More Highly Paid Federal Employees

November 14, 2010

Here we go again with another report on federal government employee pay outpacing pay in the private sector. A recent analysis from USA Today notes the following bit of information:

The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office.

For example, the report notes that the number of federal employees making $150,000 in 2005 was 7,420; in 2010, it is 82,034. This is in light of previous news that the average federal employee was making double the compensation of the average private sector employee.

All of this occurs at a time of economic stagnation where the unemployment rate remains near 10 percent and the federal debt is near $14 trillion. Never forget the fact that taxpayers, the same taxpayers who are making less on average, are the ones paying for all of this.

The term ‘public service’ has often been used in the past to imply that government employees are making a sacrifice to serve the public. Perhaps, in light of these trends, the term should be scrapped.


Employment: Growth in Federal Government, Decline in Private Sector

August 15, 2010

Below is a recent graphic from the Heritage Foundation displaying a stark visual demonstration of the growth of federal government employment compared to the decline of employment in not only the private sector but also state and local governments. What is particularly noteworthy is that it doesn’t even include temporary census workers.

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State Unemployment Funds in Crisis

May 12, 2010

ProPublica has been keeping track of what it deems a “crisis” in state unemployment insurance funds. Here is chart showing the shape of each state:

As I’ve noted before, in some states federally-sponsored unemployment can now include up to 99 weeks. One point they make is that several states are borrowing money from the federal government (money it doesn’t have) to help pay for their part of unemployment funding. More details on this situation from ProPublica are available here.


Subsidizing Unemployment

April 21, 2010

Coincidently or not, President Obama signed a further extension to unemployment benefits on April 15, Tax Day — a move that will cost more tax money. The bill extended some individuals’ benefits to a whopping total of 99 weeks (quick math: That’s nearly two years).

Though initial state unemployment benefits are funded through taxes on employers, federal extensions like this one are funded by the U.S. Treasury (read more details here). Translation: taxpayers are on the hook for subsidizing more weeks of unemployment checks for millions of Americans.

Though earlier this year, the idea of “paygo,” paying for new spending as it is voted on, was agreed on, The New York Times notes the following

… the Senate resolved a stubborn (emphasis added) impasse, deciding the $18 billion cost of the measure could be added to the deficit.

Since when is insisting on actually paying your bills considered “stubborn”? Since politicians decided they could win votes by making more individuals dependent on government subsidization.

And all of this has been done despite the earlier view of one of Obama’s chief economic advisors that unemployment insurance is an actual cause of long-term unemployment. In writing on the causes of long-term unemployment, that advisor, Lawrence Summers, observed the following:

Read the rest of this entry »


Health-Care ‘Reform’ Facts

March 20, 2010

PolitiFact, the St. Petersburg Times political fact-checking site, just recently posted what they view to be the top facts to know about the proposed health-care reform. They are posted below with further elaboration from me:

  1. The plan is not a government takeover of health care like in Canada or Britain.” This is true in the sense that it will not involve the government employing all health-care workers and providing all health-care services. However, it is a giant leap into a more heavily regulated health-care system. Some have viewed it as trojan horse to bring about a “single-payer” (government pays for it) health-care system.
  2. Insurance companies will be regulated more heavily.” I have no argument with this one. This further regulation will no doubt lead to rising premiums to cover the costs of the new government impositions. The cost to provide insurance will go up. Remember, if you want less of something, regulate or tax it.
  3. Everyone will have to have health insurance or pay a fine, a requirement known as the individual mandate.” This is also true. Leaving the paternalism in such a mandate aside, there is also a strong argument that it is unconstitutional. [picapp align=”right” wrap=”true” link=”term=health+care&iid=8281761″ src=”a/8/6/e/Speaker_Pelosi_And_4d9c.jpg?adImageId=11461241&imageId=8281761″ width=”234″ height=”155″ /]
  4. Employers will not be required to buy insurance for their employees, but large employers may be subject to fines if they don’t provide insurance.” For “large” employers (more than 50 employees), this would mean added costs to employ individuals. That would potentially mean less employment — something highly undesirable at any time, let alone a time when the jobless rate is still near 10 percent. Read the rest of this entry »

More News on the Unemployment Compensation Problem

January 4, 2010

Another new worry for the new year: increased unemployment compensation taxes for Florida employers. As I’ve blogged about previously, employers could see their taxes for this fund increase to as much as 11 times what they have been paying.

A more recent article notes the likely outcome for small businesses under this increase, predicted by an executive at a staffing firm:

The first things likely to go will be vacation time and sick leave, McLeod said. After those savings are exhausted, more layoffs may be the only option for some companies. “This increased tax is going to cost jobs, running unemployment up even higher,” McLeod said. “And 2011 will be worse on employers if something doesn’t change dramatically.”

Moral of the story: Watch out for those pesky unintended consequences of government intervention. Since unemployment is high, more funds are needed to pay for unemployment benefits. Those increased funds take money away from businesses that may have used the money to hire new employees. The result: increased unemployment and/or decreased benefits.

These unintended consequences can lead to a vicious cycle, all thanks in part to those in government who believe it is their job to fix all of our problems. In reality, their “solutions” to our problems often create new ones or at least make the current problems worse.


A Year of Bailouts

October 3, 2009

A year ago is when the whole flawed — and unconstitutional — government bailout frenzy began under the Bush administration with the Troubled Asset Relief Program (TARP). This pie chart shows where the money has gone so far:

After TARP came the auto bailouts, the “stimulus” package, Cash for Clunkers and many more dubious and economically flawed government programs to help “rescue” our economy — all under Obama. But this graph tells a lot about whether these programs helped save the economy:

graphic_unemploymentprojectionvrealitychart

The actual unemployment rate has risen well beyond the White House projections for both with and without the recovery plan. Thanks for all your help Washington!

You would think reason would tell politicians to leave things alone from now on. But to ask a politician to listen to reason is typically a complete waste of time — almost as much a waste of time as these bailouts were.