The further to the left or the right you move, the more your lens on life distorts.

Tuesday, October 12, 2010


David Brooks asks a fundamental question in the NYT: Why is it that major government projects that we used to be able to fund without difficulty have become too costly to initiate or complete today? The answer is “demosclerosis.” He writes:
New Jersey can’t afford to build its tunnel, but benefits packages for the state’s employees are 41 percent more expensive than those offered by the average Fortune 500 company. These benefits costs are rising by 16 percent a year.

New York City has to strain to finance its schools but must support 10,000 former cops who have retired before age 50.

California can’t afford new water projects, but state cops often receive 90 percent of their salaries when they retire at 50. The average corrections officer there makes $70,000 a year in base salary and $100,000 with overtime (California spends more on its prison system than on its schools).

States across the nation will be paralyzed for the rest of our lives because they face unfunded pension obligations that, if counted accurately, amount to $2 trillion — or $87,000 per plan participant.

Those of us in the Center have argued that big government will have severe unintended consequences. We’re beginning to see those consequences impact our lives. We need better infrastructure at local, state and federal levels, but we simply can’t afford it because entitlements have grown without bound.

Public pensions are akin to an entitlement and because they’re unfunded they are a long term burden on our children and grandchildren. Public pensions (like the mortgage debacle of the last few years) are a disaster waiting to happen. Again from Brooks:
In states across the country, elected leaders raise state employee salaries in the fat years and then are careful to placate the unions by raising future pension benefits in the lean ones. Even if cost-conscious leaders are elected, they find their hands tied by pension commitments and employee contracts.

In Brooks” words: “All in all, governments can’t promote future prosperity because they are strangling on their own self-indulgence.”

During this election we’re hearing both Democrat and Republican political candidates suggest that if elected, they’ll reduce the spending, and in-so-doing, they’ll eliminate the "self-indulgence" that Brooks discusses.

But at the same time, we listen to a President and current congressional leadership who are so ideological that they believe entitlements should increase in the name of “social justice.”

The battle is joined. The question is who will win.