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Old 10-12-2010, 05:11 AM   #1 (permalink)
People in masks cannot be trusted
 
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Location: NYC
Why can't we afford to anymore

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Sometimes a local issue perfectly illuminates a larger national problem. Such is the case with the opposition of the New Jersey governor, Chris Christie, to construction of a new tunnel between his state and New York.

Christie argues that a state that is currently facing multibillion-dollar annual deficits cannot afford a huge new spending project that is already looking to be $5 billion overbudget. His critics argue that this tunnel is exactly the sort of infrastructure project that New Jersey needs if it’s to prosper in the decades ahead.

Both sides are right. But what nobody seems to be asking is: Why are important projects now unaffordable? Decades ago, when the federal and state governments were much smaller, they had the means to undertake gigantic new projects, like the Interstate Highway System and the space program. But now, when governments are bigger, they don’t.

The answer is what Jonathan Rauch of the National Journal once called demosclerosis. Over the past few decades, governments have become entwined in a series of arrangements that drain money from productive uses and direct it toward unproductive ones.

New Jersey can’t afford to build its tunnel, but benefits packages for the state’s employees are 41 percent more expensive than those offered by the average Fortune 500 company. These benefits costs are rising by 16 percent a year.

New York City has to strain to finance its schools but must support 10,000 former cops who have retired before age 50.

California can’t afford new water projects, but state cops often receive 90 percent of their salaries when they retire at 50. The average corrections officer there makes $70,000 a year in base salary and $100,000 with overtime (California spends more on its prison system than on its schools).

States across the nation will be paralyzed for the rest of our lives because they face unfunded pension obligations that, if counted accurately, amount to $2 trillion — or $87,000 per plan participant.

All in all, governments can’t promote future prosperity because they are strangling on their own self-indulgence.

Daniel DiSalvo, a political scientist at the City College of New York, has a superb survey of the problem in the new issue of National Affairs. DiSalvo notes that nationally, state and local workers earn on average $14 more per hour in wages and benefits than their private sector counterparts. A city like Buffalo has as many public workers as it did in 1950, even though it has lost half its population.

These arrangements grew gradually. Through much of the 20th century, staunch liberals like Franklin Roosevelt opposed public sector unions. George Meany of the A.F.L.-C.I.O. argued that it is “impossible to bargain collectively with government.”

Private sector managers have to compete in the marketplace, so they have an incentive to push back against union requests. Ideally, some balance is found between the needs of workers and companies. Government managers possess a monopoly on their services and have little incentive to resist union demands. It would only make them unpopular.

In addition, public sector unions can use political power to increase demand for their product. DiSalvo notes that between 1989 ad 2004, the American Federation of State, County and Municipal Employees was the biggest spender in American politics, giving $40 million to federal candidates. The largest impact is on low-turnout local elections. The California prison guard union recently sent a signal by spending $200,000 to defeat a state assemblyman who had tried to reduce costs.

In states across the country, elected leaders raise state employee salaries in the fat years and then are careful to placate the unions by raising future pension benefits in the lean ones. Even if cost-conscious leaders are elected, they find their hands tied by pension commitments and employee contracts.

The end result is sclerotic government. Many of us would be happy to live with a bigger version of 1950s government: one that ran surpluses and was dexterous enough to tackle long-term problems as they arose. But we don’t have that government. We have an immobile government that is desperately overcommitted in all the wrong ways.

This situation, if you’ll forgive me for saying so, has been the Democratic Party’s epic failure. The party believes in the positive uses of government. But if you want the country to share that belief, you have to provide a government that is nimble, tough-minded and effective. That means occasionally standing up to the excessive demands of public employee unions. Instead of standing up to those demands, the party has become captured by the unions. Liberal activism has become paralyzed by its own special interests.

The antigovernment-types perpetually cry less, less, less. The loudest liberals cry more, more, more. Someday there will be a political movement that is willing to make choices, that is willing to say “this but not that.”
I will be honest I rarely read the times anymore outside of their real estate section. But I do see headlines on my homepage, and I see articles friends comment on, and this is one that made me go wow, an article from the times, that is something we do not talk about and is so true.

Why can states no longer afford big projects, we used to be able to, why are so we in the red. It shows what I did know about pensions and debt, and salaries, and it is something I do not really see the total way it affects. It also only talks about the salaries pensions benefits which has extravagant costs that affect us. It does not discuss the changes in size in the government, the cost of illegal immigration has on local government.
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Old 10-12-2010, 09:50 AM   #2 (permalink)
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Location: Near Raleigh, NC
Well, relatively speaking the wealthiest people were paying much higher taxes back then. In the 1950's 90% was the highest bracket. Now it's what 38%? Revenue is important to government work. Add to that the fact that the government can't funnel money fast enough back to the richest of the rich, with bailouts, etc.... Well, the math is easy.

I will agree that pensions for cops, etc. are way to fat. Retire after 20 years? Overtime counts towards retirement? If the cops are working that much overtime, it would probably save money to hire enough cops.

As far as democrats spending more: http://www.nytimes.com/2010/10/11/op...gman.html?_r=1
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Old 10-12-2010, 05:21 PM   #3 (permalink)
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Location: North Carolina
That's easy:

We cannot afford the large-scale projects that will allow people to earn more money and through their own efforts increase the national wealth/standard of living because after we are giving that money away for stupid reasons instead...social programs, large government in general, etc.
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Old 10-12-2010, 08:34 PM   #4 (permalink)
immoral minority
 
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Location: Back in Ohio
Inflation and living longer are two issues. Higher prices services were the providers have an actual or de facto monopoly. More things to buy now than you used to. Throw in some one-way exports and you have some issues.

It costs more, both psychologically and actually, people are collecting more benefits than were put in, and the money that was bouncing around our economy and having taxes paid each time it changed hands, is now leaving the country and doesn't make the government any money.
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Old 10-26-2010, 11:02 AM   #5 (permalink)
still, wondering.
 
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Location: South Minneapolis, somewhere near the gorgeous gorge
We can't afford to anymore because we think we can't. Money has gotten stupider.
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