In Chapters 2 and 3 of this series, the discussion regarding money and the $350 Billion dollars COVID relief monies were discussed. As this is a continuing discussion, I would encourage you to read those missives as well for a fuller understanding of the principles being discussed. Regardless, several facts remain pertinent:
- The states accepting this money will be bound to spend it in a manner the Federal Government specifies.
- The money being given to the states as a “stimulus for COVID economic growth,” will not spur anything but inflation and poor fiscal policies.
- The strings attached to this money are a noose on individual state economic growth long after the deadline to spend the money (31 December 2026) comes and goes.
Doherty (2021) writing for the NCSL (National Conference of State Legislatures) provides some clarity on the Treasury Department’s rules and regulations regarding this $350 Billion albatross being forced down the state’s throats. The funds being discussed originate in the $1.9 Trillion American Rescue Plan Act, and the Treasury Department has released operational guidance to the states and cities receiving the funds. Never forget, while the Treasury Department claims there is an algorithm for sharing the money, politics and political connections will be the final determinant in who receives how much of the funds being doled out.
Pensions are the first point of discussion as to where these funds can go; never forget, pensions remain the largest single expense for states in the United States. Those bloated governmental salaries, negotiated by unions, and put in place by legislative fiat, keep the taxpayer on the hook for poor financial planning long after the initial beneficiaries of the union retirement pyramid scheme and dead and buried. Read carefully the pension data provided by USAToday for a full and detailed discussion on just how big the pension problem is for the states of the United States.
Just as important, look at the total number of government workers as a share of the total workforce, and you will discover just how big your state and local governments have become. For example, two states selected at random from the 50-state list, New Jersey, and New Mexico are displayed below, and sourced from the article:
- Funded ratio: 38.4%
- Total pension shortfall: $130.7 billion shortfall (3rd largest)
- Gov’t workers as share of total workforce: 13.3% (20th lowest)
- Avg. annual payout per public retiree: $32,148 (9th highest)
- Funded ratio: 61%
- Total pension shortfall: $18.2 billion shortfall (18th largest)
- Gov’t workers as share of total workforce: 18.6% (4th highest)
- Avg. annual payout per public retiree: $20,907 (15th lowest)
Consider New Jersey for a moment, if you met 100 new people in one day, more than 1/10th of those met will work for the state or local government in some capacity, and those 11 people are earning $32,148 taxpayer paid dollars a year for being retired. Worse, New Jersey is kiting checks on your children’s future to the tune of $130.7 Billion dollars every year. Raising taxes cannot help closing the funding gap in the pension. Want more news, the majority of those retired are not living in New Jersey, so all those taxpayer monies are not being recouped in sales taxes, property taxes, and other taxes.
Yet, the Federal Government just borrowed $1.9 Trillion to give the states $350 Billion, and the monies provided will not even pay a years’ worth of pension payments in most cases. Let alone pay for all the other accounts that have been stripped to pay for the pension gap. For example, infrastructure (Roads, Bridges, Highways, Broadband Internet, the Electrical Grid, etc.), Teachers, Community Colleges, Unemployment Insurance, Water and Wastewater Treatment facilities, and Health and Human Services, just to name a few cash strapped state programs.
A few days ago, I was discussing broadband Internet grids, and there susceptibility to failure with people who work for a major Internet Service Provider. In Umatilla County, as an example, the Internet either currently, or previously, went down nightly for 5-6 hours at a time. Read the outage reports and you will find regular large geographic areas of the country suffering with Internet latency and connectivity issues. Yet, your state legislators must focus not upon the potholes damaging your car, not upon shaky bridges and overpasses prone to failure, but upon pensions for retirees. All due to labor unions and promises that should never have been made in the first place!
Pensions are the number one reason I, personally, think that government workers should not be able to unionize, and that the government pensions should be as rigidly controlled as the private sectors pensions. Yet, the inverse is true, unions growing in the public sector, shrinking in the private sector, and the taxpayer is left with the bill. Since the government can continue to kite checks, our children’s great grandchildren are already up to their necks in debt that is unsustainable.
Come, let us reason together for solutions that actually work. I offer below the following suggestions, feel free to agree, disagree, add more, and discuss openly in the comments. We, the owners of government, must re-take control of the government, and to do so, we must communicate and act.
- Reduce the size of government immediately to the size posted on 31 December 1999. This is an immediate and interim step. To be followed by a position by position, value discussion, where technological solutions to replace workers is decided. Eventually culling government size back to a Pre-1930’s level.
- Automate as many functions as possible. The processes of how government function are necessarily complicated to justify a jobs program. This culture of complication must cease forthwith, the processes cleared of unnecessary complications, and streamlined to allow for automation of the processes.
- Take the pensions and eradicate the unions. Privatize pensions should be the letter of the law for all, public and private sector employees. Thus, creating a new market and investment industry.
- Privatize public maintenance of roads, the fuel taxes are sufficient to pay for this and improve road maintenance immediately.
- Privatize wastewater and water generation and distribution.
- Privatize and deregulate all utilities, allowing for maximum competition, and ending the private geographic monopolies the tech companies and Internet providers have established.
- Privatize K-12 and Community Colleges changing the pay structures for teachers and reducing the “staff” positions. Get focused on delivering a product, the product is an educated student who can read, write, and do math, thinking logically, and critically. This means ending the surplus of standardized tests and putting the teacher in charge of the classroom.
Not every child should be forced into college. Not every job requires a college degree. Opening the community colleges produces certified, trained, and non-debt laden students that are workforce ready. Workforce ready means able, willing, and skilled in working, be that in academia for a degree, or in the workforce as a tradesman the requirement is the same and the distinction needs removed from the leaders of K-12 educational leadership.
The aim and the intent of all government programs is to get out of the way and let people act as they think best for themselves and their families. Not pushing children to college for a degree and a life of debt payments. Not forcing them into the military because you are too lazy to teach them how to read, write, think, and speak. Not forcing them into poverty to support a government jobs program. The government will not go “quietly into that dark night.” But, with enough insistence the government we currently know can be cut, reduced, and forced to retreat. We, the citizens, need to take back our government through the ballot box, through the judicial branch, and through demanding change in the legislative and executive branches at all levels of the government.
First step, believe it is possible; live like it has already occurred. Second step, join others to raise the cry and demand the changes. Third, support only candidates who already live fiscally proper, morally upright, and ethically dedicated. Fourth, never give up! Never lose focus, and never relinquish the moral high ground for a bowl of pottage or 30 pieces of silver.
© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.