How does the US get it's balance sheet in order, when the people won't accept any austerity measures and take to the streets in boisterous protest.
It started in Wisconsin and is spreading to other states.
How does the US get it's balance sheet in order, when the people won't accept any austerity measures and take to the streets in boisterous protest.
It started in Wisconsin and is spreading to other states.
We did it in Canada in the 90's and it wasn't fun but we have seen the benefits of this for years now. The same kind of voter swell has to take place in the US and do the dirty deed. They will all need to be on the same page and that means every state must pull the same rope to succeed. This means accepting tax increases and spending cuts every year for awhile and every state must participate.
Also they will need to be very strict on their financial institutions and not allow cowboy bankers to screw up all their hard work like what happened in Ireland. I don't think this will happen though until the Fed either creates runaway inflation or the bond market collapses.
It's an interesting story that seems to have as much to do with politics as it does to do with money:
Republicans wants state workers to increase contributions to pensions to 5.8 percent of salary, and double contributions to health insurance premiums to 12.6 percent.
They also want to limit collective bargaining to the issue of wages, and cap increases to the rate of inflation, with a voter referendum needed for bigger increases. Walker's proposal also ends government collection of union dues, allows workers to opt out of unions, and requires unions to hold recertification votes every year.
Walker said the alternative is to layoff more than 10,000 workers.Republicans have majorities in both the state Senate and the Assembly. In a bid to scuttle the proposal, Senate Democrats fled the state on Thursday and Friday to deprive the Senate of the needed quorum for a vote.
The lawmakers apparently left the state because they were concerned that they would be compelled to return to the Capitol by police if they stayed in Wisconsin.http://www.reuters.com/article/2011/...9?pageNumber=1The Milwaukee Public School system, which serves 85,000 students in the state's largest city, canceled all classes on Friday after nearly 630 unionized teachers called in sick.
Reducing employee benefits may make sense at the state level, but at the U.S. federal level it's worth keeping in mind that payroll (all those "useless bureaucrats") accounts for a whopping 5% of federal spending. It's an easy target, everyone thinks government is bloated and in the public's mind this is a huge area for savings when in fact it's a drop in the bucket.
Interesting perspective (on the federal budget debate) here: http://www.nytimes.com/2011/02/14/op...ef=paulkrugman
The HST allows our Politicians to escape dealing with an overpaid bloated Silly Service, and increasing property Taxes compensate a totally inefficient lack of Education system and overly paid Governmnet workers.
Why do we pay a Bonus to someone who speaks French but not to someone who speaks Mndarin or Spanish.?
Why are Public Sector jobs the best paying with the best benefits??
Canada has the same problems as the U.S, we just hide them with excessive taxes.
Florida, 24 Beer, $18.00, 1.75 litres of Scotch, $21.00.
No HST, we buy all our needs while we are here, and with a $1.02 , bonus.
I'm_Howard, the term "silly servants" seems unfair. I spent a few years working for the government about 25 years ago. There were lazy workers and hard workers. The compensation was barely competitive.
I think we have to be careful about making scapegoats of civil servants. As Brad said, the payroll is not necessarily the bulk of the budget. (Difficult to get real numbers because figures are easily manipulated to support political agendas). If we want lower taxes and balanced budgets then we'll have to put up with reduced government services, a weaker social safety net and health care cutbacks. The pain has to be shared by all of us.
(Sorry, don't want to start a political debate but I do think that taxes and government budgets are relevant. A broke government means no OAS, GIS, public health care, free RX drugs etc. Be careful what you wish for).
I can't speak for Canadian civil servants, but I've been working as a contractor for US federal agencies since 1996 and I have to say most of my clients are working 50-70 hours a week just like me; I get emails from them late in the night and on weekends. And when you see the working conditions many of them have to put up with (dingy cubicle farms, bad lighting, lack of supplies) it's amazing what they are able to accomplish. Entire programs are being run out of one or two cubicles on shoestring budgets. I am constantly awed by their dedication.Originally Posted by olivaw
Olivaw, "I'm Howard" has valid points.
In my experience/observation as well, the Canadian public sector (or most portions of it) is over staffed and over paid vis-a-vis the private sector.
I agree with Howard's point that Why are Public Sector jobs the best paying with the best benefits??
This aspect cannot be denied.
For the same nature of work, our colleague in the public sector is paid and compensated much better.
This disparity is more evident in benefits than in basic salary.
The sharpest contrast is in the area of guaranteed pensions.
I'm not denying that public sector workers do not work hard or do not contribute value to society - it is just that they are compensated much better than their private sector counterparts.
It is a case of Everyone is equal - but some are more equal than others.
Even in times of such austerity, when many private sector enterprises have reduced hiring, frozen pay raises, eliminated bonuses, etc. the public sector (particularly unionized workers) have guaranteed pay increases each and every year.
The reason is because their employer - the government - has ultimate power to fund itself.
All they need to do is think up some new tax, some new surcharge, some new tax rates to keep the gravy train flowing.
Not at all.If we want lower taxes and balanced budgets then we'll have to put up with reduced government services, a weaker social safety net and health care cutbacks. The pain has to be shared by all of us.
If we want lower taxes and balanced budgets, we need to equalize the benefits in the public sector to be similar to private sector, for similar jobs.
That is not all, of course, but a substantial portion of the issue.
Think about what's happened in the socialized economies of Europe, like Greece, Spain, UK, etc.
The public sector is out of control there.
Over generous vacation benefits, training benefits, paid sabbaticals, unemployment benefits, etc. essentially bankrupted the govt.
It is not fair to compare the Canadian public sector to the US one.
Theirs is no where near as generous as the Canadian one.
The Canadian one is closer to the European model.
Last edited by HaroldCrump; 2011-02-19 at 01:15 PM.
In US there is a money grab by the richest 1%. They want people working longer so they have larger unemployment which leads to lower wages. They want lower taxes for the rich and higher taxes and lower benefits for the silent/stupid majority.
Canada has the same level of debt (as % of GDP) as US:
http://www.visualeconomics.com/gdp-v...bt-by-country/, but people here think we are doing better than them, which we are not.
Debt and democracy go together like pie and ice cream. You pretty much can't have one without getting the other. It's very unfortuneate, since it was all working out so well for so long. It will be interesting to see how it all ends.
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