Public, private sectors lack fiscal balance ( Why our states and country are in perpetual deficit)

The Mercury ^ | 03/14/2010

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Before his disgrace as a cheater, a liar and a cover-up artist, former U.S. senator and Democratic presidential aspirant John Edwards talked about there being "two Americas," one for the "haves" and the other for the "have nots."

Well, maybe the multi-millionaire ambulance/skirt chaser was on to something.

It appears there are two Americas, but the country is divided between those who work for the public sector and those work in the private sector. And not surprisingly, those working for the government are doing pretty darn good.

As recently noted by Grove City College professor and economist Dr. Mark W. Hendrickson, civil servants and other public sector employees now fare far better economically than their private sector counterparts.

Since 2008, some 8 million workers in the private sector lost their jobs, while the number of federal employees jumped 7 percent per year.

While non-government workers saw their incomes stagnate, the average federal worker now makes the equivalent of $120,000 in salary and benefits, double the compensation of non-government employees.

Take the benefits away and the average government worker makes $71,197. The average private sector worker, just under $50,000.

It isn't hard to find stuff sure to infuriate the average non-government employed citizen.

While the rest of us suffered through the worst economic recession in modern times, Congress voted to increase funds for staff and other support personnel 6 percent. Included were pay raises for employees of the Federal Housing Administration, which lost $54 billion thanks to its poorly managed home-loan business. Meanwhile the CEOs of the federally subsidized Fannie Mae and Freddie Mac received $6 million.

The bulk of last year's stimulus money went for the most part not to creating private sector jobs, but to paying those already firmly attached to the public teat.

Hendrickson credits new New Jersey Gov. Chris Christie with pointing out in his state that "a 49-year-old state employee who had contributed $124,000 toward his retirement is eligible to receive $3.3 million in pension payments and another half-million dollars in heath-care benefits over the rest of his life; and a retired teacher who had put $62,000 toward her pension and not a penny for health care is scheduled to receive $1.4 million in pensions and $215,000 in health-care benefits."

Not bad work if you can get it.

When ex-Sen. Edwards came up with the idea of "two Americas," he meant to sow class envy — but not between those who collect a government paycheck and those who pay the taxes to support them. The more people who catch on to this disparity, the fewer people there will be who are willing to vote for a party of government and government workers. And that goes for both major parties.

It's time those in the other America and their protectors in public office realized a pay freeze is in order.

To quote Hendrickson, "Abraham Lincoln's ideal of government 'of the people, by the people, for the people' seems to have become government of the governing elite, by the governing elite, and for the governing elite. The current imbalance can't continue. Something's got to give."

He's sure got that right.

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By the way, this isn't only America's problem. Virtually every Western Democratic Government is insolvent.