13 December 2010

Public Unions Pushing US States and Cities to Breaking Point

It is not surprising that New York, Illinois, and Ohio are the #1, #2, and #3 US states losing population. "Poodle states" such as these are kept on a tight leash by public unions. In New York, vital public services will be curtailed to satisfy the insatiable demands of the public unions. More from a governor on the front lines of the battle to save the US from the public unions:
The majority of union members today no longer work in construction, manufacturing or "strong back" jobs. They work for government, which, thanks to President Obama, has become the only booming "industry" left in our economy. Since January 2008 the private sector has lost nearly eight million jobs while local, state and federal governments added 590,000.

Federal employees receive an average of $123,049 annually in pay and benefits, twice the average of the private sector. And across the country, at every level of government, the pattern is the same: Unionized public employees are making more money, receiving more generous benefits, and enjoying greater job security than the working families forced to pay for it with ever-higher taxes, deficits and debt.

How did this happen? Very quietly. The rise of government unions has been like a silent coup, an inside job engineered by self-interested politicians and fueled by campaign contributions.

Public employee unions contribute mightily to the campaigns of [leftist] politicians ($91 million in the midterm elections alone) who vote to increase government pay and workers. As more government employees join the unions and pay dues, the union bosses pour ever more money and energy into [leftist] campaigns. The result is that certain states are now approaching default. Decades of overpromising and fiscal malpractice by state and local officials have created unfunded public employee benefit liabilities of more than $3 trillion. _WSJ
(Notice that Al Fin has replaced the word "liberal" by the more appropriate descriptor "leftist" in the quote above, using square brackets. Leftists destroy economies intentionally, while those who go by the misnomer "liberals" only do so out of incompetence.)

Even the left-leaning New York Times has expressed some concern over the kamikaze tactics of public unions and their legislative enablers in municipalities and state houses:
It is the long-term problems of a handful of states, including California, Illinois, New Jersey and New York, that financial analysts worry about most, fearing that their problems might precipitate a crisis that could hurt other states by driving up their borrowing costs.

But it is the short-term budget woes that nearly all states are facing that are preoccupying elected officials.

Illinois is not the only state behind on its bills. Many states, including New York, have delayed payments to vendors and local governments because they had too little cash on hand to make them. California paid vendors with i.o.u.’s last year. A handful of other states, worried about their cash flow, delayed paying tax refunds last spring. _NYT
More states are approaching the breaking point due to unfunded pension, wage, and benefit liabilities to public unions.
It’s hard to overstate the havoc that a meltdown in the state and municipal bond market would cause. Many private investors and retirees are heavily invested in securities long thought safe. Worse, many pension funds, including state pension funds, have large positions in the muni market. The meltdown could feed on itself as falling bond prices would undermine state pension fund reserves and raise the interest rate on new debt issues. The panic will intensify and spread, sucking new states into the maelstrom — as more and more European countries have been affected by a crisis once limited to Greece. _AmericanInterest
Those US taxpayers who can get out, are leaving the states that have become enslaved to public unions and are growing impoverished as a result. But the same phenomenon is occurring at the US federal level, along with quite a few other fiscal, regulatory, and tax misadventures. Leaving one's country is a bit more complicated than leaving one province or state for another. But becoming an expatriate may well be easier than removing the politicians, regulators, lawyers, and union crooks who together are dragging the structure down.

You may want to add your weight to the much-maligned Tea Party movement before you go to those lengths. Most people are more attached to their homeland than they realise.


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Blogger Hell_Is_Like_Newark said...

Last night my wife and I were guests at one of my wife's friends for dinner. Friend's husband and another guest are both on the public payroll (school teachers). Even though they were both NY residents, they spoke of NJ Governor Chris Christie with a mix of fear and derision. In particular to his handling of pensions and make mention of expanding vouchers.

In regards to the pensions I replied "there isn't enough money" and went over how NJ pension system is completely broke by 2019 (likely even earlier than that).

The response back was, "what if a guy put in his time, contributed to the pensions... etc. etc.)" Again I replied, there is no money. What is deserved or not does not matter. There will be no pension system soon.

The idea that these people have been promised benefits that simply cannot be met doesn't seem to compute. I suspect many in the public sector are simply in denial. They will be hit with a cold hard reality when one day, their paycheck (or pension check) stops coming.

Monday, 13 December, 2010  
Anonymous Anonymous said...

Changing countries seems like just delaying the inevitable. Where would one go, Antarctica? I suspect that even private seasteading enterprises would eventually devolve into socialist states. Bad economics seems to be as much a property of human nature as gravity is a property of matter.

Tuesday, 14 December, 2010  
Blogger al fin said...

HILN: They are deathly afraid that Christie's realistic approach to saving the state of NJ will spread to their jurisdictions.

Baron: Look to the frontiers. If there are none, then invent a way to create new ones.

Tuesday, 21 December, 2010  

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

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