Sequester rant...

Quote: RonC

I'm not sure what the "right" number of federal employees is, but I believe it is some number less than the number we have right now. I don't want to dump any of them on the streets but we need to do with the government what many of us do in our own lives--find the waste and trim it.

In the real world the CEO tells his staff, "revenue is down, you need to cut costs 5%." Then they have to find a way to do it. We need a POTUS with the stones to tell his cabinet this.

"Hey, Dept of Education Secretary, today is Monday. Come back to my office Friday and tell me how you are cutting 5%."

That is all it would take. The Secretary of Education could cut anything from payroll to paper clips, but they have to hit that number. Then repeat for all other Departments.

Quote: AZDuffman

In the real world the CEO tells his staff, "revenue is down, you need to cut costs 5%." Then they have to find a way to do it. We need a POTUS with the stones to tell his cabinet this.

"Hey, Dept of Education Secretary, today is Monday. Come back to my office Friday and tell me how you are cutting 5%."

That is all it would take. The Secretary of Education could cut anything from payroll to paper clips, but they have to hit that number. Then repeat for all other Departments.

That is the whole problem with this stupid sequester thing. The President (he is responsible for the work product of his administration, good or bad, in spite of the way some may spin it) and Congress both passed it as a way to LOOK like they would actually do something--sit down and make cuts--but in reality neither one really wanted to do the hard work of governing.

I think we have a tone-deaf President who talked a lot about being different than other politicians but isn't (is it really smart to take an expensive golf trip when you mired in a situation that could cost a lot of jobs and you are supposed to be the jobs President?), a Senate that has a weenie for a leader, and a hugely ineffective Speaker.

Don't bother coming back with "the Speaker is fine" or "the President is great"...that is just a bunch of BS. NONE of them are doing a good job for the folks who elected them.

This whole thing would be a non-issue if they had said that on this date, barring an earlier agreement, each department and branch of government would have to figure out how to cut 5% of their budget (remember that this is an increased budget so it really isn't even a cut overall--it is a reduction in the increase) and we'll work from there.

They've got us by the balls because we take one side or the other and think the other side is the enemy. They are not. They may be wrong, they may be in favor of things we are not inclined to believe in, but they are not the enemy. Our real enemy is the entrenched political types that are more interested in how long they can stay in Washington than in how well they can lead the country.

Truly cutting spending doesn't involve mothballing aircraft
carriers and firing air taffic controllers. It means getting rid of
10's of thouands of gov't workers on useless overlapping
jobs getting paid $65K a year for doing almost nothing.

This would sink the political party who did it and thats
why it never happens.

Quote: EvenBob

Truly cutting spending doesn't involve mothballing aircraft
carriers and firing air taffic controllers. It means getting rid of
10's of thouands of gov't workers on useless overlapping
jobs getting paid $65K a year for doing almost nothing.

This would sink the political party who did it and thats
why it never happens.

I don't think it would sink anyone if it was presented properly. Either party could make it work for them if they really wanted to...but neither party is really completely in favor of reducing spending.

The problem is US. We keep saying how horrid the Congress' approval ratings are (they have been down for quite a while) but we like "our guy" and keep them in office. That is the problem with saying the approval rating of Congress is 9% and the approval rating of the President is 48%. The ineffective leader we continue to elect has a better than 50% (in most cases) voter approval rating in their district, where it counts. The President has a slightly better than 50% voter approval rating as of last November. Their work has been approved by those who elected them.

If Congress really sucks, we need to stop electing "our guy" again and again.

The talk about cutting spending is almost as goofy as the gun control debate. Conservatives want their military money, war on drugs money, lets put everybody in jail money, etc......nearly a trillion dollars. Liberals want entitlement programs to grow....free everything for everybody except for the producers.

Quote: treetopbuddy

The talk about cutting spending is almost as goofy as the gun control debate. Conservatives want their military money, war on drugs money, lets put everybody in jail money, etc......nearly a trillion dollars. Liberals want entitlement programs to grow....free everything for everybody except for the producers.

Got that figure for the second part? Didn't think so. Try $3 trillion more or less. So that one is all fine and dandy.

Quote: SanchoPanza

Got that figure for the second part? Didn't think so. Try $3 trillion more or less. So that one is all fine and dandy.

what are you saying? Have a cup of coffee and reread my post. I have a complete handle on what the BEAST is spending.....what's your point?

Your government is corrupt. That's why it is completely ineffective. There have been too many promises to too many lobbyists and corporations that the whole idea of "by the people, for the people" has gone by the wayside. Too much posturing by either side leave no room for compromise, so you get shit like this (including ObamaCare and meaningful and thoughtful gun control legislation) happening.

Here's a thought: caps on election spending, fundraising and elimination of the SuperPacs. Lobbyists must register and have caps on what perks they can give government. Government workers have caps on what they can receive from corporations and lobbyists... why doesn't that apply to Congress, the Senate, and the Presidency?

Rather than spending all of their time figuring out if their vote pisses a group or lobbyist off and their next fundraising, how about responding to the actual need of your constituents and pass meaningful and good legislation?

And please, don't give me the republican or democrat line. My post was non-partisan.

Quote: AZDuffman

In the real world the CEO tells his staff, "revenue is down, you need to cut costs 5%." Then they have to find a way to do it. We need a POTUS with the stones to tell his cabinet this.

"Hey, Dept of Education Secretary, today is Monday. Come back to my office Friday and tell me how you are cutting 5%."

That is all it would take. The Secretary of Education could cut anything from payroll to paper clips, but they have to hit that number. Then repeat for all other Departments.

No, in the real world, a good CEO is ALWAYS looking for ways to better efficiency, lower costs and get the maximum ROI regardless of the revenue numbers. Good CEOs will say, every day, regardless of the income statement, how can I invest my money and lower costs and increase efficiency?

If revenue is down 5%, the solution is not to cut costs by 5%. That's just boneheaded. The solution is to find out why revenue is down 5% and address the problem. Maybe revenue is down because your salespeople don't have enough bandwidth to sell your goods. You invest MORE in the salespeople to maximize your throughput. Maybe revenue is down because you had a bad contract with your customer. Rather than punishing your employees by forcing them to take a cut for a small group of people's mistake, you punish the small group of people, come up with a list of lessons learned, and take the hit.

The goal of any CEO should be to maximize ROI, not simply slash costs because revenue is down.

Quote: boymimbo

No, in the real world, a good CEO is ALWAYS looking for ways to better efficiency, lower costs and get the maximum ROI regardless of the revenue numbers. Good CEOs will say, every day, regardless of the income statement, how can I invest my money and lower costs and increase efficiency?

If revenue is down 5%, the solution is not to cut costs by 5%. That's just boneheaded. The solution is to find out why revenue is down 5% and address the problem. Maybe revenue is down because your salespeople don't have enough bandwidth to sell your goods. You invest MORE in the salespeople to maximize your throughput. Maybe revenue is down because you had a bad contract with your customer. Rather than punishing your employees by forcing them to take a cut for a small group of people's mistake, you punish the small group of people, come up with a list of lessons learned, and take the hit.

The goal of any CEO should be to maximize ROI, not simply slash costs because revenue is down.

Clearly you do not understand how business works in the real world. Because many is the time when you do all you can to increase sales yet sales increases do not happen. So you have to cut back to make budget, or even stay in business. Happens all the time.

What on earth do you mean about "mistake made by a small group of people" and punishing employees for it?

Quote: AZDuffman

Clearly you do not understand how business works in the real world. Because many it the time when you do all you can to increase sales yet sales increases do not happen. So you have to cut back to make budget, or even stay in business. Happens all the time.

What on earth do you mean about "mistake made by a small group of people" and punishing employees for it?

boymimbo/AZDuffman, an epic battle.

Quote: treetopbuddy

boymimbo/AZDuffman, an epic battle.

Not really, AZ always loses.

That's funny. I've never seen AZ lose a logical debate.

Quote: Mooseton

That's funny. I've never seen AZ lose a logical debate.

s2dbaker/Mooseton, epic battle 2

Quote: treetopbuddy

I have a complete handle on what the BEAST is spending.....what's your point?

The point is that while giving an inflated figure for military spending, the much larger sums for entitlements, discretionary spending and interest are omitted. Here is a wiki summary:
"During FY 2012, the federal government spent $3.54 trillion on a budget or cash basis, down $60 billion or 1.7% vs. FY 2011 spending of $3.60 trillion. Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%)."

Quote: SanchoPanza

The point is that while giving an inflated figure for military spending, the much larger sums for entitlements, discretionary spending and interest are omitted. Here is a wiki summary:
"During FY 2012, the federal government spent $3.54 trillion on a budget or cash basis, down $60 billion or 1.7% vs. FY 2011 spending of $3.60 trillion. Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%)."

what's your deal? I'm simply saying that both sides of the isle have their agendas......you can't figure that out from my OP? Military spending is insane, the war on drugs is insane, the entitlement programs are insane. The sequester is silly at best. Get it?

Quote: AZDuffman

Clearly you do not understand how business works in the real world. Because many is the time when you do all you can to increase sales yet sales increases do not happen. So you have to cut back to make budget, or even stay in business. Happens all the time.

What on earth do you mean about "mistake made by a small group of people" and punishing employees for it?

No, that's not what you said. You said that if revenue isn't there, the CEO should cut the budgeted expenses. That's shortsighted. You look for the reasons why the revenue is short and fix the problem. You don't simply cut expenses, because that cuts productivity if not properly planned or executed.

Quote: boymimbo

No, that's not what you said. You said that if revenue isn't there, the CEO should cut the budgeted expenses. That's shortsighted. You look for the reasons why the revenue is short and fix the problem. You don't simply cut expenses, because that cuts productivity if not properly planned or executed.

And I stand by what I said. Business is slow you have to cut expenses. And you cut fat as an ordinary course of business at all times. You do not keep a crew of 5 when 4 will do. You find ways to make machinery work longer, better, and cheaper.

What you do not do, cannot do, is raise prices over and over just so no employees have to be cut; so no locations have to be closed.

Cutting expenses without cutting productivity happens all the time. I will repeat, you must not have spent much time in business in the real world. Your understanding of economics is more academic than what really happens.[/link.]

All animals are equal, but some are more equal than others

I'm the one who said that cutting expenses without cutting productibity (ie increase efficiency) is one job that a CEO must do, not only in bad times, but in the good times. But cutting expenses just because revenue is down, though obvious, is not always the best choice. Certainly the $85B in cost cutting measures that the president signed into law was not the best way to cut $85B.

I did not say that you raise prices. Obviously, all that does is reduce your revenue (unless you're an oil company, then you just get on the phone with the other oil companies, or you're a casino, and you call your competitors and state that everyone is better off with 1-3-6 3-card instead of 1-4-6).

Quote: boymimbo

I did not say that you raise prices. Obviously, all that does is reduce your revenue (unless you're an oil company, then you just get on the phone with the other oil companies, or you're a casino, and you call your competitors and state that everyone is better off with 1-3-6 3-card instead of 1-4-6).

So then you do understand the Laffer Curve and that raising marginal tax rates does not raise revenue?

BTW: An oil company has among the least pricing power of any industry out there, if you raise your price on a commodity product everyone will buy elsewhere. I do seriously ask again, do you understand business and economics? The first part of your post says yes, the second says not at all.

The 'random' cutting of costs makes no sense. My example.... from old job... I was medical director of an OR.... and the 'instrumentation' certain spine surgeons put in was very expensive, lets say $10,000 per patient. There were many companies who made the instrumentation, and they were similarly priced. The hospital bigwigs above me went to one company and said "if we exclusively use you will you charge us $9,000 per case?" So a deal was struck, and the hospital expected to save $100,000 per year for the hundred cases that were done. So one surgeon, a reasonable bright man, said, sorry guys I want to use the other brand, I think it is better for my patients..... The hospital said 'their analysis showed they are the same'.... He took his 30 cases to another hospital... AND all his other cases he did.... probably lost the hospital over a million dollars when all was said and done....
My point is that if you cut a cost in private business that decreases revenue disproportionally, you have made an error. So cost cutting should never be random...
The public sector is more complicated, of course, as revenue is not the driving factor for why we have services. No one ever says... "we shouldn't have fire departments because we don't make money on them, or libraries, or road salt spreaders..." In that case the cuts should be done after making a list of priorities, and assessing which cuts will least will impact those services which are deemed the most important.

Good morning. Long term lurker, first time poster. Figured I'd join, as a DOD employee, looks like I'll have plenty of time on my hands. This sequester- minor cuts - maximun pain, as directedby the POTUS. Pathetic.

Quote: SOOPOO

The 'random' cutting of costs makes no sense. My example.... from old job... I was medical director of an OR.... and the 'instrumentation' certain spine surgeons put in was very expensive, lets say $10,000 per patient. There were many companies who made the instrumentation, and they were similarly priced. The hospital bigwigs above me went to one company and said "if we exclusively use you will you charge us $9,000 per case?" So a deal was struck, and the hospital expected to save $100,000 per year for the hundred cases that were done. So one surgeon, a reasonable bright man, said, sorry guys I want to use the other brand, I think it is better for my patients..... The hospital said 'their analysis showed they are the same'.... He took his 30 cases to another hospital... AND all his other cases he did.... probably lost the hospital over a million dollars when all was said and done....
My point is that if you cut a cost in private business that decreases revenue disproportionally, you have made an error. So cost cutting should never be random...
The public sector is more complicated, of course, as revenue is not the driving factor for why we have services. No one ever says... "we shouldn't have fire departments because we don't make money on them, or libraries, or road salt spreaders..." In that case the cuts should be done after making a list of priorities, and assessing which cuts will least will impact those services which are deemed the most important.

The thing is the Feds never cut *any* costs in *any* way. I've been in business and sometimes revenue is not what is projected so you have to cut back. Could be anything from laying off an employee to lengthening replacement cycle on equipment to stopping the coffee service. You just have to do it. And you survive. But in government they seem to say, "there is nothing to cut!"

Nonsense. I will say it again, if a CEO could not figure how to cut 3% of costs that CEO would soon be replaced by his or her board. And rightly so.

Revenue is not there then you adapt, you improvise, you overcome. What you don't do is cry that the world will end.

Gen. Patton had his supplies cut, and he still got the job done even if not the way he would have liked. Obama is no Patton that is for sure.

Quote: SOOPOO

The 'random' cutting of costs makes no sense. My example.... from old job... I was medical director of an OR.... and the 'instrumentation' certain spine surgeons put in was very expensive, lets say $10,000 per patient. There were many companies who made the instrumentation, and they were similarly priced. The hospital bigwigs above me went to one company and said "if we exclusively use you will you charge us $9,000 per case?" So a deal was struck, and the hospital expected to save $100,000 per year for the hundred cases that were done. So one surgeon, a reasonable bright man, said, sorry guys I want to use the other brand, I think it is better for my patients..... The hospital said 'their analysis showed they are the same'.... He took his 30 cases to another hospital... AND all his other cases he did.... probably lost the hospital over a million dollars when all was said and done....
My point is that if you cut a cost in private business that decreases revenue disproportionally, you have made an error. So cost cutting should never be random...
The public sector is more complicated, of course, as revenue is not the driving factor for why we have services. No one ever says... "we shouldn't have fire departments because we don't make money on them, or libraries, or road salt spreaders..." In that case the cuts should be done after making a list of priorities, and assessing which cuts will least will impact those services which are deemed the most important.

I agree--cost cutting should never be random and all sides of the issue should be discussed (it looks like they forgot to involve the surgeons in a meaningful way in this particular case). The thing is that businesses do make mistakes by cutting the wrong thing, raising the price above a certain price, changing the recipe, etc. They learn from their mistakes and move on...sometimes people even get fired for making the mistakes or businesses go under if too many mistakes are made.

Our government doesn't really even attempt to mimic a business in any way. While there may be individuals concerned with costs, most government organizations are just concerned with getting a bigger slice of the budget pie for their important work. Is some of it important? Sure is. Is some of it wasteful? Yep. We just don't have leaders all that interested in any attempt to change things because they might not get re-elected, their party may fail, etc. and they might even have to go out and work in the private sector.

We started with a bunch of folks willing to hang for their rights now we have a bunch of people who only want the right to hang on.

Career politicians and bureaucrats suck the life out of our country.

Quote: SOOPOO

The 'random' cutting of costs makes no sense. My example.... from old job... I was medical director of an OR.... and the 'instrumentation' certain spine surgeons put in was very expensive, lets say $10,000 per patient. There were many companies who made the instrumentation, and they were similarly priced. The hospital bigwigs above me went to one company and said "if we exclusively use you will you charge us $9,000 per case?" So a deal was struck, and the hospital expected to save $100,000 per year for the hundred cases that were done. So one surgeon, a reasonable bright man, said, sorry guys I want to use the other brand, I think it is better for my patients..... The hospital said 'their analysis showed they are the same'.... He took his 30 cases to another hospital... AND all his other cases he did.... probably lost the hospital over a million dollars when all was said and done....
My point is that if you cut a cost in private business that decreases revenue disproportionally, you have made an error. So cost cutting should never be random...
The public sector is more complicated, of course, as revenue is not the driving factor for why we have services. No one ever says... "we shouldn't have fire departments because we don't make money on them, or libraries, or road salt spreaders..." In that case the cuts should be done after making a list of priorities, and assessing which cuts will least will impact those services which are deemed the most important.

Well said ! However, do not run for public office. Your logic is an immediate disqualification.

Just to be clear, I work with CFOs and CIOs in large corporations to install financial software in order to increase efficiency, lower the total cost of ownership, and to improve business processes (from procurement to financial reporting to billing to project budgeting and so on). I've been doing that for 16 years. So yeah, I understand finance AND economics. I've worked with insurance, health care, utilities, universities, travel companies, banks, and financial companies.

Are you blaming Obama for the woes? Really, shouldn't we be firing the 538 congressmen for failing to come to an alternate measure? Are you suggesting impeachment? Did Bush cut any costs in his time in office?

The size of government grew by 214,000 between 2000 and 2008 yet has not grown in size since 2008. The problem is that the AVERAGE pay has jumped from 50,429 in 2000 to $73,908 in 2010 (Obama froze payroll increases for federal employees in 2010). Postal workers made $37,627 in 2000 and made 53,304 in 2010 (the size of the postal service has shrank by 26% in the same period).

If you claim that it makes sense to cut costs when the revenue isn't there, does it make sense to cut revenue (as Bush did with his tax cuts and Obama continued to do until January this year -- and oh yeah, I'm crediting Obama -- you can't blame Obama for everything bad and credit someone else for everything good) while increasing costs? Or is there a special argument that says that when you put more money in the hands of a certain section of the population, that they will raise revenue through economic growth? How did that work out?

Quote: boymimbo

Are you blaming Obama for the woes? Really, shouldn't we be firing the 538 congressmen for failing to come to an alternate measure? Are you suggesting impeachment? Did Bush cut any costs in his time in office?

Yes, I am blaming Obama. He will not allow any cuts and claims people who do want to do everything from starve kids to throw old people out on the street. Not suggesting impeachement, suggested we throw him out last November. Since low-information voters put him back in I am suggesting he do his job, and do more of it than the part that involves raising taxes.

Bush has been gone for five years now, time to move on.

Quote:

The size of government grew by 214,000 between 2000 and 2008 yet has not grown in size since 2008. The problem is that the AVERAGE pay has jumped from 50,429 in 2000 to $73,908 in 2010 (Obama froze payroll increases for federal employees in 2010). Postal workers made $37,627 in 2000 and made 53,304 in 2010 (the size of the postal service has shrank by 26% in the same period).

First, the average federal worker gets a pay raise every year. Federal pay is based on grade level and service time. So you get that built in step-raise every year. What has been frozen are the grade levels, as they should be given how government wages are higher than the private sector.

BTW: you misstated it. What hasn't increased is *government payroll.* Government has increased yearly and is now near WWII spending levels as % of GDP. The USPS is NOT part of the Federal Budget, BTW. It is chartered to run at break-even levels.

Quote:

Or is there a special argument that says that when you put more money in the hands of a certain section of the population, that they will raise revenue through economic growth? How did that work out?

It is called the "Laffer Curve" and it works well when tried. It made a boom in the 1980s and 2000s. Seen in reverse, the FICA withholding going up is currently slowing retail sales and other parts of the economy.

I don't understand why people are still talking about Bush at this point...his Presidency has been over for four years and President Obama ran saying how bad he was and how he would fix it.

No, it isn't all Obama's fault...neither was it it "all" ANY other President's fault.

It is much easier to keep saying that kind of stuff on both sides of the aisle instead of actually trying to do anything. We don't demand any better, so we get what we get...

Quote: boymimbo

The size of government grew by 214,000 between 2000 and 2008 yet has not grown in size since 2008.

You don't give a source for your numbers. But just for argument's sake, let's take the administration's most favorable view of itself, the OPM's own Historical Federal Workforce Tables:
2000-1,778
2008-1,960
2011-2,146

(end-of-fiscal-year count in thousands)

Quote: SanchoPanza

You don't give a source for your numbers. But just for argument's sake, let's take the administration's most favorable view of itself, the OPM's own Historical Federal Workforce Tables:
2000-1,778
2008-1,960
2011-2,146

(end-of-fiscal-year count in thousands)

well then, no longer reading any boy posts.

Quote: AZDuffman

It is called the "Laffer Curve" and it works well when tried. It made a boom in the 1980s and 2000s. Seen in reverse, the FICA withholding going up is currently slowing retail sales and other parts of the economy.

Hmm, some evidence suggest tax revenue slowed during the 80's when there was a large tax cut for the top rated tax earners.

The Laffer Curve does NOT say that cutting taxes increases revenue. It just says it -can-, depending on the current slope of the curve. Similarly, the Laffer Curve can also support increasing taxes to increase revenue.

Supply side economics in the 80's may or may not have resulted in a boom. As ever economics is just never that simple. Thatcher in the UK claimed to be a supply side economist, but she actually did more manipulation of the markets than you'd expect from what she actually said she believed in. I've not read enough on Reaganomics, but I know there is a mirror.

I won't argue that the US tax-code isn't broken. It is. It's not the tax cuts/hikes for the rich. It's too small part of the total pie. The biggest problem isn't the entire bulk of the 47% (*) either. It's the number of tax credits available that allows families with reasonable incomes to write off most or all of their taxes. If you examine the tax rates for a $50k earner in the UK, US and Canada, for a single person they are similar (the US has lower rates, by around 5% as I recall). Give that $50k a spouse and two kids and a mortage, and the tax rates in the UK and Canada drop a bit. In the US, they -plummet-. These aren't people subsisting on hand outs, and maybe just getting by, but they are not paying in either. Paying of the debt is going to have to come from these groups (and up). Once that's realized, you can argue about who pays how much (and what services and programs you cut on the other side). It's going to be on both. Has to be.

Course, attacking the middle class on tax is a hard task... it's a big bulk of your electorate.

(*) - I'd love to compare the percentage of net contributors across different economies. I wonder if 47% is high low or average.

I have come to the conclusion these problems will never be solved. Basically, the Congress is stealing from the government they are in charge to run and selling the tax cuts or spending increases to large political contributors at steep losses. It can't be done without huge deficits or else the general voting public would know it is coming from them. To get reelected and raise the money, the noble lose and we get government the way it is. I once thought if the general public each decided to donate $100 per person, it would solve the problems, but have since considered it would just get worse.