Exposing the Big Wisconsin Lie about "subsidized public pensions"

Tax.com's David Cay Johnston exposes the truth behind Wisconsin governor Scott Walker's claim that unionized state workers get their pensions "subsidized" by the state, a claim that has been blindly repeated in the press from the AP to Politifact. This is a carefully argued, well-documented essay from a source that is hardly partisan for labor, and bears close reading.
The fact is that all of the money going into these plans belongs to the workers because it is part of the compensation of the state workers. The fact is that the state workers negotiate their total compensation, which they then divvy up between cash wages, paid vacations, health insurance and, yes, pensions. Since the Wisconsin government workers collectively bargained for their compensation, all of the compensation they have bargained for is part of their pay and thus only the workers contribute to the pension plan. This is an indisputable fact...

Among the reports that failed to scrutinize Gov. Walker' s assertions about state workers' contributions and thus got it wrong is one by A.G. Sulzberger, the presumed future publisher of The New York Times, who is now a national correspondent. He wrote that the Governor "would raise the amount government workers pay into their pension to 5.8 percent of their pay, from less than 1 percent now."

Wrong. The workers currently pay 100 percent from their compensation package, but a portion of it is deducted from their paychecks and a portion of it goes directly to the pension plan.

One correct way to describe this is that the governor "wants to further reduce the cash wages that state workers currently take home in their paychecks." Most state workers already divert 5 percent of their cash wages to the pension plan, an official state website shows.

Really Bad Reporting in Wisconsin: Who 'Contributes' to Public Workers' Pensions (Thanks, Fipi Lele!)

(Image: Madison Wisconsin Protest, Capitol Square [IMG_2770], a Creative Commons Attribution Share-Alike (2.0) image from ontask's photostream)


  1. Really bad reporting here. You forgot the update that says the taxpayers are on the hook because the pension fund comes up short and since this is a defined benefit plan instead of defined contribution, the employer (read state or taxpayers) is on the hook for the diference.

    1. SKR

      Really bad reporting here. You forgot the update that says the taxpayers are on the hook because the pension fund comes up short and since this is a defined benefit plan instead of defined contribution, the employer (read state or taxpayers) is on the hook for the diference.


      That is why there are actuaries. Some people die soon and leave part of their pension, and some die late, taking more than their “share” of the pension.

      The margin of error should be on the high side, if they want the pension to be at least even. If the pension is coming up short, then either the actuaries are incompetent or the people in charge are not listening to their actuaries.


    2. Since you seem rather adamant about your assertion, do you have a link with data that shows how much/little Wisconsin workers have traditionally paid for their pensions? Have not seen a refutation that contains this information. Otherwise, it’s dittoheads all round.

  2. Many state retirement systems especially if the retirement started in the 90’s have benefits only superseded by Wall Street exec plans vs average final income while working.
    The thing is that whatever problem the state has, it is obligated to honor the contract, these workers have already done the work, they have earned the benefits.
    These plans are dangled to entice workers out of the private sector often to lower wages, changing the deal after you have taken the services is breach of contract just like raiding pension funds by corporate raiders is grand theft.
    As usual the corporate structure of government stacked on top of sovereign immunity means that the worst thing that happens is these ganavs are not re-elected.

    1. In the private sector when you suck the life out of an enterprise through bad deals (read “contracts”) it fails — employees, management and investors lose out — not so in the public sector, where the taxpayers remains on the hook forever. Where’s the Chapter 11 equivalent for the public sector?

  3. So basically by cutting public pensions state employees are having the pensions they already paid for stolen?

  4. OK.
    So it’s not a “pension problem”.
    It’s a “they’re getting paid to much through promises of lifetime income and benefits that we may not be able to afford” problem.
    We can debate the issue reasonably, but parsing semantics makes for a fairly lame argument.

    1. Very different. Not just semantics. Walker is framing it as though public workers are receiving “gifts” for their pensions from the taxpayers.

  5. Unless I’m mistaken (and I may well be), the Wisonsin employees are under defined benefit penion, meaning the employees will get payments on retirement that (depending on how long they live) bear no relation to their contribution to the plan. That means that taxpayers do indeed subsidize the payments

    Are the Wisconsin workers under a defined contribution plan? If so, your argument makes more sense.

  6. Nevermind that the public sector is employed by the government and all of the funds the government spends are extracted from the taxpayers. The notion that taxpayers don’t pay for these pensions or salaries is ridiculous. Between this and the “walker created the deficit” argument, the lefties are starting to sound like dittohead righties.

    1. The idea of a “public sector” vs. the “private sector” is a false dichotomy. Supposedly, somebody who works for Lockhead Martin is “private sector”, but are they really? Do private individuals buy fighters and bombers? The compensation that goes to these arms dealer sleazeballs is paid ultimately by taxes too. Let’s get rid of the benefits of these people first before attacking the teachers, road workers, snow removers, and all the other useful non-death related workers taxes pay for.

      1. Do private individuals buy fighters and bombers?

        Yes, they certainly do. Usually not directly from the makers, though; typically they conspire with the US and French governments and the owners’ name is never on the books.

      2. No, there is no dichotomy at all.

        Are salaries paid by voluntary exchange, or are they paid by fees that, if not paid, will result in arrest and other punishment beyond not receiving the service?

        The salary of workers at Lockheed Martin are fully public, and thus fall into the second category.

    2. Government does not extract money from taxpayers. The government provides services defined by the general public. You individually might not agree with some of the services the government provides, but on the aggregate the services provided are what the public has demanded. You don’t get fire/police/jails/sewers/schools/working traffic lights/plowed streets/trash free parks/the parks themselves/etc, etc, etc, unless you pay for it. Generally when government is working well you don’t notice they’re there, that doesn’t mean you get to stop paying.

      Let’s all repeat again and again, the government is not an evil overlord that takes all our money. It is an organization that carries out the will of the people.

      When you pay crap you get crap. That is, if you’re lucky, often when you pay crap you get corruption. See- Mexico.

  7. @SKR Nevermind private business doesn’t earn money in a vacuum and would spend more time securing and protecting their existing assets rather than being freed to pursue further income because of the structure in society government provides.

    The libertarians continue to sound like the selfsame dittohead righties.

  8. SKR, you sound like you don’t *want* teachers or policemen.

    Because it sure as hell sounds like you don’t want to pay them.

  9. You write that he’s “hardly partisan for labor”. But Johnston’s longest-held job was at the new york times, generally considered a house organ for liberal democrats. His books have titles like “Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super-Rich–and Cheat Everybody Else”. I kind of doubt that he’s a registered republican. He has a useful point about the accounting, but it’s buried under diatribe.

    1. the new york times, generally considered a house organ for liberal democrats

      It certainly was when Judith Miller was parroting Bush White House propaganda about the Iraq war on the Times’ front pages. Cheney, Rumsfeld, Wolfowitz… biggest buncha reds I ever saw.

  10. The argument in essay is purely semantic one. Of course Wisconsin and the state employees negociated the current compensation deal and the state contribution to the employees’ pension plans is included as part of the total compensation to those employees.

    Many employers pay directly for some part of non-salary compensation to employees. This is true to some extent whether union or non-union, public or private, management or labor. My company contributes to both my health insurance and retirement plan as well as many other types of non-salary compensation.

  11. @7

    Johnston’s longest-held job was at the new york times, generally considered a house organ for liberal democrats.

    Interesting. I’ve never before seen “generally” used to mean “among neocons and/or Fox News watchers”.

  12. If the people running the employment and the pension fund stuff – the relevant local govt. department I’d guess in this case – don’t pay in appropriate amounts to cover the benefits they have *signed contracts to pay* then why is this the fault of the employees? If, for example, a large company included paying some amount into a pension as part of the contract of employment and then failed to make any payments that would be fraud with possible prison consequences. Why are people employed to do the work of the govt. entitled to less?

  13. This article has some insight on the Wisconsin plan: http://host.madison.com/ct/business/article_930bf94a-7e36-11df-abb9-001cc4c03286.html.

    It seems to be a hybrid of a defined benefit (taxpayers make up the shortfall) plan, and a market-indexed one. Payouts go down somewhat when investment returns do.

    The Wisconsin plan was apparently quite well-funded (97% covered by contributions/investments) up to 2008, but then it took a 26% investment hit, leading to the current fight over funding the gap.

  14. @LordDon
    You are absolutely right, the proper goal of government is security for the citizenry. Business would have to expend capital to provide that security in the absence of government. I don’t really see how that impacts my comment on the the lefties parroting truthy arguments like dittoheads.

    @Johnathan Badger
    You’re right it’s not a dichotomy but more of a continuum as I’m sure you would agree that a sandwich shop falls further on the private end than Lockheed. ANd I’m pretty sure I haven’t attacked any public workers at all.

    The reason I use the word extraction is because of the lack of choice (I view the question “why don’t you move to Somalia” just as invalid as the Cuban version). The individual doesn’t get to choose which services (s)he pays for and utilizes. If that peron decides not to pay for a service that (s)he doesn’t use, ultimately men with guns show up. I would also point out that becase of the monopoly position government holds, paying not crap doesn’t mean you will get better than crap.

    1. What folks really want is for government to be replaced by the almighty and efficient private sector model of corporate capitalism. Neo-fascism.

      “I would also point out that because of the monopoly position government holds, paying not crap doesn’t mean you will get better than crap”

      I can’t wait to have my monopoly government be replaced by a plurality of corporate monopolies!

    2. @4: Never mind that government workers pay taxes and vote. It’s worth repeating that they’re more likely to have obtained a bachelor’s or master’s degree than a worker in the private sector. The whole point of obtaining a post-secondary degree is to increase your lifetime potential earnings.

      Who you should be mad at are the elected “leaders” who do stupid things with your tax dollars like; give tax abatements to multi-national corporations who will leave state as soon as the abatement period ends, buy expensive real estate at commercial rates with the notion of government-led redevelopment, give themselves fat raises in the middle of the night after the press goes home, execute shady accounting tricks to hide budget deficits, and give extremely lucrative no-bid contracts to their campaign contributors. There are many other forms of graft and naked corruption that you should be angry at the elected for. Getting pissed that your (possible and probable) neighbor, that “greedy gob’ment worker”, is getting paid a couple grand more than you is an exercise in self-loathing.

      1. > The whole point of obtaining a post-secondary degree is to increase your lifetime potential earnings.

        I seem to remember something about becoming a more knowledgeable and better-rounded person, so maybe that’s not the WHOLE point..

  15. More generally, let’s be sure we apply this same logic to the fiction that the “employee” pays 6% or so of the Payroll Tax and the “employer” pays 6%.

    The employee pays the whole thing.

  16. Shouldn’t we know just what is the unfunded amount of Wisconsin’s public pension liabilities, expressed as a percentage of Wisconsin’s gross state product?

    Or doesn’t it matter that this issue is understood in any context? Are we just supposed to go “Oooh, big numbers. Cuts must be made!”

    My understanding is that these liabilities represent a *very* small percentage of most states’ output over the next, say, 30 years (to choose a time frame that might arguably be reasonable for closing the gap on pension liabilities) — like, less than 0.3% for most states.

    That would seem to imply that we’re being sold a bill of goods on this Wisconsin public pensions “disaster.” I say this a resident of NJ, which is in a similar boat, financially and politically.

    It’s wise to beware pols with a media-generated reputation for being “straight talkers”. They aren’t. They got that reputation bestowed upon them for political reasons. Walker, Chris Christie, John McCain — somehow it’s always the Republicans who are deemed the Courageous Souls Unafraid to Tell It Like It Is.

    Whotta load.

  17. Here, let me reduce the intelectual level of this comment tree by injecting a wee bit of humor into it:

    A public union employee, a tea party activist, and a CEO are sitting at a table with a plate of a dozen cookies. The CEO takes 11 of the cookies, turns to the tea partier and says, “Watch out for that union guy. He wants a piece of your cookie.”

    1. A public union employee, a tea party activist, and a CEO are sitting at a table with a plate of a dozen cookies. The CEO takes 11 of the cookies, turns to the tea partier and says, “Watch out for that union guy. He wants a piece of your cookie.”

      I think you just raised the intellectual level of the discussion rather considerably.

  18. “It’s worth repeating that they’re more likely to have obtained a bachelor’s or master’s degree than a worker in the private sector. The whole point of obtaining a post-secondary degree is to increase your lifetime potential earnings. ”


    Holy non sequitur batman! What does degree attainment have to do with from where the funds to operate government come?

    That first setence about them paying taxes just means that some small part of their pay is coming from themselves. But since they are taxpayers, I don’t really see how that impacts my argument that taxpayers are the source of government funds. Actually, it sounds inefficient to me. Should probably cut their pay and give them a tax break to compensate, but that’s neither here nor there.

    With regards to the non sequitur, the reason for the higher degree attainment is because pay is tied to degree attainment instead of the work being done. Why should someone with a PhD get paid more than someone with a bachelors if they are doing the same wiork?

    1. It has bearing as the salaries of professionals tend to be higher than that of the general population. Degreed professionals (read: teachers, nurses, accountants, engineers, university professors, social services workers) make up a large percentage of government workers. No one, at any point in these discussions, has argued that tax dollars are not the source of government employee compensation. However, the fact that government workers also happen to be tax payers has been glossed over and blown off to the side.

      …some small part of their pay is coming from themselves…

      If taxes are such a small burden, perhaps the argument should be that taxes are too low and need to be raised.

      Also, I am not Batman.

      1. Actually, the argument I was making there when I mentioned paying themselves was that the portion that the worker as a taxpayer pays as an individual in relation to the aggregate from which the salary is drawn is small. So thats not really an argument for increasing the tax burden.

  19. Oh I would like to put forth that I think they have a contract and that contract needs to be honored and that the ability to unionize falls under the right of assembly and association. The only people I’m “mad” at, actually disappointed really, are the talking heads on the left that are resorting to Limbaughesque tactics. The whole Walker deficit argument was a total Swift boat attack. Do Swift Boat attacks work? Sure, I have heard the walker deficit argment from so many different people it’s nuts, but that doesn’t mean it’s respectable to misrepresent information for political gain. And that is exactly what the “taxpayers don’t pay” argument is, a misrepresentation.

    1. It may be a misrepresentation in fact, but I think it’s spirit is truer than what’s coming from the other side. The compensation package seems to be painted by Walker and his group as “look at all these awesome benefits that these guys get, that you don’t get, that are coming out of your pocket!”. And it’s true, it comes out of taxpayers pockets (well, technically, I guess it comes out of the pockets of taxpayers from previous years? Not really all that important). But it’s also true that the REASON they get the awesome benefits is because their take-home pay is a lot less than they’re worth (allowing for some margin of error due to potentially superior negotiating power on one side or the other). The deals are the way they are because the choice was “pay now, or pay later”, and the state chose “pay later”. It’s not fair, or honest, to say not only, “You know, you guys really should be getting less benefits, you get paid enough” (because if they were paid enough, they wouldn’t have gotten the benefits in the first place), but also “you’re not allowed to negotiate any more.”

      Taxpayers pay for the salary of public workers. This is negotiated. If the negotiation fails to produce a satisfactory result to the public workers, that’s the public workers fault. If it fails to produce a satisfactory result to the state, that’s the STATE’s fault.

  20. We have a bunch of Republicans who have made a career out of proving to you that you can’t trust government to live up to its promises. For whatever reason, the Tea Par-tay is cheering this particular example of breach of contract.

    1. “Republicans like to say that government doesn’t work, then they get elected and prove it.” – PJ O’Rourke

  21. Let me try to sum this up:

    A) It is not okay to break the social contract by raising my taxes.
    B) It is okay to break written contracts by reducing your previously agreed benefits.

    Does that about cover it?

    1. The term “social contract” is one that is sufficiently meaningless that it should not be used.

      A contract is a document, that two people voluntarily agree to, that gives each of them certain rights and obligations – as set forth in the contract. It generally has provisions that if either side violates, the contract is void. Neither party can unilaterally change the contract; there are procedures by which both have to agree to any changes.

      None of this is true of the “social contract.” One side can change it at will, one side is strictly held to all provisions while the other isn’t, nothing is even written down, and hell, no one even SIGNED or explicitly agreed to anything.

      The term “social contract” bears no relation to any other type of contract in the world. The term should be abandoned.

      1. That reinforces my point. Many people are trying to enforce an imaginary contract to the detriment of a real one.

    2. Soon WI GOPs will renege on other collectively (corporations often being collectively owned) bargained contracts.
      or maybe they won’t. ;-)

      Really, the unions’ weakness is that dems are as bought by ‘business’ as repugs are bought by ‘business’.

  22. @Anon #28
    What I’m hearing is that it is truthy enough to make a good argument. I think thats a problem.

    I don’t know where you are getting those arguments for your summary. I said they when I should have said the workers have a contract that needs to be honored.


    The Forbes article contains an update explaining that the taxpayers are on the hook for the difference. The assertion that I made is that state workers are paid by the state whose funding source is taxes. That means the taxpayers are paying the workers. Therefore, saying that the taxpayers don’t pay for the pension is not true. I don’t see how data quantifying how much those workers contribute to their pension plan has any relevance.

    1. “tax=payers’?
      You mean the Corporations that do pay tax?
      Or do you mean to simply ignore the little old widow ladies, the retired, the retired without health care, the sick, the young, the disabled, the unemployed, who don’t?

      Do the non-tax-paying citizens count for more than the tax-paying corporations?

      Screw the “taxpayers”, and save the citizenry.

    2. I wasn’t responding to you, although your comment triggered my response. Your comment stood out like a sore thumb (among the various threads on this subject) for acknowledging the desirability of adhering to written contracts.

      1. Well I thought I had to toss that out there since I’m not trying to defend the Republicans or Wall Street or making any of the other arguments that some seem to think I am making. But when you posted that, I thought, “damn he’s really putting words into my mouth”. But now it all makes sense.


        If the thesis to which you are referring is that the pensions contributions are part of the compensation package to which the workers agreed and deferred, I would accept that, excepting that the compensation originates from the taxpayers? I’ll also accept historically mismanaged, and people should be angry at those who cut the deal and mismanaged the pension. It seems rather silly to be mad at a teacher for the whole mess.

        @Ugly Canuck
        I never called the workers greedy or told you what “must be done right away”.

        1. You seemed to be doing a weird semantic thing that I honesty don’t get. I just bought groceries. I no longer own that money. We no longer refer to that money as the Snig’s money, that’s now the grocer’s money. The teachers taught, the cops did cop duties, firefighters fought fires. They were paid to do this, including their pensions. That’s the public servant’s money now. No longer the taxpayer’s money, though historically, it was. I’ve very glad you’re not mad at the teachers, I really wish no one was. There’s a difference between subsidies (giveaways to support a business/industry) and earning your wages. People don’t get a subsidy for work, it’s called wages and benefits.

          Here’s an illustration of the principle:

          1. So after you buy groceries you say that you spent the grocer’s money? I’m guessing you say you spent your money on groceries which is exactly what those taxpayers are saying. I don’t think I’m the one doing weird semantic thing.

          2. So after you buy groceries you say that you spent the grocer’s money? I’m guessing you say you spent your money on groceries which is exactly what those taxpayers are saying. I don’t think I’m the one doing weird semantic thing.

            Yes, but those taxpayers are wrong. They bought groceries, not the grocer. They may think they get to decide how much the grocer gets paid and how much he gets to pay his stock boys just because they bought a head of cabbage, but they’re wrong.

    3. What I’m hearing is that it is truthy enough to make a good argument. I think thats a problem.

      But if you are only “mad” at the left, which is what you said, then you don’t think it’s a problem that the right is saying things even less true?

      1. @ Anon #41
        That is because I had written the right’s ability to be honest a long time ago. I also changed the mad to “disappointed”. Can’t really be disappointed in the right for doing what is expected of them.

    4. Let’s get real, shall we?

      From the link posted above:

      “Why are our public pension systems and plans in such precarious financial condition? Of course there are some examples of excessive pensions, of double-dipping and of “gaming” the system to “goose” the pension amount. But these are few in number. And, even in the aggregate, the financial impact of these excesses pale in comparison to the gigantic investment losses of these pension funds. So let’s place the fault where it really belongs — not with working people — but with Wall Street banks. Who made money on these risky investment gambles? Who takes pension fund trustees to play golf and on so-called “educational” junkets at lush resorts to enjoy lavish dinners? Wall Street.”

      For more on these republican/Democrat big $$ crimes against hard-working Americans, see:


      Oh yeah those “greedy workers” victimizing “taxpayers”, hohohohohohoho

      Pull the other one, but you’ll have to pay me first!

    5. One final passage, SKR, before you tell us agian what “must be done right away”.

      Again, from the blog Pension Pulse, linked to above:

      “The conservatives will “scapegoat” public employees as a privileged — protected — class. But it was not firemen, cops, clerks, or teachers (or their unions) who lost trillions of dollars in risky investments in an under-regulated stock market over the past 20 years. The Wall Street money managers lost it in investments acquiesced in by the pension fund trustees they had wined and dined. It’s the same old story. The bankers pocket gigantic fees. The privileged few get fat. Ordinary people get run over. And now are even to be blamed — even punished — for a mess they did not create.”

      And this passage is heavily emphasized in the original, too…..

    6. Read the update on Forbes, doesn’t really refute the premise.

      The “employer” has had the advantage of using the capital invested by the Unions. “Subsidized” is not a good word to use, as it implies outright financial assistance. “Historically mismanaged” is perhaps better. The pension fund was historically mismanaged, resulting in shortfalls expected by the actuaries, but routinely ignored by politicians for political advantage.

  23. Now that I’ve actually read the colum: it’s a really good read! And I have to assume that SKR did not actually read it or the comment thread, where DCJ himself is doing — with all due respect to the BB commentariat — a better job than we of defending his thesis against similar objections.

  24. Well everybody’s got a lotta work to do.
    But I can’t forbear from quoting one final time the author of Pension Pulse, link above, as to where we ought to go from here.

    For it sounds, well, sensible:

    “While Wall Street continues to enjoy record bonuses, private and public pension plans are getting decimated. But instead of blaming people, we got to get on with it and start introducing meaningful regulations and reforms which will bolster pensions and the financial system.

    The damage is done. We’re not going to change the past, so let’s focus on building the future. ”

    That link again:


  25. Mr. Johnson is correct and incorrect in his article. He’s right that arguing whether money paid into the benefits pool directly by the state or as a percentage of salary is pointless. It’s a fixed pool going in.

    But not all of the money in the benefits system comes from employees paying into the system (directly or indirectly). A significant chunk is from interest off of investments. And those investments are subsidized. The money managed for benefits is invested on behalf of the employees. It’s invested based on a risk-reward profile to maximize reward. Because the state has guaranteed payments, it is invested in riskier investments than it would otherwise. e.g., a portion normally invested in very secure investments doesn’t have to be as high and can also be invested.

    That investment “insurance” is a subsidy. A contractual subsidy, but subsidy none the less.

    It is correct to say that Walker is trying to make state employees take less. But if that money is being paid into a fund that pays it back to employees, then those extra contributions can’t be said to be “taken” from employees. Rather, the fund is being built up to increase the total fund size. Effectively shifting the investment “insurance” payments from the state to the employees. In that respect, employees will be paying more for the same benefits.

  26. Libertarian Thomas DiLorenzo wrote an interesting analysis of public unions recently.

    This is a short summation of the article:

    Public unions have considerably greater power than private unions, for two reasons.

    The first is that their employers can’t effectively go bankrupt. If the workers of a grocery store push too hard, and ask for wages that would make the grocer unprofitable, the grocer will go out of business. Everybody loses. The market provides a natural deterrent to any single party getting too greedy.

    The second is that public employers provide artificial monopolies over the services they offer. If the workers at Kroger’s go on strike, the consumers can just go to the Safeway down the street. In the case of public employers, the consumer can’t go anywhere else, so they freak out.

    For these two reasons, public unions have a lot of power, and thus politicians are under a lot of pressure to meet their demands.

    Unfortunately, the easiest way to meet their demands, without having to actually pay any money in the present, is to promise pensions.

    A politicians can promise enormous pensions, and make the unions happy, and know that the weight will fall on his political predecessors.

    We have seen this effect in states throughout the country, California being the best example.

    Unfortunately, the future is now..that is a major reason these things are coming to ahead in various states.

  27. Yep, all across the union, state governments wanted cheap labor, so they borrowed from the future by promising great pensions by deferring some of the workers’ salaries. But many of them failed to require the pension systems to remain fully funded through the Boomers’ retirements. They fooled their workers, most of who don’t have the time or inclination to audit a pension system.

    They figured that the day or reckoning was years off, while the next election was less than 4 years away. Why not use the money they should have been paying their workers to give their rich business buddies tax breaks now?

    But forget the pension ruse. That’s just an excuse. What Republicans really want to do is fire most or all of those public employees and give the work to their buddies in big corporations, who will then kick back part of their fees to the politicians.

    Here’s the deal. Public employees do stuff that we need done. Either we pay them with our taxes, or we pay the fees to a business that does the same thing. (See: private prisons, charter schools.) Regardless of whether government workers do the stuff we need done, or employees of some private business do it, we are going to pay for it.

    The right would have you believe that, by some kind of magic, competition will force all these private businesses to do the public’s bidding at the lowest possible price.

    Not so.

    Obviously worker mobility varies with the unemployment rate and many other factors, but in any given economic environment, a job has a value. That’s the salary you have to pay somebody to get him or her to do that job. Doesn’t matter whether that person works for the state or works for a corporation, if he isn’t paid well enough, he’s going to quit and go do another job.

    Now, in addition to paying those salaries, big business also has to pay their executives obscene salaries and give them yearly bonuses and stock options. They have to give their stockholders dividends and constantly expanding value. They have to pay lobbyists and bribe politicians.

    Government doesn’t have any of this overhead.

    So much for all the crap about “fraud and waste” in government. As usual, it’s all Newspeak. Yes, you can find anecdotal examples, especially in the military, but it doesn’t hold a candle to the level of fraud and waste in big corporations.

    Anyone who actually believes that, in the long run, private business can perform public services cheaper than public servants is simply not paying attention. Or watching Faux News, which is the same thing.

  28. I love the people who think they should be entitled to work out where each and everyone of their tax dollars go and which part of civic society they don’t want to pay for.


    Not only does it not work – they’re the ones that think a much smaller government works to their benefit.

    It’s so patently nonsensical.

    The population of each of the EU countries which has a complex, educated, well-paid public service has a better life expectancy, comes higher on the list of places to live, a better ranking on the world education list and so on.


    Check out the USA versus the OECD average. Check out the EU countries.

    Check this out for life expectancy:


    Seriously. Taxation is necessary for a civil society and you need a proper public service.

    It’s a no brainer for the rest of the OECD. If you think otherwise, you really should go and live in a place you can start your own little colony.

  29. The central point of the article is both honest and accurate.

    Government workers negotiated for a set amount of compensation. Walker is deliberately misrepresenting the truth, for political gain, when he tries to claim the workers get something “extra”.

    (None of the above debate really challenges this.)

    The bigger picture: The unions agreed to take cuts in compensation. Walker (Republican governor) refused their deal. He wants to get rid of collective bargaining – basically to cripple the unions (because they and their members usually vote Democrat).

    Not only that – Walker created the whole budget “crisis” himself (with tax cuts for business). It’s a power grab, plain and simple. The rest is smokescreen and BS.

  30. ah yes… Pension funds… the fund managers are under strict rules about the way they manage the fund in spreading their fund out in the market, and the elite know the rules and are able to engineer stock market crashes to harvest the money from these funds… as the funds are usually the ones left holding the bag when the market crashes.

    Watch and learn… there’s another crash coming and your pension is about to take another shearing…

    This is why pension funds are not performing… the elite are selling their shares off to the pension funds at the top of the market…

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