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April 20, 2010


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Once again the false dichotomy of raising taxes, or Sacrificing The Children. Add to that the suggestion that you can make up for lost revenue in a shrinking economy by raising taxes forever, and you see why State employees like Jack have a different take on the economy than do people whose salaries are paid from tax receipts. Every state-funded job costs one or more jobs in the private sector, and while it's reasonable to trade off those private jobs for education and security, there comes a point at which state employees have to share in the sacrifices as well- instead of simply rationalizing away one more tax increase.

There is an argument to be made that raising taxes on the rich is not taxing a shrinking economy, but instead is taxing the growing part of it. And there is much to be made that imposing user fees and consumption taxes is a burden on economic activity. Why in an economy which suffers lack of demand would we want to suppress demand by taxing it? Granted, in an inflationary economy where we wish to promote saving, taxing consumption is a strategy aimed at a desirable goal. But not where the problem is people not spending. As for public sector jobs costing private sector ones, I have lots of experience with public sector wage recipients (I don't call them workers), and am aware of why they are so unpopular (what business posts signs like those found in courthouses saying "your lack of planning is not my emergency?"). But public sector payrolls keep private business alive in times of trouble. Cops and clerks who eat in restaurants provide livings for cooks and waitresses, etc. If people want police, parks, schools, roads, streetlights, snow removal, senior citizen centers, medicaid, courts which enforce contracts and collect debts, and the like, they need to pay for them. If they want them to run well and not as sinecures for the politically connected, they need to be vigilant on election day.

I want to add one thing. Not all public sector employees are mere "wage recipients." Some government employees work very hard and well and are valuable to society. But there are too many of the one and too few of the other.

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