Last week’s Weekly Standard investigated the growing political power of public sector unions, and the disasterous effects this has on jobs & the economy. They note that "Public sector unions have become political powerhouses in New York, New Jersey, Washington, California, and a host of other states" and conclude that "they have become so powerful as to threaten the Madisonian system set up to constrain any one faction from overwhelming the public interest."
A brief extract:
Like banks, but with even less self-control, state governments make long-term promises in boom times while depending on the short-term flow of revenues. But when the boom ends, the benefits that have been ratcheted up have to be paid for out of a declining private sector economy. Barring a sharp recovery, state and local government tax-funded pension contributions in New York are likely to triple over the next five years in order to pay out the pension benefits guaranteed by the state constitution. (This is equally true in Illinois.) California’s public pension fund liability has already topped $200 billion, and in cities such as Oakland, Vallejo, and Rio Vista bankruptcy looms.
Read the whole article here.
(H/T Commonwealth Foundation)