Tuesday, October 12, 2010

Call it the "Big Dig" effect

In "The Paralysis of the State," David Brooks details the "demosclerosis" that has driven a wedge between those who think government is overextended (e.g. Chris Christie canceling a tunnel project) and those who still want expensive government spending. Here's a clue that we're reaching an endgame:

New Jersey can’t afford to build its tunnel, but benefits packages for the state’s employees are 41 percent more expensive than those offered by the average Fortune 500 company. These benefits costs are rising by 16 percent a year.
According to Brooks and political scientist Daniel DiSalvo, state and municipal workers earn $14 more in pay and benefits than private-sector counterparts. Oh, and there's a fat bill coming due:

States across the nation will be paralyzed for the rest of our lives because they face unfunded pension obligations that, if counted accurately, amount to $2 trillion - or $87,000 per plan participant.
With every level of government on the hook for billions of pensions and long-term benefits, Americans are justifiably frightened not only by the current level of borrowing-and-spending but the unfunded liabilities just over the horizon. This is a problem I've been shooting up flares for as long as I've kept this blog: at some point the burden of entitlements and deficit spending will crowd out the thing we call "government."

Boston's notorious Big Dig, which was originally budgeted at $3 billion, has now cost American and Massachusetts taxpayers $22 billion. Governors like Chris Christie are facing up to the fact that a government squeezed by debt and expensive projects has to make a choice and sometimes the answer is "no."

Extra – Commentary echoes: "Unless our states free themselves from the massive debt that government unions have created, it will become increasingly difficult for government to afford the basic services they are supposed to provide, let alone money pits like the Hudson River Tunnel."

4 comments:

Anonymous said...

OK, so the Liberal unions have caused a situation we all claimed would happen - their models of economics are crap and unsustainable.

Good news (at least a positive way to see it) is they can't last.

Unions are dead. DEAD! Let's see them get real pensions.

Mike D.

Anonymous said...

Unlike the preceding decades, union membership has been *rising* in the last few years. Ha, ha!

Vermont Woodchuck said...

Union membership has been rising only in the public sector. That will change when there's no money to pay them; that day is very soon.

Oh yeah, the courts can order their pensions to be paid, ask with what.

Anonymous said...

The biggest increases in union membership in the past 5 years have been in health services, construction, child care and retail trades. But don't let the facts shake your convictions.