What’s Your State’s Deadweight Ratio?

forbes ^ | Mar. 16 2011 - 7:12 pm |

[BenLurkin]

The structural problem is that government has too many mouths to feed. It’s possible to quantify that problem. The result is a metric that I call the Deadweight Ratio. It tells you how many beneficiaries of government spending there are for every private sector job.

The Deadweight Ratio suggests that Connecticut and New Jersey are, despite well publicized budget deficits, in better shape than most states. It also says that California and New York are going to be sickly credits for a long time to come.

Every state has one set of people contributing to the coffer—namely, private sector workers—and another drawing from it—namely, government workers and welfare recipients. In healthy states, the contributors outnumber the users. In unhealthy states the reverse is true.

California is in trouble. For every 100 people employed in the private sector it has 113 people drawing benefits. A person working at Disney or Intel or a fast food franchise is carrying his own weight plus that of one other person—a teacher, say, or a Medicaid recipient or a retired prison guard.

Many factors contribute to California’s budget crisis. The state has a big university system, an influx of needy immigrants and an expansive notion of how involved the government should be in people’s lives.

Up to a point, the private sector is willing to carry government employees and welfare moms on its shoulders. Beyond that point, it is not, however worthy the recipients of government largesse are. Employers leave. The jobs go to other states or overseas. That leaves what’s left of the private sector in even worse shape.

[EricT.]

Just need to make a point none seems to realize around here. Public workers pay taxes too and because their salries and benefits are higher, they pay MORE than private sector employees.

So the extra taxes offsets it to where that public employee is the same dead weight as a private worker who is unemployed.

Remember, public employees produce no wealth, they cost wealth.

[ez]

Touche”.

[trumandogz]

Congratulations Mississippi!

You are finally Number One!

[Joan Kerrey]

Public workers pay taxes too and because their salries and benefits are higher, they pay MORE than private sector employees.

From where did those public workers get the money to pay those taxes? Their money comes from somewhere. It didn’t just grow on government money tree orchards.

Working human beings in the private sector paid their own taxes and the taxes of the public workers. Think it through and you’ll see the unfairness

[Merrittk]

Virginia looking good at 51.9, nice to know.

[GatorGirl]

So you’re saying we shouldn’t have public employees?

Public employees are paid for their time and effort just like private sector employees are and that money is theirs because they earned it. Take medical care—doctors and nurses don’t “create” anything they just take insurance premiums and fees and pay taxes on money that came from someone else. Silly. All earned income came from someone else.

The private sector is happy to have the military, police, fire, courts, roads, prisons, and various government offices open and ready, willing and able to assist them in getting a drivers license or registering a mortgage, keeping them safe, and keeping the bad guys out of society.

I think we can go overboard with this bashing government employees nonsense.