Author: Larry Littlefield

The New York State Department of Labor has rebenchmarked the Current Employment Survey data for the last couple of years, using more detailed data that comes in later, and reported annual average statistics for 2009. The data, in an attachment, gives an indication of why New York State is having a budget crisis. From 2008 to 2009, excluding the substantially government-funded Health Care and Social Assistance sector, New York City lost 117,700 private sector jobs (4.4%) while the rest of the state lost 152,700 (4.6%). Even so the Health Care and Social Assistance sector, which claims funds from the city and state budgets via Medicaid and health insurance premiums for public employees, added 10,700 jobs in the City (1.9%) and 14,300 jobs (2.1%) in the rest of the state. Local government employment in New York City inched up by 1,600 (0.3%) from year to year, while local government employment in the rest of the state surged by 9,100 (1.4%). Looking at one year of data, one might conclude that the problem is that we are in recession and yet government spending has carried on much as before. Looking at 20 or 40 years of data, one reaches other conclusions.

According to this article and another in the Wall Street Journal (subscriber only), California's public employee pension system might be prepared to admit that its projected 7.75% rate of return is nonsense. That means that it will also admit that even more devastating tax increases and service reductions and eliminations will be required. Required to pay for the unfunded pension enhancements of the past 12 years, resulting from deals between politicians and unions to increase their pension benefits (even as most workers get little or nothing), and deals to cut pension contributions (paying for two decades of special tax deals). New York's projected rate of return? Eight percent plus. Fraud, I as wrote here.

According to the Historical Statistics of the United States, the population of the 13 colonies in 1780 was about 2.8 million, compared with around 19 million in New York State today. Which means that David Paterson, Rick Lazio and Andrew Cuomo, given the population they are drawn from, could be compared directly with George Washington, John Adams and Thomas Jefferson, the first three Presidents of the United States.

What will politics be like a decade from now? After a decade in which taxes on those without special exemptions rise each year, but public services are cut, as more and more money is diverted to the debts and retiree benefits older generations have promised themselves? A decade during which younger generations see their standard of living fall below what their parents’ received, and they struggle to pay those higher taxes, even as top executives continue to receive massive pay and bonuses and public employees continue to retire in their 40s or 50s to a life of leisure? A decade in which those born after 1956 approach old age with no pensions and little savings, and are told that public safety net benefits for seniors will no longer be there for them? And who do we have as possible leaders as we head into this abyss? Paterson, Lazio and Cuomo, three creatures of the system supported by those who benefit from it. As Generation Greed, from the public employee unions to the lobbyists to the advertisers to Fox News, seeks to continue to avoid the uncomfortable truths and deflect the outrage through deception, as millions of people refuse to acknowledge the reality of a society that, collectively, has felt the right to take out more than has been put in, it is quite possible that U.S. politics five or ten years from now will end up something like this.

As I've written repeatedly, two kinds of people have been getting richer for the past 30 years: the executives who sit on each other's boards and vote each other higher and higher pay, and today's senior citizens, the richest in history, particularly retired public employees, whose unions control state and local governments while cheating their younger members and the public. As I have demonstrated each year, most recently in my previous post, the retired, especially retired public employees, pay vastly lower taxes on the very same income — or even a lower income — than moderate and middle income young families. Presumably as part of the same self-dealing and institutional mass rape that provides them with higher incomes.  One should not be surprised, therefore, that the rich pay lower taxes too. And since in this era of Generation Greed ideologies are frauds, one should not be surprised that policies that provide massive public advantages for the privately better off have bi-partisan support.

It’s tax time again, and time to take stock of how the events of the past year have affected two fictional couples, the Young Hopefuls, now both age 30 with a four-year-old child, and the Senior Voters, now both age 70. You may recall that in 2007 each couple had an income of $100,000, with the Young Hopefuls paying $33,028 in federal, state and local taxes and the Senior Voters $14,169 on the very same cash income, even though the senior citizen couple in this example had far more wealth and non-cash benefits such as health insurance.

Things got worse for the Young Hopefuls in 2008, as the recession caused Ms. Hopeful to be laid off from her moderate income job and Mr. Hopeful’s self employment income to drop, while the Senior Voters, who are “living on fixed incomes” benefitted from automatic inflation adjustments for their Social Security and pension. The Senior Voters paid $13,453 in federal, state and local income and property taxes on their income of $102,593, or 13.1% of it. The Young Hopefuls paid more taxes — $16,070, on their far lower income of just $57,000, or 32.1% of it. So what happened to these couples in 2009?

In this post.