UAW cuts jobs
Today, there are more union workers in government (7.9 million) than in the private sector (7.4 million), despite there being five times as many workers in the private sector, because private-sector unions must deal with choice and competition in the open market. As it turns out, both consumers and laborers prefer non-union goods, services and jobs over unionized alternatives.
According to the Detroit Free Press, the United Auto Workers union has laid off 130 workers at its Detroit headquarters as a result of strained finances. The union has seen its membership plummet from 700,000 in 2000 to 350,000 workers today.
Now, will the union bounce back with government subsidies and protection, or will the Big Three focus on building cars for once?
Read moreDebt threatens democracies in EU
Says ... EU Commission President Jose Manuel Barroso.
John Monks, former head of the TUC (Trade Union Confederation), said he had been 'shocked' by the severity of the warning from Mr Barroso, who is a former prime minister of Portugal.Think about that. Debt threatens to overthrow a government. Debt is a real threat to the sovereignty of major countries around the world.
Mr Monks, now head of the European TUC, said: 'I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: "Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They've got no choice, this is it."
'He's very, very worried. He shocked us with an apocalyptic vision of democracies in Europe collapsing because of the state of indebtedness.' ...
The looming bankruptcy of Spain, one of the foremost economies in Europe, poses far more of a threat to European unity and the euro project than Greece.
Greece contributes 2.5 percent of GDP to Europe, Spain nearly 12 percent.
And who's standing in the way of saving European democracies? Public employee unions. Sound familiar?
Mr Monks said union barons across Europe were planning a co-ordinated 'day of action' against the cuts on 29 September, involving national strikes and protests.Let's hope that the leaders (and citizens) of a country that has a $130 trillion national debt are paying attention.
If the federal government were a business, national debt would be $130 trillion
Honestly, I have a hard enough time wrapping my head around the current official figure of $14 trillion, so finding out that the national debt is almost 10 times that amount is staggering.
The debt numbers start to get really hairy when you add in liabilities under Social Security and Medicare - in other words, when you account for the present value of those future payments in the same way that businesses have to account for the obligations they incur. Start with the entitlements and those numbers get run-for-the-hills ugly in a hurry: a combined $106 trillion in liabilities for Social Security and Medicare, or more than five times the total federal, state, and local debt we've totaled up so far. In real terms, what that means is that we'd need $106 trillion in real, investable capital, earning 6 percent a year, on hand, today, to meet the obligations we have under those entitlement programs. For perspective, that's about twice the total private net worth of the United States. (A little more, in fact.)
Suffice it to say, we're a bit short of that $106 trillion. In fact, we're exactly $106 trillion short, since the total value of the Social Security "trust fund" is less than the value of the change you've got rattling around behind your couch cushions, its precise worth being: $0.00. Because the "trust fund" (which is not a trust fund) is by law "invested" (meaning, not invested) in Treasury bonds, there is no national nest egg to fund these entitlements. As Bruce Bartlett explained in Forbes, "The trust fund does not have any actual resources with which to pay Social Security benefits. It's as if you wrote an IOU to yourself; no matter how large the IOU is it doesn't increase your net worth. . . . Consequently, whether there is $2.4 trillion in the Social Security trust fund or $240 trillion has no bearing on the federal government's ability to pay benefits that have been promised." Seeing no political incentives to reduce benefits, Bartlett calculates that an 81 percent tax increase will be necessary to pay those obligations. "Those who think otherwise are either grossly ignorant of the fiscal facts, in denial, or living in a fantasy world."
There's more, of course. Much more. Besides those monthly pension checks, the states are on the hook for retirees' health care and other benefits, to the tune of another $1 trillion. And, depending on how you account for it, another half a trillion or so (conservatively estimated) in liabilities related to the government's guarantee of Fannie Mae, Freddie Mac, and securities supported under the bailouts. Now, these aren't perfect numbers, but that's the rough picture: Call it $130 trillion or so, or just under ten times the official national debt.
The liabilities of Social Security and Medicare are the largest and scariest, but read the whole thing to see where the rest of the debt comes from.
The numbers show the folly of these liberal programs - especially defined-benefit pensions, Social Security and Medicare. The fact is, they're broke. It's easy to make a promise and backload a program's costs (hello, Obamacare), but politicians can't change the fact that there's no such thing as a free lunch. How compassionate is it to create a program that's going to be bankrupt at the exact time the largest number of people are going to be counting on it?
But since liberals don't understand basic economics, I guess it's not surprising that they think they can provide health care and retirement to everyone without understanding the opportunity cost of such promises. If economic principles are too difficult for liberals (of either party) to understand, then they should at least look to socialist countries that are a little further along the road of liberal policies than we are and understand where our country (without a major correction) is heading.
Democratic Congressman attacks college student
Unbelievable.
And here I thought we were supposed to be worried about Tea Party violence. Looks like the facts get in the way of the liberal narrative once again.
Etheridge has issued an apology, but it's likely this incident will haunt him politically for a long time.
Exit question: Will Etheridge get charged with assault?
(h/t Big Government)
What's your plan?
U.S. Senate candidate Sharron Angle supports private accounts for Social Security, so Harry Reid is busy attacking and demonizing her and her idea. But what is Reid's plan to save the floundering and unsustainable program? That is the question Michael Tanner of the Cato Institute asks in a recent Las Vegas Review-Journal column.
First let's address the problem facing Social Security. According to Mr. Tanner,
Thanks to the economic downturn, Social Security is running a temporary cash-flow deficit today. That deficit will turn permanent in just six years. Of course, in theory, the Social Security Trust Fund will pay benefits until 2037. That's not much comfort to today's 35-year-olds, who have faithfully paid into the program their entire working lives but will face an automatic 27 percent cut in benefits unless the program is reformed before they retire.
Unfortunately, the trust fund is made up of U.S. Treasury Bonds, which function just like an IOU from the government (the government borrows your money to supplement current spending and then promises to pay you back later). Tanner continues,
Even if Congress can find a way to redeem the bonds, the Trust Fund surplus will be completely exhausted by 2037. At that point, Social Security will have to rely solely on revenue from the payroll tax - and that won't be sufficient to pay all promised benefits. Overall, the amount the system has promised beyond what it can actually pay now totals $15.8 trillion.There are only three ways to address the issue, and even Bill Clinton gets it: 1) raise taxes 2) cut benefits or 3) allow private investment.
So if Senator Reid is attacking Angle for her support of private investment, what is his plan? Michael Tanner may have figured it out:
Since Reid is attacking Angle for her support for private investment, one can logically conclude he must therefore favor tax increases and/or benefit cuts. And mighty big tax increases they would have to be -- a 50 percent increase in the payroll tax, or the equivalent. The benefit cuts would be no less draconian.
If George Washington had a car
A little historical revisionism but 1) America did win the war and 2) The Dodge Challenger is a pretty cool American muscle car.
New this week at npri.org
If you haven't already, check out a couple of new commentaries up at npri.org this week.
We've got Geoff Lawrence on the broken process behind Nevada's budget problems, and Patrick Gibbons on some sobering new data regarding the state's high school graduation rates.
Jim Rogers risks life, applies for CCSD's top job
If you think I'm joking, you probably don't remember Rogers' reaction to Gibbons' 2009 budget proposal.
"I would blow my brains out if I thought this was going through," said Jim Rogers, the state higher education system's outspoken chancellor.But all that aside, Rogers submitted his application to be the superintendent of CCSD.
Jim Rogers, former Nevada System of Higher Education chancellor, has decided to apply for the position of Clark County School District superintendent and is offering to work until July 1, 2013, without a salary.So why does Rogers think his candidacy is especially important?
And even if a new superintendent is in place by Christmas, there would not be much time for that person to get ready to lobby the Legislature on behalf of K-12 education. [said Rogers]Now, Jim Rogers may make an excellent superintendent, but there are two things that ought to be considered here. One, his track record. And two, while he claims he's not "really pressing" the board, there's a newspaper article about his candidacy (and most likely TV stories tonight), and he's already got backing from "parent groups, candidates for School Board and Stephen Augspurger, the executive director of the Clark County Association of School Administrators and Professional-technical Employees."
So Rogers isn't "really pressing" the board, yet he's essentially running a public-awareness campaign about his candidacy. Hmmm.
Angle an extremist? Because she doesn't want to charge toward bankruptcy?
Great common-sense post by Roger Pilon at Cato. I'm just re-posting the entire thing here:
Today Politico Arena asks:
Will Reid be able to portray Angle as an extremist?
With an air of wonder, POLITICO reports this morning that Sharron Angle, facing Senate majority leader Harry Reid in the fall elections, "has previously made eyebrow-raising statements about withdrawing the U.S. from the United Nations, eliminating the departments of Energy and Education, and privatizing Social Security." Eyebrow-raising? As in "who could stand for such things"?
Beyond the Beltway (and even in pockets within the Beltway), there actually are people who believe that American taxpayers should not be subsidizing the play things of such human-rights-respecting exemplars as Cuba, China, Russia, and their ilk, all of whom sit on the United Nations Human Rights Council. And for some reason, we actually did have both energy and education in this country before the Departments of Energy and Education were created, hard as it may be to believe, just as we had art, philosophy, and radio before the NEA, NEH, and NPR were created. And people retired, on their own savings, before the Social Security system was invented. Speaking of which, it might be useful to note that that Ponzi scheme is now operating in the red, six years earlier than expected. Now there's a reason to raise one's eyebrows.
Hold the celebration: It's worse than we thought
NPRI published an article of mine yesterday ("Graduation time: Hold the celebration") that highlighted the dismal state of affairs in Nevada public education. The article referenced recently released graduation data from the National Center for Education Statistics (NCES) and a 2009 report from Education Week. Today, Education Week has issued its 2010 report. In it, you'll find no good news for Nevada.
According to Education Week's "Cumulative Promotion Index," Nevada's four-year high school graduation rate has fallen from 47.3 percent to 41.8 percent, and is now 27 points below the national average. Over the last decade, Nevada's graduation rate has fallen 23.9 points. (Note: The 2007 data is the most recent data available.)
Graduation rates fell among all subgroups, with Asian students' 13.7 point drop representing the steepest decline. African-American, Hispanic and Native American student graduation rates all now sit below 33 percent.
Education Week also estimates that in Nevada, there will be 23,908 non-graduates this year alone. However, some of these students may graduate with a traditional diploma at a later date or leave with alternative credentials like a GED.
Nevada's official reported graduation rate for the class of 2007 was 67.5 percent. Nevada uses a "Lever Rate" calculation, which is determined by dividing the total number of students earning a standard diploma by the total of the number of students earning standard diplomas or alternative credentials, plus dropouts. This may allow for additional graduates to be counted as it may not consider the time taken to graduate. According to Education Week researchers, state graduation rates are typically inflated because of poor-quality data on student dropout rates.
NCES reports a four-year graduation rate of 51.8 percent for the class of 2007. NCES and Education Week do not include CTE diplomas as standard diplomas when calculating graduation rates.
CORRECTION: After consulting researchers at Education Week, I learned that they include all graduates as reported by the State. So this would include the Career, Technical and Adult Education but not GEDs or certificates of attendance.
