18

Are Public Employees Overpaid?

If you believe what you read on blogs or hear from certain politicians and pundits, a new kind of haves-vs.-have-nots class war is brewing across the land. Not between the rich and the poor, but between private and public sector workers, as related here.

Scandalous stories of public officials enjoying lavish or disproportionate pay and benefits at taxpayer expense, such as in Bell, Calif., and elsewhere , frequently make headlines and prompt calls for reductions in such compensation.

As with many other economic and taxation issues, the answer to the question posed in the title of this post usually depends on which side of the political spectrum you are on. Conservatives tend to answer “yes,” while liberals tend to answer “no” .

But which side is correct?

Before I delve into that question, I will first make some disclosures.  I am a full-time employee of the state of Illinois, making $35,000 per year. I do not belong to a union, and due to the nature of my job and agency, probably never will. I have only received one raise the entire time I have been so employed (nearly 4 years) due to a promotion to a slightly higher job level. I do not expect to receive any raises for the foreseeable future; in fact a pay cut is a distinct possibility. Prior to that I worked 20 years in private sector employment in the newspaper field. In some instances the pay and benefits were comparable to, and even better than, my current job. In other instances they were not as good.

Now to the question: are public employees overpaid? That depends on who you ask and how one defines “overpaid”. The average pay of state and federal employees in general is higher than that of private sector workers in general. When broken down by education, profession, etc. the picture is not as cut and dried. For lower-skilled jobs requiring only a high school or vocational education — e.g. custodians, receptionists, guards — the public sector pays better, whereas for professional jobs requiring a college degree or higher (attorneys, doctors, CPAs, etc.), the private sector pays more — often a lot more. These articles from Kiplinger and from Governing.com explain the differences in greater detail.

Two of the biggest reasons for these disparities are that 1) public employment tends to have a greater percentage of jobs requiring a college education or beyond and 2) public sector jobs are more likely to be unionized.

Public employee unions are a favorite bete noire of fiscal conservative politicians and candidates at the moment, and much of the public seems to agree with them. The fact that public employees continue in many (though not all) states and localities to enjoy benefits most private employees no longer have, such as regular salary increases, defined benefit pension plans, and caps on health insurance premiums and co-pays, arouses resentment among ordinary citizens who are forced to pay for such benefits via taxation.

Although many officeholders and candidates talk a good game when it comes to reining in public employee benefits, in practice the most frequent targets of budget cutting measures such as layoffs, furlough days and pay cuts, are lower or mid-level non-union employees. They often end up being punished for the sins (real or perceived) of their higher placed or unionized colleagues, simply because they are the easiest targets — not protected by either union contracts or political/personal connections.

The biggest problems on a state and local level are pension deficits — the growing gaps between the amount of money in public pension funds and the amount of benefits those funds are expected to pay in the future. According to this report by the Pew Center on the States, pension shortfalls are fiscal time bombs that threaten to devour entire state and city budgets if nothing is done to defuse them before it is too late.

How did the situation get that bad? In most cases it was due to a variety of factors — yes, generous union contracts played a part, but so did repeated failure on the part of lawmakers to invest properly in public pension funds, demographic changes (aging of the Baby Boomers, people living longer), and investments tanking due to the recession. No one factor can be singled out, and the entire blame for the pension crisis cannot be laid at the feet of one person or group of people. But regardless of who is or was to blame, the problem has to be dealt with, not swept under the rug.

Private sector employees are quick to point out that while they have to support public employee benefits with their taxes, public employees are not forced to do the same for private employees — they can choose whether or not to do business with a private company.

I agree, and this is in my opinion an argument that should be taken most seriously. For that reason, public employees are by necessity accountable to the public and will always be subject to various restrictions and considerations that do not apply to private employees (e.g., their salaries being public information).  This is not “unfair” or unequal, but simply part of the deal one signs up for when working for a government body.

Another claim often made by private employees is that government workers, by virtue of the pay, job security and benefits they enjoy, are artificially insulated from the realities their privately employed neighbors face — the constant threat of being fired or laid off, lack of retirement security, worry about medical bills, etc.

That might, perhaps, be true of top officials/administrators with strong political connections who make six-figure salaries, whose spouses have equally high-paying positions, and whose children or other family members are completely healthy. Otherwise, I am not so sure.

Many public employees, particularly non-union ones, are regularly threatened with layoffs or missed paychecks (most often at the end of a fiscal year). Given the poor financial standing of many public employee pension funds, combined with the fact that some public employees don’t get Social Security, I’d say many of them (including myself) who are 10 years or more away from retirement are just as worried about their retirement as you are.

Also, most public employees do not live in a bubble or a vacuum. Most used to work in the private sector at some time in their lives, and many are married to spouses who work in the “real world” or are currently unemployed or disabled. Their grown children, their parents, their siblings, and their friends and neighbors  include private employees or unemployed persons looking for work. The only exceptions I can think of might be political “dynasty” families like the Kennedys or Daleys. Plus, public employees pay all the same taxes everyone else does — federal, state, sales, property, the whole works. If taxes go up, it cuts into their budgets too.

Just because someone has a government job doesn’t mean they have, or should have, no interest in whether private business succeeds. If factories close and move overseas, if private companies go bankrupt and abolish or raid pension funds, if high taxes drive up the cost of living, if college education becomes unaffordable without taking on ruinous levels of debt — it affects them and their families too. It is in everyone’s interest, no matter what kind of job they have, to have a fiscally sound and honest government, competent public employees, and a sustainable tax structure.

Also, do not forget that for every instance in which a public official received undeserved pay, pensions or perks at taxpayer expense one could probably cite an equally egregious case of a private business executive enjoying lavish pay and benefits at the expense of fired workers, closed factories/offices, or raided pension funds. Greed is greed no matter where it occurs, and no sector of the economy is exempt from the effects of original sin.

Finally, since this is a Catholic blog, we should approach this issue from a religious perspective as well. Christ Himself chose a public employee, Matthew the tax collector, to be one of His Apostles. He also told His followers to “render unto Caesar what is Caesar’s and unto God what is God’s.” So, apparently, He did not believe that working for the government was inherently evil, unproductive or exploitive.

Some more pointed advice was given by Christ’s precursor, John the Baptist, to the public servants of his day who came to see him (Luke 3:12-14):

“Even tax collectors came to be baptized and they said to him, “Teacher, what should we do?”
He answered them, “Stop collecting more than what is prescribed.”
Soldiers also asked him, “And what is it that we should do?” He told them, “Do not practice extortion, do not falsely accuse anyone, and be satisfied with your wages.”

John was referring to practices for which the public employees of the day were notorious — tax collectors often overcharged citizens and pocketed the “profit” they made, while Roman soldiers were known for shaking down citizens of the provinces they occupied for money, food, or other goods. Here John is telling them simply to do their duty, not demand any more of the public than the law requires, and be content with what they are paid. If today’s public officials and employees did the same, there would be a lot fewer problems.

As with most problems in a fallen world, there is no perfectly just way to balance the need for a professional, competent government workforce with that of a private sector free of unnecessary taxes and regulation. This does not mean, however, that we should not attempt to find as just a resolution as possible. However this will require people who are not to blame for the situation to help clean it up, and at considerable personal cost.

For public employees, this means more work for less pay, more out of pocket expenses, and for some, no job at all. For the rest of us it could mean higher taxes, reduced services or some combination of the two. All these things will impact thousands, even millions, of good, hardworking people who are simply doing the best they can and had no part in creating the situation. It may not be perfectly fair, but life ain’t fair.

10

Chrysler UAW Workers Caught Drinking on the Job

Less than two months after President Obama visited the Jefferson North Assembly Plant in Detroit to highlight the billion dollar government bailout of Chrysler, Chrysler UAW workers were caught on tape drinking alcoholic beverages on a 30 minute lunch break.  Not to mention what looks like marijuana joints in between swigs of grog and then littering a public park with the empties.

That’s a nice liquid lunch… if it were a public holiday!

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3

Who's Gonna Grab the Third Rail?

That’s a line from a brief but astounding post by Kevin Williamson of NRO, which I’m reproducing in full here:

A little perspective from the debt commission:

“The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. ‘The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans — the whole rest of the discretionary budget is being financed by China and other countries,’ [Alan] Simpson said.”

Three programs — Social Security, Medicare, and Medicaid — consume 100 percent of federal revenue, and everything else is paid for with borrowed money.  This is why we cannot balance the budget by cutting military spending, foreign aid, food stamps, etc. There is not going to be a serious project to address our deficit/debt problem without deep, painful entitlement reform, and the longer we wait to admit that fact and get going on it, the worse it is going to be.

So, who’s gonna grab that third rail? George W. Bush tried and got hammered — an example that few if any in Washington are eager to follow.

Indeed. I think if this is going to happen, it’s going to have to come from the people (tea parties, perhaps?), because it seems suicidal for any politician to take it on without considerable popular support.

2

Planned Parenthood, What Happened to the Money?

A US Government Accountability Office (GAO) report has brought out an interesting mystery in regard to the federal funds given to Worse Than Murder, Inc, aka Planned Parenthood:

A new report from the U.S. Government Accountability Office (GAO) on federal tax money funneled into Planned Parenthood and similar organizations raises more questions than it answers about the nation’s largest abortion chain.

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2

Big Brother and The Fish Wrapper Industry

Content advisory in the video for one very crude section.  From the only reliable source of news on the net, the Onion.  The Onion exaggerates a bit. Why the Boston Globe probably has at least a few years of death spiral left to it before it has zero subscribers.

The Federal Trade Commission has produced a staff  discussion draft which may be read here, filled with bad ideas to prop up the dead tree media.  Among the worst of the ideas is what boils down to government money being used to subsidize the fish wrapper industry:

Proposals for Increased Government Subsidies, Indirect and Direct A variety of proposals have emerged to allow further government support for journalism through either indirect or direct means. Whatever the means, care must be taken to ensure that government support does not result in biased and politicized news coverage.  🙂

Increase Government Funding

Establish a “journalism” division of AmeriCorps.   AmeriCorps is the federal program that places young people with nonprofits to get training and do public service work.87 According to proponents, this proposal would help to ensure that young people who love journalism will stay in the field. “It strikes us as a win-win; we get more journalists covering our communities, and young journalists have a chance to gain valuable experience – even at a time when the small dailies where they might have started are laying reporters off.”

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25

Are We All Greeks Now?

Hattip to Ed Morrissey at Hot AirAnother fine econ 101 video from the Center for Freedom and Prosperity.   Government debt is rapidly becoming the major issue of our time, both here and abroad.  The welfare states erected throughout the world have always had a resemblance to Ponzi schemes,  and all Ponzi schemes ultimately collapse, which is what is happening around the globe.  Robert Samuelson nailed it this week in the Washington Post:

What we’re seeing in Greece is the death spiral of the welfare state. This isn’t Greece’s problem alone, and that’s why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven’t fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.

Americans dislike the term “welfare state” and substitute the bland word “entitlements.” The vocabulary doesn’t alter the reality. Countries cannot overspend and overborrow forever. By delaying hard decisions about spending and taxes, governments maneuver themselves into a cul de sac. To be sure, Greece’s plight is usually described as a European crisis — especially for the euro, the common money used by 16 countries — and this is true. But only up to a point.

Euro coins and notes were introduced in 2002. The currency clearly hasn’t lived up to its promises. It was supposed to lubricate faster economic growth by eliminating the cost and confusion of constantly converting between national currencies. More important, it would promote political unity. With a common currency, people would feel “European.” Their identities as Germans, Italians and Spaniards would gradually blend into a continental identity.

None of this has happened. Economic growth in the “euro area” (the countries using the currency) averaged 2.1 percent from 1992 to 2001 and 1.7 percent from 2002 to 2008. Multiple currencies were never a big obstacle to growth; high taxes, pervasive regulations and generous subsidies were. As for political unity, the euro is now dividing Europeans. The Greeks are rioting. The countries making $145 billion of loans to Greece — particularly the Germans — resent the costs of the rescue. A single currency could no more subsume national identities than drinking Coke could make people American. If other euro countries (Portugal, Spain, Italy) suffer Greece’s fate — lose market confidence and can’t borrow at plausible rates — there would be a wider crisis.

But the central cause is not the euro, even if it has meant Greece can’t depreciate its own currency to ease the economic pain. Budget deficits and debt are the real problems; and these stem from all the welfare benefits (unemployment insurance, old-age assistance, health insurance) provided by modern governments.

Countries everywhere already have high budget deficits, aggravated by the recession. Greece is exceptional only by degree. In 2009, its budget deficit was 13.6 percent of its gross domestic product (a measure of its economy); its debt, the accumulation of past deficits, was 115 percent of GDP. Spain’s deficit was 11.2 percent of GDP, its debt 56.2 percent; Portugal’s figures were 9.4 percent and 76.8 percent. Comparable figures for the United States — calculated slightly differently — were 9.9 percent and 53 percent.

There are no hard rules as to what’s excessive, but financial markets — the banks and investors that buy government bonds — are obviously worried. Aging populations make the outlook worse. In Greece, the 65-and-over population is projected to go from 18 percent of the total in 2005 to 25 percent in 2030. For Spain, the increase is from 17 percent to 25 percent.

The welfare state’s death spiral is this: Almost anything governments might do with their budgets threatens to make matters worse by slowing the economy or triggering a recession. By allowing deficits to balloon, they risk a financial crisis as investors one day — no one knows when — doubt governments’ ability to service their debts and, as with Greece, refuse to lend except at exorbitant rates. Cutting welfare benefits or raising taxes all would, at least temporarily, weaken the economy. Perversely, that would make paying the remaining benefits harder. Continue Reading

30

November 2009, Stupak Never Intended to Vote No on ObamaCare

Last November during a town hall meeting near the Upper Peninsula Representative Bart Stupak of Michigan, an alleged “pro-lifeDemocrat that recently voted for government funding of abortion, made it clear that he was never going to vote “No” on ObamaCare.

Biretta tip to Sydney Carton and Alicia Colon.

13

Now This, This Would be a Sign of the Apocalypse!

A Republican may be elected to serve out Ted Kennedy’s unexpired term?  It could happen! Public Policy Polling, a Democrat leaning polling outfit shows the election a toss up between the Democrat Coakley and the Republican Brown.  Scott Rasmussen, the best political pollster in the business in my opinion, shows Coakley up by two.  Last week he showed her up by nine.  On Monday Brown raised over a million dollars in one day in internet donations.

If Brown wins the Senate race in the Peoples’ Republic of Massachusetts, it will send a political shock wave across this country the like of which hasn’t been seen in many a year.  If Ted Kennedy’s senate seat isn’t safe, what seat is safe for the Democrats?  Oh, I don’t believe that I should call it Ted Kennedy’s seat per Mr. Brown.

7

Of Tea and Elections

I have had my eyes on the tea party movement protesting government spending since the beginning of the movement.  On Saturday a huge national tea party protest was held in Washington.  Estimates of crowd size range from 500,000 to 2.3 million.  Some organs of the mainstream media are attempting to downplay the significance of this event.  Politicians on both sides of the aisle are not so gullible.  They realize that a political storm is brewing.  Perhaps even more significant than this show of strength by the forces opposed to the drunken sailor spending of the Obama administration are the state tea parties taking place each week.  For example in the completely blue state of Illinois, my home state, there was a tea party at New Lennox near Joliet last week that drew 10,000 people.   This weekend a tea party at Quincy, Illinois drew 12000 people.   Receiving scant coverage from the national media, these parties are are becoming a real factor in the 2010 elections.

Charlie Cook is one of the best political prognosticators in the business.  Here is what he is seeing:

 

“Even in the best of times, Congress is unpopular. And now voters see Obama as having sent suggestions rather than proposals to the Hill, staking his future and reputation on a body that they hold in low regard. (On foreign-policy matters, where Congress plays a small role, Obama’s job-approval ratings remain quite good. It’s on the domestic side that his numbers are dismal.)

With 14 months to go before the 2010 midterm election, something could happen to improve the outlook for Democrats. However, wave elections, more often than not, start just like this: The president’s ratings plummet; his party loses its advantage on the generic congressional ballot test; the intensity of opposition-party voters skyrockets; his own party’s voters become complacent or even depressed; and independent voters move lopsidedly away. These were the early-warning signs of past wave elections. Seeing them now should terrify Democrats.”

Spending Spree

Broke Uncle Sam

 

Hattip to Instapundit.  John Steele Gordon has a first rate article here detailing how we landed in the debt morass our nation is now bogged down in.    His last sentence is a completely accurate assessment of our options: ” Only necessity will force Congress to control long-term spending on its own.  And unless the body politic forces the needed changes, that necessity in the form of overwhelming debt is inescapable.”

11

Congress Feeling the Heat

town-hall-2

Hattip to Instapundit. Democrat Congress beings are reporting here that they are encountering angry constituents at their townhall meetings.  Now why would their constituents be so angry?

red-ink

Oh yeah.

There is a political storm brewing in this country of immense proportions.  If some members of Congress aren’t aware of it yet, they will be after they return from the August recess.

9

How to Get There from Here

There’s been much discussion of late about what other country’s health care apparatus the US should consider emulating, and in such discussions France is often mentioned. Now, all cheerful ribbing against the French aside, their health care system is not nearly as “socialized” or nearly as afflicted by treatment denials and waiting lists as those of the UK or Canada. It is also rather more like the system that the US already has, in that it is a hybrid public/private system, though in their case there is a guaranteed base level of coverage everyone has through the government (funded via a hefty payroll tax — not unlike Medicare) which most people supplement with private coverage. Most doctors are in private practice, and 25% do not even accept the public plan, just as some practices in the US do not accept Medicare. However, everyone does have that minimum level of coverage, and the French spend a lower percentage of their GDP on health care than the US (11% versus 16%) which when you take into account that France’s GDP per capita is a good deal smaller than that of the US (which is the polite, economist way of saying it’s a poorer country) works out to the US spending about twice as many dollars per person on health care, while still not having universal coverage.

So what are we waiting for? Why don’t we go enact the French system here right now? Why doesn’t Obama put on a jaunty beret, dangle a cigarette coolly from the corner of his mouth, hoist a glass of wine, and just say, “Oui, nous pouvons.”
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9

Obamacare: If Congress Passes It, Let Them Live Under It

Hattip to Robert Stacy McCain at The Other McCain.  Rep. John Fleming (R. LA.) is the sponsor of House Resolution 615 which states that in the event National Health Care passes, all members of Congress who vote for it are urged to receive their health insurance under it.  This sounds like a very good idea to me.  If it is good enough for voters it should be good enough for CongressCritters.  Of course urging isn’t enough.  They should be required to be subject to Obamacare if it passes.  Here is the text of the resolution.

12

Government Funded Health Care Open Thread

In light of Zach’s stellar posting which generated over 240 comments ranging from anarchism to Oscar Romero and which inspired a posting by Michael Denton.  These comments, although informative to a certain extent, may have detracted from the original intent of the posting.  Henceforth in regards to said activities being done on Zach’s posting concerning Representative Chris Smith, I am starting a new tradition here at American Catholic, the open thread.

So feel free to comment to your hearts delight that isn’t related to any other postings on this website.

The comments policy is still in place so don’t forget to treat each other as brothers and sisters in Christ.

Enjoy.

Marxist Health Care

11

Debt Sun

 debt-sun

Hattip to Instapundit.  The Heritage Foundation supplied the above graphic which compares Obama budget “cuts” of $100,000,000.00 to the appropriations bill for fiscal 2009 of $410,000,000,000.00, the Bankrupt the Nation Act of 2009, sometimes erronously called the “stimulus” bill, which has a price tag of $787,000,000,000.00 and the estimated bill for fiscal year 2010 of $3,600,000,000,000.00.  How ludicrous is all this?  Ludicrous enough that the Obama supportive Associated Press makes fun of it.  Ludicrous enough that even Paul Krugman is chuckling.

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8

Spirit of '09

tea-party-map

Yesterday Americans rallied in hundreds of tea party protests against high government spending and taxation.  In my state 3000 people turned out in Peoria alone.  Good coverage of the tea parties is at Instapundit.  Much more at Tea Party online HQ

Elements of the mainstream media were openly contemptuous of the tea parties, perhaps one of the more obvious examples being here at Hot Air.

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1

God or Government Spending: Choose One?

Correlation isn’t causation. That said, I thought this from the Wall Street Journal was interesting:

A recent study of 33 countries by Anthony Gill and Erik Lundsgaarde found an inverse relationship between religious observance and welfare spending. Countries with larger welfare states, such as Sweden, Norway and Denmark, had markedly lower levels of religious attendance, affiliation and trust in God than countries with a history of limited government, such as the U.S., the Philippines and Brazil. Public spending amounts to more than one half of the GDP in Sweden, where only 4% of the population regularly attends church. By contrast, public spending amounts to 18% of the Philippines’ GDP, and 68% of Filipinos regularly attend church.

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7

Of Tea and Taxes

dont-tread-on-me

In politics, as in physics, an action causes a reaction.  With the election of President Obama and strong Democrat majorities in both houses of Congress, the stage is set for a radical increase in the size, power and scope of government to transform the United States into a socialist state, along the lines of the European social welfare states.  The Bankrupt the Nation Act of 2009, erroneously called a stimulus bill, is merely the first step in the process.  The President has already warned of trillion dollar budget deficits as far as the eye can see, and he has the votes for now to carry out his vision.  Can he be stopped?

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7

Is the Bankrupt the Nation Act Unconstitutional?

ronald-rotunda

Ronald Rotunda, is currently a Professor of Law at George Mason University.  Twenty-seven years ago he had the onerous task of attempting to beat legal ethics ( and I can almost hear most of you shouting “Oxymoron!”) into the heads of second year law students at the University of Illinois.  I was one of his pupils.  I came away from his class no more ethical than when I went in, but with a thorough knowledge of the rules regarding legal ethics in the state of Illinois.  I also came away with a keen appreciation for both Professor Rotunda’s dry wit, and his strong intellect.  Here  is his web-site.  He is the one wearing a bow tie and not the Vulcan.  As you can see from his site, Professor Rotunda, unlike most law professors and most lawyers, does not take himself very seriously.

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Don't Make It Hurt

So here’s an argument against irreducible complexity.  Take a family that works hard for a living, saves a large chunk of its earnings for old age, emergencies, sending kids through college, and so on.  Then create (through some combination of amino acids and other proteins) an institute that offers insurance against disaster.  The family, being prudent, realizes that the insurance, while it costs them a little more each month, could potentially save them thousands of dollars in the long run, and so it buys into the insurance company.  Now introduce a mutation: the family decides that since disasters are covered, they can divert a little more money into luxuries. Repeat this process with a health care institute that helps cover the soaring prices of medication; a loan agency to cover college tuition (which is steadily outpacing what the normal family can afford); a loan agency to cover the cost of a business; a house; a car; anything at all with the swipe of a plastic card with a magnetic strip.  With that final mutation, we now have a system in which the removal one component causes the whole organism to fail, and yet was built up by increments.

Nearly half a year after the great crash that marked our current recession as one of the worst in decades, we are still bleeding.  Our economy continues to shed jobs; the stock market wavers, falls, stabilizes, wavers, and falls again; big businesses, like the insurance titan AIG, continue to need billions of dollars of bailout money just to survive; and the government continues to scramble to pass legislation that supposedly will fix all our problems, but in reality will simply make matters worse.  The gigantic stimulus package was laughable (in more a mad, gibbering, hysterical laughter than a ha-ha laughter) in that hundreds of pet projects suddenly found funding, but precious little in the bill actually targeted economic stimulus, and much of the spending won’t happen immediately.

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21

National Bankruptcy

I have referred to the “Stimulus” bill as the Bankrupt the Nation Act of 2009 here, here, here, here, here, and here.  Now we have Senator Judd Gregg (R., N.H.), the man who Obama wanted to be Commerce Secretary, confirm what should be obvious to everyone:  we are on the road to national bankruptcy.  Heaven knows this problem didn’t start with President Obama.  However, his misguided policy of multi-trillion dollar annual deficits will push us over the brink into national insolvency.  We are in for very tough economic times for a very long period.

2

Does It Really Stimulate?

It seems a bipartisan effort to ensure that there is some sort of stimulus bill, and only a few politicians think there should be no package at all.  Many economists have warned in the past, and continue to do so now, that stimulus packages like the one currently waiting final approval, do not work.  Let’s take a moment and examine the arguments as to why they don’t work.

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9

Now We Know Who Gets The Change

obama-reid-pelosi

President Obama ran on a platform of Hope and Change.  From the details of the National Bankrupt the Nation Act of 2009, sometimes called a “stimulus” bill, we can now see who gets the change:

“Q: What are some of the tax breaks in the bill?

A: It includes Obama’s signature “Making Work Pay” tax credit for 95 percent of workers, though negotiators agreed to trim the credit to $400 a year instead of $500 — or $800 for married couples, cut from Obama’s original proposal of $1,000. It would begin showing up in most workers’ paychecks in June as an extra $13 a week in take-home pay, falling to about $8 a week next January.”

Thanks a heap!

18

Obama and the Stimulus Package

Has anyone ever wondered if it is possible that one can land in a financial crisis when one has a steady income, no debts, and a large reserve of money in case of emergencies?  Certainly, I suppose, if something devastating comes around, like an accident that requires weeks in the ICU, surgeries, and a long rehabilitation, that could bankrupt a person.  Yet such accidents, on a whole, are rare, and most people who live a financially responsible life never have to plead for a bailout.

When we look at our current financial crisis nationwide, I can’t help but wonder what people are thinking.  President Obama has promised us trillion dollar deficits for years to come in an effort to restore our economy.  Like most right-leaning folk, I’m under the impression that our current crisis has come from overspending, living beyond our means, and not being prepared for when we hit bumpy times in the economy (like $4/gallon gas, which drives prices up all around).  Perhaps, if this view is incorrect, someone will be willing to explain to me why it is so.  But my impression has been that first, people individually are consumed with buying, buying, buying, even when they don’t have the money to buy.   I have friends who, though they grossed over $60,000 a year, were still living paycheck to paycheck because of their deficit spending.  I’ve seen people who, upon receiving their government money, have gone and blown it on new cell phones (that are shut down after two delinquent months), on fancy steack dinners, and so on, instead of buying necessities or saving up what they can.  I’ve seen people struggling with hundreds of thousands of dollars of accumulated debt that came from student loans, house loans, car loans, credit cards, and so on.  This is just what I’ve seen.  What I’ve heard–word of mouth, or in the news, or on blogs–is even worse.

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2

Money Meets Rathole

moneyrathole

The Bankrupt the Nation Act of 2009, sometimes called the “Stimulus” bill, looks like it might pass the Senate.  The amount of money we are about to saddle upon our grandchildren, if not our great-grandchildren, to attempt to pay back, may be as little as $780,000,000,000.  For the sake of comparison,  here is a list of how much other monumental undertakings in our nation’s history cost, adjusted for inflation.  Between the Bankrupt the Nation Act of 2009 and the Great Bailout Swindle of 2008, our government will be allocating funds in less than six months that represent one-third the inflation adjusted cost of the US expenditures in WW2 over three years and eight months.  This is fiscal lunacy on a cosmic scale and future generations will wonder at our abysmal folly.

7

Viewing the Stimulus Package, Part A

I decided to find out for myself what is in the Stimulus Package being debated. The version I’ve looked at is the version the House passed, and I can’t image the Senate version looks much better. Here is the results of Division A (the first 250 pages or so).

Things this package will not be used for: casinos and other gambling establishments, aquariums, zoos, golf courses, or swimming pools; any public work (airports, bridges, canals, dams, dikes, pipelines, railroads, mass transit, roads, etc) that does not purchase all iron and steel from within the U.S. (unless there simply isn’t enough iron available, or buying locally increases cost by 25% or more, or it is “in the best interest of the public” to buy abroad).

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