Public School Teachers and Public Sector Workers have Secret Millionaire Retirements

Posted by PITHOCRATES - January 6th, 2013

Week in Review

President Obama stood firm during the fiscal cliff debate to raise taxes on the millionaires and billionaires.  To get those who can afford it to pay a little more.  The visible millionaires.  To help pay for the secret millionaires.  Public school teachers.  And public sector employees (see Millionaires, Billionaires, and Teachers by Randall Hoven posted 12/10/2012 on American Thinker).

Our President likes to use the phrase “millionaires and billionaires.” A person whose net worth is $1 million or more is a “millionaire.”

Most of us working stiffs have trouble thinking in terms of net worth; we are more used to the concept of annual salary. How does net worth translate into annual income, or vice versa? In round numbers, the annual income equivalent is 4% of an investment nest egg. So if you have $1 million socked away, consider that to be equal to $40,000 income every year…

That relationship can be turned around: if you have an annual pension of $40,000, you are effectively a millionaire, especially if that pension is adjusted for cost of living…

Now let’s look at public school teachers. In Illinois, where I live, the Illinois State Board of Education puts out a report on teachers’ salaries. The table below is a pretty good summary of that 110-page report. A beginning teacher with a Bachelor’s degree in a median school district might make about $40,000 per year. But by the time a teacher retires, she could be making $55,000 to $120,000, depending on how much graduate education she got and her school district.

And when that teacher does retire, what is her pension? If most school districts are like Chicago’s, the teacher will make about 50% of her final salary if she retires at age 55, or 75%, the maximum, if she waits until age 59…

In short, a lot of retired Illinois teachers are millionaires.

But that’s not all. Teachers who retired from the Chicago school district get 60% of their health insurance premiums subsidized. In round numbers, let’s call that a value of $8,000 per year.

Also, the above values do not include any other savings or investments made over the teachers’ careers, including home values. If they have their own 401k’s in addition to their pensions, those were not included. Social Security was not included either.

Wait, there’s more. These pensions are for life. Many or most of them are also adjusted for cost of living. Every month, for the rest of their lives, retired teachers get checks or automatic deposits of a reliable amount, indexed for inflation and guaranteed by the government. They don’t have to worry about investment risks…

The situation of the retired public school teacher is also not that much different from fire fighters, policemen, postal workers and other public employees. Nor is it that much different from a lot of other retired workers, especially union members such as General Motors retirees. If such people are getting pensions and benefits of $40,000 per year or more, not an exceptional amount, they are millionaires…

The main reason the US Post Office, the federal government and many state and local governments face unsustainable debt, bankruptcy and default is due to the costs of public employee pensions. GM went bankrupt largely due to the costs of its retirees’ pensions and benefits.

Businesses go bankrupt, governments face default and economic growth slows to a near standstill. Meanwhile, retired public school teachers, who had to work 9 months of the year during their careers, now pull in checks 12 months a year, indexed for inflation and guaranteed by the government, in amounts that often make them millionaires, maybe twice over.

So public school teachers, fire fighters, police officers, postal workers and other public employees are not the same as people who work in the private sector.  For when people retire from middle class jobs in the private sector they don’t live a long retirement like a millionaire.  They live a shorter life in retirement worrying that they may outlive their retirement savings.  Or that some illness may wipe out their retirement savings.  Forcing them to return to work in the last remaining years of their life.  Something school teachers, fire fighters, police officers, postal workers and other public employees don’t have to worry about.  As long as they can maintain a privileged class in America.  An American aristocracy, if you will.  The thing we fought the Revolutionary War to put an end to in the New World.  Old World aristocracy.

Not everyone can live like this.  For there just isn’t enough taxpayer income to tax away to pay for everyone.  Which is why the aristocracy is a privileged class.  In a ‘classless’ America.  A class that attacks rich people to pay their fair share.  So they can enjoy their millionaire retirements.  Without having the talent or ability of an entrepreneur.  The investment savvy of a Mitt Romney.  Or simply not having been lucky enough to be born into an aristocratic family.  Like a Kennedy.

And if you think these millionaire retirees have earned their good life like an entrepreneur, consider how hard they have to work for their Masters Degree.

You might notice from the table of teacher salaries that a Masters Degree with extra graduate hours can add $20,000 or more to a teacher’s annual salary. Just for fun I want to show you two course descriptions. The first one happens to describe an engineering course I teach which is for undergraduates, required of all engineering students and generally taken in a student’s 2nd or 3rd year of college.

 Engineering Mathematics: The Laplace transform and applications; series solutions of differential equations, Bessel´s equation, Legendre´s equation, special functions; matrices, eigenvalues, and eigenfunctions; vector analysis and applications; boundary value problems and spectral representations; Fourier series and Fourier integrals; solution of partial differential equations of mathematical physics.

This second course description is taken from the University of Missouri St. Louis bulletin. It describes a graduate level course in the Education school.

 The Educational Role of Play: Emphasizes play as a constructive process with applications to cognitive and social development. Special attention to facilitating play in early childhood classrooms.

Note that the first course description (the one with all of that math) was an undergraduate course.  While the second course description (all about having fun) is a graduate course in the school of education.  The person learning about fun in the classroom will live like a millionaire in their retirement.  While the odds are that the one that worked so hard to learn all of that math to help create the wonderful things in our high-tech economy will not.  Why?  Because brilliant engineers have to earn their retirement.  While the privilege class makes the engineers and other hard working Americans pay for their millionaire retirement.  Is that fair?  According to the Left, yes.

Worse, these are the people teaching our children.  This privileged class that exploits the taxpayer so they can live a longer and more comfortable retirement are teaching our kids the evils of capitalism.  To turn them into Democrat voters.  So they vote for the party that attacks those who earn their wealth.  To make them pay their fair share.  So these teachers and public sector workers can continue to live their millionaire retirements.  While most of their student’s parents struggle in their own lives because they’re paying so much in taxes to support the better lives of their children’s teachers.

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Unemployment, High Taxes, Obamacare, Uncertainty, Public Sectors and a Snow Crisis

Posted by PITHOCRATES - January 3rd, 2011

Obama Saves our Economy with 10% Unemployment and Job Killing Obamacare

The departing White House economist, Larry Summers, says that if it wasn’t for President Obama, the economy would be in a mess.  Unlike the near 10% unemployment stagnant cesspool it currently is.  Others say he may have stabilized the economy, but he is smothering the recovery because of the patent anti-business policies of the Obama Administration (see Judging Obama’s economics by Robert J. Samuelson posted 1/3/2011 on The Washington Post).

The trouble is that Obama, having stabilized the economy, weakened the recovery. What’s missing from Summers’s valedictory is any sense of contradiction between the administration’s ambitious social and regulatory agenda and the business confidence necessary for hiring and investing. Of course, the connections existed. The health-care law raises hiring costs by requiring in 2014 that all firms with more than 50 employees provide health insurance or be fined. The law brims with complexities and uncertainties that make it hard to estimate the ultimate costs. Will firms with, say, 47 workers eagerly expand beyond 50 if that imposes all the extra costs? It seems doubtful.

Woe to the business owner after 2 years of President Obama.  Obamacare.  It’s going to cost business big.  But how big no one knows.  Even the people who wrote that monstrosity.  As Dave Barry so eloquently wrote (see Dave Barry’s 2010 Year in Review posted 1/3/2011 in the Miami Herald).

The centerpiece of this effort is a historic bill that will either (a) guarantee everybody excellent free health care, or (b) permit federal bureaucrats to club old people to death. Nobody knows which, because nobody has read the bill, which in printed form has the same mass as a UPS truck.

In a word, uncertainty.  It’s anyone’s guess.  And that’s a pretty big variable to put into a business plan.  Better to circle the wagons and wait and see.  And by wait and see I mean don’t expand.  Don’t build.  Don’t hire.

But just think how worse things would be if it wasn’t for Obama.

High Unemployment and High Taxes – They Usually go Together

And this on top of some of the highest corporate tax rates in the world (see Pat Toomey says U.S. has highest corporate tax rates in the world posted 1/3/2011 on The St. Petersburg Times’ Politifact).

On the Jan. 2, 2011, edition of NBC’s Meet the Press, Sen.-elect Pat Toomey, R-Pa., cited a striking statistic in urging the United States to lower its corporate tax rates.

That striking statistic?

“We should be lowering corporate tax rates because we have the highest in the world right now.”

They fact checked.  There are different taxes to look at (statutory, effective, excise, payroll, etc.).  Their conclusion?

Still, if you rate Toomey on his specific wording by looking at “corporate tax rates,” he’s right that the U.S. does now have the highest corporate tax rates on the books, at least among the biggest industrialized democracies, which is most economists’ typical yardstick. So we rate his statement Mostly True.

Uncertainty.  High taxes.  And they wonder why unemployment hovers at 10%.

Tax and Spend Creates Business Uncertainty

And taxes won’t be coming down any time soon with the Obama administration.  The national debt has never been higher (see National Debt Tops $14 Trillion by Mark Knoller posted 1/3/2011 on CBS News).  And the Obama administration wants to raise the debt ceiling.  Because they want to keep on spending. 

You need to pay for spending.  With debt, printing or taxes.  All of which will add cost to business.  More debt increases interest rates.  Printing money causes price inflation.  Taxes just plain add costs.  And they pass all those costs on to you.  The consumer.

But it’s the uncertainty that plagues business. Yes, it’s bad.  But will it get worse?  Probably.  So business hunkers down.  They don’t expand.  They don’t build.  And they don’t hire.    Not for the indefinite future.  Until they have some sense of what’s to come. 

To Save Obamacare Obama Tries to Hide the Facts

Even the Obama administration know they’re not helping the economy.  And they know that Obamacare is a train wreck.  So they’re doing everything they can to lie to the people.  To get their propaganda front and center.  How?  They’re paying Google with our tax dollars to alter ‘Obamacare’ search results (see HHS is Paying Google with Taxpayer Money to Alter ‘Obamacare’ Search Results by Jeffrey H. Anderson posted 1/3/2011 on the Weekly Standard).

Obamacare is bad.  Even they know it.  So they’re trying to control Internet content.  Scary, isn’t it?  Censorship can’t be far behind.

A Snow Crisis is a Terrible Thing to Waste

FDR exploded the size of Big Government.  He gave birth to the nanny state.  But one thing he didn’t do was to neuter private business.  And empower the public sector employees.  He knew if you were going to partner with Big Labor you needed big taxes.  You get big taxes from businesses.  And from their employees.  In other words, it all trickles down from business.  If you shut down business, you shut down everything.

Today, though, it’s all different.  They don’t just take from business. They eviscerate business.  To feed the public sector.  Who produce nothing.  They just consume tax dollars.  And live a far better life than you or I.  Case in point, the NYC blizzard (see Sanitation Department’s slow snow cleanup was a budget protest by Sally Goldenberg, Larry Celona and Josh Margolin posted 12/30/2010 on the New York Post).

Selfish Sanitation Department bosses from the snow-slammed outer boroughs ordered their drivers to snarl the blizzard cleanup to protest budget cuts — a disastrous move that turned streets into a minefield for emergency-services vehicles, The Post has learned.

That’s your public sector.  When the mayor forces them to live like the rest of us they protest vehemently.  Taking advantage of a crisis, they paralyze a city.  Prevent emergency services from using the streets.  Because they’re not happy with wage and benefit packages similar to the private sector.  So they protest.  And ask for our support in their struggle against unfair labor practices the mayor is using against them.

Solidarity, Brother?  Or are you Giving me the Finger?

Even their union brethren have had enough.  And that says a lot (see Labor’s Coming Class War by William McGurn posted 1/4/2011 on The Wall Street Journal).

In theory, of course, organized labor is all about fraternal solidarity. For many years, it is true, private-sector unions supported collective-bargaining rights and better benefits for government workers, while public-employee unions supported the private-sector unions in their opposition to legislation such as the North American Free Trade Agreement in the 1990s.

Suddenly, it’s a different world. In this recession, for example, construction workers are suffering from unemployment levels roughly double the national rate, according to a recent analysis of federal jobs data by the Associated General Contractors of America. They are relearning, the hard way, that without a growing economy, all the labor-friendly laws and regulations in the world won’t keep them working.

The union trades are among the biggest group of laid off workers.  And while they sit unemployed waiting to pick up a call, the public sector goes on.  Living extremely well.  And the high taxes to pay those fat wage and benefit packages are killing business.  The very business they need to build stuff.

What’s more, “blue-collar union workers are beginning to appreciate that the generous pensions and health benefits going to their counterparts in state and local government are coming out of their pockets,” says Steven Malanga, a senior fellow at the Manhattan Institute. “Not only that, they are beginning to understand the dysfunctional relationship between collective bargaining for government employees and their own job prospects.”

And while the public sector bitches about pay cuts in their jobs, unemployment soars among the union trades.  I once complained about my wage and benefits until I met the man who had none.  So don’t go looking for the solidarity on the picket lines.

Over in New York, meanwhile, newly inaugurated Gov. Andrew Cuomo faces a similar battle. Mr. Cuomo campaigned on a cap on property taxes and a freeze on state salaries, both anathema to the powerful state-employee unions. As the New York Times reported last month, however, in this showdown Mr. Cuomo may have found a surprising ally in the 100,000- member Building and Construction Trades Council of Greater New York. Maybe not so surprising: The Times says unemployment for these workers is running at 20%.

These union employees at least provide value.  They build things.  And build them very well.  Sure, you can say some are overpaid.  And maybe some are.  But one thing you can’t say is that they haven’t been sharing any of the sacrifice during these down times.  Unlike their public sector brethren. 

In some ways, this new appreciation for the private sector is simply back to the future. FDR, for example, warned in 1937 that collective bargaining “cannot be transplanted into the public service.” In the old days, unions understood economic growth. Mr. Malanga points to AFL-CIO President George Meany’s strong support for the JFK tax cuts as an example.

These days the two types of worker inhabit two very different worlds. In the private sector, union workers increasingly pay for more of their own health care, and they have defined contribution pension plans such as 401(k)s. In this they have something fundamental in common even with the fat cats on Wall Street: Both need their companies to succeed.

By contrast, government unions use their political clout to elect those who set their pay: the politicians. In exchange, these unions are rewarded with contracts whose pension and health-care provisions now threaten many municipalities and states with bankruptcy. In response to the crisis, government unions demand more and higher taxes. Which of course makes people who have money less inclined to look to those states to make the investments that create jobs for, say, iron workers, electricians and construction workers.

Big Government and the Public Sector can’t Exist without Business

To tax and spend you need big piles of tax money.  Which anti-business policies won’t give you.  And raising tax rates will hurt business and consumers alike.  Which also won’t give you big piles of tax money.  Ditto for excessive government debt and printing money.  They all kill economic activity.  And we’re killing our economy.  Which is shrinking that pile of tax money.  And this is causing cities and states budget problems.  Requiring a reckoning with their public sector employees.  Which is going so badly that the public sector unions are now finding themselves an island unto themselves.  No one is feeling pity for these pampered prima donnas.  Even their fellow union workers in the building trades are abandoning them.

Things are bad.  But they can get worse.  If we try to bail out the public sector.  We do that and we’ll end up like Greece.  The only difference being that there won’t be anyone to bail us out.  So that’s not an option.  We have to cut spending.  Before we end up like Greece. 

We need to repeal Obamacare.  Cut taxes.  And stop attacking business.  If we want jobs.  And prosperity.  For one fundamental truth in life is that business can exist without the public sector.  But the public sector can’t exist without business.  Someone has to pay all those taxes.

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FUNDAMENTAL TRUTH #45: “The bluest of cities in the bluest of states have the most activist governments, the deepest recessions and the most abject poverty.” -Old Pithy

Posted by PITHOCRATES - December 21st, 2010

Blue States Bleeding Red

We call it the Great Recession.  It started with the subprime mortgage crisis.  Then the dominoes started falling.  And unemployment rates started to climb.  So many people lost their jobs that it wasn’t only banks and auto companies staring into the abyss of bankruptcy.  Our city and states were, too.

But not all our cities and states.  Some were hanging in there during the Great Recession.  There was a pattern.  Sure, it was a rule with some exceptions, but a general rule all the same.  And if you looked at one of those red/blue electoral maps, you could see the states (and the cities) having the biggest financial troubles.  You just looked for the blue.

The blue states are the ‘Democrat’ states.  The red states are ‘Republican’.  And the states that are in the news with financial troubles tend to be the blue states.  The New England States.  The Mid-West states.  And the West Coast states.  The rate of business failures and high unemployment rates have hammered these states.  Taxable income plummeted.  Without the income to tax, tax revenue plummeted.  And these blue states are bleeding red.

Blue States and Unionized Public Sector Employees

These are the Big Government states.  Home for most of the nation’s liberal democrats.  Although liberal democrats make up only about 20% of the national population, most of them live in these states.  And when you pack a lot of this 20% into these small areas, their influence can reach a majority.  And they can control these cities and states.  And do.

These liberals are the guilty rich (anti-capitalist inheritors of great wealth).  Crony-capitalists (anti-capitalists who eschew the free market and bribe politicians in exchange for governmental favoritism).  Big Union (anti-capitalists who eschew the free market and seek legislation that favors them).  The celebrity rich (anti-capitalist movie stars, musicians, painters, artists, etc., who don’t live in the real world).  University professors (anti-capitalists who still have posters of Che Guevara up in their classrooms).  The mainstream media (anti-capitalists who want to shape opinion instead of practicing journalism).  And, of course, the poor and government-dependent.

And then you have public sector employees.  Unionized public sector employees.  And their ranks are growing.  They don’t work very hard.  But boy are they paid well.  And talk about fat benefits.  Pension plans that most can’t even imagine.  They have made themselves a privileged class.  And with their boss having the power to tax, that privileged class will be remaining privileged for a long time to come.  Unless a Great Recession comes along.

Much of Flyover Country not having any Budget Crises

What is flyover country?  It’s that are area of the country liberals fly over when traveling between the West Coast, the Big Union Mid-West, New England and, of course, Washington D.C.  It’s that area in between.  The red states.  You see, liberals fly over the red states because they don’t like them.  Or Republicans.

Because America is a center-right nation, and the liberals have concentrated in the blue states, that has left most of ‘fly over’ country conservative.  And what do conservatives NOT like?  Big Government.  So liberals don’t go where they’ve not welcomed.  For Big Government is the heart and soul of liberalism.

So the red states don’t have Big Government.  They don’t have masses of government-dependent people.  And they don’t have large public sectors.  Or public sector union employees.  Which means they don’t have huge Big Government budgets.  Or budget crises.

The Public Sector Out Paces the Private Sector in the Blue States

But the blue states do.  Their Big Cities are packed with government-dependent people.  And they have a huge public sector to cater to these people.  And a public sector union that pays this public sector very well.  They have pay and benefit packages that are to die for.

Of course, a public sector doesn’t make anything.  They have no goods or services that they can sell in the free market.  They have but one source of income.  Taxes.  And when times are good, taxes are good.  But when times are poor, so are taxes.

Part of the liberal democrat’s strategy to remain in power is to get as many people as possible dependent on government.  This helps make Democrat voters (people who vote Democrat because they are afraid of losing their government benefits).  And justifies their huge government budgets.  So they keep adding people to the public dole.  And keep growing their budgets.  It’s a foolproof plan.  As long as the private sector grows along with the public sector.  So the private sector can keep paying the taxes to support the public sector.  And the privileged class.

Big Government – The Road to Bankruptcy

But it doesn’t always work.  When businesses fail they don’t have any income.  So they can’t pay any income taxes.  And when a business fails people lose their jobs.  And their incomes.  So they don’t pay any income taxes either.  But it doesn’t end there.  Without any income, they can’t buy anything in the free market.  So other businesses see their sales decline.  And have to lay off employees.  And these laid-off people can’t buy anything in the free market.  So more businesses see their sales decline.  And they lay off people.  And on and on it goes.  Where does it stop?  Usually in a bad recession.  Or even a great one.

You add all of this up and what do you get?  Big cities with growing budgets (and growing pension obligations).  And shrinking tax revenue to pay for it.  Costs exceed revenues.  Ergo, bankruptcy.

And some of the states with the most generous public sector pay and benefits are California, Illinois and New York.   Some of the bluest of blue states.  And coincidentally, these are the states facing some of the biggest budget crises.  Actually, it’s no coincidence.  It’s the ultimate consequence of Big Government.  Bankruptcy.

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It’s Public Sector Union Pay and Benefits, Stupid, Bankrupting our Cities and States

Posted by PITHOCRATES - December 20th, 2010

The Greed of Public Sector Unions

Cities around the globe are imploding under the weight of their own debt crises (see $2tn debt crisis threatens to bring down 100 US cities by Elena Moya posted 12/20/2010 on the Guardian).

More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned.

But it’s not just American cities.

Cities from Detroit to Madrid are struggling to pay creditors, including providers of basic services such as street cleaning. Last week, Moody’s ratings agency warned about a possible downgrade for the cities of Florence and Barcelona and cut the rating of the Basque country in northern Spain. Lisbon was downgraded by rival agency Standard & Poor’s earlier this year, while the borrowings of Naples and Budapest are on the brink of junk status. Istanbul’s debt has already been downgraded to junk.

Cities throughout the world are going belly up.  Why?  Here’s a clue.

US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning.

State pension funds?  That means only one thing.  Union pensions.  It’s public sector union pay and benefits that are bankrupting our cities and states.  Why?  They’re monopolies.  Public sector employees have no competition.  There are no market forces dictating the pay of these employees.  And there is no incentive for the unions to bargain anything away.  Not when the municipality can raise taxes.  And that’s what the unions expect the municipalities to do.  Because they just don’t cut their pay and benefits.  Not when taxpayers can pay more taxes.  And when it comes to getting by on less, the unions will always choose the taxpayer to get by on less.  Not the unions.

Vallejo, a former US navy town near San Francisco, is still trying to emerge from the Chapter Nine bankruptcy protection it entered in 2008.

The city, now a symbol of distressed local finances, is still negotiating with the unions, which refused to accept a salary cut plan two years ago. Paul Dyson, an analyst with the Standard & Poor’s credit agency, said Vallejo, which is mostly a dormitory town for Oakland or San Francisco employees, did not have enough local industry to sustain its finances and property tax – a major source of local income – plunged with the collapse of the real estate market. The S&P credit-rating agency has a C rating on the town – the lowest level.

With a population of about 120,000, Vallejo has $195m (£125m) of unfunded pension obligations and has to present a bankruptcy-exit plan to a Sacramento court by 18 January.

Talk about the greed of CEOs all you want but their ‘greed’ never bankrupted a city.  Like the greed of unions do. 

Cities who don’t Cut Union Pay and Benefits Face Bankruptcy

This is our future.  The public sector grows bigger and bigger.  They take care of themselves.  And tax private business (and private citizens) more and more to pay themselves those fat union pay and benefit packages.  But when more and more people work for the public sector instead of the private sector, what do you get?  Vallejo.  Detroit.  Madrid.  Florence.  Barcelona.  Lisbon.  Naples.  Budapest.  Istanbul.  To name a few.  And how are these cities doing?  They’re sucking air.

You can cut the police and firefighters all you want but it won’t help the problem.  You may be able to squeeze another millage or two by scaring people by cutting their police and fire services.  But the public sector unions have got to cut their pay and benefits to make any real change.  And they have to be serious cuts.  They have to take such a big cut that…dare I say it?  Yes, I dare.  They have to take such a big cut that they end up living like you or me.  And everyone else who works in the private sector.

Of course, you know what the public sector union employees will say to that?  That’s just crazy talk.

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The Two Americas: The Public Sector and Those the Public Sector Screws

Posted by PITHOCRATES - November 13th, 2010

Public Sector Living it Up While We Don’t

Who’s weathering the recession with the least amount of pain?  Why, the rich, of course.  And where do the rich live?  Well, according to Newsweek, seven out ten of the richest counties can be found surrounding our nation’s capital (see You live in nation’s richest counties posted 11/12/2010 on www.wtop.com).  Coincidence?  Or is it because many of those people living around Washington DC work in Washington DC?

Meanwhile, in California, voters rolled up a newspaper and swatted their public sector unions across their collective snout (see The Rollback Begins, and Investor’s Business Daily editorial posted 11/10/2010).

Last week’s elections didn’t just upend the Democratic Party in Congress. They also delivered a warning to the public-sector unions that form the core of the party’s support. In nearly all elections where public pay and benefits were an issue, the voters ruled that the era of ever-richer rewards for government was over: Say goodbye to fat pensions at 55. Get used to living like the rest of us.

Did they finally just have enough?  Or is it that they’re just finding out how much better they live than the people paying those salaries and benefits?

Then there’s the Bell effect. Earlier this year, struggling taxpayers learned just how well some public-sector employees were doing. The revelation of outrageous salaries in the California city of Bell was a catalyst for scrutiny of public pay in general. All kinds of data have surfaced since then about six-figure salaries and lavish overtime in places large and small. It’s clear that the governing class has not been shouldering its share of sacrifice in these tough times.

They had no idea how bad their government was screwing them.  When they did, they spoke at the recent midterm elections.  They said, “Bad public sector unions!  Bad!  [Deleted expletive] you and the horse you rode in on.”

Your Stimulus Program at Work: $27 Light Bulbs

And if the raping and pillaging wasn’t bad enough (and don’t you think it should be?), look at what we got for that excessive compensation.  Graft, corruption and incompetence.  Government construction contracts have long been a license to steal.  The vehicle of choice?  Change orders.  Contractors win bids by submitting quotes substantially below cost.  Once they get the contract, the raping and pillaging begins.  They submit grossly inflated invoices for extra work.  Bloomberg reports a typical example (see New Jersey Auditor Questions $27 Light Bulbs Billed Under Stimulus Program by Dunstan McNichol posted on 11/12/2010). 

One contractor sought $27 for light bulbs, while another billed $1.50 for similar items, according to the report and Assistant Auditor Thomas Meseroll. Another vendor charged $75 for carbon-monoxide detectors that it had provided to a different program for $22, the report said. Eells also cited $32,700 in auditing fees when “no services had been performed” and $69,000 in construction costs that couldn’t be verified.

There are honest contractors out there.  But it’s hard for an honest contractor to get any of these contracts when incompetent boobs in government make it so easy to steal.  Especially repugnant in this example is that we paid for this contract via the $814 billion federal economic-stimulus program.  And, sadly, we know this is not the exception to the rule.  It is the rule.

Neither Rain nor Sleet nor Competence nor Fiscal Accountability

Whenever government runs anything they do a piss poor job of it.  Take, for example, the U.S. Postal Service (USPS).  Sure, it’s an independent organization, but the House oversees it.  And provided it a $15 billion line of credit.  Which they just borrowed the remaining $3.5 billion available on it (and who out there really thinks that they will repay that $15 billion?  If you have your hand up, put it down.  You’re embarrassing yourself).  If it walks like a duck, quacks like a duck then it’s run by government.  And run poorly.  UPS and FedEx are doing fine.  In fact, they’re chomping at the bit to deliver some mail.  But the government says no.  Only government has the requisite skill and expertise to walk around and put things into slots (thank you Seinfelds Newman for that bastardized line).  And just how well are they doing over there at the USPS?  Not good.  They’re projecting bankruptcy unless government saves their sorry ass (see Postal Service posts $8.5 billion loss by Ed O’Keefe posted 11/12/2010 on the Washington Post).

The cash-strapped U.S. Postal Service delivered more bad news Friday, announcing it lost $8.5 billion in the fiscal year that ended in September. Without congressional action to change its obligations, officials said, the Postal Service likely will go broke at the end of fiscal 2011.

Railroads used to say they were in the railroad business.  That’s why a lot of them went belly up.  They didn’t know what kind of business they were in.  And because of that, their competition swooped in and took their customers.  Because truckers understood what kind of business they were in.  Transportation.  And they could compete against the railroads.  Stunned by this revelation, the railroads reinvented themselves.  Understood their role in the transportation industry.  They’re doing well now.  That’s what the USPS needs to do.  Find their role.  Because this can’t be your dad’s USPS anymore.  And they can’t keep trying to run it like it is.

The Only Thing Government is Good for They’re not Good AT

Whether it’s graft or incompetence, the end result is the same.  Government screws us.  That’s what the power to tax can do for you.  You can give yourself whatever pay and benefits you want.  You have no competition.  No one can sell better government services for less.  There is no restraint on their greed but their conscious.  Which, of course, they have repeatedly shown not to have one.

If you place a government employee into a room, without a doubt he or she will be the most unqualified person in the room.  They have no marketable skills.  They can’t run a business.  They just know how to buy and sell votes.  And how to get rich off of the public purse.  If you want to destroy a business, let government run it.  If you want cost overruns, let government run it.  If you want to cozy up with unscrupulous people who want to steel from the public purse, let government run it.  And yet who do we keep demanding to fix and run things?  Government.  It boggles the mind. 

We need government.  Some government.  As in ‘limited’ government.  Private business cannot provide some public goods and services.  Sanitary sewers, for example.  Or the fresh water system.  But it’s like Peggy Bundy said on the television show Married with Children.  She was lamenting about the sexual inadequacy of men.  She said, “The only thing they’re good for they’re not good at.”  And so it is with government.  At least, based on their track record.

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