I have not had time to post some recent data on the growing chasm between public and private worker pay in the US, but I still plan to do it as this is a theme we’ve been pounding the table on since blog inception in 07… [Dec 16, 2007: California in a State of Fiscal Emergency - Coming to a Theater Near You] Much like many of its people who have spent far more than they take in, the politicos at the state level act no different than the politicos at the federal level. Spend what you have today, and never assume a rainy day in the future. Since the state and city level budgets cannot be solved by more and more borrowing, there is only one ultimate solution. Full subsidization by the federal government, who not only is running massive deficits of its own – but in the end game, will be the vessel for states to run deficits. [May 5, 2009: Federal Aid Surpasses Sales Tax as Top Revenue Generator for States] We are now officially at that point as some of the states have run out of accounting gimmicks to paper over deficits.
I tried to be generous in the title of this specific piece since it’s the holiday season, but it really should be something akin to "private workers of country asked for bailout to subsidize early retirement and generous benefit packages for public workers of California." Or "taxpayers in Idaho asked to pay for imbalances in California." In LA alone, pension payment will be sucking up 1 in 3 (yes, you heard that right) of all revenues in half a decade. Leaving the other 2/3rds for minor things like… running the 2nd largest city in the nation. [Aug 11, 2009: LA Times - Amid Cost Cutting, Los Angeles City Pensions Continue to Soar] These are the type of things the nation is being asked to subsidize via these "stimulus plans" and whatever the Governor is asking for now.
- •"We should never, ever design a pension formula that provides more for a person when they
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.
