August 20, 2010

Obama is Expanding the Federal Workforce While the Rest of the Economy is Contracting

"If one understands that socialism is not a share-the-wealth programme, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs. Communism or, more accurately, socialism is not a movement of the downtrodden masses, but of the economic elite." - Gary Allen, None Dare Call It Conspiracy, Concord Press, 1971

Obama's Recession Plan: More Bureaucrats

The Hill
February 16, 2010

As hard-working Americans struggle through one of the worst recessions in U.S. history, one part of the country remains recession-proof: Washington, D.C.

Even though federal tax revenues are down 20 percent and the national debt has ballooned to $12 trillion, President Barack Obama and his allies on Capitol Hill continue to believe that we can borrow and spend our way to prosperity. As part of that plan, they’re using our hard-earned tax dollars to increase the size of government and the salary of bureaucrats.

While the private sector has lost a total of 7.7 million jobs during the past two years, the ranks of the federal bureaucracy have swelled by nearly 10 percent. Furthermore, while the average salary in the private sector is $40,331, a typical federal worker earns $71,206. Worst of all is the explosion of government salaries at a time when most taxpayers are struggling to make ends meet.
According to an investigative report by USA Today, the proportion of “federal employees making salaries of $100,000 or more jumped from 14 percent to 19 percent during the recession’s first 18 months – and that’s before overtime pay and bonuses are counted.”
Since the recession began in December 2007, the U.S. economy has been shedding jobs at its worst rate since the Great Depression. But you would never know it if you worked “inside the Beltway.” When the economy turned south two years ago, the Department of Defense had 1,868 employees earning $150,000 or more. Today, there are 10,100 employees at the Pentagon taking home that salary. At the start of the economic slump, the Department of Transportation had only a single career employee earning more than $170,000. Today, there are more than 1,600 career federal workers at the DOT making that amount. Obama has recommended an additional 2 percent pay raise for 2010. That’s unconscionable.

The time has come for Washington to live within its means. If most Americans are coping with a weak economy by tightening their belts, our public servants can to do the same. That’s why I am calling for a salary freeze on all federal salaries above $120,000 until unemployment is under 7 percent, which should be in the next two or three years. Those who are earning three times as much as their peers in the private sector can make do until we reach that benchmark.

The only way we can rebuild our economy is to spur job growth in the private sector. It is the private sector – not government – that is the engine of our prosperity. After all, every single government job must be paid for through tax revenues – and those revenues come from the private sector. Increasing employment in the federal government is no solution at all. Indeed, by raising the price of government at a time when tax revenues are plunging at the fastest rate in 80 years, we are plunging our nation into its greatest debt crisis in history.

According to the president’s own budget, we will add $9 trillion in government debt over the next decade, bringing the total national debt to $21 trillion. That doesn’t even include the Democrats’ health care bill which – if passed – will cost at least hundreds of billions more. That is the economic equivalent of medical malpractice, and it must stop.

If we freeze the pay of the highest-paid federal employees – including members of Congress – it won’t eliminate our deficit overnight. But it will send a powerful message to the folks in Washington that they work for the taxpayers; not the other way around.

The bureaucrats might complain if the freeze drags on year after year. But my response is simple: If you want a raise, help the private sector start hiring people again. If you want more money, do something about unemployment.

This is an issue where conservatives will naturally take the lead, but we invite Democrats and independents to join us, as well. All Americans can rally around this common-sense issue which is about establishing fairness, accountability, and restoring fiscal sanity to the federal government.

Now is the time for action.

Federal Hiring Burdens Taxpayers

Citizens Against Government Waste
May 4, 2010

Taxpayers have another reason to worry about the wastrel federal government. A new Gallup poll showed that federal hiring outpaced private sector-hiring for the month of April. According to the poll’s written analysis,
“By almost a 2-to-1 margin, federal employees say their employer is hiring rather than firing, giving the federal government a relatively robust +18 Job Creation Index for April. (Federal workers make up about 5 percent of the sample of workers Gallup interviewed in April.) . . . The Job Creation Index among private-sector and other non-government workers is +9.”
Taxpayers have reason to be concerned about the hiring of more federal workers. A recent survey of federal and private-sector pay by USA Today confirmed that the feds overcompensating their workers; average federal salaries exceeded average private-sector pay in 83 percent of comparable occupations.

Unfortunately, taxpayers are not only burdened with paying monstrous federal salaries, but also must underwrite exorbitant benefit packages that continue for decades after an employee leaves a job.

According to an April 5, 2010 article,

“According to the Bureau of Economic Analysis, average health, pension and other benefits tally up to $40,785 per federal worker — compared with just $9,882 per private worker.”
Among the problems with this, is the fact that the federal government does not have “profits” it can use to pay its workers more money. The government must raise taxes on the hardworking public to pay these increases, or borrow the money. The federal government is currently operating at a $1.6 trillion budget deficit and has a $12.8 trillion national debt.

For taxpayers, the one bright spot in the Gallup poll was the fact that state and local governments are downsizing. According to the poll’s written analysis,
“This contrasts with Index values of -28 among state and -26 among local government workers (about 7 percent and 5 percent of Gallup’s workforce sample, respectively).”
Another recent development in the private/public pay issue according to a May 4, 2010 article written by Josh Barrow of the Manhattan Institute is that private wages are on the rise. According to Barrow,
“The first quarter of 2010, private employee compensation growth outpaced state and local government employee compensation growth.”
While this is good news, it will be some time before the private-sector catches up to the public’s extravagant wages and, unfortunately, it seems that public employees’ wages will not ever decrease markedly.

Sadly, state and local governments have been known to inflate salaries and benefits, just like the federal government. An article by Fred Barnes in the May 3, 2010 edition of The Weekly Standard highlighted the alarming fact that 20 million people work for state and local governments and an additional three million have retired with pensions. Barnes cited the U.S. Bureau of Labor Statistics data showing that state and local government salaries are 34 percent higher than those for private sector jobs and benefits are 70 percent higher than the private-sector. The Weekly Standard also reported that,
“In Contra Costa, California, the final salary of one fire chief, 51, was $221,000. He was given an annual, guaranteed pension of $284,000. Another chief, 50, whose final salary was $185,000, got a pension of $241,000.”
Until the federal, state, and local governments can tamp down the inflation in salaries and benefits to reasonable levels and cut excessive spending, taxpayers should continue to cringe every time they hear that the government is hiring.

Jobless Millions Signal Death of the American Dream for Many

The Guardian
August 5, 2010

Richard Gaines is one of the best-known faces on Camden's Haddon Avenue. It is a rough-and-tumble street, lined with cheap businesses and boarded-up houses, and is prey to drug gangs. Gaines, 50, runs a barbershop, a hair salon and a fitness business. He works hard and is committed to his community. But Haddon Avenue is not an easy place to make a living in the best of times. And these are far from the best of times.

Just how badly the great recession has struck this fragile New Jersey city, which is currently the poorest in America, was recently spelled out to Gaines. In happier times – whatever that might mean for a city as destitute as Camden – local businesses on Haddon Avenue could at least rely on a bit of trade from those who made their money on the street.

Young men bought flashy clothes and got sharp haircuts and always paid in cash. But no longer. The economy is now so bad in Camden that even the criminals are struggling and going short.
"Even the guys who got money from illegal means really don't want to spend it," Gaines said.
Such a development, though, is just a snapshot of the deep problems still hitting the wider American economy. Growth rates are stuttering and a recovery is struggling to take hold. It may even now be showing signs of going backwards again, as countries such as Germany start to power forward. Joblessness has taken hold in America, with the numbers of long-term unemployed reaching levels not seen since the Depression of the 1930s. The figures are frightening and illustrate a society that remains in deep trouble.

The headline jobless figure of 9.5% is bad enough but does not begin to convey the problem as it fails to measure those who have stopped looking for work. Over the past three months alone more than a million Americans have fallen into that category: effectively giving up hope of finding a job and dropping out of the official statistics. Such cases now number some 5.9 million and their ranks are likely to grow as millions more find their jobless status becoming a permanent state of hopelessness. Surveys show that with each passing week on the dole their chances of finding a job get slimmer.

Though corporations, especially in the banking sector, are posting healthy profits, they are not hiring new workers. At the same time, government cuts are sweeping through city and state governments alike, threatening tens of thousands of jobs and slicing away at services once thought vital. Schools, street lighting, libraries, refuse collection, the police, fire services and public transport networks are all being scaled back.

America appears to be a society splitting down the centre, shattering the middle class that long formed the cultural bedrock of the country and dividing it into a country of haves and have-nots.
"A once unthinkable level of economic distress is in the process of becoming the new normal," warned Nobel-prize winning economist Paul Krugman in a recent New York Times column. Or, as Steven Green, an economics lecturer at Baylor University, put it to the Observer: "We are really in a tough spot right now."
There is a new name for those falling down the black hole of joblessness that has opened up in America's economy. They are the 99ers.

It is a moniker that no one wants. It refers to the 99 weeks of benefits that the jobless can qualify for in America. Government cash helps those laid off keep a tenuous grip on a normal life. It keeps a roof over their heads, pays a phone bill, puts food on a table and petrol in a car. But once the 99 weeks are up the payments stop – as is happening now for millions of people – and they are 99ers.

For many, that moment, which America's politicians have refused to extend, represents the moment of destitution; a sort of modern American version of the old Victorian trip to the workhouse. There are now more than a million 99ers and the number gets bigger each week.

But who are they? Despite Republican attempts to paint them as feckless or job-shy, they are usually anything but. The 99ers are people like Anne Strauss, 58, who spent 35 years working as a PR professional on Long Island. Despite spending every day hunting for work, she has not had a job since June 2008. She and her husband are now living on credit cards watching debts mount as they stare into the abyss.
"Looking for a job is the hardest I have ever worked," she said with a smile that conveyed no humour or happiness, only the deep stress that is common to many 99ers.
Strauss, along with about 50 other 99ers, protested on Wall Street last week, demanding an extension of the benefits that could keep them out of poverty. As bankers and financiers strode into the flag-draped Stock Exchange they chanted: "Shame! Shame!" and told their stories. It was a litany of middle-class lives shattered by the recession. There was Connie Kaplan, a corporate librarian who was desperate to resume her career.
"We are not bums, we are hardworking," she said.
Or Lori Ghavami, a New Jersey financial analyst in her 30s, who had once worked on Wall Street itself and now was staring at landlords' bills she was scared she could not pay. Or New Yorker Steven Bilarbi, 62, who had worked for the same employer for 37 years, until 2007. He has not worked since, despite refusing to spend daytime hours at home and engaging in a permanent job hunt. He is now living off savings and depleting his pension.
"I go to job fairs. I don't feel like staying home. What would I do? Watch game shows and soap operas?" he fumed.
Meeting 99ers is to tap into a deep well of anger at lives that have been knocked off course, shattering the enduring vision of the American dream that many had felt they had achieved. Just take Donna Faiella, a 53-year-old New Yorker who lives alone in Queens. She spent 28 years working in film post-production and video-editing. She was successful and had a career. Now she is desperate for a job, any job. But she cannot find one.
"I will do anything. I will sweep floors. You think I look forward to collecting unemployment? It is fucking degrading," she said, almost quivering with anger.
Faiella is in dire trouble. Joblessness has eaten away at her sense of identity.
"I feel like we are worthless. We are lost in the world. I don't know what to call myself. I don't have a title any more. What do we do? What do we do?" she implored.
Faiella has one week of benefits to go. Then her 99 weeks will be up. She will have a title again. But not one she expected. She will be a 99er.
"I am petrified. Do I become homeless?" she said, adding that she has begun making inquiries at local shelters.
If the 99ers are coming to symbolise a human segment of society that America is slowly abandoning to its fate, then Camden is the geographic expression of that marginalisation. Large stretches of the once bustling river port city seem to epitomise urban blight. Vacant lots and burned-out abandoned houses line many of its streets.

Its 79,000 residents have the lowest median household annual income of any city in the US at just $24,000 (£15,000). In terms of crime rates it was the nation's second-most dangerous city last year. Some estimates reckon that about a third of Camden's houses are empty. A third of its people are in poverty and a fifth are unemployed.

It is a deeply grim picture and it is getting worse. Camden's city government is facing the prospect of massive cuts as its cash-strapped resources have run out and it has built up huge debts. Services have already been cut and only a last-minute rescue last week saved Camden's three public libraries from being closed.

In a city that has had it tough for decades these are hammer blows to its residents. One woman who has watched in dismay as the recession unfolded outside her door is Dorothy Allen, 81, who has lived near Haddon Avenue for almost four decades. Known by almost everyone as "Mom", she calls herself "the mother of the block". She has never known anything like the area's current troubles.
"I have been here since 1971 and it's the worst it's ever been," she said.
Yet to listen to America's politicians many would think recovery is just a matter of time. Yes, they say, the recession has been hard, but America will pull through and everything will be as it once was. Last week New Jersey senator Robert Menendez visited Camden, stopping at a local health clinic. He spoke of the achievements of the Democrats in staving off economic disaster.
Job creation was coming, he told his audience of health executives: "It is not going fast enough to get people back to work but it's a dramatic turnaround."
It does not feel that way for millions of Americans all across the country. Camden is far from unique in slashing its services. In Colorado Springs more than a third of street lights have been switched off to cut the municipal electricity bill. The city has also sold off its police helicopters.

In Hawaii schoolchildren were told to stay at home for 17 Fridays to save costs. In a suburb of Atlanta local bus routes were closed, at a stroke wiping out public transport for thousands of people who relied on it to get to precious jobs.

Whether it's the poor of Camden or Colorado Springs or Atlanta, or among the growing throngs of the 99ers, millions of Americans are discovering that working hard, doing the right thing and obeying the rules are no longer enough.

Back at the 99er rally on Wall Street, Anne Strauss felt that way. During her working life she had refused to claim benefits to which she was entitled as she thought she was doing just fine. Now, as a newly minted 99er, she was looking for help from the country that she had always believed in. But the help was not forthcoming. It is hard to see how the version of the American dream that Menendez described could now ever apply to her. For Strauss, living on credit, desperate to work, but with no job in sight, that dream looks a thing of the past, not the future.
"This is not the country I grew up in," Strauss said.
Alexandra Jarrin, 49, worked for a small technology company near New York City, earned $56,000 a year, had petrol in her car and a roof over her head. She was enrolled in a graduate business school. Then, two years ago, she lost her job. She received her last unemployment payment in March, putting her among the first wave of "99ers" who have come to the end of their 99 weeks of entitlement to benefits. When interviewed by the New York Times, she was living in a motel in Brattleboro, Vermont, having paid $260 she managed to scrape together from friends and from selling her living-room furniture – enough for a week-long stay.

She said she wept as she left her old life.
'I thought, you know, what if I turned the wheel in my car and wrecked my car?'
Her vehicle is now on the verge of being repossessed. Jarrin has contacted her local shelter, but was told there was a waiting list.
"Barring a miracle, I'm going to be [sleeping] in my car," she said.

Obama Stimulus: $1 Trillion, 600,000 Government Jobs and Few Media Questions

With a forecasted $1 trillion deficit for the foreseeable future, mainstream media hit and miss on just how much government will expand under current proposals.

Business & Media Institute
January 7, 2009

The words “economic stimulus” have a certain appeal to them because, after all, who wouldn’t want the U.S. economy to be stimulated?

But, as the country is nearing his inauguration on Jan. 20 and the inevitability of President Barack Obama’s stimulus project looms, many in the news media have neglected to determine the who, what, when, where, why and how much aspects of the stimulus.

Even before Obama is able to sign a economic stimulus package into law, as most are expecting, the Congressional Budget Office is reportedly expecting a $1 trillion deficit, more than double what it had forecasted in September, according to an article in the Jan. 7 Wall Street Journal.

And despite the staggering deficit figures, some are spreading fear that the economy will come crashing down if immediate, drastic – and expensive – action is not taken. One example is New York Times columnist and Nobel Prize-winning economist Paul Krugman, who in his Jan. 5 column detailed his “nightmare scenario”:
“It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious,” Krugman wrote. “As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it’s only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy — well, you can see where this is going.”

“So this is our moment of truth,” Krugman continued. “Will we in fact do what’s necessary to prevent Great Depression II?”
‘Creating or Saving 3 Million Jobs’

While the pundits have wanted the government to shoot first, then ask questions later, they’ve sounded the theme of restoring jobs to rescue the ailing economy.

Obama has repeatedly said he sees the stimulus as a means of “saving or creating 3 million jobs.” Even on Jan. 7, at a press conference naming Nancy Killefer the Treasury Department’s first “chief performance officer,” a position created to track government spending, he told reporters the stimulus, or “economic recovery and reinvestment plan,” would require “dramatic investments to revive our flagging economy – save or create 3 million new jobs, mostly in the private sector.”

However, only a report by ABC’s Jake Tapper on the Jan. 5 “Good Morning America” pointed out the magnitude of “saving or creating 3 million jobs,” as Obama has explained on repeated occasions.
“Obama’s team is pitching a plan that will cost between $675 billion and $775 billion, one that creates three million jobs, 80 percent of them in the private sector,” Tapper said. “But they will face skeptics.”
Tapper illustrated this same point on his blog and included Republican Senate Minority Leader Mitch McConnell (Ky.) appearance on ABC's "This Week" in his “GMA” segment.
“Well, do we really want to create 20 percent of the jobs in the public sector?” McConnell said. “That would be 600,000 new government jobs. That’s about the size of the post office workforce.”
It’s difficult for some to imagine how 600,000 jobs could be created out of thin air. Conservative talk show host Rush Limbaugh theorized that one possibility could be the reinstitution of the draft on his Jan. 5 radio program.
“Barack Obama says he’s going to create three million new jobs, 80 percent in the private sector, which means 20 percent will be government jobs. That’s 600,000 government jobs. Where is he going to be able to do that real quick? Where could you do this in a matter of months? I said you could reinstitute the draft.”
Understanding the Scope – Government’s Role in the Economy

As Tony Strika explained in a post for Seeking Alpha back in November 2008, government does account for a percentage of gross domestic product (GDP) – the standard by which the economy is measured. However, the notion government can create wealth through job growth is one often misunderstood by the media.
“Well, it’s not the way it usually works, a president-elect trying to push a legislation through Congress two weeks before he's even sworn in, but this is no ordinary time,” “CBS Evening News” anchor Katie Couric said on her Jan. 5 broadcast. “And with the economy in crisis, Barack Obama went to Capitol Hill to meet with congressional leaders and urge them to approve a stimulus package he can sign soon after he takes office. The cost of the plan could run as high as $775 billion. It would include $300 billion in tax cuts. All this aimed at creating or saving three million jobs.”
But Peter Schiff, president of Euro Pacific Capital, explained that in theory government can’t create jobs in a Dec. 27, 2008 Wall Street Journal op-ed.
“Governments cannot create but merely redirect,” Schiff wrote. “When the government spends, the money has to come from somewhere. If the government doesn't have a surplus, then it must come from taxes. If taxes don't go up, then it must come from increased borrowing. If lenders won't lend, then it must come from the printing press, which is where all these bailouts are headed. But each additional dollar printed diminishes the value those already in circulation. Something cannot be effortlessly created from nothing.”
And the same is true for job “creation” by the government – as Schiff noted. Government’s interference in the labor pool by competing with private-sector jobs or by propping up inefficient jobs through acts like the auto bailout would disrupt the marketplace and further damage the economy.
“Similarly, any jobs or other economic activity created by public-sector expansion merely comes at the expense of jobs lost in the private sector,” Schiff continued. “And if the government chooses to save inefficient jobs in select private industries, more efficient jobs will be lost in others. As more factors of production come under government control, the more inefficient our entire economy becomes. Inefficiency lowers productivity, stifles competitiveness and lowers living standards.”
$300 Billion Tax Cuts or Redistribution of Wealth?

Another key components of Obama’s economic stimulus, which the media have often alluded to, is the $300 billion in so-called tax cuts.
“Later this week, he [Obama] will be delivering what aides are calling a major address on the economy and what to do about it,” Tapper said in his Jan. 5 “GMA” report. “But first, he's coming here to Capitol Hill to talk to Democratic and Republican leaders about the stimulus package, which could include up to $300 billion in tax cuts.”
But are they really tax cuts? Depending on who benefits, they’re not, according to economist Thomas Sowell, They’re really “welfare” if given to those who don’t pay taxes, the senior fellow at the Hoover Institute at Stanford University told Fox News Channel’s “Hannity & Colmes” co-host Alan Colmes on the Jan. 5 broadcast:
SOWELL: Well, insofar as that's true, yes, but sometimes you’re giving tax cuts to people who don't pay any taxes. And that’s not giving them back their money. That's simply handing out welfare.

COLMES: But you said not federal taxes, but they pay other taxes. They pay Social Security taxes. They pay other kinds of tariffs and taxes. You’re just talking about federal income tax.

SOWELL: Well, but if that’s the case, then – then you can cut down on the Social Security tax. If you really want to give back people the taxes they’re paying. Otherwise, you're giving out welfare and calling it a tax cut.
The Ultimate Cost

Congress and the incoming Obama administration have not settled on a total price tag for the stimulus. Obama declined to assign a specific cost when ABC correspondent Jake Tapper asked him to at his Jan. 7 press conference. According to Tapper’s question, the newly branded Obama economic team has the estimated price ranging from $675 to 775 billion. But Tapper noted that an Obama memo stated that economists are pushing for the stimulus to range from $800 billion to $1.3 trillion. However, Obama told it would be on the “high end” of their estimates.

NBC White House correspondent Chuck Todd suggested the cost would be “close to $1 trillion” on the Jan. 5 “NBC Nightly News” and explained that Obama would make the case that it is “urgently needed.”
“While today was all about getting congressional leaders on board, Obama will take his campaign directly to the public with a speech on Thursday, outlining why a massive stimulus package, which may cost close to $1 trillion dollars, is urgently needed,” Todd said.
However, the urgency expressed through the network media has lacked an explanation of where the source of the financing for a $1 trillion stimulus might come from. As Arthur Laffer, founder and chairman of Laffer Associates and a former member of the Reagan administration’s Economic Policy Advisory Board, explained – the money has to come from somewhere and that what a lot of people are missing, especially the media.
“You can’t bail someone out of trouble without putting someone else into trouble and the federal government doesn’t have a tooth fairy,” Laffer said on CNBC’s Jan. 5 “Fast Money.” “And every dollar of tax rebate or stimulus, whatever you want to call it has to come from the taxpayer sooner or later. And that’s going to hurt the economy.”
Laffer blamed both sides of the aisle for not making this realization and noted just how much the national debt has expanded.
“And frankly, they’ve pushed this national debt – it’s not just the Democrats, it’s the Republicans as well, they’ve been sort of clamoring for this as well,” Laffer said. “They’ve pushed the national debt to almost 100 percent of GDP.”
Alternative Proposals

Although they have not gotten a lot of broadcast network media coverage, there have been some alternative options for economic stimulus.

Laffer has proposed an across-the-board income tax holiday, which he claimed would stimulate economic growth.
“If you wanted to do a temporary targeted stimulus package, why don’t you do this – the national income tax, federal income tax is about $1.4 trillion projected for next year, a little less than that,” Laffer said. “Just imagine if we said for the next six months – Jan. 15 through July 15 – there will be no income taxes on anybody who earns income during that six month period – could you imagine the boom that we’d have during that six month period? That’s what you really want to do, is make tax rate reductions, so people want to work more, produce more hire more and buy more during that period.”
Some critics argue that wouldn’t be an effective stimulus, just as those that oppose the Obama tax cuts, because not everyone pays income taxes. Rep. Louie Gohmert, R-Texas, proposed a two-month tax holiday, which would include not just personal income taxes, but also FICA (Federal Insurance Contributions Act) taxes – Social Security, Medicare, etc.

That proposal won the favor of former GOP House Speaker Newt Gingrich, but there are doubts as to whether or not Gohmert’s plan would work. Business & Media Institute adviser Dr. Gary Wolfram, the William Simon Professor of Economics and Public Policy at Hillsdale College in Hillsdale, Mich. criticized by calling it “a Keynesian sort of idea.”

Repeating Japan’s Mistakes

The media should be showing how government stimulus doesn’t work, as Japan found out in the 1990s.

At the end of the 1980s, the Japanese economy experienced an asset bubble, which resulted in the crashing of their economy. To remedy the situation, the Japanese government employed a Keynesian strategy to stimulate their economy.
“Between 1992 and 1995, Japan tried six spending programs totaling 65.5 trillion yen and cut income tax rates during 1994,” Benjamin Powell wrote for the Ludwig von Mises Institute. “In January 1998, Japan temporarily cut taxes again by 2 trillion yen. Then, in April of that year, the government unveiled a fiscal stimulus package worth more than 16.7 trillion yen, almost half of which was for public works. Again, in November 1998, another fiscal stimulus package worth 23.9 trillion yen was announced. A year later (November 1999), yet another fiscal stimulus package of 18 trillion yen was tried.”
As Powell explained, the Japanese remained persistent with their repeated efforts to stimulate their ailing economy.
“Finally, in October 2000, Japan announced yet another fiscal stimulus package of 11 trillion yen. Overall during the 1990s, Japan tried 10 fiscal stimulus packages totaling more than 100 trillion yen, and each failed to cure the recession.”
It didn’t work, as former senior vice president and director of research for the Federal Reserve Bank of San Francisco Michael Keran explained in a release issued by House Minority Leader John Boehner’s office on Jan. 7.
“Japan in the early and mid-1990s engaged in major fiscal stimulus focused on infrastructure projects with deficits equal to 7-8% of GDP and a cumulative Debt/GDP of almost 150%. None of this led to economic recovery until the late-1990s when the Bank of Japan engaged in quantitative easing of monetary policy and the Government of Japan finally introduced a taxpayer bailout of the banks. The Fed and Treasury in the US have already taken such actions. The Japanese experience suggests that additional fiscal stimulus will only add to the Debt without helping the economy.”
This has gotten very little attention from the broadcast network media, with exception of former Bush adviser, Fox News Channel’s Karl Rove, who appeared in an interview on NBC’s Dec. 2, 2008 “Today.” “Today” co-host Matt Lauer referenced a Nov. 28, 2008 Wall Street Journal piece Rove wrote that used the Japan example and asked him if he thought Obama’s stimulus was destined to fail.
“He [Obama] laid some broad outlines, giving money to states in infrastructure spending and couple of other items,” Rove said. “And look, federal highway dollars, one out of every four federal highway dollars are spent in the year that they’re appropriated. Three out of four are spent years and years later. Japan put a half a trillion dollars into infrastructure spending in the decade of the ‘90s and it didn’t work in stimulating their economy.”
To give you an idea of the kind of job losses that have taken place since the Democrats took control of Congress, the American Observer created the following video (h/t Gateway Pundit):

Prez-Elect Makes New Pitch, Promises on Job Creation -- Including 600,000 New Government Employees

ABC News Blog
January 3, 2009

In his radio address today, President-elect Obama uses some new language when discussing what he wants the stimulus package to achieve in terms of jobs. First off, he has a name for the package -- the "American Recovery and Reinvestment Plan."

The president-elect says he wants to "create three million new jobs" -- this is a change from a few weeks ago, when he said he wanted the plan to create OR SAVE two million jobs.

He says the "No. 1 goal of my plan ... is to create three million new jobs, more than 80 percent of them in the private sector.”

If you do the math: 20 percent of three million means 600,000 new government employees.

Watch the address above or read the text HERE.

Unemployed? Need a Job? The Federal Government is Always Hiring

Fine-Tuned Finances
April 10, 2009

As of April of 2009, the unemployment rate is officially sitting around 8.5%. Some would argue that the methodology used by the Department of Labor to calculate those statistics is flawed and the true unemployment rate is much closer to 13%. Whatever the case somewhere between 1 and 8 and 1 and 12 American workers are without jobs. Others are forced to take part-time work or two-part time jobs instead of getting one full-time job.

We will probably see some sort of economic turnaround during the second half of 2009, but that doesn’t give much comfort to those who are currently unemployed. If you are currently without a job, there’s one employer that’s hiring all around the country that you might not have considered, and it really shouldn’t be much of a surprise at all. It’s the Federal Government.

As the size of the government grows, there will be a need for more federal employees. There are also going to be a lot more federal employees that retire in the near future as the baby-boomer generation retires. Many of these employees were first hired back in the Great Society Initiatives that President Johnson started back in the 1960′s. Since federal jobs can often be very lucrative, many of the people that started working for the federal government never quit their jobs. Since many of these people will be retiring in the next decade, there will be some great jobs to be found.

Currently the federal government has a cap of 2 million non-military civilian federal employees. This was placed hen the United States had a population of 200 million. Currently to get around that limit, the Federal Government has been using a large number of contractors to do the work that it can’t hire the people to do. It’s anyone’s guess as to whether or not that limit will be lifted in the near future, but if it is, there will likely be a surge in federal hiring.

If you’ve applied for work in the private sector before, you’re going to find that navigating your way through the hiring process with the Federal Government is extremely confusing. If there’s anyone you know, whether it be a friend, a family member or a member of your local church that’s already in the local system, it would be well worth your time to sit down with them and ask them how the process works.

Federal Employees Earn 30 to 40 Percent More than Private-Sector Workers, Study Finds
August 10, 2010

Federal employees earn 30 to 40 percent more money than their private sector counterparts on average, a study from the conservative Heritage Foundation finds. These pay discrepancies persist despite the recession, unlike the situation in the private sector, where unemployment is 9.5 percent and wages have steadily declined.

The report comes on the heels of a new unemployment numbers showing another month of anemic job growth in the midst of President Obama’s “Recovery Summer” tour, where he is highlighting what he calls signs of economic recovery.

Those still employed are better off working for the federal government, the Heritage report found, where they could earn salaries 22 percent higher than their privately employed peers and benefits that are far more generous than those in the private sector.

The report found that in the private sector, wages are closely tied to productivity.
“Businesses that pay wages below the associated level of productivity lose quality employees to competitors paying higher wages,” the report stated. “Businesses that pay workers more than their productivity lose customers to competitors with lower prices because of lower costs.”
While the government portends to peg its pay rates to market wages, in practice federal wages often bear little resemblance to private sector wages in similar jobs.

The biggest culprit, according to the report, is the federal General Schedule (GS) pay scale, which determines the salaries of 70 percent of the federal workforce. Each of the 15 GS pay grades has 15 incremental steps, each earning slightly higher wages with wide ranges in pay depending on the step. For example, a college-educated, entry-level GS 7 position earns an average of $42,209 at step one. By step 10, a GS 7 level employee would earn an average of $54,875 per year, not counting benefits.

Advancement is achieved through seniority, with some positions offering so-called career track advancement, where an employee is promoted annually to the next pay grade until they reach the maximum. Commonly, this is done over a three year period – from a GS 7 grade to a GS 9 grade, for example. Once the employee reaches the maximum pay grade for their job, they can then advance through the steps based on seniority, to a maximum of 10.

Federal employees can be promoted to the next step faster based on good performance, the report noted, a metric that is not synonymous with productivity.

On average, federal employees earn 60 percent more than the average private sector employee – $79,000 vs. $50,000 respectively. Add in retirement and health care benefits and that gap grows to 85 percent.

Some of that gap is due to the fact that some federal jobs, like IRS agents and customs officials, are unique to the federal government, the study notes, so there is no private sector equivalent to compare them too.

Another factor that drives the raw average up is the fact that the government employs a higher percentage of college-educated Americans than the private sector does. Only 59 percent of private-sector workers have high school diplomas compared to the 89 percent of federal workers who do. Federal workers, the study noted, are also an average of five years older than private sector ones.
“A more skilled workforce naturally earns more than a less skilled one; education and experience increase workers’ productivity,” the study notes.
When Heritage controlled for similar occupations and employee characteristics, however, it still found a pay gap of 22 percent between federal and private sector employees.
“The federal pay system gives the average federal employee hourly cash earnings 22 percent above the average private worker’s, controlling for observable skills and characteristics,” reads the report.

“Including non-cash benefits adds to this disparity. The average private-sector employer pays $9,882 per employee in annual benefits, while the federal government pays an average of $32,115 per employee,” the study found.

The Heritage report also found that government jobs – in addition to being more lucrative – are almost impossible to lose. Despite a national unemployment rate that remained at 9.5 percent, federal employment has grown during the recession.
“Federal employees enjoy job security irrespective of the state of the economy,” the study documented. “Since the recession began, federal employment has risen by 240,000 – 12 percent. The unemployment rate for federal employees has only slightly risen from 2.0 percent to 2.9 percent between 2007 and 2009.”

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