I was surprised at some of the pushback to Invictus’ post, Austerity At Work yesterday — at least when it comes to the data portion. The number of state, local and federal layoffs is well documents.

Here is the WSJ:

One reason the unemployment rate may have remained persistently high: The sharp cuts in state and local government spending in the wake of the 2008 financial crisis, and the layoffs those cuts wrought.

The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck, with 586,000 fewer jobs than in December 2008. Friday’s employment report showed the cuts continued in April, with 15,000 government jobs lost.

This is not politics, but simple numbers. Sorry if it conflicts with your previously assumed narrative . . .

 

 

Source:
Unemployment Rate Without Government Cuts: 7.1%   
Justin Lahart
WSJ, May 8, 2012,
http://blogs.wsj.com/economics/2012/05/08/unemployment-rate-without-government-cuts-7-1/

 

 

Category: Economy, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

46 Responses to “Unemployment Rate Without Government Cuts? 7.1%”

  1. b_thunder says:

    The data portion of Invictus’ post is pretty clear: the Gov’t reached unsustainable levels during GW Bush administration, just as the single family home construction. To pretend that we should maintain the same level of Federal/state/local employment is like telling Spain that they need to build more houses!

    What are we after: the prosperity for more people and *real* wealth creation or, like the Chi-Coms and the Soviets, we’re all about “reporting growth and drop in unemployment” at any cost? Even if growth is fictional and the and 50PE stock market is taken as the definite sign of “unprecedented” wealth creation? Would you feel better if the gov’t employment levels remained @2008 levels and the unemployment rate was 7.5%? How would you feel in about 5 years when taxes would have to be raised significantly in order to pay for the borrowed $$ needed to pay for these gov’t workers today? Moreover, there’s no way the gov’t can be shrunk during the “boom times.”

    It’s not that the gov’t workers are useless – in the long term some of them are are very useful. But, like housing, we need to figure out what the “normal” (aka sustainable) level is, and try not to exceed it. Especially when there’s not enough taxes generated in the private sector to pay for existing gov’t employees.

  2. ConscienceofaConservative says:

    Makes sense, if states hire more people unemployment goes down and budget deficits don’t matter until they matter. Aren’t we arguing about short vs medium vs long term? The longer one’s horizon the more mis-allocated resources and the ability to borrow to fun those deficits matter. And nobody talks about whether those state and city workers are delivering services at the best price.

  3. Rich in NJ says:

    I think you have to distinguish between state/local and federal government employees.

    Since the beginning of his term, state and local governments have shed 611,000 employees — including 196,000 educators — according to government statistics.WaPo>, April 29th.

    I don’t think it is in the national interest to be cutting back on teachers or other public employees who provide essential services. The amount they are paid for those services is a separate issue.

  4. Rich in NJ says:

    Fixing the link

  5. craig.r.jackson says:

    Maybe the government should assume X amount of school district debt per teacher. The financial chieftains divide the budget into two chimerical parts, the side that is discretionary and the side that is not. You can imagine how huge the non-discretionary side is. Federal stimulus would get the most bang for its buck, so to speak, by assuming municipal debt on a per direct service worker basis.

  6. 873450 says:

    Government workers are not real people with real jobs. They become real when they are unemployed.

  7. ilsm says:

    conscienceofaconservative;

    The “conservative” knows the price of all “state and city workers” but the value of no police officer, firefighter, school teacher or snow plow driver, or any “state and city workers” delivering other aspects of “domestic tranquility” or “general welfare”.

    I was at the gym yesterday, in the locker they keep a TV going while I was drying off I heard a report that a mid sized city in the next state over was going to close two fire stations, not so good for public safety and more issue to any measure of safety than buying F-35′s or a few trillion bucks in other stuff that do not work, but a federal grant came through and the stations will remain open another year.

    “And nobody talks about whether those state and city workers are delivering services at the best price.”

    You are confusing state and local government performance with federal contractor performance in the war industry and the other parts of cronie capitalism called discretionary non war spending.

    In state and local services the folks get to see what they pay for, go to council meetings and raise cain with school boards. In the 40% of federal outlays for perpetual war and crony capitalism no one gets a say but the PAC’s

    Bigger issue is “best price”, as if the value of what “those state and city workers are delivering” is meaningless.

    Stop the national guard from getting any F-35′s, they do not work!

  8. ironman says:

    What you’re observing in the chart is really an outcome of the President’s 2009 stimulus package, which did very little to boost the private sector, but did a lot to boost state and local government payrolls.

    Let’s keep in mind that one of the reasons the President’s stimulus package was so ineffective for the private sector is that state and local governments used a very large portion of it to keep people on their payrolls without making any other cuts to things like pensions or pay, which is why there is so little difference in the “with” and “without” state and local government cuts from December 2008 through early 2010 in the WSJ’s chart.

    As a result, the U.S. unemployment rate didn’t go as high as it might have otherwise during the primary period in which the stimulus ran (early 2009 through mid 2010), because state and local governments used it to insulate themselves from the deteriorating economic situation during that period. These represent the bulk of the jobs that were “created or saved” during this period of time, which we can see in the chart as minimal job losses for the public sector.

    It’s only after that money ran out that state and local governments began shedding people off their payrolls in significant numbers – catching up to the job losses that occurred much earlier in the private sector, as state and local governments cannot use deficit financing to sustain payrolls that became genuinely bloated with respect to the size of the private sector, especially since the private sector shrank so much in comparison.

    To think – if the stimulus had actually worked to create jobs in the private sector, many of the jobs being lost by state and local governments since the money ran out might have been avoided….

  9. Conan says:

    Barry first off I would like to thank you for presenting Invictus on your blog and of couse to Ivictus himself for writing it…For myself I have noticed that be it the subject or the way presented or I don’t exactly what, but it does stimulate converstion and cause people to comment, sometimes emotionally….on many of his subjects….

    I think that it causes one to view things maybe more from the left or the right than other articles that you publish….most subjects are more complex than the simple graphs presented…for example the subject of today…Govenemnt jobs….Is it Federal or State and Local…is it Obama or is it Bush…What does the the role of Government mean to the economy for jobs…Big Goevernment Socailism or Free Market Capitalism…

    Makes for interesting converstion and definately stimulates people to give their views….

  10. BR, today’s graph is appreciated. Some who are disappointed with UK, EU & Eurozone growth should take note: their austerity measures have much to to with recent soft GDP stats.

  11. Joe Friday says:

    ConscienceofaConservative,

    Makes sense, if states hire more people unemployment goes down and budget deficits don’t matter until they matter.

    Except government workers are not the drivers of the budget deficits, merely the convenient scapegoats.

  12. victor says:

    1) State and Local Gov’s shed jobs with plunging tax revenues because they MUST (by their own laws) balance their budgets. Even with the lay-offs the unfunded liabilities of the State and Local Gov’s are mind boggling

    2) Fed Gov. actually added a modest amount of jobs in the same period

    3) With 50% of newly minted college grad’s finding no jobs or underemployed there is little consolation from “what could have been”

    4) 7.1%=could have been. But:

    According to the Bureau of Labor Statistics (BLS), the U-6 unemployment rate remained flat in April-2012 at 14.5 percent – meaning some 22.8 million people are either unemployed, have stopped looking for work, or need full-time work but can only find part-time employment.

  13. Joe Friday says:

    ironman,

    What you’re observing in the chart is really an outcome of the President’s 2009 stimulus package, which did very little to boost the private sector

    The independent non-partisan Congressional Budget Office DISAGREES with that claim.

  14. RW says:

    Joe Friday beat me to it so I’ll only add that ironman’s commentary for all that it appears reasonably well thought out and written is none-the-less almost entirely a work of fiction.

  15. InterestedObserver says:

    Reading some of the comments above and elsewhere, it seems that there’s a lack of appreciation regarding how a modern economy works.

    Look, public sector employees are paid and buy goods. They create demand in other words. Demand that’s basically needed to navigate a credit crisis. Virtually everyone middle class and below puts a much larger fraction of their earnings to immediate use in consumption by daily living expenses. That’s why the growing income inequality is so corrosive in the US and why developing economies kick into hyperdrive when a middle class emerges. It’s the mechanics of a modern specialized economy.

    Sure, it would have been great if all the stimulus could have been productively put to use in the creation of private jobs. But guess what, if you’re a private employer, expanding as demand crashed would have been a very bad call. That’s not good or bad, it’s how the economy functions.

    As for public sector workers delivering services at the best price…., as a society we’ve decided to handle some issues that serve all, and as a corollary, there’s intrinsic inefficiency. Rural electrification, the national highway system, public education, the Internet, and the mail system all have components that incur high costs because we, as a nation, believe (or use to) that our long term health is enhanced by incurring these costs so that all are served. All of these costs are an aspect of human capital development in the end. In essence, they are part of our infrastructure.

  16. rd says:

    Much of the issue is very much a major problem with government accounting (is there such a thing?)

    It appears that most governments these days are effectively running a cash flow accounting system. This is useful for staying solvent in the short run but is virtually worthless for long-term planning.

    Everytime they add permanent staff, they have added a person’s working and retirement lifetime of costs without accruing the liability. We are seeing this coming home to roost now as employees that used to be young are now retiring. Instead of an extra 1% or so of pay each year, many local and state governments elected to give the employees expensive benefits in retirement and allowed them to start retirement early compared to most of the rest of society. After all, the politicians would retire before most of the employees would so it was “somebody elses problem”.

    Similarly, politicians like having new buildings and roads built. They are highly visible and have plaques on them that can have their name on it (our own Ozymandiases). However, refurbished water lines and sewer are not sexy. Neither is repainting of bridges or repaving roads, so maintenance is an easy thing to cut from annual cash flow budgets. If they had accrued O&M costs with the capital cost, many of our infrastructure problems would not be occurring and in fact, much of the infrastructure would not have been built at all, so suburbs would have been smaller and denser.

    The good news is that laying off employees, while it may cause a reduction in services, including public safety, will cause costs to be lower a number of years from now as the dip in the number of employees retiring a couple of decades with lots of years of service will reduce those payouts then.

  17. Rick Caird says:

    Joe Friday is wrong. According to this reference for 11/2011

    http://www.washingtontimes.com/news/2011/nov/22/cbo-stimulus-hurts-economy-long-run/

    The CBO has reevaluated the stimulus and the model they were using and finds the stimulus will be a net negative over time.

    Both RW and Joe Friday seem to believe we should take their statements as gospel. The rest of us, however, would like references and arguments rather than mere assertion.

  18. BigD173 says:

    What we have seen increasingly at the state and local level has been privitization: Functions formerly performed by government employees have been shifted to the private sector. This has taken workers off the payrolls of state and local governments and added to private sector employment.

    I don’t have any hard data on the amount of jobs lost in the public sector and gained in the private sector because of the privitaization phenomenon, but the anecdotal evidence is plentiful.

    With this is mind, it is questionable to say that, but for the decrease in public sector employment, the unemployment rate would be 7.1%, or whatever. To some extent, the decrease in public sector employment, due to privitization, adds directly to private sector employment.

  19. SecondLook says:

    Privatization of government services has been growing steadily and largely, since the 1970′s. In fact, the Federal government currently spends more for sub-contractors then it does for civil service employees. The numbers are less at the State and Local levels, but quite large; from everything to janitorial services to prisons. By now, there aren’t that many public jobs remaining that can transferred to the private sector – at least, not for any meaningful less cost.

    Also, the bitter quandary is that, for many municipalities, out-sourcing is a useless option, they simply don’t have the money, either for the public, or private workers.

    So, no, governments shedding jobs doesn’t contribute much, if anything, in the way to more private jobs.

    I’ve always wondered about using any real distinction between public civil service and privatized civil service. They are both doing the same thing, their paychecks come from tax revenue. The latter costs less (usually, but not always), however, it’s rarely is more efficient – cleaning toilets is cleaning toilets.

    One area that no one wants to see go private is tax collection. For centuries that used to be the system. People would be contracted to collect taxes from a district, and they would get a percentage of what they brought it. It worked very well, the profit motive and all that. Too well for the public tastes…

  20. fmm says:

    “What we have seen increasingly at the state and local level has been privitization: Functions formerly performed by government employees have been shifted to the private sector. This has taken workers off the payrolls of state and local governments and added to private sector employment.”

    That’s a real Rube Goldberg explanation for the loss of government jobs. In my humble opinion, since I am not a trained economist, I would say that massive loss of jobs in the private sector (construction) caused a massive shortfall of tax revenues, leading to state and local governments not being able to fund necessary jobs. If the state and local government jobs had shifted to the private sectors, the necessary funds would still have come from the state and local governments and still have been entered on the balance sheets as government expenses.

  21. davidzielski says:

    Great! We stop counting those that can’t find a job. Now we stop counting Federal/state employees.
    Maybe if we stop counting the unemployed the rate would be 0.00% and the economy would be in the
    biggest job expansion in a lifetime. Keep up the good work!

    ~~~

    BR: That i not remotely what this suggests.

  22. Old Rob says:

    “”This is not politics, but simple numbers. Sorry if it conflicts with your previously assumed narrative . . “”
    What the heck does that mean? The real point is that it is not ALL the numbers. The cost per job to maintain higher employment at the government level might be in excess of $300,000 per job per year.
    No thanks; I’ll take austerity. It is instructive.

  23. bobnoxy says:

    If no government job cuts, the unemployment rate would be 7.1%? Well, if my grandmother had wheels, she’d have been a bicycle. And if the 23% of small business owners who haven’t paid themselves in over a year were rightfully considered unemployed, the rate would be close to 13%.

    http://www.cnbc.com/id/47723383

    If this isn’t a recession already, it’s the oddest recovery on the books. Record food stamps usage, Medicaid enrollments and housing scraping bottom suggests we never left the recession of ’07.

  24. NMR says:

    Rick Caird Says:

    Joe Friday is wrong. According to this reference for 11/2011

    Of course this reference is the Washington Times…..not exactly the most objective source of economic comment. And as someone famously said in the long run we’re all dead. The need was to prop up demand and create jobs in the short/medium term which the CBO confirms happened (and a large majority of economists polled by Chicago University believe to be the case). What happens five or six years later is entirely speculative. I can’t accurately predict what’s going to happen next year but maybe Rick Caird has second sight?

  25. UncleMilty says:

    What would the unemployment rate be if taxes were raised to pay for those higher levels of gov’t employment? Worse yet, what would the unemployment rate be if cash was actually set aside to fund the corresponding increase in unfunded pension/health care liabilities. I’m guessing it would be much higher than where we are now. Excessive gov’t employment is only stimulative if you can defer the cost to future generations.

  26. Derektheunder says:

    There does seem to be a lack of reporting of federal employment numbers on their own, and it does irk me a little bit when articles and posts appear to use the fact that state and local gov’t employment has been decimated to conceal the fact that federal gov’t employment marches on.

    It’s disingenuous to give the administration credit for cutting government size and expendature when it’s mainly the state/local taking that hit. It’s a trend that’s centralizing economic power and swapping police, firmen, and teachers in our towns for useless bureaucrats in Washington. It seems to me it should be the other way around.

  27. DeDude says:

    And during previous economic downturns the Dems and Repugs have always been able to agree to help the state and local governments by providing direct support to avoid the damage to the country from local government job cuts in a weak economy. They have also been able to agree to do consumer support actions such as $1000/child tax credits. However, with a black democrat in the white house and right wing Gopsters in control of the house the only tax-breaks that are allowed to run out are those for the consumer class – and apparently the more the state governments can crash the recovery the better for the Gopsters.

  28. [...] While we’re on the topic of the stimulus, Barry Ritholtz quotes the WSJ, and points out that the state & local-level anti-stimulus has bee…: The Labor Department’s establishment survey of employers — the jobs count that it bases its [...]

  29. Conan says:

    Here’s one to read to stimulate some thought:

    Obama’s four biggest failures
    Commentary: Liberals will vote for Obama, but they won’t like it

    http://www.marketwatch.com/story/obamas-four-biggest-failures-2012-06-25?pagenumber=1

    Strange election we have coming up..
    Liberals don’t like their candidate, but will vote for him over a Republican.
    Conservatives don’t like their candidate, but will vote for him over a Democrat…

    So the question is who will be truly happy, if either win??? Also I found it interesting the criticism of Mr Obama for carrying on the Bush Policies…..You have to ask, “How did that happen?”….

  30. ellwood2011 says:

    I think it’s a much muddier picture than you claim. Local govt depends on property and like taxes. If you say there was a housing bubble – and you did – then you must also believe there were more property taxes being collected and local gov jobs being created than a nonbubble economy would have. In which case, the 12/08 local gov jobs peak is probably a bubble too. So you’re measuring from a favorable point for your argument but on a more normalized basis it’s not material.

    But much more importantly, the private sector workforce has suffered much greater losses in this recession. Look at Figure 1 on this webpage: http://www.rockinst.org/e-alert/mail/2012/Rockefeller_Institute_Data_Alert_02_17_2012.htm

    Third, everyone overlooks the drain of retirement payouts and health care on tax revenues. All those jobs could have been funded out of the growth in retiree and medical care payouts. Try cutting back on pension double dipping and see how many jobs you can create by spreading the same money around.

  31. DeDude says:

    We can either all build our own personal swimming pools, or we can be taxed to pay for building and running public swimming pools. The individual solution is: 1. wasteful (as each pool is rarely used), 2. Inferior in size (as both space and money constrain the size of individual pools). 3. Much less safe (although some can afford 24 hour mommy lifeguards), 4. Much more expensive (as people competing with the Jones’es spend thousands on something that could be provided by a few hundreds in increased taxes) and 5. Socially isolating (since you never meet new or “different” people in your own backyard. The same things go on with parks and play-sets. The only advantage provided by the individual solutions is the so-called “convenience” and for that people are willing to pay 10 or hundred fold more for their private solutions than what they would pay in increased taxes to fund public facilities. The cuts in taxes and associated services to fund hugely more expensive and wasteful private solutions is simply insane. Now in order to afford all these wasteful expensive private indulgencies we are cutting local spending (and taxes) to the point where we reduce the things that have no private counterpart such as education and police/fire protection. This country has either been zoombified by morons or gone collectively insane.

  32. VennData says:

    Rick,

    Notice the last line of the link less Washington times (chuckles at the paper of Rev. sung Yung Moon) and their unbelievable spin of the CBO article.

    “… CBO said there is no crowding out in the short term, which is why the Recovery Act boosts the economy in the near term..’

    Which contradicts your conclusion and the article itself. The headline of the article is a trick used by the laughable ‘Washington Times’ – and the other conservativley controlled Wall Street Journal – frequently. Give a headline the emotional GOP can use and bury the sophistry in the article and then include one one toward the end to keep us from being sued.

    Rick, read the CBO report, not the rev. Sung Young Moon’s interpretation of it.

  33. DeDude says:

    @ellwood2011;

    That would all be so true except for the fact that most municipalities have reduced their rates as values on properties went up. Tax collection as a % of GDP has been on a downward slide since Kennedy got rid of the 90% top tax-rate.

  34. techy says:

    DeDude:

    Because its not a real debate. wait till romney gets elected they will all forget about fiscal responsibility.

    for republicans the real reasons are one which you cannot say loudly since that will piss of the moderates and they will never win elections.

    what is the real reason: we fought a civil war for it, and also the whole bible belt converted from social democrats to republicans after voting right act of 1965 I think. in short: religion and race.

  35. ellwood2011 says:

    I quote from the “Payroll Employment in 2007 ” BLS report
    which is found at http://www.bls.gov/opub/mlr/2008/03/art2full.pdf

    “Deceleration in the housing market and problems with subprime mortgages had a negative effect on employment in construction and other housing-related industries. Manufacturing continued its long-term contraction, while … local government continued to expand.”

    So although the private sector most correlated with local government revenue – housing – had begun contracting, the local government sector “continued to expand” in 2007.

    And from Sep 07 to Sep 08, state and local govts added another 300,000jobs:
    http://www.bls.gov/news.release/archives/empsit_10032008.pdf

    So a lot of what you are seeing as “lost jobs since 2008″ are jobs that prudent state and local govts would not have added in the first place. If those govts had just stood pat beginning in 07, the unemployment graphs that Invictus shows would not exist. The unemployment rate might have been slightly higher in 07 but the job losses from 08 forward would largely have been avoided and there would be nothing close to the 7.1% vs 8.2% graph that Invictus draws.

    The beginning reference point determines your narrative, nothing more.

  36. ellwood2011 says:

    @DeDude

    Even if what you are saying is true, it has nothing to do with my comment. If rates went down because values went up, it still was the case that aggregate property tax revenues went up and that is mainly what funds local govt jobs. And taxes as a % of GDP is irrelevant to how local govts fund their payroll.

  37. DeDude says:

    @ellwood2011;

    I have not seen anything to suggest that local government spending went up during the boom. The income from property taxes went up some places to compensate for a reduced flow of revenue from federal, and particularly state governments. But this idea that somehow the local government was on a spending and hiring spree during the housing boom is not supported by any data that I have seen. Do you have any data to support the idea that somehow local government employment was increased drastically during the Bush II years? The only data I have seen was that Bush II was reducing federal support for state and local government forcing them to either cut services or raise taxes. Taxes as % of GDP is actually important to look at in that connection because it may help you find out if one entity is shifting burdens to another (between local, state and federal). Otherwise it is easy to be confused about changes in spending vs. changes in taxing.

  38. Joe Friday says:

    Rick Caird,

    Joe Friday is wrong. According to this reference for 11/2011

    From your link:

    All told, the stimulus did boost jobs and the economy in the short run, according to CBO’s models.

    That, by definition, is a successful stimulus.

  39. Joe Friday says:

    rd,

    The good news is that laying off employees, while it may cause a reduction in services, including public safety, will cause costs to be lower a number of years from now as the dip in the number of employees retiring a couple of decades with lots of years of service will reduce those payouts then.

    So you think fewer firefighters, fewer police, fewer nurses, and fewer teachers is “good news” ?

  40. ellwood2011 says:

    ““All told, the stimulus did boost jobs and the economy in the short run, according to CBO’s models.”

    Dude, CBO’s models are designed that way i.e., their assumptions are that fiscal stimulus has a multiplier effect. Those are its assumptions. So, yeah, if you run a model twice, once before you act and once after, you’ll get the same result. What happened in the real world may differ.

  41. ellwood2011 says:

    @DeDude,

    “I have not seen anything to suggest that local government spending went up during the boom.”

    It’s hard for me to believe that anyone might think otherwise (I mean, seriously, does government cut back in a boom? what aspect of local government spending can you recall going down before 2009?) , but anyway you can find all the data at this website.

    http://www.usgovernmentspending.com/local_spending_chart

  42. MayorQuimby says:

    “This is not politics, but simple numbers. Sorry if it conflicts with your previously assumed narrative . . .”

    Nonsense Barry. Gvmt spending is up and deficits are in the Trillions. That is not austerity anymore than a fat man cutting back his 3 gallons of ice cream to 2 can claim to be trying to lose weight.

    GET REAL and grow up people. We are broke (hence monetizations in the Trillions). Hey – I’m in no hurry for a shitstorm and the longer we can hold out the better imo. But we have pushed the monetary system to its breaking point and must reverse course at some point.

  43. DeDude says:

    @ellwood2011;

    Interesting that you gave me a link to a Romney site, but even the local government spending increases shown there are not that drastic. I cannot find anything about local government employment on the Romney site. If spending increases because the federal and state aid to support schools has been cut, then that may be counted as increased local government spending but it is really just a government spending shuffle where higher levels of government can claim “reduced spending” by shuffling that spending down to lower levels.

  44. Joe Friday says:

    ellwood2011,

    Dude, CBO’s models are designed that way i.e., their assumptions are that fiscal stimulus has a multiplier effect. Those are its assumptions. So, yeah, if you run a model twice, once before you act and once after, you’ll get the same result. What happened in the real world may differ.

    Ah Dude, the GDP went from a NEGATIVE 9% in the 4TH QTR prior to the enactment of the stimulus, to +3.8% in the 4TH QTR after the stimulus:

    1ST QTR ’09: -6.7% > 2ND QTR ’09: -0.7% > 3RD QTR ’09: +1.7% > 4TH QTR ’09: +3.8%.

    That’s a swing of more than 12% GDP from negative to positive.

    The almost 850,000 a month job losses at the end the previous administration prior to the stimulus was replaced by an average of almost 200,000 a month job gains. That’s a reversal approaching a MILLION jobs a month.

    Is that “real world” enough for ya ?

  45. victor says:

    @DeDude: the individual vs. public solution has been applied with great success in the former USSR and I know from my younger years, remember the kolkhozy? It is still alive in several one party system countries and people there love it , especially the Party bosses (I mean scoundrels), N. Korea, Cuba and now Venezuela anybody?. I am beginning to re-live the good old days of my youth here in Lala land, a one party State in the making. Our three times a charm young Governor (74 and going strong) and his faithful legislature have found the solution to the State’s $16B projected budget deficit that MUST be balanced per the CA Constitution: increase income taxes on the rich (that should be no problem they are overwhelmingly members of his Party), increase sales taxes (hit the poor where it hurts!) and…apropos your public solution, build a high speed train system for some $90B, no kidding, cannot make this stuff up!

  46. [...] public sector. If the GOP hadn’t forced layoffs of more than 600,000 workers in the public sector, the unemployment rate would be close to 7%. If we’d added a million government jobs as we did during the Reagan era, we would be much better [...]