Public Sector vs. Private Sector

The U. S. Federal Government is spending 3.6 Trillion this year, and only taking in 2.4 Trillion in revenues, meaning the government is about 1/3 over budget. This kind of obscene spending has spanned multiple administrations, increasing over a period in which my 401K could have lost about one third of its value at any time. When my house lost a third of its value, and the company I work for had to lay off a third of our engineering department, etc. The private sector is forced to make tough cuts that our elected officials in the public sector do not.

Due to the magic of supply and demand, failing organizations get smaller and eventually disappear. Healthy organizations hire and expand. And when times do get tough, the American people make adjustments to their budgets to survive. Even worse than the historic deficits due to increased public sector spending, is how the money is being spent. I am amazed how government spending seems to favor the debters and defaulters in this culture, at the expense of the frugal and conservative. The compensation and benefits disparity with the private sector is staggering. So why is our failing government growing by one third while the rest of us sacrifice one third just to tread water?

There is a night and day difference on how the private sector and public sector do business. In the private sector, companies innovate to compete and bad companies get smaller and fail, not get bigger. Households must cut budgets to survive. In the public sector there seems to be a reverse relationship between efficiency and job security, bad government grows bigger, not smaller. When this congress finally gets around to their budget, you better believe it will set records.

Why should the public sector put up with this? I believe most Americans in the private sector are more than willing to pay their fair share of the federal budget associated with the enumerated federal powers. However, public and private sector economics must relate to each other in order to be representative. Spending money you don’t have is not representative. Re-distribution of earned wealth is not representative. Economic class warfare is not representative. Bailing out connected companies is definitely not representative. It’s NOT Monopoly money! The Federal Government cannot create wealth, only consume it, digested in fraud and corruption and vomited out to special interest cronies to buy votes and consolidate power.

It appears the private sector grows weary of the disparity as we approach the mid-term elections. Far from Democrat vs. Republican, or a referendum on Progressives or the current administration, this feels like a battle between two economic ideologies: The redistributive public sector with organized labor, and the private sector innovators with its business interests. A case may be made for both sides, and they are not mutually exclusive, but I like the way that these mid-terms are headed. It’s about time the tables were turned, and sometimes private sector economics resembles public sector politics. You can certainly vote with your dollars; don’t like the service at a restaurant, don’t go back. But sometimes you vote with your vote. And when the current public sector has failed the private sector, it’s time to make a change. It’s been too long, you went too far, the sleeper has awoken. There is no such thing as royalty in the United States of America. I’m not expecting a utopia, but maybe we could throw a monkey wrench into Washington machine and return the wake-up call.

A Decade of Rhetoric

Most economists agree, taxes are detrimental to a recovery, and there are folks on both sides of the aisle looking to stimulate the economy as this is an election year. Yet the Obama/Pelosi gang insists on waging some asinine class warfare policy of refusing to extend the Bush tax rates for the top 3% of wage earners. They sure want to extent the tax cuts for the middle class, but wait….

Wouldn’t that be an admission of the obvious? It contradicts a decade of rhetoric about the Bush tax rates benefiting only the rich millionaires and billionaires in this country. On top of that, they want to extent the majority of the tax cuts, and rename them: “The Obama Tax Cuts for the Middle Class”. How insulting. I assure you, NOBODY is getting a tax cut, NOBODY! The most you could hope for with this extension would be to keep your taxes at the current rate, there is NO tax CUTS here, people.

Pelosi sure did squawk about how this extension would be voted “without a doubt” before the mid-term recess, assuring us all that she had this covered. Boehner called her bluff as he gained 39 or so blue dog Dem votes to extend ALL tax rates, and Pelosi caved. So now, congress has recessed early to campaign to save their political lives without the extension for any of us. Leaving something like this to the lame duck session is extremely risky. If for some reason the extension is not passed, either procedurally, or to punish the “rich”, and the largest tax hike in US history is exacted on this struggling economy, it would amount to political suicide.

So here is a decade of rhetoric of my own: STOP THE SPENDING! Cut the corporate tax rate, capital gains, extend the current rates for everyone PERMENENTLY and for heaven’s sake stop referring to people making over 200K a year “millionaires”. I am convinced that a few small measure such as these would remove the majority of the uncertainty that is handcuffing our economic outlook. Put the people’s concerns above the unpopular redistributive policy and you might save yourself from the indignity of being viewed as the worst POTUS in history.