Click on WORD or PDF for full content
David Goldman (AKA Spengler) gives ten reasons why the economy is not recovering. He discusses his number one reason at some length in the post. Here are three of his other reasons:
7. State fiscal crises continue to worsen. “Doomsday is here for the state of Illinois,” California’s last set of cosmetic measures do little to address a $20 billion deficit, Baltimore has no idea how to close a $120 billion deficit. On top of this year’s $200 billion deficit, states face a trillion-dollar shortfall in pension funds.
5) Regional banks continue to drop like flies, with 702 banks holding assets of $403 billion on the danger list.
3) What bank credit is available is funding the US Treasury deficit in the mother of all crowdings-out, replacing commercial loans on banks’ balance sheets…
In the WaPo, Senator Tom Coburn says that government spending is the our biggest problem.
For the past several weeks the American people have been inundated with analysis about what’s wrong with Washington largely from the perspective of Washington insiders who are frustrated about health care and political retirements. We’re told that gridlock, procedural holds, partisanship and extreme ideology are preventing members of Congress from working together. While some of this analysis is true — Washington is petty, partisan and shortsighted — few are acknowledging that Congress does enjoy remarkable unity in one critical area: spending beyond our means.
In the past two years, an institution supposedly paralyzed by gridlock has succeeded in passing the most consequential pieces of legislation it handles every year — appropriations bills — by 3-to-1 margins. In the past few weeks, Congress has increased the debt limit from $12.1 trillion to $14.3 trillion but made no effort to eliminate any wasteful or duplicative spending. Since 1994, both parties have worked together to create 90,000 new earmarks, with only a handful of earmarks going down to defeat. …
…The message of hope that America needs to hear is that individual citizens really do have the power to fire and replace members of the spending supermajority. Since just 1994, the country has experienced several “change” elections that resulted in shifts in power in Washington. These change elections show that our political system is working. When the American people are engaged, new representatives and senators are elected.
The gridlock theorists should remember the wise words of Thomas Jefferson: “When the people fear their government, there is tyranny; when the government fears the people, there is liberty.” …
Prepare to be nauseated. In Reason, Steven Greenhut explains the numerous ways in which the government rich are getting richer and more powerful while the rest of us are getting poorer.
Politicians allow government employees to break laws.
In April 2008, The Orange County Register published a bombshell of an investigation about a license plate program for California government workers and their families. Drivers of nearly 1 million cars and light trucks—out of a total 22 million vehicles registered statewide—were protected by a “shield” in the state records system between their license plate numbers and their home addresses. There were, the newspaper found, great practical benefits to this secrecy.
“Vehicles with protected license plates can run through dozens of intersections controlled by red light cameras with impunity,” the Register’s Jennifer Muir reported. “Parking citations issued to vehicles with protected plates are often dismissed because the process necessary to pierce the shield is too cumbersome. Some patrol officers let drivers with protected plates off with a warning because the plates signal that drivers are ‘one of their own’ or related to someone who is.” …
Politicians approve large salaries for people who produce nothing in the economy. Although they do produce more bureaucracy, rules, and regulations that we must pay for and follow.
…There was a time when government work offered lower salaries than comparable jobs in the private sector but more security and somewhat better benefits. These days, government workers fare better than private-sector workers in almost every area—pay, benefits, time off, and job security. And not just in California.
According to a 2007 analysis of data from the U.S. Bureau of Labor Statistics by the Asbury Park Press, “the average federal worker made $59,864 in 2005, compared with the average salary of $40,505 in the private sector.” … As Heritage Foundation legal analyst James Sherk explained to the Press, “The government doesn’t have to worry about going bankrupt, and there isn’t much competition.”
Politicians legislate excessive pensions that will be paid for by those of us who work in the private sector.
…But the real action isn’t in what government employees are being paid today; it’s in what they’re being promised for tomorrow. Public pensions have swollen to unrecognizable proportions during the last decade. In June 2005, BusinessWeek reported that “more than 14 million public servants and 6 million retirees are owed $2.37 trillion by more than 2,000 different states, cities and agencies,” numbers that have risen since then. State and local pension payouts, the magazine found, had increased 50 percent in just five years.
Then politicians and government workers say there’s not enough money to provide basic services like policing. They don’t tell the truth about why they can’t provide the minimal services that a government should provide its citizens.
In July 2009, Orange County, California, Sheriff Sandra Hutchens proposed more than $20 million in budget cuts to close the gap caused by falling tax revenue. …
…The sheriff failed to identify another reason for the tight budget: In 2001 the Orange County Board of Supervisors had passed a retroactive pension increase for sheriff’s deputies. That policy nearly doubled pension costs from 2000 to 2009, when pension contributions totaled nearly $95 million—20 percent of the sheriff’s budget. So the sheriff decries an economic downturn that is costing her department about $20 million, but she doesn’t mention that a previous pension increase is costing her department more than double that amount. It’s safe to say that had the pension increase not passed, the department would have money to keep officers on the streets and to avoid the cuts the sheriff claims are threatening public safety. …
And the government grows and metastasizes, killing the economy and destroying the standard of living for normal Americans.
…At all levels, state and local government employment grew by 13 percent across the United States from 1994 to 2004. The number of judicial and legal employees increased by 28 percent. The number of public safety workers increased by 21 percent. The number of teachers increased by 22 percent. …
Michael Hodges’ invaluable Grandfather Economic Report uses the Bureau of Labor Statistics to chart the growth in state and local government employees since 1946. Their number has increased from 3.3 million then to 19.8 million today—a 492 percent increase as the country’s population increased by 115 percent. …
Chase Davis, in the Ventura County Star, reports on another perk that California government employees are receiving.
Amid a crippling fiscal crisis, managers throughout California’s government have routinely allowed their employees to amass unused vacation time, enabling hundreds of workers to end their public service careers with payouts topping $100,000, a California Watch investigation has found.
…In one case, James C. Tudor Jr., the former president of the State Compensation Insurance Fund, cashed out six times more vacation time than regulations allow, taking home more than $550,000 after he was fired in 2007 in the wake of an internal probe that “uncovered serious abuses at the highest levels,” according to state Senate documents. …
…State regulations cap the amount of vacation time most employees can accrue at a maximum of 80 workdays, or 640 hours. …
…It also dwarfs caps at some of the state’s largest private employers, including Oracle, Western Digital and Nestlé USA, records and interviews show.
Nestlé in Glendale, for instance, caps its longest-serving employees at 280 hours. …
In the LA Times, Andrew Malcolm has the back story on Desiree Rogers’ departure from the White House.
…The departures have started rather early for the Obama Chicago crowd — just 13+ months in. But the power jockeying has been going on inside all along. And today….
…the weeding began. Desiree Rogers, the White House Social Secretary who was such a close Chicago pal of both Obama and his wife Michelle, is gone as of next month. …
You will recall the Obamas’ first-ever White House State Dinner last fall for India’s prime minister, one of dozens of events organized by Rogers. However, the glittery guests included the notoriously uninvited Salahi couple. They were thoroughly searched like everyone else. …
…The Obama political crew, which knows how important family friends are to the boss and, more importantly, the boss’ wife, hung the blame on the Secret Service.
…But here’s Rogers’ problem: She’s not from the Daley Democratic faction that controls the White House now, particularly access to Obama. The Ticket examined the Chicago connections in depth here earlier this month. …