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A Small Businessman Answers “Why is America Broke?”

By November 3, 2011No Comments
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A Small Businessman Answers “Why is America Broke?”


By Wayne Allyn Root, Former Libertarian Vice Presidential Nominee


Any small businessman with street smarts and common sense can tell you why America is broke, and why there are no new jobs. He’ll tell you that unlike government that spends money it doesn’t have, a small business can only spend what it has. He’ll tell you small business hires only those it needs and pays them only what they are worth, while government hires far more employees than it needs and pays them far more than they are worth. And, get ready for the grand finale- no small business would ever pay workers for 30 years of not working.


This is why the U.S. economy is in crisis. This is why Apple Computer has more money in the bank than the United States government. This is why there are no jobs. This is why we are suffering the Obama Great Depression.


It’s simple. When you own a small business you pay your employees only what they are worth, you pay them only if they show up for work, and you don’t pay a pension and free healthcare for life. Pensions, free healthcare, and “fair wages” are wonderful ideas in the fantasy world of naïve liberal do-gooders who have never run a business, made a payroll, or paid anyone else’s health insurance. In the real world it just doesn’t work. Forget “fair wage.” Salaries, pensions and benefits paid by government are an “Insane Wage.” They are unsustainable. And they are destroying our economy.


Firemen in Las Vegas average just under $200,000 per year. Lifeguards in Southern California make $100,000. Port Authority policemen in New York, employees of the BART train system in San Francisco, and the average federal employee earns about $100,000. Many California education administrators are earning $200,000 salaries.


Then, to make it much worse, taxpayers owe these amounts for life, as pensions, for not working. It’s obscene and suicidal. Think about it- there are 21 million U.S. government employees.


Just like Greece, which is hopelessly bankrupt and threatening to bring down the entire European Union, our own U.S. government employees want to retire at age 45 and start collecting $100,000+ a year for not working…for life. They also expect free healthcare…for life. All of this for secure jobs with easy hours, weekends off, lots of sick and vacation time, automatic pay increases, all with no financial risk or investment required, and no measurement of performance.


No small businessperson could even imagine paying $50,000 per year for 10 employees, while also paying $50,000 per year for 20 retired employees at the same time. They couldn’t survive. And, if the government required every business do it, no consumer could afford the cost of a restaurant meal, dry cleaning, gas, or a slice of pizza.


GM and Chrysler went bankrupt because of this exact model. It’s no problem for the first 20 years. Then your employees start to retire and the bill comes due. Now you have to pay for both the new employee’s salary, and the old employee’s pension, plus free healthcare. This is what is at the root of the bankruptcy and insolvency of the PIIGS- Portugal, Italy, Ireland, Greece, Spain…and soon the rest of Europe. This pension nightmare is on the verge of toppling governments across the globe, just as it eventually toppled GM and Chrysler.


It’s time public employees pay for their own retirement- just like everyone in the private sector. I have no pension. I have no free healthcare for life. My responsibility is to save enough from my income to fund my own retirement. Public employees should also be responsible for their own retirements. It’s as simple as changing from a defined benefit plan to a defined contribution plan- just like corporate America.


What keeps this government employee union racket afloat?  Of course it’s the taxes paid by small business owners and private sector taxpayers who have no pensions of their own. They work for us, yet they receive benefits we can only dream of. They retire on $100,000 per year pensions, while we slave away until the day we die, to pay all the taxes required to cover their obscene pensions.


That brings us to the question on everyone’s minds- “Why are there are no new jobs?” While Obama believes that government spending and government jobs are the answer, in reality, every new government job is a burden on taxpayers. A government job isn’t an addition to the economy…it’s a subtraction. It’s a new expense. When Obama creates new government jobs, he’s just created a massive new obligation for taxpayers. Not just an expense for this year, but an expense for 50 or more years (until the day each government employee dies). In some cases, it’s even worse. When a government employee dies, their bloated pension is paid to the surviving spouse until they die.


So Obama isn’t helping us by creating government jobs. He’s killing us. For every new government job he’s putting taxpayers on the hook for $100,000 a year for the next 20 to 30 years, plus $100,000 a year for 30 or more years after they retire, plus free healthcare for life. Every new government employee is a negative drain upon the American economy. For every government job created, the taxes necessary to pay for it kill multiple private sector jobs.


Why is America broke? It’s the bloated number of government employees. It’s their obscene wages (salaries 40% to 70% above the private sector) and their insane pensions that are destroying the U.S. economy and creating a lifetime of unsustainable debt for future generations. That’s why the private sector is on life support. That’s why there are no jobs. And that’s why there aren’t going to be any, anytime soon.




Wayne Allyn Root is a former Libertarian vice presidential nominee. He now serves as Chairman of the Libertarian National Congressional Committee. He is the best-selling author of “The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gold & Tax Cuts.” His web site: