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Archive for February, 2010

Wall Street Journal Opinion Page Jan 7, 2010

Tuesday, February 16th, 2010

Wall Street Journal Opinion Page Jan 7, 2010
by: Geoff Ficke

The reason almost all government entities, federal, state and local, are strangling in debt is personnel costs (“Illinois Race Foils Bid to Balance Books,” U.S. News, Jan 4 2010). Too much headcount, too much compensation, and audacious benefit packages are choking the taxpayers and businesses that are saddled with the burden of covering profligate politicians and their pandering to public employee unions with onerous tax burdens.

Comparable private enterprise and government jobs are wildly disparate in compensation, heavily tilted in favor of government workers. No private enterprise wishing to stay in business can allow workers to retire after 25 or 30 years of service and be immediately vested in a pension, especially as life expectancy continues to increase.

A few politicians will dissemble about the “unfunded pension liabilities” that are legal obligations they must confront. Most simply continue to enhance these deals at the behest of ravenous public employee unions. Public be damned. Illinois is but a microcosm of the disaster we must confront.

It is time to confront unions with a demand to rationalize pay, work rules, benefits and pensions with private industry plans. If unions won’t enter realistic negotiations, then it is time for governments, at all levels, to pursue bankruptcy. Sure, the credit ratings and borrowing costs would take a short-term hit. In the medium term, however, when bureaucrats are paid what they are actually worth and budgets and spending are corralled, the bond market will be reassured and reward governments that are sober, prudent and proper stewards of the produce taken from taxpayers with more access to lower rates and funding.