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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (46676)	10/24/2010 1:31:52 PM
From: Peter Dierks	1 Recommendation Read Replies (1) \| Respond to of 71588

Public-Sector Unions Choke Taxpayers By John Stossel October 20, 2010 "I thought unions were great -- until at Chrysler, the union steward started screaming at me. Working at an unhurried pace, I'd exceeded 'production' for that job." That comment, left on my blog by a viewer who watched my Fox Business Network show about unions, matches my experience. No one ordered me to slow down, but union rules and union culture at ABC and CBS slowed the work. Sometimes a camera crew took five minutes just to get out of the car. Now unions conspire with politicians to rip off taxpayers. Steve Melanga of the Manhattan Institute complains that politicians get union political support by granting government workers generous pensions and health benefits. After those politicians leave office, taxpayers are liable for trillions in unfunded promises. "It's squeezing out all other spending," Melanga says. "Where are we going to get this $3 trillion dollars? ... When they're (government workers) allowed to retire at 58 and the rest of us are retiring at 60 and 67 -- and by the way we're living to 80 -- it's crazy. The public sector is the version of the European welfare state which, by the way, in Europe, they're actually rolling back." John Gage, president of the biggest federal workers union, the American Federation of Government Employees, disagrees: "This thing about unions and the public sector and bankrupting America, that's very far from the truth. Yes, we have a problem with pensions. Basically because these pension plans haven't been properly funded." Melanga's response: "Fund public-sector pensions at a level that we can afford, (and turn) the pension system into a defined-contribution system. Public-sector employee unions and states have refused to do that." A defined-contribution plan is like your 401(k). Your pension benefits depend on how well your investments do. State and local unions, by contrast, have "defined-benefit" plans, which simply force taxpayers to send retirees a monthly check. Gage doesn't like Malanga's suggestion: "Can you imagine working 30, 35 years ... and (with) what just happened with the (stock) market, suddenly you're left holding nothing?" I don't think they'd be holding "nothing." Yes, the market crashed, but the Dow is still above 11,000. Twenty-eight years ago, it was below 800. That's up more than 1,000 percent. Over time, 401(k)s provide a decent retirement. When I said that we in the private sector have such plans, Gage responded, "Only because of the laws in this country which make it almost impossible for private-sector workers to organize and to have a union. ... (W)ithout unions, we'd have a 'race to the bottom.'" But this makes no sense. Do all employers move to Mexico because wages are lower there? But many viewers side with Gage: Grover said: "Stossel's take on Unions is nothing but appalling. According to him, workers have no rights. Workers are the ones who make a company profitable, not CEOs. In Stossel's slanted view, worker's are dirt and don't deserve anything." Jakob wrote: "Are you really this stupid? Do you really want to lower American workers' standards to that of Honduras and China, where democratic unions do not exist? Would you like for us to go back to a time in America before we had unions? When children worked in factories for 14-hour days and health and safety standards simply did not exist?" These are popular views. But they are wrong. Factories are safer because of free markets. Companies want better workers and must compete to get them. Free markets create wealth that permits parents to send their kids to schools instead of factories. Unions once helped to advance working conditions, but now union work rules mostly retard growth and progress. Many workers understand that, and that's why only 8 percent of private-sector workers still belong to unions. In the private sector, wage and pension demands are tempered by competition. If one company pays too much, a competitor takes his business. But governments are monopolies. They face no competition and get their money by force. So they can conspire with public-sector unions to milk taxpayers. That explains the fix we're in today. Something's got to give. realclearpolitics.com

To: Peter Dierks who wrote (46676)	10/24/2010 1:40:52 PM
From: Peter Dierks	1 Recommendation Respond to of 71588

U.K. Makes Big Cuts — Why Can't We? Posted 10/20/2010 07:05 PM ET Government Spending: You've got to hand it to David Cameron, the U.K.'s conservative prime minister. He's taken a sharp ax to Britain's budget and seems intent on cutting it down to size. It's a lesson for us to learn. Alarmed at the rapid deterioration in Britain's finances, the newly elected Tory government has announced plans to reduce spending by about $130 billion by taking the meat ax to such sacred cows as public housing, welfare, prisons, higher education, flood control and sports programs. Even-larger long-term cuts will come from the 500,000 jobs sliced from public payrolls by 2015, according to the appropriately named Office for Budgetary Responsibility. That's an enormous reduction in the U.K.'s notorious welfare state. Expect the usual wailing and gnashing of teeth — the Labour Party has already called the cuts a "reckless gamble." But Britain had no choice. Its debt has piled up to an ominous level, and the country fears the same kind of panic-induced budget slashing that has taken place in Italy, Greece, Spain and Ireland. Better to do it now than be forced to do it later. That said, why aren't we doing the same thing here? Our anticipated deficits of $1 trillion a year through the next decade are due to excessive spending. This spending surge will increase our debts from a large but manageable $7.5 trillion at the end of 2009 to $20 trillion or more by 2020. Our debt-to-GDP ratio will soar from just above 50% today to 90% — a debilitating level that most economists agree is unsustainable for the long term. The thing is, fixing this wouldn't even require the major cuts seen in Britain. Just a little bit of willpower. Over the next decade or so, based on Congressional Budget Office projections, federal spending will increase 5.8% a year on average, from $3.49 trillion in 2010 to $5.86 trillion by 2021 (see chart). Revenues are expected to rise by 12.7% a year, from a depressed $2.14 trillion this year to $ 5.1 trillion in 2021. What if, instead of nearly 5.8% a year in spending growth, we let spending grow at half that rate — 2.9% a year? We did some quick, back-of-the-envelope calculations. As you can see on the chart, spending continues to grow, but we erase the deficit entirely by 2021. Yes, it will take some doing, starting with controlling entitlement spending, which is growing at an unsustainable rate of more than 6% a year. The government's own forecast shows a $107 trillion lifetime deficit for Social Security and Medicare — about two times the size of the entire world economy. But it can be done. Raising the retirement age to reflect longer expected lifetimes is one way. Another is to help people save for their own retirement through tax-free savings accounts. What's important is to get started now. That isn't the only place cuts can be made. Take the Commerce Department. It isn't needed. It has 12 agencies under one umbrella, which means lots of useless bureaucratic overhead. Some of its functions — the census, for instance — are required by law. So they can become independent. But there's little evidence that the Commerce Department does much of anything that couldn't be done by other government departments or the private sector. Ditto for the Energy Department. Created by Jimmy Carter, it hasn't added one kilowatt to our nation, yet it wastes billions of dollars each year. All its functions — including managing the nation's nuclear laboratories — can be done better by others. How about the Education Department? It's not responsible for educating a single student. In fact, since its advent it has played a major role in the degradation of American schools. Yet rather than give it less money, we give it more, as if money were no object. In short, government can be shrunk in lots of ways without making a difference in how we live. By making cuts now, we can avoid turning our government into an oppressive leviathan while staving off a debt-induced financial collapse. investors.com