GirlChat #505944


Re: that's NOT totalitarianism

Posted by Baldur on 2010-July-03 16:37:34 EDT, Saturday
In reply to Re: that's NOT totalitarianism posted by Silence Dogood on 2010-July-03 08:46:31 EDT, Saturday

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"So why not work to improve private sector pay rather than begrudging government employees the salaries and benefits they've fought hard for? Yes, after decades of encouraging outsourcing and undermining organized labor in this country, salaries for private sector workers have remained stagnant (especially compared to executive pay). But that's no reason to drag government workers down as well."

Um, you really don't have any clue about economics, do you?

The private sector is the base. The private sector is what produces wealth. The public sector relies on the base, skimming off a portion of the wealth that the private sector produces. In a sustainable economic model, the private, productive sector must increase before the public, consuming sector can increase. Even then, there is usually no compelling reason for the public sector to increase. The public sector simply increases because it can, because the employees thereof benefit thereby and deliberately game the system to their own advantage.

As for the "salaries and benefits they've fought hard for" - that usually means that they threw their political support to politicians who would give them even more of somebody else's money. Not at all like the hard work that private sector employees do to improve their pay and benefits.

In any case, the reason for the big economic gains in the 1950's and 1960's was that after World War II the USA had the only game in town - the only developed industry that didn't suffer horribly during the war and was in a position to continue producing. Since then, other nations have developed or redeveloped their productive capacity, and Americans have to actually compete - which has shocked many who got used to easy work with guaranteed returns. We are still much better off than before in many ways, and many of our industries remain quite competitive, but we do have to actually compete.

"The fact that state and federal governments continue to offer decent pay and benefits actually helps everyone, as it gives private sector employers reason to offer similar incentives in order to attract the same potential employees"

Um, no. In fact, there is now reason to believe that much of the reason why African nations have remained poor is because the strong government sectors there have siphoned off talent from private industry with higher pay, which means that the growth of the private sector has been retarded. Keeping in mind that the private sector produces and the public sector consumes, it is not necessarily a good thing to draw the most capable people into government. Certainly the government needs some capable people, and should offer comparable pay to the private sector, but we should not forget who actually produces the wealth.

""Thanks to all our government spending, many private sector employees have lost their jobs and all their income""

"Not sure how that follows.."

A healthy economy depends a great deal on the confidence of investors and consumers. When governments go deeply into debt, to the point where it becomes obvious that they will not be able to repay their debt, investors and consumers start to lose confidence. Investors start moving their savings to safer investments; consumers reduce discretionary spending in anticipation of hard times; with less available capital and less consuming, the economy slows down and companies start laying off employees or even closing down. If the debt is high enough that investors are concerned that the government may start inflating the money supply to pay down their debt, then there may be an increase of consumer spending on things they may need in the future as consumers decide to spend their money while it is still holding its value, which may cause some people to mistakenly believe that the economy is improving even as it is getting worse.

"If this tax burden were as heavy as you suggest, California likely wouldn't be experiencing a financial crisis right now."

It's true that it might have been better to have higher taxes in the past than to have the debt burden now, but that would at best have smoothed out the problems over a longer period. The real problem is that during the last economic boom the California legislature saw all the money coming in and decided to spend it rather than to set it aside for a rainy day. That led to an increase in public spending, and of course the political process assures that once public spending starts in a new sector it will never stop - so California is stuck with higher spending, which combined with a predictable drop in the economy means higher debts, which causes uncertainty among investors and contributes to a worsening economy, and the process then begins to feed on itself.

""If the employees in question think that they are not being paid enough, they are always welcome to find another job that pays better.""

"And all these working class folk are just as welcome to apply for these government jobs that offer the salaries and benefits they envy."

I've found that the most productive working class folk also have principles.




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