11 January 2010

Government vs Private Economy: Ongoing Saga

...the modern-day path to the middle-class runs through the government, and government can only create so many jobs. SeekingAlpha

you need to understand that government cannot expand indefinitely--at some point, the people paying into the system (i.e., the private sector) will be unable to support the number of people deriving a direct salary from taxpayer dollars (i.e., government workers). If government directly or indirectly created most of the jobs in the last decade, where is the private sector growth that will sustain these new jobs?

...It used to be that a union job was the ticket to the middle class; however, union membership has been declining, except in the government sector, where many government employees have demanded and received substantial benefits unavailable to the general public (e.g., pensions, lifetime medical care, etc.). It's not surprising that unions have been losing members--as manufacturing declined, so did union membership. These days, unions tend to focus on low-level service workers, like hotel staff and janitorial workers, to fill their membership rosters.

Janitorial work, now increasingly linked to a union, has become a better ticket to the middle class than many other available non-union jobs.

...Meanwhile, public employees--government lawyers, teachers, prison guards, police, etc.--have kept their eyes on more serious issues. Although the rights and wages of an average private sector workers have been declining for decades, government workers received generous pay raises and pensions. According to Steve Malanga, "A study...by the Employee Benefit Research Institute estimated that the average public sector worker earns 46% more in total compensation than his counterpart in the private sector, largely because government employers spend 60% more per worker on benefits than counterparts in the private sector." In addition, according to the BLS, approximately 36% of government workers are represented by unions vs. 7% for non-government employees. Government workers were also nearly five times more likely to belong to a union than were private sector employees. As they say, membership has its benefits. SA
As long as government employees can vote, and as long as government employees are likely to vote for an ever-growing government, the government will keep growing at the expense of the private, productive sector.

Of course it is unsustainable. Naturally, it is irrational and doomed to catastrophic failure. And yet, the US elected the Obama - Pelosi administration with the full knowledge that something like this could very well happen.

Too late to take it back, America. You have chosen the path to the next civil war.

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Blogger Linda Morgan said...

Great post, but I gotta disagree with this little bit here:

"And yet, the US elected the Obama - Pelosi administration with the full knowledge that something like this could very well happen."

There may be millions of smart, and therefore very worried, voters in the US electorate, but there are also millions who couldn't wrap their heads around the basic concepts in this post if you tutored them for a week. And millions more who'd get all fired up about dismantling the whole ticking bomb...until a shiny object distracted them.

And this isn't even counting Krugman and his ilk who simply know better than you and other non-Nobel-Prize-winning figments of reality.

In any case, the US didn't elect the Obama-Pelosi regime with full knowledge of anything but Hope. And Change.


Tuesday, 12 January, 2010  
Blogger al fin said...

Yes, but you must allow a blogger the freedom for a bit of dramatic posturing on his own blog, nicht wahr?

Besides, Al Fin blog informed American voters of exactly what to expect from an Obama presidency long before the election took place. If they did not read and take heed, whose fault is that?

Okay, sure. And that is why there is so much information on survival posted and linked on this blog. ;-)

Tuesday, 12 January, 2010  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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