4 ms·

I don't want to get in the way of some nice comfortable randian ideology, but you could at least read a wikipedia article: http://en.wikipedia.org/wiki/2008%E2

by jbooth 15y ago

I don't want to get in the way of some nice comfortable randian ideology, but you could at least read a wikipedia article: http://en.wikipedia.org/wiki/2008%E2%80%9311_California_budget_crisis http://en.wikipedia.org/wiki/2008%E2%80%9311_California_budg... The Cali budget crisis was caused by a decrease in revenue. Let me repeat that. Decrease. Similarly, federal spending on domestic discretionary (what you're complaining about) has been flat or almost-flat for a decade, while spending on defense/security has been skyrocketing. Lastly, if you want to reduce government spending on employee benefits, the first, second and third things you should think about are healthcare reform, not pensions. Healthcare costs are and have been inflating a lot faster than any other cost-of-living cost. Compound 15% over 10 years and see where that gets you.

ams6110 15y ago
As you identified, domestic discretionary is not the problem. It's likely higher than it needs to be, but it's not on an exponential curve. It's domestic entitlements that are going to bankrupt us.
- jbooth 15y ago
  Well, there's medicare, medicaid and social security. For SS, "bankrupt" is a little overblown. Adjust a percentage point or two for Social Security and it projects to be fine for like 70 years. Assuming the feds pay back the money they've borrowed from the SS trust fund. (Man, remember that "lockbox" guy? What a dweeb.) Medicare is the big problem. And the problem is costs. The government's on the hook for the old, the poor, and the too sick to get insurance, and like I said, insurance and provider costs have been increasing by 15% a year or so. We need a better system of healthcare regardless of how the accounting is done.
  - adventureful 15y ago
    Assuming the Feds pay back the stolen SS funds? In which quantum reality is that going to happen while the inbound SS funds are now in the red, while we run a $1.3x trillion deficit annually, and 10,000 new boomers retire each day for the next 15 to 20 years. America has at least $100 trillion in entitlement liabilities that can never be paid for under any circumstances. Which is why the Fed has begun to monetize as much of it away as they can without sparking massive inflation. That supposed point or two of adjustment is a purely fraudulent number from make-believe-land. SS is already bleeding out right now, prior to full scale boomer retirement. All of their accounting lies are premised on the Federal Reserve destroying your standard of living for the next 50 years to pay for the massive red ink that boomers are going to generate in SS.
  - orangecat 15y ago
    Money is fungible, so any trust fund or lockbox is an accounting fiction. SS being "fine" is irrelevant if the rest of the budget runs huge deficits, especially if raising taxes isn't viable because Social Security's (regressive) taxes are already taking so much. Medicare is the big problem. And the problem is costs. Agreed. More specifically, the problem is aging. We should do something about that.
jimmyvanhalen 15y ago
By the way, Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...
bcx 15y ago
I found that wikipedia article pretty interesting. In particular that "over 40,000 public employees in the Bay Area alone earned over $200,000 in 2009." To be fair when you look at the source data: http://www.mercurynews.com/salaries/bay-area?appSession=16339427271864&RecordID=&PageID=2&PrevPageID=&cpipage=8&CPISortType=&CPIorderBy= http://www.mercurynews.com/salaries/bay-area?appSession=1633... You'll see that many of the top paid state employees are doctors, or policemen/firefighters who get paid a ton of overtime. But you'll also notice things like the director of IT for Alameda County was paid 430,312 with a 266,760 base salary. Where as the direct of IT for San Mateo country had a base salary of 175,775 and had pay around to 330K. Which is probably market for someone like that in the Bay area, but sure seems a lot for a government position. I think it is reasonable that if salaries go up in a good year, that salaries should go down in a bad year. I'd be interested in seeing the change in government employee pay over time relative to tax revenue.
- jbooth 15y ago
  With police/fire, those numbers are a little distorted because often a lot of the overtime is detail pay, which is paid by private parties (bars, concerts, etc) after routing through the department. So it shows as a government payroll but it's not coming out of your tax dollars. And I'm sure there are plenty of idiots who got entrenched and earn more than they're worth, but that's the same in any large bureaucratic org, public or private.
- jberryman 15y ago
  This doesn't speak to compensation vs. tax revenue, but public employee compensation as a share of state expenditure has actually been in steady decline over the last two decades. http://www.americanprogressaction.org/issues/2011/03/state_budget_deficits.html http://www.americanprogressaction.org/issues/2011/03/state_b...
othermaciej 15y ago
> The Cali budget crisis was caused by a decrease in revenue. Let me repeat that. Decrease. The cited Wikipedia article says that, but it also says: "Another source has been the continuous growth in salaries and benefits of state employees during economic boom times, some of which were lobbied by trade unions." Note also that the decrease in revenue was due to falling incomes as a result of the recession, not falling rates. Spending was on an unsustainable path based on assuming that boom times would last forever.
- toyg 15y ago
  The problem with public sector pay is currently an open topic in Europe as well, exacerbated by a generalized crisis of confidence in political classes post-1990. On one side, you have a private sector that is dramatically widening the income gap thanks to globalization processes and technological advances that lower expenses, increase productivity and maximize revenue. On the other, you have a public sector that basically cannot compete for talent unless they try to align to private-sector pay levels, because in a post-Soviet "capitalism-uber-alles" world, public office does not grant much social status in itself. It's a vicious circle: the more we disparage civil servants, the less people are attracted to those jobs, the more you have to pay for lower-quality applicants. The same goes for cutting entitlements, by the way. If you can't make public office appealing in itself, you have to pay civil servants in line with any other similar job, or suffer from corruption and "revolving door" effects with a private sector they're supposed to effectively rein in. This applies even to the most high-profile positions (presidents, senators etc). Remuneration levels for US presidents or British Prime Ministers, for example, are so ridiculously low in real terms, that the office is basically seen by most career politicians as an introduction to the moneyed "conference-speech" circuit, or as a past-time for millionaires. It also makes them ripe for corruption: when somebody earning £ 150k per year has to deal with multi-billionaires, it's easy to predict how it will end.
robomartin 15y ago
Interesting article. It does not change what I said at all. Government cannot and should not exist in isolation of reality. In this case, a reduction in tax revenue was a result of a reality that caused catastrophic damage to the lives of millions of Americans and destroyed businesses far and wide. Not so if you were in government. In that case you got to live inside this protected environment at the expense of all of those who were suffering on the outside. Notice how the article you point to chronicles all of the efforts to raise tax revenue in a variety of creative ways. What is conspicuous due to its absence are the cuts. No talk about cuts. Nobody in government ever gets fired or laid-off. Why? If I have a business and times are tough I cut my spending. I might move t cut marketing. Maybe even move my operation to a cheaper location. Downsize my building. Find ways to become more efficient. And, yes, eventually, if there are not other options and sales are down, I have to lay off employees. At the personal level, if a member of the family looses her job or is hit with a reduction in income you take the same kinds of steps to achieve fiscal balance: No more Starbucks; Cheaper (or no) satellite TV plan; No more dining out; Rent movies instead of going to the theater; more camping, less hotel vacations; etc. This isn't an academic exercise for me. I've lived this. I've had to live through economic difficulties and have had to make the tough choice to let valuable people go in order to ensure the survival of my businesses. I've had to make serious personal adjustments in order to adapt to new economic conditions. You do what you have to do and come out the other end stronger and, what's more important, alive to continue moving forward. There's nothing I detest more than the fact that we have allowed government to exist in nearly absolute isolation of our realities. They are supposed to work for us. The reality is that we work for them. That is fundamentally wrong. The talk in Sacramento (and D.C.) should never be about raising revenue but rather about optimizing the available revenue and giving us the most for our money. And, yes, this should also mean adapting to economic conditions; adjusting workforce size accordingly; becoming more efficient; not entering into criminal contracts with unions; not spending more than is available --ever-- and, in general, living by the same rules everyone else has to live by. The California problem isn't a reduction in revenue. It is the combination of that along with the inflexibility of government rules, services and systems to adapt. There's more than one variable in this equation, it can't always be "revenue, revenue, revenue".

by jbooth 15y ago

ams6110 15y ago

As you identified, domestic discretionary is not the problem. It's likely higher than it needs to be, but it's not on an exponential curve. It's domestic entitlements that are going to bankrupt us.

jbooth 15y ago
Well, there's medicare, medicaid and social security. For SS, "bankrupt" is a little overblown. Adjust a percentage point or two for Social Security and it projects to be fine for like 70 years. Assuming the feds pay back the money they've borrowed from the SS trust fund. (Man, remember that "lockbox" guy? What a dweeb.) Medicare is the big problem. And the problem is costs. The government's on the hook for the old, the poor, and the too sick to get insurance, and like I said, insurance and provider costs have been increasing by 15% a year or so. We need a better system of healthcare regardless of how the accounting is done.
- adventureful 15y ago
  Assuming the Feds pay back the stolen SS funds? In which quantum reality is that going to happen while the inbound SS funds are now in the red, while we run a $1.3x trillion deficit annually, and 10,000 new boomers retire each day for the next 15 to 20 years. America has at least $100 trillion in entitlement liabilities that can never be paid for under any circumstances. Which is why the Fed has begun to monetize as much of it away as they can without sparking massive inflation. That supposed point or two of adjustment is a purely fraudulent number from make-believe-land. SS is already bleeding out right now, prior to full scale boomer retirement. All of their accounting lies are premised on the Federal Reserve destroying your standard of living for the next 50 years to pay for the massive red ink that boomers are going to generate in SS.
- orangecat 15y ago
  Money is fungible, so any trust fund or lockbox is an accounting fiction. SS being "fine" is irrelevant if the rest of the budget runs huge deficits, especially if raising taxes isn't viable because Social Security's (regressive) taxes are already taking so much. Medicare is the big problem. And the problem is costs. Agreed. More specifically, the problem is aging. We should do something about that.

jimmyvanhalen 15y ago

By the way, Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...

bcx 15y ago

I found that wikipedia article pretty interesting. In particular that "over 40,000 public employees in the Bay Area alone earned over $200,000 in 2009." To be fair when you look at the source data: http://www.mercurynews.com/salaries/bay-area?appSession=16339427271864&RecordID=&PageID=2&PrevPageID=&cpipage=8&CPISortType=&CPIorderBy= http://www.mercurynews.com/salaries/bay-area?appSession=1633... You'll see that many of the top paid state employees are doctors, or policemen/firefighters who get paid a ton of overtime. But you'll also notice things like the director of IT for Alameda County was paid 430,312 with a 266,760 base salary. Where as the direct of IT for San Mateo country had a base salary of 175,775 and had pay around to 330K. Which is probably market for someone like that in the Bay area, but sure seems a lot for a government position. I think it is reasonable that if salaries go up in a good year, that salaries should go down in a bad year. I'd be interested in seeing the change in government employee pay over time relative to tax revenue.

jbooth 15y ago
With police/fire, those numbers are a little distorted because often a lot of the overtime is detail pay, which is paid by private parties (bars, concerts, etc) after routing through the department. So it shows as a government payroll but it's not coming out of your tax dollars. And I'm sure there are plenty of idiots who got entrenched and earn more than they're worth, but that's the same in any large bureaucratic org, public or private.
jberryman 15y ago
This doesn't speak to compensation vs. tax revenue, but public employee compensation as a share of state expenditure has actually been in steady decline over the last two decades. http://www.americanprogressaction.org/issues/2011/03/state_budget_deficits.html http://www.americanprogressaction.org/issues/2011/03/state_b...

othermaciej 15y ago

> The Cali budget crisis was caused by a decrease in revenue. Let me repeat that. Decrease. The cited Wikipedia article says that, but it also says: "Another source has been the continuous growth in salaries and benefits of state employees during economic boom times, some of which were lobbied by trade unions." Note also that the decrease in revenue was due to falling incomes as a result of the recession, not falling rates. Spending was on an unsustainable path based on assuming that boom times would last forever.

toyg 15y ago
The problem with public sector pay is currently an open topic in Europe as well, exacerbated by a generalized crisis of confidence in political classes post-1990. On one side, you have a private sector that is dramatically widening the income gap thanks to globalization processes and technological advances that lower expenses, increase productivity and maximize revenue. On the other, you have a public sector that basically cannot compete for talent unless they try to align to private-sector pay levels, because in a post-Soviet "capitalism-uber-alles" world, public office does not grant much social status in itself. It's a vicious circle: the more we disparage civil servants, the less people are attracted to those jobs, the more you have to pay for lower-quality applicants. The same goes for cutting entitlements, by the way. If you can't make public office appealing in itself, you have to pay civil servants in line with any other similar job, or suffer from corruption and "revolving door" effects with a private sector they're supposed to effectively rein in. This applies even to the most high-profile positions (presidents, senators etc). Remuneration levels for US presidents or British Prime Ministers, for example, are so ridiculously low in real terms, that the office is basically seen by most career politicians as an introduction to the moneyed "conference-speech" circuit, or as a past-time for millionaires. It also makes them ripe for corruption: when somebody earning £ 150k per year has to deal with multi-billionaires, it's easy to predict how it will end.

robomartin 15y ago

Interesting article. It does not change what I said at all. Government cannot and should not exist in isolation of reality. In this case, a reduction in tax revenue was a result of a reality that caused catastrophic damage to the lives of millions of Americans and destroyed businesses far and wide. Not so if you were in government. In that case you got to live inside this protected environment at the expense of all of those who were suffering on the outside. Notice how the article you point to chronicles all of the efforts to raise tax revenue in a variety of creative ways. What is conspicuous due to its absence are the cuts. No talk about cuts. Nobody in government ever gets fired or laid-off. Why? If I have a business and times are tough I cut my spending. I might move t cut marketing. Maybe even move my operation to a cheaper location. Downsize my building. Find ways to become more efficient. And, yes, eventually, if there are not other options and sales are down, I have to lay off employees. At the personal level, if a member of the family looses her job or is hit with a reduction in income you take the same kinds of steps to achieve fiscal balance: No more Starbucks; Cheaper (or no) satellite TV plan; No more dining out; Rent movies instead of going to the theater; more camping, less hotel vacations; etc. This isn't an academic exercise for me. I've lived this. I've had to live through economic difficulties and have had to make the tough choice to let valuable people go in order to ensure the survival of my businesses. I've had to make serious personal adjustments in order to adapt to new economic conditions. You do what you have to do and come out the other end stronger and, what's more important, alive to continue moving forward. There's nothing I detest more than the fact that we have allowed government to exist in nearly absolute isolation of our realities. They are supposed to work for us. The reality is that we work for them. That is fundamentally wrong. The talk in Sacramento (and D.C.) should never be about raising revenue but rather about optimizing the available revenue and giving us the most for our money. And, yes, this should also mean adapting to economic conditions; adjusting workforce size accordingly; becoming more efficient; not entering into criminal contracts with unions; not spending more than is available --ever-- and, in general, living by the same rules everyone else has to live by. The California problem isn't a reduction in revenue. It is the combination of that along with the inflexibility of government rules, services and systems to adapt. There's more than one variable in this equation, it can't always be "revenue, revenue, revenue".