The Party is Over

Budget Strikes“I am sorry that I’m the guy that has to be here at the time when the party’s over.”  That’s a quote from Governor Chris Christie in response to a state employed police officer who was angry at potentially losing future raises as well as being asked to contribute more to his health benefits in order to close huge budget deficits in New Jersey.  The truth is, liking the budget cuts is irrelevant to the reality of its necessity, or as Gov. Christie likes to say, “Math is math.”  More than ever, that math is spelling huge trouble, and the source of it is increasingly found in the entitlement mentality of government employees like the one that vented to Christie.


But this is far from a problem that New Jersey alone is dealing with.

Newly inaugurated Governor Rick Snyder (R) of Michigan released a report this week on the state’s fiscal crisis.  In it, he clearly shows where the “party” has been and where all the good jobs have gone: State & Local government employees as well as teachers who have seen annual compensation increased by 19 percent over the last decade outpacing the private sector they serve by over 6 percentage points.  But even those numbers fail to capture the extent of the imbalance.

In Michigan, the 2009 average compensation of a state employee was $85 thousand.  Compensation for teachers was a close second at $75 thousand with local government employees bringing in an average of $57 thousand.

And what of the private sector you may ask?  Well they came in last at a mere $40 thousand in annual compensation.

And how has Michigan been paying for these incredible salaries?  Why, on the back of the tax payer of course!  But even that isn’t enough.  Luckily for the big spenders, the last decade was a free-for-all in deficit spending resulting in only three of the last ten years having more tax revenue than expenditures.  The result is a staggering $1.5 billion deficit and a mind blowing $70 billion debt without even counting the $55 billion in additional unfunded liabilities for state pension and healthcare benefits.


Michigan’s problems only begin there.  For a true understanding of just how bad it is, take a look at the charts included in the report.

And Michigan & New Jersey are just the tip of the iceberg.  Behold the projected state budget shortfalls for 2012 totaling $124.7 billion.


Combine those numbers with the $1.5 trillion dollar deficit, the hundreds of billions of dollars in state debts & unfunded liabilities as well as the $14 trillion national debt and $55 trillion in unfunded liabilities, and it becomes clear that the Chris Christies and Rick Snyders of this world have got it right: The party is over.  No one is or should be immune to the sobering results of decades of reckless spending.  We keep pointing to the weakened economy as the reason we need to cut back, but that is false.  The reason the economy is weakened is because we hadn’t been cutting back.  Cutting back isn’t simply a way to limp through this mess.  It is the only way to prevent it from happening again.

So to the unions and the government employees who are making much more than their private sector counterparts, reality has caught up with all of everyone, not just the private sector.  The sacrifice involved in reversing the tide will not afford you a waiver this time. The time for protesting is over. Math is math.  The cuts are coming.


Cross-posted at


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