What the Government Pays To Snoop On You 174
transporter_ii writes "So what does it cost the government to snoop on us? Paid for by U.S. tax dollars, and with little scrutiny, surveillance fees charged by phone companies can vary wildly. For example, AT&T, imposes a $325 'activation fee' for each wiretap and $10 a day to maintain it. Smaller carriers Cricket and U.S. Cellular charge only about $250 per wiretap. But snoop on a Verizon customer? That costs the government $775 for the first month and $500 each month after that, according to industry disclosures made last year to Congressman Edward Markey."
So now we know Skypes business model (Score:2, Interesting)
This must be Skypes business model then. Well do you think Microsoft develops all these backdoors and supplies them for free? No way! The company was never worth $7 billion on it's disclosed revenue, it must have had some other value to Microsoft.
Next big elephant in the room, IS WINDOW BACKDOORED. I mean beyond the NSA certificate, has Microsoft sent down updates that are really NSA spy packages?
How much of Silicon valleys business is a subsidy from the US Gov in the form of a pay-to-spy?
Re:It costs the government NOTHING. (Score:5, Interesting)
The government is just as capable of producing wealth as any other entity.
Capable != actually doing it. The private world has the profit motive for keeping it productive. The activity has to generate some sort of value to the actor beyond its cost or it isn't generating a profit.
If the government spends money on a program that adds more value to the economy than the cost of the program (such as food assistance, which has close to a 2:1 return), then the government has produced wealth.
Where is this study that claims a 2:1 return? I decided to google for this and came across this study [usda.gov]. The money quote:
SNAP brings Federal dollars into communities in the form of benefits which are redeemed by SNAP participants at local stores. These benefits ripple throughout the economies of the community, State, and Nation. For example:
* Every $5 in new SNAP benefits generates $9.00 in total community spending.
* Every additional dollarâ(TM)s worth of SNAP benefits generates 17 to 47 cents of new spending on food.
* On average, $1 billion of retail food demand by SNAP recipients generates close to 3,000 farm jobs.
Note that $5 in spending produces $9 in spending not wealth. So right there we don't have a 2:1 return. As I see it, we take $5 of someone's money and use it to generate far less than $5 of value - feeding someone who can feed themselves. That's negative return on investment right there.
It's a destructive economic gimmick to conflate spending or economic activity with wealth creation. They aren't equivalent or even correlated. For example, a disaster creates a lot of spending and economic activity (from reconstruction efforts), but it results in a net loss of wealth.
Re:It costs the government NOTHING. (Score:5, Interesting)
That money the government spent was taken away from someone who then couldn't invest it in something else. So, in order to show a net benefit to society, it's not sufficient to show that the government produced a positive return, it's necessary to show that it produced a positive return that was larger than the person the money was taken away from would have gotten, and that these benefits are large enough to compensate for the additional negative effects that taxation and government spending have.
Of course, your claim of a "2:1 return" is unsubstantiated to begin with. The USDA study where this number seems to come from (you fail to provide sources for your ridiculous statement, so you leave your readers guessing) claims an economic multiplier of 1.79. An "economic multiplier" is not a "return". You can have "economic multipliers" with no net benefit to society at all, or even negative "returns". And even that number is based on a single report, using an economic model (rather than empirical data), created by single person at an organization with a strong interest to make SNAP appear in a positive light.
I happen to think SNAP is one of the better welfare programs and should continue, but your statements about it border on fraud.
So what you're saying is (Score:4, Interesting)
Re:It costs the government NOTHING. (Score:2, Interesting)
We are undertaxed. How can we tell? because we are running a deficit. As simple as that.
Say if you go to a restaurant and start paying by installments. How do you go about finding out if you have over or underpaid? well you check to see if you still have a deficit on your tab, if there is still one you haven't paid enough. It is no different with the government,
What you are trying to say is that the government is overspending and I might or might not agree with you (in fact, I agree with you: it overspends by a mile particularly in defense matters and tax subsidies to the wealthy people/corporations), but saying we are overtaxed today is a factual falsehood propagated by the GOP. Given current levels of expenditures we are way under-taxed.
Re:It costs the government NOTHING. (Score:2, Interesting)
The private world has the profit motive for keeping it productive.
They have the motive to make profit. That does not necessarily equate to being productive. There are many companies right now that have increased profits with decreased revenues and decreased production. Where's the wealth building in that?
Note that $5 in spending produces $9 in spending not wealth. So right there we don't have a 2:1 return. As I see it, we take $5 of someone's money and use it to generate far less than $5 of value - feeding someone who can feed themselves. That's negative return on investment right there.
You are correct that spending does not equal wealth building. However, there is some correlation. Spending on durable goods is a good indicator of wealth building. The U.S. GDP is somewhere around $16 trillion. U.S. wealth is calculated at over $100 trillion.
It's a destructive economic gimmick to conflate spending or economic activity with wealth creation. They aren't equivalent or even correlated. For example, a disaster creates a lot of spending and economic activity (from reconstruction efforts), but it results in a net loss of wealth.
There is certainly spending that represents a consumption of wealth as well as spending that represents the production of wealth. I think you might be interested in this graph [wikipedia.org] The bottom 40% have .2% and yet we are led to believe that we should tax them more. The government could tax everything they have and it would be almost nothing.
Re:Actually (Score:1, Interesting)
They just love that welfare for businesses.
Re: It costs the government NOTHING. (Score:4, Interesting)
Well, I think then the government should take all the money you earn and reallocate it. You can live in public housing and get SNAP for food. According to you, it's clear that that would produce the greatest societal benefits, since the government according to you knows better what to do with your earnings than you do.
Re:It costs the government NOTHING. (Score:5, Interesting)
Wow, that's the most oversimplified attempt at discussing economics I've seen for a long time. Hint: economics is complicated - if it were easy we'd have a simple working system that everyone could agree one (or, at least, the people who worked out out would get very rich by betting on the economy 100% correctly and other people would notice) - and any explanation that simple is likely to be wrong.
Consider the following counter example:
The government builds and maintains a road between two places. This employs people, taking them out of the labour pool where they could be doing other things, so it's a cost. But it also allows the two places to trade more cheaply, which increases wealth production. Similarly, employers at either end of the road would have access to a wider pool of employees and potential employees to a wider pool of employers and so people would end up in more productive employment.
Now, would the same apply if private industry built the road? This is where it starts to get more complicated. First, who would build the road? It might be some consortium of businesses at both ends who wanted to use it. If so, then they might charge money to anyone not part of the consortium to use it, which would give them a competitive advantage, but be less healthy for the economy as a whole by producing a barrier to competition (and, most specifically, a barrier to entry for new companies).
It might be a third party that thought that the road would be profitable, who would run it as a 'common carrier' toll road. This, however, would provide a disincentive for people to use it. If they priced it too low, then they'd go out of business (which would discourage future road-building companies). If they priced it too high, then they'd make it unprofitable for some users to use it, however given that the cost of the road is now a sunk cost the economy as a whole benefits if as many people as would gain any benefit at all from it use it.
In some cases, the benefit to the economy may be significantly lower than the cost of the road, so it would not make sense for the government to make the investment. It's often difficult to make that call, however. In the UK, be Beeching Report identified a large number of unprofitable railway lines and, to save taxpayer money, the nationalised railway service closed them. Unfortunately, it turned out that a lot of the unprofitable lines were ones that got people from near where they lived to a more profitable line. When they were closed, people at the edges ended up having to buy cars, which meant that they no longer used the larger lines either, and so pushed those into unprofitability (and so there was a second Beeching Report some years later which repeated the entire mistake). The cost to the economy of no longer having a widespread, cheap, railway network is widely agreed by economists to be significantly greater than the savings from closing the lines.
A nationally owned private rail operator may have seen further ahead, but most likely they'd have had shareholders making the same demands: sell off the unprofitable lines and concentrate on the profitable ones. A larger number of smaller railway operators would have had similar problems, with the ones operating the unprofitable lines going out of business and reducing demand on the profitable ones.