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Ask the Expert

Signal Photos

 

No hidden money tree

Posted: March 16, 2010 9:02 p.m.
Updated: March 17, 2010 4:55 a.m.
 
Regarding Gary Horton’s column “Blind to our own blindness” (Feb. 3), there are several problems with your metaphor here.

First of all, as you note, Mom’s union benefits are from a private company, which is a vastly different animal from unionized public sector workers. And it’s the benefits of the public sector workers — prison guards, teachers, etc. — that are bankrupting this state, along with other social programs.

If Pacific Bell can no longer afford those benefits, they either cancel or reduce them or go out of business — as you actually noted correctly by saying many companies have replaced pension benefits with 401(k) programs of one kind or another.

But what happens when the state workers’ benefits become overwhelming financially? Are they trimmed back or eliminated, like in the private sector?

No. Instead, Joe Taxpayer’s whacked with yet another massive tax hike.

Even putting aside issues such as legality and constitutionality, this is the underlying and fundamental flaw in your analogy and rationalization. The government doesn’t actually produce anything. It gets all its “wealth” by taking it from private-sector producers.

“Mr. Clean” created and ran his own business, obviously well enough that he could afford to retire. Pacific Bell supplied goods and services profitably enough to provide pension and other benefits to its employees. But if either had been run the way the government’s run, they’d have failed in the marketplace, gone out of business and Mr. Clean and Mom would both be left with nothing, looking for jobs as Wal-Mart greeters.

But when government fails in the same way, we the taxpayers simply get whacked with yet another bill for yet another program we’re supposed to support — like the nationalization of health care and the provision of more “free” benefits for someone.

Well, there’s nothing “free” in government handouts. Someone is paying for them. And that’s the taxpayer.

We either get hit with direct tax increases, or indirect increases through the effects of monetary devaluation.

But the bottom line is that there’s no money tree hidden somewhere to pay for this stuff.

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