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The Great Economic and Political Battle in America: Private Sector Taxpayers Versus Public Employee Unions

By June 10, 2007No Comments
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Nevada Governor Jim Gibbons did something amazing before the 2006 election- he made a promise to the voters to not raise taxes. That got him elected in the most Libertarian state in America. Then he did something even more amazing- he kept his promise to the voters and taxpayers. The howling, screaming, ranting, raving, complaining, protesting and predictions of disaster from the usual big-spending liberal suspects was deafening. Yet despite what all the “horrified” journalists, public employee unions, big-spending politicians, naysayers and liberal elite lucky-sperm-club snobs (blessed with big trust funds) said was impossible- Gov. Gibbons actually did it and Nevada (gasp!) is still standing. Can you imagine? It’s actually possible to survive as a state without tax increases. Who would have ever believed that? To the contrary, Gibbons’ courageous stand guarantees that Nevada will remain one of the (if not THE) fastest growing states in all of America, with one of the fastest growing economies, the lowest unemployment, the best climate for entrepreneurship and home ownership, and the lowest taxes. That combination is no coincidence. South Carolina Governor Mark Sanford, a true Libertarian, proved the same thing 3000 miles away from Nevada- Sanford too held the line on taxes and spending- he actually made drastic spending cuts. Like Gibbons, he too was vilified by liberal critics, savaged in the press, and attacked by politicians from his own Republican Party. Yet surprise of all surprises- Sanford won re-election by a landslide!

But champions of smaller government and lower taxes, like Governors Gibbons and Sanford, cannot afford to rest on their laurels now. None of us can afford for them to rest. Our work has just begun. Now comes the next big issue that courageous politicians (there are few) across America will have to face: the disaster of public employee unions looting taxpayers and devastating our children’s and grandchildren’s economic future with lavish wages, pensions and health care benefits.

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 Californiaâ€� is the perfect test-tube, poster-child for the disaster headed our way. Let’s all study it and take it very seriously. The problem exists all over the country- although on a smaller scale (simply because California is that much bigger, more liberal, and just plain STUPID). The L.A. Times article entitled “Public sector reels at retiree healthcare tabâ€� 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.

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 pounds the public nonstop about the “divide between rich and poor in America.” But this is the secret “fairness divide” the liberal media has up until now completely ignored (or hidden): the obscene compensation and benefits lavished on public employees, 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, create jobs, make payrolls, pay millions in taxes (payroll, state and local, federal, sales taxes). Yet we have no guaranteed paychecks (actually we often pay ourselves nothing in order to make employee payrolls when things are tight), no pension of any kind, 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 80% of salary for life? Why is this gigantic divide “fairâ€�? The answer of course is it is not.

Tens of millions of American taxpayers are going to start asking these same two 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 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? 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, Nevada and the other 48 states are facing bankruptcies and crisis of epic proportions. And the real heroes of the American economy, the risk-takers and job creators called small businesspersons, will be forced to work from January to October to pay the 80% taxes that will be necessary to save this country from economic disaster.

Brave politicians must deal head-on with this looming economic crisis now, before public employee unions destroy the greatest economy in world history and bleed private taxpayers dry. History proves that great Democracies are always destroyed when too many citizens think they should feed off the public dole. When 1 of 5 (or more) taxpayers works for the government, and many more live off companies that do business with the government, our economy is in deep trouble. It is a recipe for political bribery (“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 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, want the government to grow ever-larger (to protect their jobs, benefits and entitlements) will rig the system to continually screw the taxpayers and benefit themselves.

I’m sad to say that the battle being waged today is about the same issues as the American Revolution of 230 years ago: freedom, excessive taxes and taxation without representation. But today it isn’t Americans versus British. Today it is a battle of government and government employees versus the rest of America (the taxpayers who create all the jobs and pay all the taxes). Today it is private sector versus public employees. When the ultra-liberal L.A. 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.

Wayne Allyn Root