NCPA - National Center for Policy Analysis


April 18, 2006

If politicians continue to make more salary and benefit promises to public employees, the result will be the most divisive domestic conflict since the Civil War, says Lewis Andrews of the Yankee Institute.

According to Andrews:

  • A lack of accountability in America's public education system is costing taxpayers more than $100 billion annually, an amount more than three times the annual budget of the entire state of Massachusetts.
  • Nearly 40 percent of New York's $45 billion Medicaid budget is frittered away through fraud, abuse and the indifference of Albany lawmakers.
  • At the federal level, billions of dollars are wasted on duplicative benefit programs; for instance, there are 50 programs for the homeless scattered across eight separate agencies, 23 programs for housing aid in four departments, 26 programs for food and nutrition in six departments and 44 job training programs in nine agencies.

But this is just a mild prelude to the looming conflict between public employees and the voters who subsidize them.

  • New transparency rules show that Illinois state pension obligations will reach $4 billion annually by 2010.
  • If Maryland's $20 billion health care liability for retirees is to be paid, it will take 13 percent of the state's general fund every year -- on top of the $770 million Maryland already spends on employee medical benefits.
  • But a recent analysis puts the current shortfall in the funding of state employee pensions at $284 billion; it will also take more than $5 trillion to cover the cost over the next 75 years.

The costly inefficiency of the public employment complex promises to inspire social and technological advances, and a new era of American leadership, says Andrews.

Source: Lewis M. Andrews, "America's Second Civil War: The Public Employment Complex vs. Taxpayers," Yankee Institute, April 2006.


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