Reason: The public sector is killing the private sector
posted at 2:45 pm on March 31, 2010 by Ed Morrissey
“We’re twisting arms! We’re threatening people!” Normally, one would be tempted to call the government to stop people making these kinds of threats. Unfortunately, as Reason TV reports, those people are the government. In fact, the public sector has become the one growth industry in the Great Recession, with hardly a blip in its job expansion. But it comes at the expense of the private sector, and what’s more, it creates a permanent lobbying class for even more government expansion:
1. They cost too much. As USA Today recently noted, federal employees make on average almost $8,000 more than their private-sector counterparts. When you add in benefits, the gap spreads to about $30,000. State and local government workers make around the same as private-sector counterparts, but their health and retirement packages mean they make significantly more in the end.
2. We can’t fire them. The private sector has shed positions in response to slackening demand and the economic downturn. That sort of adjustment is painful but necessary, as it allows the economy to adjust to changing circumstances and workers and employers to move into new activities. Because it is guaranteed certain amounts of tax revenue and has a non-market mind-set, the public sector is largely insulated from such forces and keeps or even adds workers despite changed conditions. The result? We keep paying for things that we don’t use, need, or want.
3. They create a permanent lobby for expanded government and higher taxes. Look at California, where teacher unions have spent over $211 million dollars on elections in the past decade. One result is that 40 percent of California’s budget must be spent on education, regardless of the number and needs of students. Over the last 10 years, taxpayer contributions to public-sector pension funds has increased by 2000 percent!
But the entire story can be told in this chart:
As government increases, so does its reach into the lives and wallets of Americans in every walk of life. Instead of being public servants working at critical tasks, they have become the taskmasters — and increasingly unaccountable for their actions. Every mandate creates a new bureaucracy, and every bureaucracy creates a human cost when it comes time to cut it back. This is an increasingly dire cycle for Americans who value their independence and liberty.
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