Morning Bell: Government Unions vs American Taxpayers

Conn Carroll / February 23, 2011

The Washington Post reports today that “the daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates.” But there are a number of big differences between our national debt now and the debt in 1946. The Post reports: “State and municipal governments from Sacramento to Madison to Harrisburg have racked up about $2.4 trillion in debt, or more than 15 percent of GDP.”

And even this total is understating the problem. Recent studies show that state and local governments are severely underestimating their pension and benefit promises, including a $574 billion shortfall for the nation’s top major cities and a possible $3.4 trillion shortfall for the states. The cause of these crippling pension and benefit obligations is no secret. The Post explains: “Public employees often enjoy more generous pension and health-care benefits, and these are at the root of the long-term budget problems confronting many states.”

How did this happen? Why did so many state and local governments not only spend too much today but promise future spending far beyond the means of taxpayers to pay for it? Government unions. And across the country, legislators and governors are beginning to fight back. (more…)