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Reason Foundation

Reason Alert: Bell Fiasco Highlights Pension Crisis

Plus, why the Republicans are serious about cutting spending and the mosque controversy

August 20, 2010

Bell Isn't Only City That Should Re-Examine Pensions, Salaries
Reason Foundation's Adam Summers writes, "The Bell scandal is a microcosm of a new class struggle-in California and across the nation-between taxpayers and government employees. Government employees have become the new privileged class. The argument of public workers has always been that they do not earn as much in salary as comparable private-sector workers, so governments must make up for this inequity through increased job security and greater pension benefits. If this was true a generation or two ago, it certainly is not today. The most recent Bureau of Labor Statistics report on employee compensation revealed that, as of March 2010, state and local government workers earn, on average, nearly 44 percent more than do private-sector workers, including 34 percent higher salaries and wages and over 66 percent greater benefits. California taxpayers are already paying pensions of over $100,000 a year to more than 12,000 former state and local government workers, including over 9,000 state and local employees covered by the California Public Employees' Retirement System and greater than 3,000 former school administrators or teachers covered under the California State Teachers' Retirement System. At the federal level, a recent USA Today analysis, based on Bureau of Economic Analysis data, found that government employees' average compensation has grown to more than double that of private-sector workers. Federal workers earned average pay and benefits of more than $123,000 in 2009, compared to a little over $61,000 in total compensation for private workers. Since 2000, federal worker compensation has increased 36.9 percent after adjusting for inflation while private-sector workers saw only an 8.8 percent increase."
Bell Was Also Loaning Money to City Employees - Adrian Moore on Fox Business California's Public Pension Fund Managers Take Mega-Jet-Set Kickbacks
How Public Servants Became Our Masters  

Republicans Aren't Serious About Cutting the Size and Scope of Government
"You remember the late 20th-century GOP, right? They were the rag-tag band of crazy dreamers who managed to take over Congress in 1994 and, with the help of a pliant but deft Democratic president, give us kinda-sorta balanced budgets within a few years. Then, when they got full control of the federal government, blew the doors off any semblance of spending, foreign policy, and regulatory constraint (yes, it's all true). And, arguably worst of all, they took what even Democrats in the mid-'00s conceded was looking like a 'permanent Republican majority' into a series of slam-dunk wins for the party of Harry Reid and Nancy Pelosi and Barack Obama...The best strategy in electoral politics is to let the other party drive the country into a ditch every once in a while. That way, you can take back the House or the Senate or 1600 Pennsylvania Avenue without actually doing any serious work. And by fiddling while Rome burns and playing to useless side issues rather than putting forth a serious counter agenda. With that in mind, here's three reasons why the Republicans aren't serious about advancing any sort of real reform when they get in office. Keep in mind it's mere months before midterms when they just might take over one house of the government." - Reason.com Editor Nick Gillespie goes looking for spending cuts and solutions from Republicans not named Paul Ryan or Gary Johnson.
Obvious Failure of Stimulus Becomes Obvious Even To Economists
John Stossel: The President's Misguided Attacks on Social Security Privatization

Gingrich Knows a "Stealth Jihadi" When He Sees One
In his syndicated column, Reason magazine's Jacob Sullum writes: "I do not often agree with President Obama or New York Mayor Michael Bloomberg. But they have taken the right position in the controversy over plans for a Muslim community center in lower Manhattan, defending religious freedom and property rights against government meddling driven by irrational prejudice. In contrast, whatever residual respect I had for Newt Gingrich because of his libertarian impulses as a Republican opposition leader and speaker of the House has been wiped out by his shameful performance as a jingoistic rabble-rouser who insists that 'we should not tolerate' what the Constitution requires us to tolerate. By conflating the avowedly moderate, pluralistic, and ecumenical backers of Park 51 with the terrorists who destroyed the World Trade Center, he encourages the same sort of collectivist thinking that inspired those mass murderers."
Radley Balko: The American Muslim Success Story

New at Reason

Government

Radley Balko: The Government's License To Steal

Will the War in Afghanistan End in 2012?

Cease and Desist the Distribution of Raw Milk

California

Robert Poole: Reducing Traffic on I-405 in Los Angeles

UCLA Epidemiologist Fired for Reporting Unhelpful Results

L.A. Teachers Union Fears Data

War on Drugs

Feds Trying to Make Examples Out of Showhorse Athletes

The Shifting Limits of Obama's Marijuana Tolerance

Fannie, Freddie and Housing

Free Market Reform for Fannie and Freddie

Barney Frank: We've Already Fixed Fannie and Freddie

It's Never the Right Time to Reform Fannie and Freddie

Return of the Angry Renter

Videos

The New Orleans School Voucher Program

UC Irvine Neuroscientist James Fallon

Shirley Svorny on the Economics of Health Care Regulation

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