Saturday, August 19, 2006

This is the MBA Administration?

If David Cay Johnston didn't exist, it would be embarrassing to have to invent him.
Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers—each of whom owes $25,000 or less in back taxes—to three collection agencies....The move, an initiative of the Bush administration, represents the first step in a broader plan to outsource the collection of smaller tax debts to private companies over time. Although I.R.S. officials acknowledge that this will be much more expensive than doing it internally, they say that Congress has forced their hand by refusing to let them hire more revenue officers, who could pull in a lot of easy-to-collect money. [emphasis mine]

The cash flow choices are simple:
The private debt collection program is expected to bring in $1.4 billion over 10 years, with the collection agencies keeping about $330 million of that, or 22 to 24 cents on the dollar.

By hiring more revenue officers, the I.R.S. could collect more than $9 billion each year and spend only $296 million—or about three cents on the dollar—to do so, Charles O. Rossotti, the computer systems entrepreneur who was commissioner from 1997 to 2002, told Congress four years ago.

The math from that is also simple: Over ten years, the outside collection agencies will produce a net of $1.07B ($1.4B-0.33B). Over ten years, the IRS would produce $87.04B ($90B-$2.96B).

The net loss of owed tax revenues—all from low-level debtors—will therefore be approximately $85.97B.

And they're using reputable companies as well:
One of the three companies selected by the I.R.S. is a law firm in Austin, Tex., where a former partner, Juan Pena, admitted in 2002 that he paid bribes to win a collection contract from the city of San Antonio. He went to jail for the crime.

Last month the same law firm, Linebarger Goggan Blair & Sampson, was again in the news. One of its competitors, Municipal Services Bureau, also of Austin, sued Brownsville, Tex., charging that the city improperly gave the Linebarger firm a collections contract that it suggested was influenced by campaign contributions to two city commissioners.

And the reasoning is the same as the justification for outsourcing: capital classification advantages, not value maximization:
Under federal budget rules, money spent to hire tax collectors is treated as a discretionary expense, and Congress is cutting discretionary spending. In business terms, the rules treat the I.R.S. as a cost center, not as the government's profit center.

The private debt-collection program, however, is outside the budget rules because, except for the start-up costs, the collectors are to be paid from the proceeds.

So we have the failed outsourcing experiment, the failed privatization experiment, bogus accounting, and poor incentive alignment combined to produce nearly $86B in lost revenues. If there were any responsibility to the shareholders, the CEO would be fired.

(Cross-posted to Economics Question of the Day)

Thursday, August 17, 2006

If these gits had been in the 4-H Club instead, they wouldn't be graduating

You might not know this is a case of Our Guys Redux from the lede.
A judge decided two high school athletes can complete the football season this fall before they serve 60-day jail sentences for a car crash caused by a decoy deer placed in a country road. Two teens were injured. [emphasis mine]

Doesn't sound too serious, right? Maybe 60 days is reasonable?

Second 'graf:
"I shouldn't be doing this, but I'm going to. I see positive things about participating in football," Judge Gary McKinley said Tuesday.

First hint something might be wrong. (Memo to the Judge: When you can verbalize "I shouldn't be doing this," your brain is trying to tell you something.)
Robert Roby Jr. crashed his car into a pole and broke his neck, collarbone, arm and leg. His passenger, Dustin Zachariah, suffered brain damage, Bailey said.

(Cross-posted from Marginal Utility)

Monday, August 14, 2006

13 August

It's true; Lieberman losing caused to panic emboldened some.

Whether they are terrorists is left as an exercise to the reader.

Tuesday, August 08, 2006

08 August 2006 - Spared the wrath of SFWA, for now

Until this comment to this post, I was worried that Brad at Sadly No! has once again decided to take on yet another member of the Science Fiction and Fantasy Writers of America.

This generally is not a choice one makes without considering the possible consequences.

Sunday, August 06, 2006

6 August 2006 - No, he gives them metaphoric blow jobs while complaining about the real thing

Joe Lieberman declares, understating the case severely, That’s something that separates me from my opponent – I don’t hate Republicans.

Saturday, August 05, 2006

6 August 2006: What Vincente Fox REALLY learned from George W. Bush

Democracy is great unless you count all the votes.

5 August 2006: Abreu already paying dividends for Yankees

New York's lone hit was a clean first-inning single to right by Bobby Abreu.

Thursday, August 03, 2006

3 August 2006

Is synthetic testosterone something you get from reading too much Peter Beinart and the Corner?

Follow-up: When even The New Republic calls your effort "a textbook case of how not to wage a war," how long after that should you declare victory and leave?

Wednesday, August 02, 2006

2 August 2006

If the current rage of killing of Lebanese civilians will "create a new momentum between us and the Palestinians," why did Olmert's government think it was a good idea to leave six years ago?

Tuesday, August 01, 2006

1 August 2006

We keep thinking that it's George Bush's accent that causes him to say, "War on Terra."

What if we're wrong?