Tuesday, February 17, 2015

Federal debt; military bases

Federal debt
Feb. 3, 2015: The Wall Street Journal reported that a White House analysis projects that interest payments on the national debt, about $210 billion for 2015, will increase to about $600 billion by 2021 and about $790 billion by 2025. The 2021 amount is roughly equal to projected defense and nondefense discretionary spending for that year. The projections suggest that the competition between debt service obligations, defense spending and discretionary spending will be fierce.

Under the circumstances, one might think that Congress and the President would instantly jump at any opportunity to increase revenues without raising taxes or passing major legislation. Unfortunately, if one though that, one would be wrong. Each year Congress knowingly allows hundreds of billions in tax revenues to go uncollected. IRS net tax gap (tax evasion) data for 2001 was $290 billion and $385 billion in 2006, an increase of $19 billion/year. At that rate of increase, the tax gap, Congress' annual gift to tax cheats, would be $537 billion for 2014. To collect most of that, all Congress would need to do is to increase the IRS's budget for tax law enforcement. Instead of enforcing existing law, Congress intentionally limits the IRS enforcement budget, thereby allowing tax cheats to steal hundreds of billions each year from honest U.S. taxpayers. This bipartisan game has been going on for years. Not surprisingly, the situation undermines public trust in the tax system and in the rule of law. Obviously, some of the spending that the lost tax revenue could have paid for is financed by debt.

A reasonable conclusion is that Congress annually permits hundreds of billions of theft from taxpayers and resulting added debt because it reflects Congressional incompetence and/or it serves the interests of people in Congress, e.g., pandering for re-election, corrupt payback to campaign contributors or whatever else the case may be.

Military installations
Feb. 7, 2015: The New York Times reported that Pentagon officials have asked Congress for permission to inventory all military installations with the goal of shedding unneeded installations and saving billions in operation costs each year. The Pentagon has about 562,000 facilities worldwide and they cover about 24.7 million acres. That is about the size of Virginia. Congress blocks attempts to allow the DoD to do the inventory. The NYT article implies that Congress prevents an inventory because doing that could be the first step leading to base closings in affected Congressional voting districts.

A reasonable conclusion is, as the NYT implies, that Congress annually defends billions in Pentagon waste because it reflects their incompetence and/or it serves their interests, e.g., pandering for re-election, corrupt payback to campaign contributors or whatever else the case may be.

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