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September 29, 2014

Who Says the Economy's Not Growing!

Well, at least the part that's subsidized by your hard earned tax dollars:

645,000 Maryland residents had so-called Obamaphones in 2012 — one hundred times as many people as there were in 2009, and double the number in that state who are supposed to be eligible for the program based on their income.

The program, officially called Lifeline, is run by the Federal Communications Commission and imposes hefty fees on every paying phone company to give free phone service to low-income Americans.

The profits to telecom companies from the free, government-provided phone service are so great that in Nebraska alone, 51 corporations, many of them who are not even traditional phone companies building infrastructure and attracting paying subscribers, fought for a piece of the pie.

That structure allows advocates to argue that it’s not a tax and doesn’t affect the budget, and lessens the extent to which the FCC is beholden to Congress.

Officials admitted Maryland's 10,000 percent increase over three years in a little-noticed hearing before the House's Subcommittee on Communications and Technology in April last year.

"By the third quarter of 2012, the number of Lifeline subscribers in Maryland had risen almost 100 fold to 645,000" compared to three years prior, industry consultant Billy Jack Gregg told Congress.

"Moreover, the current number of Lifeline subscribers in Maryland is almost double the number of low income households in the state" who are eligible.

The FCC says it has since instituted some reforms to put a damper on fraud. Until recently, applicants could self-certify their eligibility, and the FCC found millions of dollars of abuse when it finally checked.

But it only sent letters saying “don’t do it again, or you might be fined” to people who lied on their forms to obtain multiple phones or obtain them even though they had high incomes, it said at the hearing.

And it used the money recovered not to shrink program costs or refund fee-payers, but as free bonus funds that were reinvested to provide free Internet for the poor, with no authorization from Congress.

And then there's this delightful nugget. How do you solve the problem of students borrowing more in federally subsidized student loans than they can afford to pay back? If you guessed, "Shift the cost to taxpayers, and pay no attention to that whole perverse incentive thingie", a stuffed marmoset is on its way to you by parcel post:

Last week we told you about the $20 billion annual rise in Department of Education outlays, due to an increase in student-loan borrowers using income-based repayment programs. Today the Journal reports the disturbing details for taxpayers.

"Enrollment in the plans has surged, thanks in part to a continuing administration publicity campaign. As of June, the number had swelled to 1.91 million Americans holding more than $101 billion in student loans—nearly a 10th of all outstanding federal student debt. The number of borrowers and debt covered roughly has doubled in the past year," reports the Journal.

These plans allow borrowers to reduce monthly payments to just 10% of discretionary income. The loans can then be forgiven after ten years if borrowers work in government or for a non-profit—basically any job as long as it doesn't involve a profit-seeking business.

...So the government is spending taxpayer dollars to encourage young people to avoid repaying loans to taxpayers, while at the same time encouraging these young people to work for outfits that don't pay taxes.

We were told that, come the Revolution, there would be no math.

Posted by Cassandra at September 29, 2014 08:49 AM

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Comments

"We were told that, come the Revolution, there would be no math."

About damn time, too!!

Posted by: Math Nazi at September 29, 2014 12:56 PM