Cato’s Dan Mitchell brings us the next lesson from the Center for Freedom and Prosperity on Econ 101, only this time we’re talking about government economics. For those people who work in the federal government, the recession never really happened. Not only has hiring remained constant and growth continued, the average compensation for federal employees also continued to rise while private-sector employees lost jobs and wages. Average wages for the federal sector now outstrips that of the private sector by well over 50%, but when also allowing for better benefits and tight job-security rules, the gap goes to double that of the average private-sector employee. That’s good news … for those in favor of big, bloated bureaucracies:
The wages and benefits aren’t the real problem, however. The pension plans are “ticking time bombs,” thanks to somewhere between one to three trillion dollars in underfunding the pensions. That’s true on the federal and state levels. Also, note where six of the ten richest communities are located in the US, and why.