And You thought Just The Federal Government Was In Dire Financial Shape

Many experts from assorted fields of expertise have talked about how dangerously high the Federal government's debts and spending are and how that debt and spending threaten the very solvency of the country. Just in the last three fiscal years during which the Democrats controlled Congress, together with the first two years of the Obama Presidency, the national debt will have gone up about Trillion or about ,000 per U.S. Household. It is on a trajectory to go up another Trillion in the next decade and that is probably a best case scenario. This comes out to over 0,000 per household. All of the thorough measures of sound fiscal policy, e.g. every year deficit as a division of Gdp, total national debt as a division of Gdp, etc. Are raising red flags of how dire our nation's Federal government finances are.

But, wait! There's more. If you view the Federal government was in bad financial shape, think some statistics for some local and state governments that appeared in a new New York Times description by David Brooks:

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- In New Jersey, employment advantage packages for state employees are 41% higher than similar advantage packages for those working for the mean Fortune 500 company.

- New York City schools are in bad shape, possibly because the city has allowed over 10,000 former policemen and police women to retire before the age of 50.

- In California, a state very, very close to bankruptcy, in-state police officers receive 90% of their salaries when they retire at age 50.

- An mean California corrections officer can earn over 0,000 when overtime is taken into account.

- The description points out that California spends more money on its prison principles than its school systems.

- Unfunded state government pension obligations total about Trillion. Agreeing to a source quoted in the article, a political scientist at the City College of New York, government employees at all levels of government earn, on average, make more per hour in wages and benefits than their secret sector equivalents.

- Buffalo, New York has 50% fewer citizens than it had in 1950 but the same whole of local government employees.

Want some more torture? think the following facts from the November, 2010 issue of calculate magazine and the description that in case,granted a blueprint for financially salvage the country:

- during the Great Recession, the secret sector of the cheaper shed roughly 8.5 million jobs but all levels of government indubitably added government employees during the stepping back to the tune of 100,000. Thus, there were fewer and fewer secret sector jobs and their taxes to maintain more government employees, putting huge strains on the government budgets below the Federal level.

- In a July report, the national discussion of State Legislators estimated that the states face a total allocation gap of billion for the next fiscal year, with roughly half of all states mental that their deficits will be more than 10% of their total budgets.

- In a June analysis, the National Governors association estimated that the cumulative allocation shortfalls for state governments over the next three years will be roughly 0 billion. Despite their own estimates, the same Governors are recommending budgets that are actual 3.6% Higher for fiscal 2011.Talk about insanity. Fewer secret sector jobs are ready but state and local governments expand. Governors know they will have less money in the arrival years but recommend that state government budgets be increased. Population bases shrink substantially but the governments supporting substantially fewer citizens does not. It's crazy.

Why are we in this situation. Two potential causes:

1) Mr. Brooks suggests that it all comes down to the political class seeing to spend taxpayer dollars to buy votes for the perpetual re-election. Take care of the group laborer unions with high wages raises during economic boom times and promised future pension increases in lean times, essentially kicking the financial time bomb of pensions down the road to future generations, and you will most indubitably get most of the union votes and a good occasion of re-election, fiscal sanity and prudence need not apply.

2) The calculate description debunks the claims by state and local politicians that the economic downturn caused their allocation problems. The description calculates that in the middle of 200 and 2008, i.e. Good economic times before the full impact of the stepping back took hold, the national Population grew 8% and the Cpi inflation indicator grew 25%. Thus, a rough evaluation of how much state and local government should have grown to take into account more Population and inflation ( Buffalo, ensue closely) would be about 33%. However, during the good times and before the Great Recession, total state government spending indubitably increased about 60%, roughly twice as much as it logically should have. Thus, the political class has no one to blame but themselves. They increased their power and model at the charge of their taxpaying constituents well before they can blame the economic downturn. Thus, ego, not recession, got most of the states into the allocation mess they are in today.

The sad part of the whole situation is that the state and local governments are now so hamstrung by these outrageous commitments to unions and pensions, they have very minute money left for helping out their citizens. By overpaying police and corrections officers, both active and retired, the state of California neglects its school systems. The New Jersey Governor recently suspended work on a new tunnel into New York City from New Jersey because it was getting too costly and also because the state has such high commitments to its group sector unions that there is minute money left over for such projects, even though the long term financial advantage of the tunnel is high. Buffalo's city government is at least 50% less sufficient than it was 60 years ago plainly because it has the same whole of group employees serving half as many people, despite productivity and efficiency enhancements in the way we live and work, e.g. Computers, communications, etc.

Mr. Brooks indubitably nails the fundamental qoute with the following thoughts:

"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 over-committed in all the wrong ways.... Someday there will be a political movement that is willing to make choices, that is willing to say 'this but not that.'"

"Immobile government," what a amazing vision that also applies to the Federal government and the political class running it. Politicians seem to spend most of their time in office running for their next re-election, never willing to say no to any group or organization in order to scrounge up as many votes as possible, logic, reality, and fiscal sanity being thrown out the window. We never run surpluses and we never see politicians tackle long term problems. Problems like the War On Drugs, the vigor crisis, failing group education, illegal immigration, impending fiscal insolvency of group protection and Medicare/Medicaid, etc. Are never solved. Seems like the same numbness is also happening at the local and state level. Be scared, be very scared.

And You thought Just The Federal Government Was In Dire Financial Shape

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