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

Many experts from varied 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 while which the Democrats controlled Congress, including 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 other 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 standard measures of sound fiscal policy, e.g. every year deficit as a percentage of Gdp, total national debt as a percentage of Gdp, etc. Are raising red flags of how dire our nation's Federal government finances are.

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

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- In New Jersey, employment benefit packages for state employees are 41% higher than similar benefit packages for those working for the average 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 average 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 system 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 underground sector equivalents.

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

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

- while the Great Recession, the underground sector of the cheaper shed roughly 8.5 million jobs but all levels of government beyond doubt added government employees while the retreat to the tune of 100,000. Thus, there were fewer and fewer underground sector jobs and their taxes to support more government employees, putting mountainous strains on the government budgets below the Federal level.

- In a July report, the national consulation of State Legislators estimated that the states face a total budget 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 relationship estimated that the cumulative budget 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 underground sector jobs are available but state and local governments expand. Governors know they will have less money in the advent years but recommend that state government budgets be increased. Habitancy bases shrink substantially but the governments supporting substantially fewer citizens does not. It's crazy.

Why are we in this situation. Two inherent causes:

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

2) The hypothesize description debunks the claims by state and local politicians that the economic downturn caused their budget problems. The description calculates that in the middle of 200 and 2008, i.e. Good economic times before the full impact of the retreat took hold, the national Habitancy 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 list more Habitancy and inflation ( Buffalo, corollary closely) would be about 33%. However, while the good times and before the Great Recession, whole state government spending beyond doubt 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 statue at the expense of their taxpaying constituents well before they can blame the economic downturn. Thus, ego, not recession, got most of the states into the budget 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 petite 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 public sector unions that there is petite money left over for such projects, even though the long term financial benefit of the tunnel is high. Buffalo's city government is at least 50% less efficient than it was 60 years ago plainly because it has the same estimate of public 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 beyond doubt nails the basal 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 wonderful 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 assosication 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 energy crisis, failing public education, illegal immigration, impending fiscal insolvency of public security and Medicare/Medicaid, etc. Are never solved. Seems like the same dullness is also happening at the local and state level. Be scared, be very scared.

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

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