The financial genius Warren Buffet thinks the rich should be taxed more. It’s baffling to me how someone who clearly understands the use of capital and how inefficiently the governments use capital can suggest such a thing.

If Warren takes his capital gains and invests it, the money will go to things like machinery. The purchase of that machinery will create jobs. The use of the machinery will create jobs and the resulting products will benefit society.

Now let’s go a different route. Let’s listen to Warren and give that money to the government. Let’s itemize a bit. We will assume 1/3 goes to administration, to pay government salaries in which nothing is produced. Let’s say they spend the 1/3 on food stamps. Once again nothing is produced. Now we will assume the remaining 1/3 is spent on building a bridge. If we are lucky the bridge will be useful to someone but don’t count on it.

Now I’m not saying that Warren’s money was wasted. Though a piece of the government salaries will be donated by individuals to the Democratic party, you’ve got to feed the beast, I’m sure most of it went to buying groceries and paying electric bills. As for the food stamps, of course some of it will get traded for cigarette money, but at least some of it will get used to buy baby formula. Finally, the bridge. Yes, it’s useful. I hope it’s not a bridge to nowhere.

Now I’m not saying government completely ineffective in leveraging capital and that the free market is proficient in using the same. But without question the free market is better at using money in a way that will answer the needs of the people. How about a few examples of government spending that I read about just this week:

#1 ‘Insane’ even by Illinois standards? Union official to get $500,000 in pensions

A labor leader in Chicago is expected to receive pension payments of nearly $500,000 a year, while another could get about $438,000 a year, according to reports Wednesday.

The Chicago Tribune and WGN-TV, which obtained information about union pension benefits during a joint investigation, said at least eight union officials in Chicago were eligible for what were described as inflated city pensions on top of union pensions for the same period of employment.

Chicago and Illinois are facing financial trouble, in part due to pension shortfalls.

On Tuesday, state Sen. Mark Kirk released a report on Illinois’ debt that said it had the worst credit rating of any state and that its debt was rising, NBC Chicago reported.

The Tribune said the official who was expected to get about $438,000 a year would do so from three pensions covering the same work period: a city laborers fund, a union district council fund and a national union fund.

It said an analysis showed that this 59-year-old union official, Liberato “Al” Naimoli, would get a total of about $9 million if he lived to his expected lifespan.

Another official, Charles LoVerde III, a former trustee of the city laborers’ pension fund, stood to receive three pensions for the same time period totaling nearly $500,000 a year, the investigation found.

The Tribune said he took leave of absence in 1998 from a job with the city’s water management department, which paid $44,000 a year, to work full time for the local.

The paper said the law states that union leaders with city pensions cannot “receive credit in any pension plan established by the local labor organization based on his employment by the organization.”

The Tribune said the joint investigation with WGN-TV found that Naimoli, president of Cement Workers Local 76, was receiving a city pension of about $158,000 a year. It said his city pension was based on his union salary.

Naimoli, who retired in 2010 from the $15,000-a-year city job, is also now eligible to receive a pension of about $60,000 a year, the paper said, from the Laborers’ Pension Fund for Chicago and Vicinity.

He also will become eligible for payments of about $220,000 a year from a third pension, provided by the national union, LIUNA, on his 60th birthday next year.

The Tribune said he had not worked his $15,000-a-year job with the city for a quarter of a century.

http://www.msnbc.msn.com/id/44872639/ns/us_news-life/t/insane-even-illinois-standards-union-official-get-pensions/

#2 Report: Pentagon doesn’t know where the money is going

The Defense Department, which has promised to publish a reliable account of how it spends its money by 2017, has discovered that its financial ledgers are in worse shape than expected and that it will have to spend billions of dollars in the coming years to make its financial accounting credible, the Center for Public Integrity reported Thursday.

The U.S. military has spent more than $6 billion to develop and deploy new financial systems, but the effort has been plagued by significant added overruns and delays, defense officials told the CPI, a nonprofit investigative news organization.

The Government Accountability Office said in a report last month that although the services can now fully track incoming appropriations, they still can’t demonstrate that their funds are being spent as they should be.

http://openchannel.msnbc.msn.com/_news/2011/10/12/8294595-report-pentagon-doesnt-know-where-the-money-is-going

The Defense Department can’t tell reliably how it spends money for another six years. And it needs xxx billion just to do that? The Defense Department represents 20% of the Federal budget.

#3 Green Jobs Brown Out or How to spend $157,000 per Job.

The green jobs subsidy story gets more embarrassing by the day. Three years ago President Obama promised that by the end of the decade America would have five million green jobs, but so far some $90 billion in government spending has delivered very few.

A new report by the Labor Department’s Office of Inspector General examined a $500 million grant under the stimulus program to the Employment and Training Administration to “train and prepare individuals for careers in ‘green jobs.'” So far about $162.8 million has been spent. The program was supposed to train 125,000 workers, but only 53,000 have been “trained” so far, only 8,035 have found jobs, and only 1,033 were still in the job after six months.

The green jobs subsidy story gets more embarrassing by the day. Three years ago President Obama promised that by the end of the decade America would have five million green jobs, but so far some $90 billion in government spending has delivered very few.

The jobs record is even more dismal when you consider that many of the jobs classified as green aren’t even new jobs, much less green, according to a report from the House Committee on Oversight and Government Reform. They include positions that have been “relabeled as green jobs by the BLS [Bureau of Labor Statistics].”

This means that bus drivers, Environmental Protection Agency regulators, university professors teaching ecology, and even the Washington lobbyists who secure energy loan guarantees count as green employees for the purposes of government counting. The Oversight Committee finds that even a charitable assessment of the Labor program puts the cost of each green job at $157,000.

http://online.wsj.com/article/SB10001424052970204524604576611191286160766.html

Of course private enterprise wastes money. But here’s the thing. The money wasted was given up voluntarily. That can’t be said for the money wasted by government. That money is extracted. You would think that money you are forced to surrender would be used with some sort of oversight. The term “government oversight” is an oxymoron.