No. 811



We have become a nation of “Takers” not “Makers,” so says Stephen Moore, senior economics writer for the Wall Street Journal. Sometime back a friend sent me an article written by Mr. Moore, dated April 11, 2011, in which he outlines in very vivid detail why many states in our nation are teetering on the verge of bankruptcy. As a general rule, when any business or a government goes bankrupt, it means that expenses exceed income. If this situation continues for long enough, an organization of any kind is insolvent and has no other choice but to declare bankruptcy. It’s kind of like that fellow I heard about one time who was making it for $3 and selling it for $1, but they said he was making it up on volume.
From a practical standpoint, when a ship starts sinking, you know the first thing that happens, don’t you? The captain and crew begin to throw everything overboard that is not nailed down to lighten the load. This is what states that are on the verge of bankruptcy must also do, but it’s very painful. If you want to understand better why so many states – from New York to Wisconsin to California – are going bankrupt, consider this depressing statistic. Today in America, there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.
It gets worse. More Americans now work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. Here is the real rub and why we must reverse the trend if we are to survive. Nearly half of the $2.2 trillion cost of state and local government is the $1 trillion-a-year tab to pay the benefits of state and local employees. Is it any wonder that so many states cannot pay their bills? In his article Mr. Moore gives a number of state-by-state examples, but it all adds up to the same thing, as already stated -- unless the trend is reversed we will not survive.
However, don’t expect a reversal of this trend any time soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence. When 23-year-olds aren’t willing to take career risks, we have a real problem on our hands. Sadly, we could wind up a generation of Americans who want to work for the Department of Motor Vehicles.
The real question for me becomes, what are we going to do about it? While easier said than done, we must elect people to office who have business experience and understand our free-market economy, and create jobs that are attractive for our nation’s college graduates. We can also reduce the size of government and not have to lay off or fire anyone just by attrition. Just stop hiring people to work for the government and, in a few years, the ratio will come back into balance. There certainly was a day when the dream of most college graduates was to go into business for themselves and not seek a career in the government. My economic attitude has always been, “Give me opportunity and then get out of the way.” To be sure, there is security in the ship of state, but only if it’s not loaded too heavy.
(EDITOR'S NOTE: Jim Davidson is a public speaker and syndicated columnist. You may contact him at 2 Bentley Drive, Conway, AR 72034. To begin a bookcase literacy project visit www.bookcaseforeverychild.com. You won’t go wrong helping a needy child.)