Government Pensions Not Sacred

Here's an interesting story from this morning's WaPost discussing once sacrosanct government employee pension plans now on the chopping block.  It is high time.

Take a look at this impressive piece from National Affairs on how public sector unions have skewed the market with monopoly pricing power for government labor. As the Reverend Wright tells us, "the chickens are coming home to roost:"

What you say?  But CW, you are a pensioner, you too are on the government dole.  Indeed I am.  And I've written elsewhere (on that Navy blog that few of you ever read) that my ridiculously low annual medical insurance premium ($256) is a crime and should be raised, and that the military should begin to offer "lump sum" retirement payoffs to those interested in deferring benefits until later in life (something I most assuredly would have done).

There are solutions to these problems, but we have to be serious about them and not afraid to sacrifice sacred cows. 

Good Work, If You Can Get It

The City Manager in Bell, California (pop. 38,000) makes nearly $800K a year.  The Chief of Police?  Over $450K.

Be angry, America.  Very angry. 

Next WaPost Pulitzer Nominee in This Morning's Paper

Dana Priest and William Arkin of the Washington Post have produced this year's Pulitizer nominee in investigative reporting---a multi-part, multi-media, investigation of the extent of classified spending, research and activity in the US.

I heard about this effort a few months ago, and then again last week once the folks in DC began to get nervous.  There was talk of an interactive map on their website that would allow folks to pinpoint the location of facilities where classified work was performed (Top-Secret; Secret was just too hard to track). 

I had some concerns about such a map, as I figured the bad guys would know how to read the WaPost website too; when I clicked the map this morning, it is indeed an impressive thing, with the broad reach of these facilities evident.  But to their credit, the WaPost put a "governor" on the google map, only allowing one to zoom in to a level at which it appears impossible to gain any real targeting information.  I surely hope that means that the computer geeks working for the bad guys won't be able to jimmy the works and zoom in farther (further?), but for now, I'll guess they can't.

This story is kind of a double dip for Priest, as she's already written a book about the rise of the military "CINCS" (Commanders in Chief--a term Mr. Rumsfeld got rid of--they now call themselves COCOMS--Combatant Commanders) and their broad influence in the across military and political matters worldwide.

Ms. Priest is a good reporter, and it is obvious she has an interest in the growing size and reach of government, military and intelligence agency power and influence.  Would that the WaPost had a reporter this dogged on the waste in government social programs beat....

Presidential Commission On Debt

President Obama's Commission on Fiscal Responsibility and Reform gets underway tomorrow, a body of 18 members, 12 of whom come from the US Congress. Though it seems to me the natural debt reduction commission IS the US Congress, the pragmatist in me realizes that sometimes you need a "splinter" group to go off and look really hard at hard problems. The members have "pledged" to take initiatives agreed on by 14 of 18 members forward in Congress.

It sounds as if both spending cuts and tax increases are on the table. Republicans would be advised to ensure that a third option--tax reform--is on the lips of all its members, as shifting from an income-based taxation system to a consumption-based system is ultimately the smart, long play for the Party (and the country).

The Commission will make its initial report in December of this year (after the 2010 Elections, natch).

Reason TV--Why Public Sector Employees Are Killing The Economy

A fantastic three minute video here from Reason TV (via Instapundit) laying out the reasons public sector (a.k.a "gubment") workers--especially unionized--are a growing threat to economic stability.

I'm a little conflicted on this one. First of all, I don't like giant, undifferentiated statistics (like a woman makes 76 cents on the dollar compared to a man). Generally, there are important facts in the differences that have to be explored. So when I hear that federal employees make $8K a year more than their private sector counterparts--well, I start thinking about the time I was the CEO of a $1B company with 300 employees (--Captain of a US Navy Ship)--and I was paid about $108,000 a year. I sorta thought the taxpayers got me at a bargain there. That said, there are lots and lots of "non-executive" government workers who do seem to make a pretty good living doing things that folks on the outside would receive less for.

Shovel Ready Project: The Government of the United States of America

Okay, granted, it's snowshovel ready, but have any of our readers noticed that our protector and nurturer, our coddler and milkteat known as the Federal Government has been shut down for 3 straight days? Is anyone else here afraid to go to sleep at night? Cynicism aside, I can't help but question what the director of the Office of Personnel Management (OPM) told NPR about the shut down:

You know, it's an opportunity cost of - we put a rough ballpark on this of about $100 million.

First of all, this was from a story yesterday so the DOPM's estimate may have only been for two days, thus making today's "lost opportunity cost" more like $150M. Second, I thought it worthwhile to get a definition of "opportunity cost" and found this one from "The Economist" (seems that they might have at least a ballpark idea of it):

The true cost of something is what you give up to get it. This includes not only the money spent in buying (or doing) the something, but also the economic benefits (UTILITY) that you did without because you bought (or did) that particular something and thus can no longer buy (or do) something else. For example, the opportunity cost of choosing to train as a lawyer is not merely the tuition fees, PRICE of books, and so on, but also the fact that you are no longer able to spend your time holding down a salaried job or developing your skills as a footballer. These lost opportunities may represent a significant loss of utility. Going for a walk may appear to cost nothing, until you consider the opportunity forgone to use that time earning money. Everything you do has an opportunity cost. ECONOMICS is primarily about the efficient use of scarce resources, and the notion of opportunity cost plays a crucial part in ensuring that resources are indeed being used efficiently.

Okay, so now knowing enough about that to be dangerous, one might ask, "Well, then, what did the USG give up, in deciding to shut down most of its snow-covered area of operations?"

A lot of people are fond of saying that the US Government produces NOTHING. That is patently untrue. What the US Government has been producing extremely well for many, many years is staggering debt. And it is clearly undergoing a major reorganization to ramp up that production dramatically under the current Administration.

So taking the numbers from Office of Management and Budget's copy of the FY10 Budget, we see a predicted Debt Held by the Public of $9.882T (or $9,882,000,000,000) which was an increase of $1.351T from the year before). Because we are talking about spending FY10 dollars, let us just suppose then that the US Government this year is producing $1.351T of Debt Held by the Public while executing this budget. That equates to somewhere around $3.701B of Debt Held by the Public produced by the US Government each day (that gave credit to the government for working on weekends which they generally do not).
Now, it wouldn't be fair, or accurate, to assess that the government has been shut down 100%, so production continues, but to a lesser degree than normal. For example, the cost of the government continues (that is always paid for right off the top--self preservation) and, the relative handful of "essential" government employees are still reporting to work. And of course, the entire USG doesn't reside under two feet or more of snow at the moment. So let's conservatively, since we are largely conservatives here, assess the contribution of the shutdown USG offices to the production of publicly-held debt to be on the order of 2%. That drops the production of three days worth of shutdown to $74M/day X 3 days = $222M.

So would I be incorrect to suggest to DOPM that maybe the real "opportunity cost" of shutting down the Government for 3 days has been more like $150M - $222M = -$72M? And that the opportunity cost continues to decrease (or increase in the negative direction) with each day the contribution of the DC Metro area Feds stop producing debt?

Sounds like a White Christmas came early to us taxpaying debtholders this year.