EDITORIAL: Public-sector unions bankrupting America

Washington Times ^ | 4/23/10 | House editorial

[JohnHuang2]

Usually it takes a national government to spend itself into a debt measured in the trillions. Yet it comes as little surprise that the same profligacy that pervades the corridors of federal power infects this country's 87,000 state, county and municipal governments and school districts. By 2013, the amount of retirement money promised to employees of these public entities will exceed cash on hand by more than a trillion dollars.

[JohnHuang2]

Lemme see . . .

-- According to the Labor Department Thursday, first-time jobless claims last week totaled 456,000, down 24,000, but up 14,000 from the week ending March 27 (days before Obama said "We are beginning to turn the corner . . . the worst of the storm is over!") and up 11,000 from the week ending 3/20 and up 2,000 from the week ending 3/13 and up 17,000 from the week ending February 6. In fact, the latest claims figure (456,000) exactly matches that from the week ending January 2 (days before Obama said "The trend is pointing in the right direction") but up 2,000 from the week ending December 26. The 480,000 first-time jobless claims for the week ending April 10 nearly matches the figure for the week ending December 5 (483,000), a number which prompted Obama to say "The trend line right now is good, the direction is clear!". (H/T: Uncommon Misconceptions).

Despite the staggering "improvement" in the latest figures and the massive census hiring, the 4-week moving average for first-time jobless claims is up 2,750.

"You would think they'd be saying thank you, that's what you'd think." -- Barack H-----n Obama

-- In a separate report, the Labor Department admitted that wholesale prices jumped by a 'more-than-expected' 0.7 percent in March, while food prices spiked by 2.4 percent, the biggest surge in 26 years. "Experts" say 'move along, nothing to see here' regarding food prices since food prices are often volatile. After all, you have to go back only 26 years to find numbers like this. In fact, wholesale food prices have jumped 6.8 percent during the past year. Gasoline prices rocketed by 2.1 percent in March. On the bright side, if you exclude food, energy, capital equipment, health care, autos, trucks, publishing, telecommunications, water, air and rail transportation, all textile, wood, paper, computer, appliance and furniture products, plus the rest of the economy, the March wholesale inflation rate was ZERO PERCENT! The producer price index has soared 6 percent in the past year.

You would think they'd be saying thank you, that's what you'd think.

-- In another sign of a powerful recovery, the jobless rate rose in a total of 24 states in March, with 11 states posting rates above the national average, stuck at 9.7 percent for three months in a row. Thirty-three states have used up their jobless benefit funds and have had to borrow nearly $40,000,000,000 from the federal government to keep doling out benefits. Florida, Georgia, California and Nevada saw their jobless rates hit new record highs in March; Florida and California over 12 percent and Nevada hit 13.4 percent unemployment.

You would think they'd be saying thank you, that's what you'd think.

-- A new survey of around 950 business owners by the National Federation of Independent Business found that "capital expenditures remain near record lows, sales are still weak, and credit lines are hard to find" and "few businesses say they plan to hire new workers within the next three months," echoing the findings of another poll of small companies (100 or fewer workers), done by American Express, which had "one in five businesses [saying] their companies are 'sinking ships,' while more than half said they were merely 'staying afloat,'" (CNNMoney, 4/15).

You would think they'd be saying thank you, that's what you'd think.

Speaking of small businesses, since start-ups and bootstrap companies are a good source of job creation, and these fledgling companies depend on 'angel' investors planting the seed money, the Chris Dodd finance "reform" bill -- as even BusinessWeek admits -- "has three provisions that, taken together, could dampen angel investing far more than the Great Recession. Currently, fledgling companies can raise money from accredited investors -- high-net-worth individuals -- without regulatory approval." So, to fix this job-fueling and economic-growth-producing problem, the "Dodd bill would require money-raising startups to register with the SEC, which would get 120 days to review the filing," and review a slew of pornographic websites from government computers. "The wealth and income baselines for [angel investors] would also double. The bill proposes revoking the rule that allows angels to follow federal regulations, rather than various state rules, in funding companies . . . the anti-angel section of the Dodd bill constitutes a step in the wrong direction," (BusinessWeek, 4/20).

You would think they'd be saying thank you, that's what you'd think.

But! Existing home sales rose 6.8 percent (5.35 million units, annual rate) in March. "The process of a recovery has begun!", proclaimed the president of Naroff Economic Advisors, Joel Naroff. Oops. That quote was from back in August of 2008, when "the worst housing slump in decades [was] far from over," (MSNBC, 8/25/2008). March's rate of 5.35 million units per year is about a million units per year slower than the 6.33 million units per year rate posted for August, 2006, which MarketWatch said showed "a continued implosion in the housing market," and evidence of a "sluggish economy" under George W. Bush. And when the current $8,000 tax credit for first-time home buyers and $6,500 for repeat buyers ends at the end of this month, then what?

Anyway, that's...
My Two Cents...
"JohnHuang2"

[JohnHuang2]

Friday-morning ping! Have a great weekend!

[familyop]

"And when the current $8,000 tax credit for first-time home buyers and $6,500 for repeat buyers ends at the end of this month, then what?"

...more cities like Detroit? ...a flood of people from American tent cities floating to Cuba? ;-)

[SkyPilot]

The tiny state of NJ has more state and local employees as as we do US Marines.

The number of full-time workers employed by the state of New Jersey in the executive branch has increased from 67,213 in 2002 to 80,800 as of May 2006. The number of executive branch workers has increased by 20.2 percent since 2002, as compared to growth in the state’s population of less than 2 percent. The total number of New Jersey State employees is 152,000. This figure includes employees with various state authorities, hospitals and state colleges, who are not considered executive branch workers. When you factor in local employees, the number jumps off the charts to 389,000.

The US Marine Corps has 203,095 total personnel.

New Jersey’s state budget has increased from $22.9 billion in 2002 to $30.9 billion with adoption of Governor Jon Corzine’s budget for 2007. State spending has increased $8 billion, as have state taxes and fees to pay for the increased spending. That’s a 35 percent increase since 2002.

New Jersey State debt has increased from $17.8 billion in 2002 to $38.2 billion as of June 2006. State debt has increased $20.4 billion dollars since 2002, 214 percent.

Why Is New Jersey A Financial Mess?

The total number of US Marines serving in the United States, and around the world, is Guess who is better paid? (by a huge margin).

An average Marine Corps Corporal serving in a ground combat division earns $22,000 per year.

The average salary of a NJ state employee was $49,164 in 2009.

Where are this nation's priorities?

[Cowboy Bob]

Can someone enlighten me...Why do government employees need a Union? I thought Unions were created to give workers negotiating power against evil corporations. Since when has our own government been accused of exploiting its employees?

[familyop]

There’s no mention of public school teachers’ unions in the article.

[Cringing Negativism Network]

Let’s see.

Unions were in theory, formed to protect employees from bosses. A long time ago, and a labor situation far far away.

Government employees work for AMERICAN VOTERS.

So public unions, in fact isolate government workers, from the will of the American voting public.

Public unions should be banned. Public workers work for the people. The voters.

That’s why it’s called “public service”.

Start by eliminated that scam called “tenure”. Just get rid of it. Teachers are just like everyone else - nobody else in America gets “tenure”. Get rid of it now.

Next replace (all) non military public service pensions with what real people who have real jobs, have - 401k plans.

[exhaustguy]

Even more than the salary is the defined benefit “inflation indexed” pension. Go out and price an inflation indexed annuity, and you will see what the actuarial value of such a pension is. Also consider the liberal build up to get that pension is simply amazing and nothing in the non-union private workplace (even for professionals) even comes close. Combine that with cadillac health insurance (also outside of union workplaces few professionals in private industry have anything close to it).

Finally if you are a public sector employee who is “underpaid” you get a 10 year payback period at 10% of your discretionary income for your student loan. The calculation is as follows
AGI minus 150% of poverty level (which is $16K for a single person and $33K for a family of four). Note for AGI you can deduct HSA, 401(k)s and IRAs.

Lets say you start at $45K out of college as a single person, if you borrow anything more than $25K (assuming 6% interest) your loan will be subsidized over that amount.

If you are only making $30K (still a nice salary for a single guy when you add the benefits like summers off for a teacher), then anything over $13K will be subsidized. You have a few kids along the way, then the deal even gets better.

I think I will tell my kids to go to the most expensive schools and rack up huge debt and go to work for the government (just kidding). As obscene as the health care portion of the bill was, this payback on student loan feature may even be worse.

[ronnie raygun]

Socialists on the move, the private sector middleclass pays for most of it, zero is killing the middleclass. What happeneds when the money’s all gone? They will crack down on all the unions that supported them and helped them get to thier goal. Stupid lemmings falling into thier trap because they are oblivious to history!

[Oldeconomybuyer]

The next rape of the US Taxpayer: Public sector labor unions pension funds are "too big to fail".

[Condor51]

EDITORIAL: Public-sector unions bankrupting America

Yep that's a fact. And I can prove it by our Property Tax Bills.

Before our mortgage was paid off I never paid attention to them: 'It was in our monthly mortgage payment so why worry'.

But after paying off the mortgage, then having to pay the bill directly I looked veeeeery closely at them. And then my head exploded. At least half of our Tax Bill goes to ..... ta-da .... PENSIONS!

From our Elementary School district Teachers to the 'professors' at the County Community College. And to the Firemen, Police, the Township slugs who I assume do 'work', our Librarians, and even for the guy who reads my water meter -- PENSIONS!

And every year their PENSIONS, and our Tax Bill goes UP by about 10%. But oddly, our income doesn't? Now I admit my mathematical knowledge may be limited as I went to Chicago Publik Skuuls (/s), but when more goes out than comes in... well, it doesn't take Quantum Mechanics to calculate what the end result will be. Either the Public PENSION Increases will have to end or I'll have to stop eating.

And I kinda got used to eating.

[hoosierham]

It's just more communism:the productive being forced to support the lazy.

We could start by cuting public "workers" numbers by 50%(that is the number of public workers AND the pay they each receive!).

[SumProVita]

Great post of REALITY...as usual.

AND...it’s going to get FAR worse. Our property taxes have gone up this spring as well as the cost of water. I am sure there will be more to come.

[steve8714]

Economic forecasting is like jumbo shrimp, or military intelligence. We’ll know a true recovery is underway after the fact. Looking back, does anyone think it a coincidence that things got worse after TARP one and the election of Obama?

[GeronL]

Big ol BUMP!!

[seemoAR]

When the Toons were co- governors of Arkansas, they created “jobs” and gave them to minorities on welfare. I wonder what percent of Gooberment drones are minorities.

[DH]

Nice politically correct picture. 4 white marines, 1 black and 1 female. However, I didn’t see any Asian or American Indian marines. Did they forget something to make it “properly” correct?

[maica]

A suggestion after hearing the Fox radio newscast at 10:30 this morning:

They reported that the lie about GM repaying it’s loan from the treasury has been made public by Republicans in Congress - Sen. Grassley?

Fox news should add how many other, - one, several, none - “news” agencies are reporting this.

We who listen to talk radio hear news that huge numbers of other Americans never even hear.

[Alamo-Girl]

Thank you so much for your excellent wrap-up, dear JohnHuang2!

[Jimmy Valentine's brother]

You would think they'd be saying thank you, that's what you'd think.