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Author Topic: The US Budget Deficit Explained using Jack Daniels
JWatts
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This is a humorous, reasonably short YouTube video illustrating the recent budget deficits.

Jack Daniel Rocks!

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Pyrtolin
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It's amusing, but deceptive.

The deficit isn't the number of shots, but the number of shot glasses that you have on hand for people that don't have any or lost theirs (say in a giant dishwashing accident/market crash).

The Jack is production potential, people that get glasses have an income or other assets, and the house rule is that people with their own glasses get poured first, then the house glasses.

Anyone left over after all the glasses have been poured is unemployed and has to go to the back of the line for the next round.

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Star Pilot 111
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But the next round, the bartender(republicans) gives those with glasses bigger, and philibusters, so the ones without glasses don't get Jack.
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Star Pilot 111
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Let me do that again [Embarrassed]

But the next round, the bartender(republicans) gives those with glasses, bigger glasses, and philibusters, so the ones without glasses don't get Jack!

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quote:
Originally posted by Pyrtolin:
It's amusing, but deceptive.

The deficit isn't the number of shots, but the number of shot glasses that you have on hand for people that don't have any or lost theirs (say in a giant dishwashing accident/market crash).

The Jack is production potential, people that get glasses have an income or other assets, and the house rule is that people with their own glasses get poured first, then the house glasses.

Anyone left over after all the glasses have been poured is unemployed and has to go to the back of the line for the next round.

Jesus. You're starting to caricature yourself now.
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Pyrtolin
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Glad I could give you another chance to jump to personal attacks instead of meaningful arguments.
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JWatts
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Pelosi splits with Reid, dismisses GOP plan to avoid a shutdown
quote:
House Minority Leader Nancy Pelosi (D-Calif.) is showing no enthusiasm for the new proposal from Republicans to avoid a government shutdown, putting her at odds with Senate Majority Leader Harry Reid (D-Nev.).

Pelosi said in a statement that the GOP's plan for a two-week spending bill cuts funding for critical programs.

Link

Of course, Pelosi may not have much political power left.

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flydye
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The shot glasses represent whiskey taken from the cellars, kitchens and bottles of rot gut from a vast cross section of America, with the implied idea that the government can more efficiently use it then anyone else. This is a dubious proposition and considering a lot of this whiskey is being given to the poor pipples in direct give aways like welfare, the eternal UEI, Medicaid etc, I don't buy the 'glass warfare' that Pyrtolin and starLisa is selling.

And let's not ignore the fact that a big part of the stimulus bill was the Dems and the Unions nicking a bottle and having themselves a grand old time around back when a lot of Americans were finding their glasses were empty...well!

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TomDavidson
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quote:
And let's not ignore the fact that a big part of the stimulus bill was the Dems and the Unions nicking a bottle and having themselves a grand old time...
You mean "giving money to companies to employ people who perform traditional liberal-ish work?"
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flydye
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No, but nice try. I mean giving money to 'necessary services' i.e. teachers, fireman and police unions, so the didn't suffer any of the bumps and bruises that the rest of society had to suffer under. See payback
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TomDavidson
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So, to clarify, you are upset that liberals (and, by proxy, "their" unions) provide more necessary services than conservatives do, and believe that teachers and firemen have presumably suffered less than highly conservative investment bankers in the recent financial crisis?

[ March 05, 2011, 09:59 PM: Message edited by: TomDavidson ]

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edgmatt
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Can you say "loaded question"? Jeez Louise.

I take issue with the term "necessary services" for one.

Public sector employees have suffered less than their private sector counterparts. Your comparison can be summed up as "do you believe these people have suffered less than the people who are substantially wealthier than them?" which the answer of course is no.

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TomDavidson
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quote:
Public sector employees have suffered less than their private sector counterparts.
Which makes perfect sense and is as it should be, because one of the reasons people work in the public sector for considerably less money than is available in the private sector is that there is better job security.
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edgmatt
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Ok so we agree that your question was ridiculous, good.

Are you aware that the entire public sector is funded completely by the private sector?

People in the public sector make more money than their counter parts in the private sector. Link.

quote:
Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations.

Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.


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edgmatt
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quote:

PAYCHECK

The typical federal worker is paid 20% more than a private-sector worker in the same occupation. Median annual salary:
Federal Private Difference
$66,591 $55,500 $11,091

Forgot this part.
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edgmatt
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So to be clear, your saying that the public sector people, who get more pay and better job security, should not suffer as much as the people who pay them in an economic downturn?

In fact to quote you, this is as it should be, yes?

[ March 05, 2011, 11:15 PM: Message edited by: edgmatt ]

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TomDavidson
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quote:
Are you aware that the entire public sector is funded completely by the private sector?
I don't see why that's relevant. The entire medical sector is funded completely by the private sector, too, but no one says we should stop paying doctors so much money. Heck, the financial services industry exists specifically to skim profit off the private sector -- it does nothing else -- and yet people aren't out there whining that they don't want their bank loans to be paying for some banker's new house.

quote:
The typical federal worker is paid 20% more than a private-sector worker in the same occupation.
Every study that I've ever seen on this subject that has come to that conclusion has failed to take into account length of time on the job and level of education. Every study I've seen that does take that into account concludes that public sector workers fare far worse. It's also worth noting that here we're discussing state government, too, which pays even worse than the feds. [Smile]

[ March 05, 2011, 11:17 PM: Message edited by: TomDavidson ]

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edgmatt
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quote:
I don't see why that's relevant. The entire medical sector is funded completely by the private sector, too, but no one says we should stop paying doctors so much money.
I am not going to explain to you the difference between a doctor, who I choose to pay, or pay as necessary, and a teacher who I pay even if I pay additionally for a private school.

No one is saying we should stop paying doctors so much is because they too have taken a hit in the economic downturn. Only the public sector has been insulated (artificially) from the economy, and that is why people are saying we should stop paying them so much.

Anyway, I am just happy that you realize that your original question "So, to clarify, you are upset that liberals (and, by proxy, "their" unions) provide more necessary services than conservatives do, and believe that teachers and firemen have presumably suffered less than highly conservative investment bankers in the recent financial crisis?" was loaded and did nothing but distract from what flydye was talking about.

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TomDavidson
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quote:
I am not going to explain to you the difference between a doctor, who I choose to pay, or pay as necessary, and a teacher who I pay even if I pay additionally for a private school.
Whether or not you personally pay for the teacher has no impact on whether or not that teacher is necessary.

quote:
Only the public sector has been insulated (artificially) from the economy, and that is why people are saying we should stop paying them so much.
Why do you believe that the public sector in Wisconsin has been artificially insulated from the economy? For that matter, why do you think the people who're saying we should stop paying public sector workers "so much" haven't been saying this for years, and wouldn't say it even if the economy were good? Bear in mind, that whole tiresome trope is far older than the current administration.

quote:
...did nothing but distract from what flydye was talking about.
Oh, it was loaded. I dispute, however, that it was nothing but a distraction. In fact, I assert that fly's whole conversation here is a distraction. [Smile]
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Greg Davidson
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quote:
People in the public sector make more money than their counter parts in the private sector. Link.
When I follow this through the USA Today article, it points to a link it claims is the Bureau of Labor Statistics, but that link just points to another USA Today page that uses that title. Later, they show a table of data entitled "Source: Bureau of Labor Statistics, USA TODAY analysis"

First, this is misrepresentation. Second, it looks like USA Today is being fast and loose with definitions to arrive at a pre-determined conclusion. For example, the salary for "Public relations manager" of $132,410 is above the top of the civil service pay scale and must be referring to a position within the Senior Executive Service - maybe that's the level for someone who manages many others, but it's not what a low level PR person gets. Then, when it comes to lawyers, if you compare the salaries of lawyers with expertise in issues affecting federal cases, I suspect that the private sector lawyers average somewhere between a factor of two and a factor of ten more than their civil service counterparts.

I have worked both in federal government and in private industry, and no one goes into the civil service because the salaries are higher. The SES positions in government start at $120K (that's the same level as a General in the military). If you do something like manage the Department of Defense (with a $700B budget and responsibility for protecting our country), you can earn as much as $180K/year. If you are only Secretary of the Air Force, the number is less. Same cap applies to the head of the Department of Justice, with someone with a lesser job like the head of the criminal or anti-trust divisions making less.

So what I get out of this is that there is a deliberate campaign to mis-represent data to create an inaccurate perception to inflame anti-government sentiment.

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Pyrtolin
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quote:
Originally posted by edgmatt:
So to be clear, your saying that the public sector people, who get more pay and better job security, should not suffer as much as the people who pay them in an economic downturn?

In fact to quote you, this is as it should be, yes?

If my house burns down, should we burn your house down too?

Your entire question is loaded with the false pretense that anyone should be suffering in the first place, never mind the fact that it's the public sector that's still hemorrhaging jobs right now and creating a significant drag on employment numbers.

It's downright self-destructive to say that just because a large number of jobs are lost in one area, we should cut critical jobs in another area, especially when, in many cases, the need for people to do the latter kind of work is probably higher, not lower. But even more, the question shouldn't be "How many people can we easily spitefully lash out at on the way down?" but "How can we ensure similar security across the board?"

Germany handled matters the right way here, and bounced out of the downturn in short order by taking the simple step of ensuring job security and retraining for its private sector (and also by allowing it's localities to create sufficient additional currency to continue to function properly, allowing it to pretend that it wasn't spending much extra to support that policy) It paid companies to keep people employed through the crash and kept itself out of the negative feedback loop cause by massive private sector layoffs.

If we stab our left hand enough times it will eventually stop the cut on our right hand from bleeding as much, but not in any remotely desirable fashion, when what we should by doing is bandaging the wound properly.

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flydye
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quote:
Originally posted by TomDavidson:
Oh, it was loaded. I dispute, however, that it was nothing but a distraction. In fact, I assert that fly's whole conversation here is a distraction. [Smile]

That is pretty much your only contribution to the forum: to derail points which take away from your chosen narrative. Unfortunately, you don't have a lock on the truth, nor a lock on interpretation.

But please, be honest. You think ALL my posts are distractions and that the forum would be best served by my absence.

[ March 06, 2011, 08:08 AM: Message edited by: flydye ]

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flydye
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And by Germany, you mean not wasting a ton of money on a stimulus, yes?

Tell me, if all the payors of a teacher lose 5% of their wages, but are still expected to work the same, is it morally acceptable that the teacher not join her friends, neighbors and countrymen in sacrifice? If she is paid 5% less, is she going to be 5% less efficient in her teaching? Why?

I would also love to see a citation on how public sector unions are losing employees at a faster clip then the private sector.

[ March 06, 2011, 08:28 AM: Message edited by: flydye ]

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flydye
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quote:
Originally posted by TomDavidson:
quote:
Are you aware that the entire public sector is funded completely by the private sector?
I don't see why that's relevant. The entire medical sector is funded completely by the private sector, too, but no one says we should stop paying doctors so much money. Heck, the financial services industry exists specifically to skim profit off the private sector -- it does nothing else -- and yet people aren't out there whining that they don't want their bank loans to be paying for some banker's new house.

quote:
The typical federal worker is paid 20% more than a private-sector worker in the same occupation.
Every study that I've ever seen on this subject that has come to that conclusion has failed to take into account length of time on the job and level of education. Every study I've seen that does take that into account concludes that public sector workers fare far worse. It's also worth noting that here we're discussing state government, too, which pays even worse than the feds. [Smile]

First point: Doctors and the Financial Sector both are not immune to market forces. Teachers are. Ask Bear Stearns how many people they lost. Has any fire department or school had 25% layoffs? And since you feel that the Financnial Sector does nothing, I assume that means that you are not invested in the market at all. Are you or aren't you?

Second, your point of time in service and eduction refute your point. Public Service is such a sweet gig that they have one third the turnover of the private sector. Yes, part of that is due to the nature of their jobs, but there are private teachers, firemen and security.

Additionally, you blatantly ignore the fact that a teacher who gets a mail-in Masters of whatever dubious qualification automatcially get a bump in salary whether it actually increases her effectiveness or not. So a person in the private sector is spending money on an advanced educational degree with no guarantees, but a teacher is (and who wants to bet that she also has a nice union mandated educational benefit. Heck, even my company has it)

The incentives educationally aren't the same.

[ March 06, 2011, 08:39 AM: Message edited by: flydye ]

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edgmatt
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quote:
If my house burns down, should we burn your house down too?
Do you really think that is an applicable analogy?

A better analogy would be: If 5 houses are being built, and a 6th house is paid from the first 5 and relies completely on the first 5 houses being in good shape so it can be built, and those first 5 houses catch on fire and get damaged, should they continue to pay the same amount to the 6th house? Shouldn't they spend their money on themselves to get their own houses straightened out first, and THEN start paying for that 6th house after that?

quote:
it's downright self-destructive to say that just because a large number of jobs are lost in one area, we should cut critical jobs in another area
It's self destructive not to when the latter of the two areas relies solely on the former for pay.

quote:
"How many people can we easily spitefully lash out at on the way down?" but "How can we ensure similar security across the board?"
Where are you getting 'spite' from? You believe that people want the government to stop spending money they don't have, because they are spiteful? You haven't heard any other arguments concerning inflation, debt, American dollar value, economizing, etc? Cmon....

No government, no king, no dictator, religious leader, CEO, CFO, manager, president, statesman, governor or mayor anywhere can "ensure similar security across the board".

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edgmatt
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Greg - you are right that link I gave is worthless.

This one is better, and the link in there to the Employer costs to employee compensation has a good chart.

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Greg Davidson
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Thank you very much for actual data from the real Bureau of Labor Statistics. Actual data provides the kind of anchoring that can promote a legitimate discussion. The data-set you provided does not have the direct comparison of multiple job categories that is included in the unsubstantiated USA Today chart, but it does have an overall comparison with private sector and state-and-local government jobs. It also has an explicit caveat regarding direct comparison of the two averages:

quote:
Compensation cost levels in state and local government should not be directly compared with levels in private industry. Differences between these sectors stem from factors such as variation in work activities and occupational structures. Manufacturing and sales, for example, make up a large part of private industry work activities but are rare in state and local government. Management, professional, and administrative support occupations (including teachers) account for two-thirds of the state and local government workforce, compared with two fifths of private industry.
If you are an advocate of the conservative position that government workers are paid too much, you don't need to take that caveat at face value, but you would need to develop arguments that address the issue that was identified. The report asserts that the responsibilities/qualifications (and thus the associated compensation) of the average government job are different from the responsibilities/qualifications for the average private sector job. A legitimate critique needs to address that issue, and with actual data. If a pundit or politician is making assertions based on such data while ignoring issues like that raised above, it reveals his or her lack of integrity.
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TomDavidson
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quote:
You think ALL my posts are distractions and that the forum would be best served by my absence.
*blink* I don't know where you've gotten that idea, actually. There are very few people whose absence, I think, would improve the forum, and there are no people whose absence I've actually recommended to anyone.

quote:
First point: Doctors and the Financial Sector both are not immune to market forces. Teachers are.
This is a bald calumny.

quote:
Has any fire department or school had 25% layoffs?
Amusingly, I was just reading in the paper today how, despite agreeing to layoffs of 25% two years ago, our school district would need to face a further 30% workforce reduction under Walker's budget. So, um, yes.

quote:
And since you feel that the Financnial Sector does nothing, I assume that means that you are not invested in the market at all. Are you or aren't you?
I'm invested quite heavily. However, I do not for a moment think that I'm providing a valuable service to the companies in which I'm invested; I'm leeching off their profitability, and they're grudgingly willing to let me in exchange for some tiny amount of up-front capital.

quote:
Public Service is such a sweet gig that they have one third the turnover of the private sector. Yes, part of that is due to the nature of their jobs, but there are private teachers, firemen and security.
First off: private teachers, firemen, and security officers don't have three times the turnover of public ones. Secondly: I have made the point that people go into public service partly because they would rather have job security and good benefits than high salaries. Your response here, which is that public service must be a "sweet gig" because turnover is lower, is not only a non-sequitur but actually reinforces my point: the sort of people who go into public service are the sort of people who value employment stability above salary.

quote:
Additionally, you blatantly ignore the fact that a teacher who gets a mail-in Masters of whatever dubious qualification automatcially get a bump in salary whether it actually increases her effectiveness or not.
In Wisconsin, a teacher cannot work for more than five years at the secondary level without obtaining a Master's degree in Education from a certified and accredited school. Nor is any bump in pay "automatic," although -- quite understandably -- there usually is a bump in pay, albeit a considerably smaller one than someone usually gets in exchange for, say, a completely worthless "mail-in" MBA.

quote:
If 5 houses are being built, and a 6th house is paid from the first 5 and relies completely on the first 5 houses being in good shape so it can be built, and those first 5 houses catch on fire and get damaged, should they continue to pay the same amount to the 6th house?
That's still a stupid analogy, because you're speaking of houses here as if they were not providing different services. But let us accept that, yes, there are six houses here, and five of them are damaged to the point of unlivability but continue to support the sixth. Are you saying that it makes more sense for the five houses to stop supporting the one house that is providing living quarters to everyone in the neighborhood?

quote:
It's self destructive not to when the latter of the two areas relies solely on the former for pay.
Why, again, should the source of the pay matter?

quote:
Where are you getting 'spite' from?
Well, lines like "mail-in degree" strongly suggest a certain amount of immature and misplaced resentment.
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edgmatt
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Tom-

I didn't start with the bad analogies, I improved on Pyrtolins. If you are going to insult mine, at least have the consistency to insult his as well.

The source of the pay matters because if the source of the pay dries up, then the people who depend on that source for pay wont be able to receive as much pay.

Greg-

quote:
If you are an advocate of the conservative position that government workers are paid too much, you don't need to take that caveat at face value, but you would need to develop arguments that address the issue that was identified. The report asserts that the responsibilities/qualifications (and thus the associated compensation) of the average government job are different from the responsibilities/qualifications for the average private sector job. A legitimate critique needs to address that issue, and with actual data. If a pundit or politician is making assertions based on such data while ignoring issues like that raised above, it reveals his or her lack of integrity.
It's that many (not all) government workers are payed to much at the current time. If a state does not have enough money to pay for everything it wants to pay for, it needs to make cuts, just like the rest of the country has had to do recently. The argument is not that government workers should get less just because someone else is making less. The argument is that government workers need to get paid less because there isn't as much money to pay them what they were being paid before.

The private sector (which is the only source of income for the public sector) took a huge hit.

Even though here are essential aspects of the public sector just as there are essential aspects of the private sector, both the private sector and the public sector rely on the private sector more soto produce wealth. (A simple way to understand this is to take any law or program that helps a corporation or business make money and see which relies on the other. The business doesn't need the law to exist even though it might be incredibly useful. The law/program however is completely meaningless without a business to work on.)

Since the greater amount of production exists in the private sector AND..

...the private sector is not able to (at this time) produce the amount of money needed to fund everything in both sectors...

...how can (and not 'why should?') the public sector expect to receive the same amount of pay as when there was more money flowing into the public sector?

In short, it is not a matter of "should we?", or a matter of moral agreement, or what we think is "right". It is a simple matter of "can we?". If the money isn't there, salaries cannot be paid.

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TomDavidson
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quote:
The source of the pay matters because if the source of the pay dries up, then the people who depend on that source for pay wont be able to receive as much pay.
Are we asserting that the "source of pay" has dried up, here?

quote:
If a state does not have enough money to pay for everything it wants to pay for, it needs to make cuts, just like the rest of the country has had to do recently.
If cuts were the issue, Walker would be cutting instead of going after collective bargaining.

quote:
If the money isn't there, salaries cannot be paid.
The money is there. We simply need to take it away from the people hoarding it.
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Greg Davidson
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quote:
It's that many (not all) government workers are payed to much at the current time. If a state does not have enough money to pay for everything it wants to pay for, it needs to make cuts, just like the rest of the country has had to do recently. The argument is not that government workers should get less just because someone else is making less. The argument is that government workers need to get paid less because there isn't as much money to pay them what they were being paid before.
So should governments equally be expected to take their commercial contracts and their financial contracts (bonds) and say "oops, we are short on funds" and therefore we won't be honoring our contracts? Or should government treat corporations and bond-holders better than regular people who happen to work for them?

In practice, we often do. The Wisconsin state workers have agreed to allow their contract to be disregarded to reduce their compensation. This is a dramatic difference from the treatment given to contracts of wealthy Wall Street types who insisted that a cap on bonuses above $500K for executives of bailed-out firms would violate fundamental principles (and yes, some of the same people on Fox News arguing for violating the contracts with government unions were the ones saying that the law of contracts precluded any limits on the bonuses of the Wall Street guys).

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Greg Davidson
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There is also the degree to which irresponsible reductions have been made in the taxes of the wealthy. I am digging through taxes and federal financial aid forms right now, and I can tell you how it looks from my perspective. We're at the lower end of the wealthy spectrum in 2010, with 85K of income more than the 250K boundary-line (and essentially all of of wealth comes from income - there's less than 1K of interest/dividends from all sources, and we don't own any other assets except our condominium). If the "socialistic" tax plan of the Obama Administration had gone into place, paying 38% (instead of 35%) on the $85K over $250K would have cost us an additional $2550 in taxes. With three kids in expensive schools, I have over $110,000 of educational expenses in 2010, but still the extra $2550 would not be a big sacrifice. Nonetheless, to defend the extension of this tax cut on my family (and on many others farther above the $250K threshold) the Republicans pushed for and succeeded in adding $600 billion to the federal deficit.

If I wasn't personally benefiting from this, I would be susceptible to accusations of just being envious. But since I am fortunate enough to be benefiting from these pro-wealthy policies, let me say that they are patently unfair and they are coddling those with power who don't need the help, while we are asking for much more drastic sacrifices from those who are much more harshly affected.

I am not saying that all wealthy people are in on a conspiracy, but I am saying that a variety of institutional factors have aligned a coalition in support of favorable treatment for wealthy people, and that group has developed a political and media infrastructure that intentionally generates anger, resentment and suspicion among different groups within the middle and lower income groups to deflect attention from much more substantial transfers of wealth.

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Pyrtolin
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quote:
Originally posted by flydye:
And by Germany, you mean not wasting a ton of money on a stimulus, yes?

I mean pretending not to put huge amounts into stimulus, when they're actually printing large amounts of money on the local level, and making layoffs to expensive to be worth it over companies taking responsibility for their employees.

http://crookedtimber.org/2011/01/19/keynesianism-by-stealth-and-symbolic-austerity-german-fiscal-policy-and-the-post-2007-economic-crisis/

http://en.wikipedia.org/wiki/Chiemgauer

quote:
Tell me, if all the payors of a teacher lose 5% of their wages, but are still expected to work the same, is it morally acceptable that the teacher not join her friends, neighbors and countrymen in sacrifice? If she is paid 5% less, is she going to be 5% less efficient in her teaching? Why?
Have the teacher's services suddenly become less valuable? Is there less need for teachers? Has their cost of living gone down?

Unemployment and dropping wages are the problem- we should be looking to stop that not allowing the infection to spread further.

quote:
I would also love to see a citation on how public sector unions are losing employees at a faster clip then the private sector.
The BLS provides the statistics every month. The numbers on Friday were 220,000 private sector jobs created, 30,000 public sector jobs lost. Here's a couple of decent graphs.

http://www.econbrowser.com/archives/2011/02/boehner_math.html
http://www.econbrowser.com/archives/2010/11/the_october_emp.html

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edgmatt
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quote:
Have the teacher's services suddenly become less valuable? Is there less need for teachers? Has their cost of living gone down?

There isn't enough money to pay them. In the private sector, there would be less people going to the teachers to be taught, and therefore less money earned by the teachers.

The public sector is immune to this (as several people here have pointed out) because no one pays for teachers (for example) directly. We pay it in taxes and we have no choice.

If it were possible to do, how many people would have stopped sending their kids to school for X amount of time in order to save money? That number is certainly greater than zero, but it isn't reflected because the public sector is not price oriented.

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TomDavidson
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quote:
In the private sector, there would be less people going to the teachers to be taught...
Are you saying that we should educate fewer people? That one downside of the public sector is that it continues to do things like educate children, rescue people from burning buildings, and fix roads even if those things temporarily become unprofitable due to an economic downturn?

It seems to me, rather, that we as a society should recognize that these services are actually essential services and simply suck it up and pay for them, taking more away from useless bankers if we have to.

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Pyrtolin
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quote:
Originally posted by edgmatt:
quote:
Have the teacher's services suddenly become less valuable? Is there less need for teachers? Has their cost of living gone down?

There isn't enough money to pay them. In the private sector, there would be less people going to the teachers to be taught, and therefore less money earned by the teachers.


If there isn't enough money for the economy to function properly, then the very simple answer is that we need to produce or otherwise mobilize enough money for it to work, again, not to cut services that there is a clear need for.

quote:
The public sector is immune to this (as several people here have pointed out) because no one pays for teachers (for example) directly. We pay it in taxes and we have no choice.

If it were possible to do, how many people would have stopped sending their kids to school for X amount of time in order to save money? That number is certainly greater than zero, but it isn't reflected because the public sector is not price oriented.

And such penny-wide, pound-foolish reasoning is exactly why we handle those investments at the community level instead of the individual one, since the long term losses and costs of such decisions far outweigh the short term apparent savings, never mind the fact that, for many, they up front costs of such essential investments stand as a barrier that prevents the escape from poverty if they must be handled at the individual level.
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Pyrtolin
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quote:
Originally posted by TomDavidson:
It seems to me, rather, that we as a society should recognize that these services are actually essential services and simply suck it up and pay for them, taking more away from useless bankers if we have to.

Money is a resource that government regulates. There's no sucking it up in asking the government to pay for anything, just a question of increasing production.

That's only loosely related to the importance of limiting the profitability of bankers edging in on the government's domain by using money to produce more money instead of wealth and capital growth to make sure that they aren't swamping the system.

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TheDeamon
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quote:
First, this is misrepresentation. Second, it looks like USA Today is being fast and loose with definitions to arrive at a pre-determined conclusion. For example, the salary for "Public relations manager" of $132,410 is above the top of the civil service pay scale and must be referring to a position within the Senior Executive Service - maybe that's the level for someone who manages many others, but it's not what a low level PR person gets. Then, when it comes to lawyers, if you compare the salaries of lawyers with expertise in issues affecting federal cases, I suspect that the private sector lawyers average somewhere between a factor of two and a factor of ten more than their civil service counterparts.[/qb]
They may have been fast and loose with their pay sources, but I could believe that rate of pay is potentially being seen by someone who has worked their way well up the GS payscale. The thing you need to remember, and should considering you say you worked as a Government employee yourself at one point, is that the GS payscale is not the only pay a GS may be entitled to.

They can get COLA(cost of living allowances) for living in high-cost areas, and I seem to recall some other benefits as well that may not be directly tied to income as well(but can have values attached to them, such as a retirement plan the government pays into for them).

Yes, it is misleading that they're quite possibly comparing a (senior) Food Service Worker in one of the highest COLA areas in the country against some generic food service worker elsewhere but I could believe their government employee example does exist.

[ March 07, 2011, 12:01 PM: Message edited by: TheDeamon ]

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TheDeamon
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quote:
Originally posted by edgmatt:
quote:
Have the teacher's services suddenly become less valuable? Is there less need for teachers? Has their cost of living gone down?

There isn't enough money to pay them. In the private sector, there would be less people going to the teachers to be taught, and therefore less money earned by the teachers.

The public sector is immune to this (as several people here have pointed out) because no one pays for teachers (for example) directly. We pay it in taxes and we have no choice.

There is a reason why some of the "traditional essential services" were rolled into the purview of public services and paid for by the government rather than the individual directly.

It was because they determined that in a highly urban environment it would be a bad practice to have a Fire Department that wouldn't respond to a fire emergency because the person at that address(or the entire neighborhood) didn't pay their "fire suppression services fee" so they'd allow that neighborhood to simply burn down instead.

Which isn't to mention that the nature of firefighting is such that you would much rather deal with a small fire than a large one. So it makes more sense to structure that service such that everyone is getting the service regardless of what their financial status may be. This is of particular benefit for renters.

Law Enforcement is also in the same general category, we want everyone to be able to get equal protection(although reality is a lot different than the theory), and again the best way to do that is structure it into a government service. So you don't get mugged, walk into the local police station and get informed "I'm sorry, I see you didn't pay your Law Enforcement services fees this month, we can't help you."

Which then brings us to:

quote:
If it were possible to do, how many people would have stopped sending their kids to school for X amount of time in order to save money? That number is certainly greater than zero, but it isn't reflected because the public sector is not price oriented.
This is perhaps the biggest reason there is a Public Education System in the first place, because historically, this is the first thing families would cut from their budget if it was a line item.

Heck, even after Education became a public service free for everyone. Education still was a frequently cut item for many families in the United States. The reason being that Little Johnny the 12 year old had "more value" to the family budget in the work force as child labor than he did going to school where he was just another expense.

Of course, we have child labor laws preventing them from sending Little Johnny off to work at the tender age of 12, you have to wait until they're 16 now in most states(unless you happen to have an applicable waiverable situation).

The point still stands that in todays society, where employers put perhaps way too much value on education, creating a situation where families would withdraw their children from the education system because "We can't afford it" would be very likely to turn into a complete disaster for the nation as a whole.

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TheDeamon
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quote:
Originally posted by Pyrtolin:
quote:
Originally posted by edgmatt:
The public sector is immune to this (as several people here have pointed out) because no one pays for teachers (for example) directly. We pay it in taxes and we have no choice.

If it were possible to do, how many people would have stopped sending their kids to school for X amount of time in order to save money? That number is certainly greater than zero, but it isn't reflected because the public sector is not price oriented.

And such penny-wide, pound-foolish reasoning is exactly why we handle those investments at the community level instead of the individual one, since the long term losses and costs of such decisions far outweigh the short term apparent savings, never mind the fact that, for many, they up front costs of such essential investments stand as a barrier that prevents the escape from poverty if they must be handled at the individual level.
It gets better, I'd put some of the economic turmoil we're currently experiencing at the feet of the states that have balanced budget amendments(my state is one of them). The concept itself is a great one. However, the application of the concept leaves much to be desired, as is the case with many great ideas.

While I'm not an advocate(and somewhat of a skeptic) on the Keynesian approach of of Recessions being the time for Governments to open up their pockets and start spending like crazy. I do think that there are occasions where (short-term(1-2 years) ranging into a medium-term(say 5-ish years)) deficit spending is a valid response.

As the problem you end up with when you remove the Government's ability to run a deficit is ongoing feedbacks on the economy. In this example that state makes up about 1/10th of the economy(10%). (Note: The US Federal Governmnet, in contrast is over 20% of the economy by itself)

Now we have Government revenues go down by 5% for the year. The state government responds by cutting spending by 5%. By virtue of that budget cut, before trying to play with any multipliers that would also come into play(the same dollar being spent multiple times over the course of the year), you have just shrunk the State Economy by at least 0.5%(5% of 10%).

Which also isn't to mention the local governments that exist as well. From the data I'm looking at, I'd say 10% of the state economy being comprised of local government spending is probably a decent rule of thumb.

So let's also give than a 5% budget cut across the board as they don't want to operate in the red. We've just shrunk another 10% of the economy by another 5%, for a total loss of at least 1% of the state GDP(bearing in mind there will be a multiplier effect on those cuts, so its impact is actually larger) for the upcoming fiscal year because the local and state Governments are required to balance their budgets. Do keep in mind, a 1% loss to GDP is also likely to directly translate into a 1% loss of state revenue to following year.

It's going to take a lot of private sector growth to offset the impact of those cuts, since the immediate impact to the private sector is going to be a loss of income to them as the state(and it's potentially newly unemployed workers) is spending less money. Which is where that multiplier starts to raise its ugly head.

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