“You can fool some of the people…” 

by Public Interest Institute Monday, March 30, 2009
MOUNT PLEASANT, IA – The $1 trillion Federal government bailout has passed and been signed into law. The Iowa budget is still under discussion, but will eventually be passed. President Obama and Governor Culver are presiding over the biggest government expansion in American history, funded on loans and borrowing. These spending “stimulus” packages will most likely be followed by the largest tax increases in American history, because the loans must be paid off at some point.

According to Alan Reynolds, economist and Senior Fellow at the Cato Institute in Washington, D.C., the business and economy of the United States is being held back by not only the current tax burden, but the fear of the “expected tax burden” to pay for these stimulus packages. Most of the money will not go to create private sector jobs, but will instead be used to fund increased numbers of government employees. According to Reynolds’ analysis, each of the 300,000 or more government jobs created – while well paying – will cost over $646,000 to create. At a generous average of $50,000 per job in the private sector, that amount would create about 13 jobs, not one. Who’s being fooled here?

According to Iowa Workforce Development reports, federal, state, and local government workers in the first quarter of 2008 made up almost 250,000, or 18 percent, of the total 1.4 million workers in the state. This is almost 1 of every 5 employees. According to Census data, it takes 100 Iowans working in the private sector generating income, to pay for 6 state government workers. Who is playing the fool here?

Fortunately, according to the Iowa State Department of Administrative Services, the state is curtailing the use of bonuses for state employees. Governor Culver suspended the “exceptional” job performance and “recruitment” bonuses last year. As recently as FY 2004, over $1.1 million in bonuses was paid to 357 State government employees, or over $3,000 each, reported the Globe Gazette. In response, State Representative Clel Baudler recently submitted House File 27, which proposes a ban on incentive pay for state workers. “Representative Baudler might also consider submitting legislation addressing the government’s efforts to fool all of the taxpayers all of the time,” said Deborah Thornton, a Research Analyst with Public Interest Institute in Mt. Pleasant, Iowa. Hopefully, even without it we will eventually recognize that the fools they are concentrating on are not our neighbor, but us.

Public Interest Institute’s INSTITUTE BRIEF, “‘You can fool some of the people…’,” is available at www.limitedgovernment.org.

For an interview or more information on this issue, contact Deborah Thornton, Public Interest Institute Research Analyst.

Public Interest Institute is a non-profit, non-partisan, public policy research organization located in Mount Pleasant, Iowa. The Institute promotes the importance of a free-enterprise economic system and limited government in society based upon individual freedom and liberty. Public Interest Institute believes that ideas have consequences, and involved individuals can make a difference. We challenge concerned citizens to become better informed about public policy issues.

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