City Journal Autumn 2014

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Steven Malanga
State Budget Bunk « Back to Story

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great article. Politicians refuse to change!
Erblotnied Forgatner January 19, 2011 at 12:12 AM
OMG! Unbelievable!
Just curious- any cites for the data used in this article? It's a shame that what would be a decent piece on state fiscal policy is ruined by unsubstantiated attacks on public employee unions. But then again, one has to consider the source and the "journal" it is published in.
People complaining about unions are missing the point of the exercise. The unions are forcing the politicians to keep their promises, and when money gets tight, the politicians start screaming about how unreasonable it is to be forced to do what they said they would do. I don't know how that's the fault of the unions.

The bigger point is about the proper role of government, what the people expect it to do, and a realistic assessment of the money required to do those things. And if wants > money available, making the hard choices required to ensure that we don't spend more money than is available, or an agreement that yes, we do want to pay for that, or a multi-year budget process that allows for a less gimmicky approach to the financials.
Socialism flourishes when they can steal from "the rich" and buy votes of "the poor", once that money is gone they steal money from unborn citizens by massive borrowing.

America is bankrupt - socialists have stolen until they can't steal anymore.

Socialism withers once the money is all stolen - that's where America is today - bankrupt.

Thanks a lot Democrats........
So when do people start going to prison for this stuff?
"Last year, New York offered another early-retirement plan: it ostensibly trimmed payrolls by 3,600 workers, but within a few months, a New York Post investigation found, hundreds of those workers were already on the payroll again in temp jobs while collecting retirement wages."

How is it that unions caused the early retirement of required government workers? Obviously required because they ended up being paid for under private contracts that probably cost more than their salaries and benefits as government workers.

What I find curious as well is these tricks and traps have spread even as conservatives have proclaimed they have won the political debate and been shifted all levels of government to conservative fiscal principles.

I grew up in the 50s and 60s and back then government was expected to work well and deliver value for the taxes paid. Then Reagan argued that we should see government as a problem and should not expect government to be anything but inefficient and corrupt. Anyone who works for government is deemed lazy and corrupt. Seems we get the government we expect: good government by good public servants in the 50s and 60s, and corrupt government by corrupt politicians since 1980.
Steve-Great article. Now we need the other side of this financing scam. Where is the money going? Certainly, the abject dishonesty in financing the states' largess is a symptom that masks the greater problem. Eliminating the palliative effect of borrowing will expose the gross mismanagement by politicians and government bureaucrats. Without the creative destructive force of competition, programs that are not needed remain and little cost saving modernization occurs. Let's privatize government activities. How about starting with the department of motor vehicles. Gov't sets standards, numerous franchises and let the franchisees compete. My guess is you will see technology reduce the cost of this process overnight.
Execellent article. When did every level of government and business become so morally corrupt? Pity the U.S..
The underlying problem that is causing all of this is an upsidedown demography resulting from too many older people (baby boom) and too few younger people (birth control and abortion). Simple solution is more immigration.
This article is eye opening. I follow finance and the markets every day and had no idea of some of these things.

The problem with any new efforts to reign the gov'ts in is that they will find a way around them exactly like they found a way around all the previous efforts to reign them in. They are un-reigninable. lol

Now pointing it all out and fighting it is a commendable thing, but it's a losing battle.

Just realize that they and the federal gov't are ALL GOING TO GO BROKE, and plan your finances accordingly.

The reason that the finances of the gov'ts are broke is because everyone wants someone else to look after their incomes and future.

Assess what the impact of these entities going broke is going to be and invest accordingly. And that's not as simple as it all sounds. While gold is the most likely beneficiary, events could also transpire that include deflationary elements.

Nothing is sure in life, so you just have to place your bets and wait and see.

All of this is hidden from ordinary citizens and ,even if it were known, making sense of it to form an intelligent vote would cause one to have a tremendous headache. It is easier to vote with your feet. Then when a state like Michigan goes under all the excesses are purged. A bad but necessary ending.Bankruptcy and a new political party for limited government is the fairest solution.
"During the current recession, voters have expressed outrage at public employees’ rising numbers, plush salaries, and lavish benefits."

As a former MTA employee, I would still be working for the agency if I received "plush salaries and lavish benefits". But I never did, and neither do most public employees. I left for the private sector because the pay and benefits have and always will be MUCH BETTER than the public sector. You have to work THIRTY YEARS and be in a "top tier" position (basically an executive) to get "plush" compensation.

The REAL problem with municipal spending is the cost of outside contracts. That's right, the PRIVATE SECTOR has been overcharging and underperforming the work its been hired for by the state & city. And many of these lax firms received the work in the first place because they rub elbows with your favorite politician - democrat and republican alike.

Cathy Black was not hired by Mayor Bloomberg to teach our kids and better the school system. She was hired because she, and Joel Klein, have become liaisons between the Dept of Education and major corporations so that these businesses can sure up big education contracts.
I'm really glad to be unable to find my state, "Florida", in this article!
The irony is that, due to the inability of states to bring their budgets under control, states are less and less able to perform basic government functions, much less do great things. The roads don't get repaired, sewer plants do not get upgraded and overall services degraded. You don't even touch upon the other segments of state government - municipalities and counties, which do the same thing as the states. The problem starts with salaries and pensions, and the inability to address these really tells you who are the true constituencies of state and local government. The people are only a well to be pumped dry.

No state has yet reached the point where the money has truly run out, although we seem to be getting there fast. It is going to be very interesting to watch how it all pans out. Whatever happens it is a certainty that it will not be to the benefit of the taxpayers.
It would seem that too many states are willing to go to extremes to perserver their parasitic public-sector work force and its obscene pensions.
Compared to our state govenments, Bernie Goldberg, with his Mega-Ponzi Scheme, was an amature, a piker,a schmuck who couldn't pass along the blame to his heirs and assigns. He is in prison while the biggest criminals walk away with golden umbrellas to enrich them in retirement. Something is wrong with this picture.
When a cancer has metastasized into every organ of a body. where does one start surgery? Inravenous drips of placebos placate the patient for the moment. but when the orderly comes through the door with the patient's name on a toe tag, faith in the treament has to wane. Can it be that we have allowed ourselves to be destroyed by ourselves? Appearing more like that every day. Euthanasia is looking better and better. Where do I sign up ?
Thanks. This explains a lot. but it has flaws as well. It is absolutely false that public employees are swimming in gravy. Their salaries are reasonable, and so are their pensions. It is, to be polite about it, just humbug to blame state employees, even unionized ones, for the mess States are in. the solution to these problems are going to have to involve things that are not even mentioned, much less discussed in this article. For example,even though the two-thirds majority widely required for tax increases is mentioned, this un/anti democratic requirement is one of the main causes of the debt/deficit crisis in the States, and the absence in almost every State of State income taxes is another.
Still, this is an informative, if incomplete, article. Again, thanks.