free Press of “energy efficiency grants” coming to “our” local communities. (There are countless other kinds of federal grants, too.)

Do you think it is the constitutional business of the United States to take tax money from Americans in general (and borrow more) to give to other people for “heating and air conditioning” — and many other projects?

Where in the Constitution is there any such authorization? You say some things are not delegated by the Constitution — and thus are prohibited! You are right! But lamentably, too many things emanating from Washington these days are clearly unconstitutional — yet happen anyhow.

When our country is more than $13 trillion in debt and our annual budget is adding about $1.4 trillion in red ink, do you think it is really a “good idea” (even if it were constitutional) to send $300,000 to LaFayette, Ga., for an aeration system for a sanitary sewer system?

We are sure the LaFayette sewer improvement is desirable. But is it desirable for U.S. taxpayers to finance a strictly local system in LaFayette, or anywhere else?

Meanwhile, Jasper, Tenn., is getting $100,000 for heating and pump retrofits at City Hall and city pump stations.

McMinn County is going to get $100,000 for lighting and heating upgrades.

Pikeville will get $100,000 for street light replacement and biofuel development.

Chattanooga is going to get nearly $1.9 million for “energy audits,” a new energy office, building energy upgrades and LED lighting.

East Ridge will get $99,077 for energy retrofits in five city buildings, plus some traffic signals.

Red Bank will get $100,000 for City Hall lighting, heating and insulation.

Signal Mountain will get $100,000 for heating and water-heating retrofits at a historic school.

Soddy-Daisy will get $100,000 for energy retrofits at three city buildings.

Hamilton County will be getting $616,500 for new park lighting, traffic lights, a “green” roof at the Health Department, energy audits — and elementary school tours.

The list goes on and on locally — and multiplies throughout the whole United States!

The cost mounts up — in red ink!

How many of those “good” things do you think local taxpayers would have voted higher taxes to pay for locally? If not, are they really good ideas?

Spending money on federal grants still costs “us” even if it comes from Washington.

Is money from “the government” really “free,” after all?

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Freedom_Czar said...

Nature smiles at the union of freedom and equality in our utopias. For freedom and equality are sworn and everlasting enemies, and when one prevails the other dies. Leave men free, and their natural inequalities will multiply almost geometrically, as in England and America in the nineteenth century under laissez faire. To check the growth of inequality, liberty must be sacrificed, as in Russia after 1917. Even when repressed, inequality grows; only the man who is below the average in economic ability desires equality; those who are conscious of superior ability desire freedom, and in the end superior ability has its way.

DURANT, WILL, The Lessons of History

September 27, 2010 at 5:53 a.m.
fairmon said...

The numbers here can be multiplied many times with some states and cities getting much more, check out California. Grant dollars to some states per tax dollar paid is much higher than some states receive. TN. is lower than average.

Nothing is free and the price is often much higher than anticipated. This money is like a variable interest rate or balloon loan. A day of adjustment and reckoning will come.

It is not free, it is not justified but it will get the incumbent re-elected.

The cost of government employees to administer and monitor the grants and the local resources required to apply and obtain them is staggering.

At some point local tax payers take on a future cost resulting from the grant while the eagle flies elsewhere to drop another load.

The politicians can always blame social security for the general fund short fall and threaten people with it's demise if the objection to such spending becomes too great.

The solution may be gas to around $10 a gallon and taxes to 50% or more then sufficient people will be concerned enough to understand and protest the irresponsible behavior of their elected officials if it isn't too late.

There is only one pie and everyone wants a big slice so the government pretends there are more and more pies from which each can have a slice.

September 27, 2010 at 9:07 a.m.
whatever said...

Believe it or not, not all programs are local. It is beneficial for parts of the nation to keep others healthy, even if those other parts couldn't afford it, or would stubbornly refuse to pay for it.

Which is often not actually the case, but because as a net effect, the balance may even out. Very few people actually want to do a net accounting of costs versus benefits over any kind of broad picture.

Taking the long view is important, not the short one.

Energy usage, sewer systems, valid concerns over all. Do I want a disease epidemic breaking out somewhere if it could be prevented? No, I don't. Do I want some random place burning power (thus causing more pollution to go into the air I breathe) unnecessarily? No, I don't.

Call me selfish if you like, but I'd rather prevent problems than stand around wringing my hands over phantom objections.

But hey, if the TFP wants to come out in support of a Constitutional Convention, I'll support explicitly enumerating such powers to settle your objections.

September 27, 2010 at 10:22 a.m.
whatever said...

Nothing is free and the price is often much higher than anticipated.

Doing nothing, I will note, is also not free, and the same goes for its price.

September 27, 2010 at 10:23 a.m.
nucanuck said...

Harp.

"...if it isn't too late."

From your prior postings,I suspect you already know that the economic tipping point has been passed.

We both lament the fact that the nation seems unable to coalesce and begin the needed repairs.

Divided,we are falling.

September 27, 2010 at 11:17 a.m.
hambone said...

What the various city halls listed in this opinion need is more SUNSHINE!!

September 27, 2010 at 4:15 p.m.
fairmon said...

nacunuck I suspect we may have passed the point of return or at least the point of a normal return. Regarding our earlier exchange about investing, deflation, inflation. The data indicates a period of painful deflation similar to Japan before inflation explodes creating a crisis greater than the crisis justifying TARP.

Whatever If my comments suggested no grants were appropriate then I did not communicate well. However a cursory look at the endless list reveals a lot of "pork" among the chickens in the legislative branch.

My local council members answer to justify the grants was if we don't get it someone else will. A prevalent national attitude with most cities staffing and paying people to pursue and gain any grant possible. I think our sustainability position which is a grant funded activity may include seeking more grants, I am not sure what a sustainability position provides. I did check with CSTCC to see if one could acquire a degree in sustainability since it pays so well for work from home.

$3 million to increase the staffing of our police department certainly appears to me a local issue that those of us desiring more protection should pay for even though we may have to give up some sculptures and crafts, or god forbid do without a parking garage and other "nice to haves" that our leadership wants to provide us. If we can't pay for it now what suggest we can 2-3 years hence?

Taxes should be increased on everyone to a pay as we go plus start paying down the debt. We have too long been a society of takers. If the majority want all those wonderful things then have us pay for them. Cut up the credit cards and quit issuing more cards with higher limits.

The whole limb has to be amputated, is it less painful to do it a joint at at time?

Don't worry about the rampant spread of anything since no significant change will occur and I have no delusions that either of us will get any more attention than we would by passing gas in a hurricane. Grants will continue to flow and probably increase regardless of our support or lack thereof.

I am very confident the governments behavior will enable me to increase my personal wealth to the point of being one of those the majority insist have a much higher tax bracket. I will not object and will utilize the same instruments now used by others to avoid any significant impact.

How many tax payers do you think would accept and support providing a free cell phone to those under a certain income level? Compliments of your legislatures at tax payers expense; safelinkwireless.com

September 27, 2010 at 4:43 p.m.
nucanuck said...

Harp,

Because of the debt/savings differences,I doubt that Japan will be analogous. We shall see.

Previous you mentioned dividend stocks that you hold. In the 1970s,my dividend stocks went south when interest rates rose. The interest was small recompense.

Since the current interest rate structure is completely artificial/engineered by the Fed,you may wish to tread carefully,as it certainly seems that the Fed's stature is slipping ,if not tumbling.

September 27, 2010 at 5:22 p.m.
whatever said...

If my comments suggested no grants were appropriate then I did not communicate well. However a cursory look at the endless list reveals a lot of "pork" among the chickens in the legislative branch.

I'm sure there are, however most of my reply was to the editorial which was primarily antagonistic to the thought at all.

Concern for waste? Fair and reasonable. Outright opposition that knows no sense or compromise. Goes too far.

A prevalent national attitude with most cities staffing and paying people to pursue and gain any grant possible.

You'll find this true in large companies too. I think of it as the Shark effect. If you're not eating, you're being eaten.

How many tax payers do you think would accept and support providing a free cell phone to those under a certain income level? Compliments of your legislatures at tax payers expense; safelinkwireless.com

You should check the fact sheet on that page. Or this one:

http://www.factcheck.org/2009/10/the-obama-phone/

And yes, I do support people being able to communicate in this day and age, I don't know about you, but I realize how important they are, and how people aren't magically going to get less poor when you cut them off from certain aspects of society.

Given how much of the public interest(right of ways, EM spectrum) is being used for phone services anyway, I can't begrudge some of it being put to the public interest.

Really, it's not a bad principle.

If I were writing the Constitution today, I would not be adverse to requiring the government have such duties, I see it much the same as the mail really.

September 27, 2010 at 6:19 p.m.
fairmon said...

Whatever

We do have opposing views on the issue. I have gone to the providing web site to assist a relative in applying even though I think it is not justified. We already pay the "Gore tax" that was justified as a means of providing everyone access to telephone service. I don't have or see the need for a "cell" phone for myself why in the hey would I want to pay for someone else one? I guess so they could irritate the hell out of everyone with their loud public conversations. We should buy them a car so they could talk or text while driving.

I am not rejecting assisting those truly not capable to have clothing, food and shelter. The number that can and won't do for themselves account for a healthy percent of those government(s) supported. I view the government like a drug dealer, they get people hooked with no motivation to do otherwise.

Would you object to requiring some meaningful work or successfully completing training to better quality them for employment in return for financial assistance.

I guess that is what makes us unique you and I can reach different conclusions when processing the same data.

All mail service should be outsourced with the three major private carriers and the postal service abolished. The circumstances and need were totally different at the inception.

Short of that option the post office is asking for another increase in postage. The request should be increased to a level that makes them self sufficient and a healthy increase granted with the understanding they would no longer in any manner be subsidized. Compete or die, isn't capitalism cruel?

I hope you are not a government employee. I have dealt with many government operations during forty years of managing a large manufacturing operation and doing business with some government entities. The inefficiencies, poor use of work time, the slow no urgency approach to everything, The very liberal pay and benefits with over staffing and duplication evident convinced me that many options are better than the government managing an operation. Of course there are some exceptions. In some cases we just have to tolerate the poor cost control.

I struggle with supporting the government even in those social assistance endeavors that are legitimate. I prefer seeking more effective alternatives.

Give me a couple of items in the constitution you think are bad and need to be changed?

September 27, 2010 at 8:28 p.m.
whatever said...

Give me a couple of items in the constitution you think are bad and need to be changed?

Most of it is a lack of enumeration regarding the powers and obligations of government that apply to this day and age. I've seen somebody argue we shouldn't have a National Weather Service just because it wasn't listed. Sigh. Some of it is just in the language, which I think needs to be more clear. A good portion of it is in regards to the politicians and the elections process. I'm still debating whether recall or referendums should be part of it, but I would seriously give consideration to a preferential voting system.

Also the USPS hasn't been receiving taxpayer subsidies for years. Payment for services rendered, but not subsidies. But as long as the government is going to communicate with its citizens through the mail, I'm going to insist on it being publicly funded. If you want to make a convincing argument for another avenue of communication, I'd consider it, but I believe the duty would remain. That's part of the argument for the phones, that and I think it does help people get jobs and off welfare.

And welfare programs already do have requirements for training and job seeking for most people.

September 27, 2010 at 9:23 p.m.
fairmon said...

Most do not have the training and contribution requirement.

How much meaningful communication do you receive from any government via USPS? What is received that could not be part of the third party contract?

You are really stretching the justification for providing phones. There are too many other avenues of communicating to go there. However I will go to whatever extreme giving is desired if it includes taxing those above the poverty line enough to pay as you go and reduce the debt by no less than 5% each year. I can stand as much pain as the majority can to assure we are all equally impoverished.

We now know how we each view the issue and probably both know we won't change the others opinion. Even worse neither will influence the behavior of our elected elite.

September 27, 2010 at 10:29 p.m.
whatever said...

Most do not have the training and contribution requirement.

I do not know where you get your statistics from, but is that excluding programs for children and the disabled? Is that by monetary value, number of programs, or people in it?

How much meaningful communication do you receive from any government via USPS? What is received that could not be part of the third party contract?

If I'm to receive any unsolicited official communication through that means, I'm going to have to insist on governmental provision. They could certainly try to privatize it, but well, I think they did well enough when they took the USPS to self-funding so I don't see it entirely necessary at the moment.

The only reason the USPS has problems with keeping up is a lack of control of some of its fundamental operations like employment and rates. That and some of its cash inflows have been dropping. Junk mail declining...not something I am too grossly offended by, mind you, but still it was a way to make money.

But even if we did agree that the postal system was an obsolete form of communication with the government, then I'd insist on a replacement system anyway.

It's one of the things I consider necessary.

You are really stretching the justification for providing phones. There are too many other avenues of communicating to go there.

Eh, it's a reasonable decision, I could be swayed on the numbers, but not to make an objection on the principles.

Even worse neither will influence the behavior of our elected elite.

Well that I agree with. Unless...want to lurk in some shrubbery with a camera??

September 27, 2010 at 10:58 p.m.
fairmon said...

Unemployment, food stamps, utility assistance, the weatherization program, are a few that come to mind that have only the no or low income provision with no requirement or incentive to improve capability or one's lot in life if physically able to do so.

September 28, 2010 at 9:09 a.m.
whatever said...

I don't know about these utility assistance or weatherization programs, but I can tell you that Unemployment and Food stamps DO have such requirements.

You can check it out on their websites.

Sorry, but I think you've been misinformed.

September 28, 2010 at 7:02 p.m.
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