February 24, 2013

What Would We Do Without These Guys?

Readers suggested a topic on the latest political showdown. “How will the sequester affect your local housing market if it happens? In particular, will it have an effect on real estate markets in areas with heavy concentrations of federal workers, like San Diego and Washington, DC?”

One asked, “What government programs would you rather get rid of completely rather than going through the sequester? And I don’t mean a moronic list where you just say get rid of every acronym you can think of. So, I mean specify the programs, or military equipment being bid or the NASA projects or the loan guarantee or the tax subsidy or whatever.”

“What do you want to get rid of. Bonus points if you can find out how much money it would actually save. Triple points if you can find out how much money it would save and how many people would lose their job because of it. Quadruple if you can explain the eventual outcome, like how much house prices would fall (at least in wealthy areas) if the mortgage interest deduction went away, or how much extra time it would take to track down sources of salmonella if the FDA lost certain programs.”

One had this, “Too many departments. There must be hundreds what do they all do? How they would howl if you cut one more than the other?”

“What would we do without these guys?? Securities and Exchange Commission (SEC). Government National Mortgage Association: without these guys we would all be living in caves. Fiscal Responsibility and Reform, National Commission: the Department nobody pays attention to.”

“Federal Housing Finance Agency: provides supervision, regulation, and housing mission oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. really …”

And another said, “The problem with getting rid of Departments and agencies outright is that many of those employed therein are suddenly dumped into a jobless economy, further straining the whole system as the survivors regroup and recoup. Moreover, the expertise and social infrastructure they’ve amassed and developed is lost along with them. In my experience, federal employees are a lot more qualified and accountable than state (or certainly municipal) employees.”

“A more rational approach would be to implement 1% across-the-board cuts in EVERYTHING paid for by US government check this year. Everything. Tax returns, DoD contracts and foreign aid allotments, Medicare reimbursements and SSI payouts, federal salaries, state subsidies, corporate kickbacks and contracts, agency budgets, military hardware, salaries, and benefits, grants and loans, bond payouts. Everything.”

“Then next year, cut 1% from THAT amount etc., until we’ve reached the desired level of austerity. That way the pain is distributed equitably and gradually, organized blowback in minimized as everyone is involved on some level, and no one is disproportionately ‘punished’. A 1% reduction for everyone is far less disruptive than a 10% (or 20%) cutback in selected established systems, while still allowing for streamlining and managerial evolution as they adapt.”

“Secondly, the Tobin Transaction Tax (.001%/share traded on any market or bourse) should be instituted forthwith. Overnight end to high frequency trade manipulations by ’sanctioned’ players, with the money collected going directly to UN-monitored relief efforts. That should help rein in the FED and keep the IMF accountable to the markets, not the bankers who feed from them.”

A reply, “The problem with 1% cuts for everything, is that some stuff should be cut 100% (corn and soy bean subsidies for a start) and some stuff should be funded more (effectiveness research for medical procedures and drugs). Congress often doesn’t allow the departments to make those decisions. That is their prerogative, but then they also refuse to make the decisions as to what should be 100% cut themselves.”

Bits Bucket for February 24, 2013

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