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A Columbus Day Story: The Great Economic and Political Battle of Private Sector Taxpayers Versus Government Employee Unions

By October 14, 2008No Comments
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As I sit writing this commentary on Columbus Day, it occurs to me that I've worked all day. On a holiday. From 5 AM until 10 PM. I've run my business; run my Vice Presidential campaign; done numerous media interviews; and now I'm spending my night writing a political commentary. These are things you do when you're an entrepreneur with lots of ambition and no guaranteed paycheck each week. You earn your keep. From morning until night, you make phone calls, send emails, attend business meetings- anything and everything to survive and THRIVE. I know my friends in the private sector understand exactly what I'm talking about. When you work as a business owner, or independent contractor, or in sales (real estate, stocks, bonds, insurance, mortgages, automobiles), there is no such thing as an “off day.�

We work early mornings, late evenings, weekends, holidays, birthdays, anniversaries, during our kid's ballgames and dance recitals. And the thought of “early retirement?� Well it's just not in the cards for ambitious entrepreneurs. If you're employed in the private sector, I know you understand exactly what I'm talking about. But if you're a federal or state employee, this kind of work schedule is something you can't even begin to understand. And that is exactly the problem. A big problem. A cancer upon our nation. It's a big problem for all of us- you, me, taxpayers, cities, states, our entire country. We are all in grave danger.

Because there is a war brewing in this country. I'm not talking about the Iraq war. Nor the Afghanistan war. Nor the threat of any war with Iran. I'm talking about an economic war that threatens to bankrupt our cities, our states, and our country. A war that threatens to burden our children and grandchildren with debt they can never hope to pay off. It is a war of government employees and their unions, versus all of us in the private sector.

We have created a monster- a privileged class of government employees who think they are entitled to a better deal than any of the rest of us- the taxpayers. They work for us, yet they think they're better than us. They act as if we work for them. They think that while the country is in recession, they deserve ever-higher salaries, pensions and benefits.

We are a nation in the midst of severe recession. Business is down everywhere. Ask any small businessman or woman- sales are down a severe 30% to 40% (or worse). Car dealerships are seeing 50% or higher drops in revenue. America is in crisis. Businesses are drastically cutting budgets and laying off millions of employees. Yet guess who isn't cutting? Guess who isn't laying off employees? Guess who isn't reducing salaries or pensions or benefits? I'll give you three guesses. Government. Government. And more government. Local, state and federal governments want more money during the worst recession of our lifetimes. Bigger budgets. Higher taxes. More money spent on education (which translates to higher teacher salaries). More employees. Higher cost of living increases. Bigger pensions. More health benefits. Can you even imagine the gall?

My business revenues are down 30% to 40% and they want increases? Government is still hiring, while the rest of us are laying employees off? Government is asking for budget increases, while the rest of us are busy cutting budgets? It's obvious that government employee unions want to bankrupt America the same way that auto worker unions destroyed the entire auto industry. The same way that auto unions wrecked the biggest companies in the world- Ford, Chrysler and GM. The same way they bankrupted the economies of the city of Detroit and the state of Michigan.

It is no coincidence that Michigan now has the single worst economy in these United States of America. They won't rest until all of us in the private sector slave away 9 months a year to meet all their demands, to pay all their obscene salaries and pensions and health benefits. They won't rest until the whole America is one big decaying, depressed, economic disaster like Detroit.

If you doubt me, please Google the Los Angeles Times cover story of Sunday 6/10/07 on this economic tsunami headed our way. The normally ultra-liberal L.A. Times reports that California will surely go bankrupt sometime in the near future under the weight of unfunded public employee liabilities. The Times reports that health care benefits alone for retired California public employees will grow from $4 billion today to $31 billion by 2020. That's just the healthcare! There is no possible way to pay for it all. It is a looming disaster for every state in the nation. But the bleeding-heart liberal, “People's Republic of California� is the perfect test-tube, poster-child for the disaster headed our way.

That article was “the canary in the coal mine.� It was written over a year ago. Today Governor Arnold Schwarzenegger is pleading with the federal government to loan California $7 billion dollars- or the state will go bankrupt. The chickens have come home to roost. You can't pay state employees 40% higher wages than other employees in the private sector- at least not if you want to survive economically. California now has the highest state income taxes in the country. Those two are no coincidence. In order to pay one privileged class a "decent living wage" (as liberals like to call it) you have to redistribute wealth away from those who actually earn it (by risking their own money and by creating actual jobs). In other words someone has to pay for all these big salaries and pensions for government employees- so taxpayers get fleeced. The result is that successful business owners (and anyone with assets) are leaving (or should I say escaping) California in droves. Tax revenues are therefore going down, not up, due to this exodus of brains and talent to low tax states like mine- Nevada.

The problem exists all over the country- although on a smaller scale (simply because California is that much bigger, more liberal, and obviously more ignorant of simple mathematics). The L.A. Times article entitled “Public sector reels at retiree healthcare tab� reports that local governments will soon be overwhelmed. "It will be impossible to meet their obligations. The only possibilities are bankruptcies, or a death by a thousand cuts in services to the public." That's a direct quote from the ultra-liberal Los Angeles Times. And that prediction of being overwhelmed “soon� is obviously referring to today. My prediction is that over the next 4 years, hundreds, if not thousands of cities throughout the USA will declare bankruptcy in order to get out from under their government employee union contracts. Bankruptcy will give them the leverage to renegotiate more reasonable (some would say “sane�) deals with government employees.

The Times quotes nonpartisan studies that report wages for state and local government workers are 40% higher than private employees, and retirement and fringe benefits are a whopping 60% higher. The liberal media bombards the public nonstop about the "divide between rich and poor in America." But this is truly the secret "fairness divide" the liberal media has up until now completely ignored (or hidden): the obscene compensation and benefits lavished upon public employees (who happen to vote virtually 100% Democrat just like the media), and the divide between employees of the public sector, and taxpayers of the private sector.

Why do public employees deserve so much more compensation than those in the private sector? Based on what? Small business owners like myself take massive risks, often put their life savings and homes on the line as “personal guarantors,� create jobs, make payrolls, pay millions in taxes (payroll, state and local, federal, sales taxes), and pay for health insurance for our employees. We make it possible for others to live the American Dream. And of course the massive taxes that we pay, make it possible for government to keep hiring, to keep over-paying government employees, and to keep expanding their bloated budgets.

To do all this, we in the private sector work weekends, holidays, birthdays, anniversaries, and overtime for no extra pay. We never get to retire early. I have yet to meet a business owner retired at age 55. Not one. Yet we in the private sector have no guaranteed paychecks (actually we often pay ourselves nothing in order to make employee payrolls when things are tight), no tenured jobs for life, no pension of any kind, and no one to pay our health insurance after retirement. Heck, we have no idea if we can ever retire.

Why do public employees deserve so much more than the rest of us? Why do they get to retire early on an obscene pension of 80% of their last year's salary for life? Why do they deserve health care for life, when the rest of us in the private sector don't?

Why do they deserve to get the day off for Columbus Day and weekends and sick days when the rest of us don't? There simply are no “sick days� when you own your own small business- you either show up or you lose your customers (and your business). There is no time to get sick when you own your own business- so you just don't. I haven't missed a day of work in 25 years. Why is this gigantic divide between public sector employees and private sector taxpayers “fair�? The answer of course is it is not. And it is time for a citizen revolt to end this travesty of justice- simply because the rest of us can't afford to pay for a privileged class anymore.

Tens of millions of American taxpayers are going to start asking these crucial questions: First, why should we in the private sector take all the risks, work 14 hour days (including weekends and holidays) and labor under the burden of ever-higher taxes, so we can pay for the lavish salaries, pensions and benefits of public service employees? Secondly, why are government offices closed on weekends and on holidays, when we often work on those days? Third, why should we slave away at work until the day we die, so we can pay for the early retirements at age 55 or 60 of public employees who get to play golf for the rest of their lives with pensions of 80% (or more) of their last annual working salary, plus full health care for life?

Why should the private sector taxpayers be stuck with this burden? Who are these government employees that they should be paid so much better than the typical taxpayer? No one is saying that they don't deserve to be paid a good wage. What we are saying is simply that it should be in line with what private sector employees with similar jobs receive. And when times are tough and the rest of us in the private sector are cutting budgets and laying off employees, government should be doing exactly the same thing.

The real issue is not whether the overwhelmed taxpayers and small business owners can pay for it or not- we cannot. The real issue is what happens when the unfunded liabilities come due? California, and the other 49 states are facing bankruptcies and economic crisis of epic proportions. Meanwhile the real heroes of the American economy- the job creators and risk-takers called small businesspersons and entrepreneurs- will be forced to work from January to October just to pay the 70% to 80% taxes that will be necessary to save this country from economic disaster.

Can that happen? It already has- it's called France. That's why our American economy is so successful year after year when compared to the stagnant French economy. It's because America encourages and rewards entrepreneurship, ambition and personal responsibility; while France encourages a welfare state where virtually everyone has a guaranteed job, guaranteed medical care and guaranteed pension for life. The result is high unemployment, high taxes, and shared misery for all. Unfortunately California is becoming our American version of France.

Brave politicians (if there are any left) must deal head-on with this looming economic crisis now, before public employee unions destroy the greatest economy in world history and bleed taxpayers and private industry dry. History proves that great democracies are always destroyed when too many citizens believe that they are entitled to feed off the public dole. When 1 of 5 (or more) citizens works for the government; and many more live off companies that do business with the government; and even more citizens depend on government handouts; our economy is in deep trouble, our way of life is threatened, our taxpayers are drowning in debt.

Worst of all, it is quite simply a recipe for political bribery and extortion (“Pay me more, increase my pensions and benefits, and I'll vote for you, support you, contribute to you, and my union will go door to door on your behalf�). Why should government employee unions that donate millions of dollars to politicians, then be allowed to negotiate with those same politicians for obscene pay raises? Why should one class (private sector taxpayers) shoulder all the burden of another class (entitlement junkies and government employees)?

Our Founding Fathers created our constitution to keep the government out of our lives. That constitution clearly gives the power to the people- not the government. But if a majority of Americans live off of, and work for the government, then the tables have turned. Those same people that work for the government; depend on the government; and pay their bills and mortgages with government paychecks; therefore desperately need the government to grow ever-larger (to protect their jobs, benefits and entitlements).

Afterall, the more government keeps hiring, the more employees are available to join the government employee unions. And therefore more union members available to contribute to union political action funds; to vote for union-friendly politicians; and to man phone banks or walk door to door to campaign for union-friendly politicians. These same union organizers and “community organizers� (as Obama calls them) can therefore be counted on to rig the system to continually fleece the taxpayers and benefit themselves- with the full cooperation of the corrupt politicians they helped elect.

I'm sad to say that this war being waged today is all about the same issues as the American Revolution of 232 years ago: freedom; excessive taxes; and taxation without representation. But today it isn't American peasants versus British soldiers. Today it is a battle of government employees and government employee unions, versus the rest of America (the taxpayers who create all the jobs and pay all the taxes). Today it is private sector, versus public service employees. No lives are being lost in this war. But taxpayers are fighting for our economic lives- and the future of our children. There is no blood spilled. But taxpayers are sacrificing blood, sweat and tears to toil all day, every day in order to pay the heavy taxes required to feed this privileged class.

When the ultra-liberal Los Angeles Times makes it a front page story, the disaster is bigger, closer and more devastating than we ever imagined. The time to act is now- before the people working for and depending on government outnumber the people that depend on ourselves and want government out of our lives.

My Columbus Day is now over. I've been working for 17 hours. I'm going to sleep. I have to be up at 5 AM again tomorrow…and the next day…and the day after. Remember, I have 4 young children, a big mortgage, no guaranteed weekly paycheck, no pension, no government guaranteed job for life, and no early retirement on the horizon. For me, it's “off to work I go� for the next 30 years (or more). For those of us who aren't members of the privileged class, there is no rest.

Wayne Root is the Libertarian Vice Presidential nominee on the Libertarian Presidential ticket of Bob Barr/Wayne Root. His web site is: