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Thursday, December 18, 2008

The New Ruling Class

New York State, possibly the worst run state in the union, is facing a huge budget deficit, more than $15 billion. Since most state governments, unlike the federal government, are required to balance their budgets, New York's Governor Paterson is scrambling to find additional revenue and is raising and creating new taxes on such a broad array of goods and services even the late George Harrison would have been impressed, e.g. on cable TV, gym dues, clothing, music downloads, manicures, wine, theater tickets, sports events, taxi cabs and many, many more, including, even, non-diet sodas; there will also be sharp increases in fees for state services like license/registration renewals, hunting/fishing licenses etc.

In fact, the situation is so bad in New York State, Albany actually intends to lay off state employees (you read that right). How many, you ask? According to the New York Post, New York State, which numbers 239,830 souls (up 3.4 percent from just two years ago) on its payroll, will be pink-slipping all 520 of them regarded as superfluous, an impressive .2 percent of the state's workforce. Apparently the remaining 239,310, most belonging to powerful unions, are so vital to the public weal they are not expendable. Note that many other states are facing similar deficits and are handling them similarly to New York State.

Meanwhile, Wall Street is laying off workers by the tens of thousands and is joined by other industries are doing same, with layoffs numbering in the hundreds of thousands. It makes me wonder, as the recession deepens and more people in the private sector are let go, if a tipping point will be reached as people, getting laid off or seeing family members and friends laid off, begin to get little bit resentful at the vast army of government workers who not only are well-paid and not being asked to take pay cuts; not only are not being laid-off and not being asked to do whatever it is they are alleged to do, only a little bit better and faster, but are also vested in extravagantly generous pensions that are driving many states to the brink of bankruptcy, California in particular.

Dare people in this country come to the conclusion that state and municipal workers have become the new ruling class in America, accountable to no one, automatically awarded pay increases regardless their productivity and able to retire after thirty years or so at nearly full salary via pensions that are eating up a rapidly increasing proportion of state budgets everywhere? Might people wonder if this vast protected class is really that much more essential to the nation than all those in the private sector now being shown the door?

UPDATE: Thanks to Bob Siletzky for pointing out my atrocious math: .002 percent above should read .2 percent (corrected).

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