Government waste by the billions

I'm not in favor of this scheme but nevertheless it tells you a lot about what's happened to our country. Any serious project has become a financial boon for the lawyers, planners, environmental study types and mostly the politicians. We are no longer a nation of builders but rather peripheral service providers. It's like our education system where teaching the basics has been usurped by self esteem and psycho babble, public construction has lost its focus. Building things is subservient to everything other then actual construction.

Auditor faults state's high-speed rail agency

California's plan to build a high-speed rail system could be in jeopardy because the state agency overseeing the $42 billion project hasn't figured out how to secure enough money, according to an audit released Thursday.
The High-Speed Rail Authority also suffers from lax oversight, poor management and insufficient planning, according to the report by state auditor Elaine Howle.
Howle determined the agency needs to figure out alternative business plans because the planned funding - including billions in anticipated state and federal dollars and private financing - may not all work out.
The authority is charged with building the 220-mph train system between the Bay Area and Southern California by 2020.
The audit was requested by the Joint Legislative Audit Committee, made up of members of the state Senate and Assembly. Many of its findings are similar to a report issued by the nonpartisan Legislative Analyst's Office in January.
"This report concludes that the High Speed Rail Authority has not adequately planned for the future development of the program," Howle wrote in a letter to the governor and Legislature accompanying the audit. "The program risks significant delays without more well-developed plans for obtaining funds."
Plan 'lacks detail'
As of February, Howle wrote, the authority had secured about $11.6 billion in funding. But the agency's December business plan "lacks detail regarding how it proposes to finance the (program) and mitigate associated risks."
For example, the authority anticipates up to $19 billion in federal funds, but has received only $2.25 billion and does not have commitments for future federal dollars, according to Howle. And without federal or other funds, the authority cannot legally leverage the $9 billion in state bond funds approved by voters. Its plans for up to $12 billion in private funding are also vague, she said.
Howle said the agency's assumptions of state and federal funding appears to be 2 1/2 times more than what is now available.
Addressing problems
The auditor recommends that the authority develop alternative funding plans. The authority's interim executive director, Carrie Pourvahidi, said in a written statement that the agency has "already moved aggressively to address many of the issues and suggestions ... including refining our business plan to respond to questions about funding, risk management and ways to attract private investment."
Howle also found that the authority needs to improve oversight and administrative controls. For example, the agency has not created a system to track some areas of spending - including bond funds and federal stimulus dollars - that it is legally required to account for. She recommended tracking the expenditures and creating a long-term spending plan.
Additionally, the audit found that the authority has been lax in monitoring architectural and engineering contracts, including when it paid for tasks not included in contractors' work plans and made up to $2.9 million in payments without making sure the work was done. And a "primary tool" for monitoring the program's status - monthly progress reports - have contained "inaccurate and inconsistent information," according to Howle.
Issue with title
The board that oversees the authority is looking for a new executive director. In a written response contained in the report, board chairman Curt Pringle agreed with many of the findings but took issue with the report's title, "High Speed Rail Authority: It risks delays or an incomplete system because of inadequate planning, weak oversight, and lax contract management." Pringle called the title "inflammatory" and "overly aggressive" - something Howle disagreed with.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said legislators will use the audit's findings to "implement necessary reforms" as they review the authority's budget in the coming weeks.
"The Senate asked for the audit because of concerns about the management of the high speed rail authority, which have now been validated," he said in a written statement. "These problems need to be fixed and they need to be fixed now."

Killing the Golden Goose

Ronald Bailey points out the hidden cost of health care reform: the loss or severe slowdown of innovation.

As I have pointed out some prominent analysts actually favor putting a stop to medical innovation. For example, I noted in my article, "Dreams of Stagnation" that bioethicist Daniel Callahan argues that...

... even the Europeans, Callahan sadly notes, have been contaminated by "the quest for perfect health." His nostalgia is palpable. "If we had exactly and only the same range of technologies as were available twenty or thirty years ago, there would be no problem in equitably allocating resources," he writes. "We could readily afford that level of medicine and health care." (It would be even cheaper, of course, if we returned to using rattles and beads as remedies.) Callahan says political philosopher Daniel Sarewitz is "not far off the mark when he writes: `Political and cultural institutions might find their goals better served by responding to [their] problems as if scientific and technological progress had come to an end and the only recourse left to humanity was to depend upon itself.' "

Callahan reiterated his arguments for European-style cost controls on medical innovation in his new book, Taming the Beloved Beast: How Medical Technology Costs Are Destroying Our Health Care System:

"They use—among other tools—price controls, negotiated physician fees, hospital budgets with limits on expenditures, and stringent policies on the adoption and diffusion of new technologies." [In other words, stifle innovation.]

"Cutting the use of technology will seem wrong—even immoral—to many," Callahan admits.

Well yes.

Harvard University economist Kenneth Rogoff observed:

"[I]f all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology. Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable U.S. market. If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt."

In my column, "2005 Medical Care Forever," I suggested this thought experiment:

...what if the United States had nationalized its health care system in 1960? That would be the moral equivalent of freezing (or at least drastically slowing) medical innovation at 1960 levels. The private sector and governments would not now be spending so much more money on health care. There might well have been no organ transplants, no MRIs, no laparoscopic surgery, no cholesterol lowering drugs, hepatitis C vaccine, no in vitro fertilization, no HIV treatments and so forth. Even Canadians and Britons would not be satisfied with receiving the same quality of medical care that they got 45 years ago....

As Rogoff suggests, the nationalized health care systems extolled by progressives have been living off the innovations developed by the "only country without a universal health care system." I wonder how Americans would vote if they were asked if they would be happy freezing medical care at 2005 levels forever?