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PrintFebruary 12, 2010
One hand washes the other
Ed Lasky's exploration of the symbiotic relationship between public employee unions and government overspending at the federal, state and municipal levels sparked a few further thoughts.
Total federal spending as a share of gross domestic product is now the highest in American history other than during a few years during World War 2, over 25%. Of course, the recession has limited government revenues (taxes), but the huge jump in the annual deficit has come primarily from an unprecedented spending binge, that has added over 4% to the federal share of total GDP in but 15 months.
About 300,000 new non-military workers have joined the federal workforce alone in less than two years. That jump in the workforce, and the concomitant base level for future government spending, will be permanent, if the Obama ten year budget forecast is to be believed.
More than a third of the stimulus package, originally estimated at $787 billion, now adjusted to $862 billion, went to the states and municipalities, enabling them to maintain their spending levels. State and local governments award huge contract concessions to the unions in exchange for political donations and support. Taxpayers are left holding the bag.
There is a fundamentally different relationship that exists between employers and employees (and unions) in the private sector, where unions are aware that if they make a company uncompetitive, the company could fail and disappear, taking all their jobs with it. States will not disappear; they will get bailed out by Uncle Sam (stimulus,II, II or IV), or by higher taxes.
But do not expect the public employee unions to make any concessions. The employees on the public's payroll, who earn almost double on average as private workforce employees do, and can retire in their 50s with generous pensions and medical benefits, continue to live large during any recession. The Obama administration is totally in hock to the NEA, the AFSCME, and the SEIU in particular. It is why Obama and his Senate henchman Dick Durbin, gutted the Washington, DC voucher program which had shown some real success in lifting the achievement levels of inner city African American children. The NEA demanded the program be scrapped. And so, like a gunslinger in an old western bar, who fires at the feet of one of the patrons, the President and the Democrats in Congress "danced."
New Jersey's new Republican Governor tries a new approach, a real freeze on spending.
Michael Barone on the unions.
Another Republican plan to bring the budget into balance before we become North Argentina.
The Democrats think if only taxes were much higher, all that "essential" spending could be paid for.
The White House Budget Director says the current pace of spending and deficits is unsustainable.
