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Posted (edited)

Via Paul Krugman comes this interesting post from David Frum regarding Frum's criticism of Larry Kudlow's opinion about cutting the salaries of the civilian workforce in the US.

Frum writes:

The total annual cost of all federal civilian pay and benefits can be estimated at about $260 billion.

A 5% across the board pay cut would save no more than $13 billion , and in fact much less: remember, federal pay is unusually benefits-heavy.

To put it another way: even if we fired every single federal civil servant and shuttered the entire non-defense federal government, three-fourths of the budget deficit would still be with us.

And Paul Krugman agrees:

But the Kudlow picture is nonetheless a key part of conservative imagery; the idea of vast rooms full of government employees doing nothing productive is central to their vision of painless spending cuts. The fact that it’s not remotely true is irrelevant; they want it to be true, and that’s enough.

I would expect that Canada would put up similar (relative) numbers.

Edited by msj

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

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Posted
the idea of vast rooms full of government employees doing nothing productive is central to their vision of painless spending cuts.

As an employee in the health care system, I can tell you that this is DEFINITELY the case. And the most wasteful, sloth excessive spending and money lost is in the higher income managerial sector.

Posted

The salary cuts are more important symbolically and politically, rather than for their economic impact. Many people may get annoyed at the government and its employees if they continue to keep their jobs and receive high salaries while much of the rest of the economy and workforce is seen to suffer. By reducing government salaries, they hope to avoid this kind of political problem.

Posted

As an employee in the health care system, I can tell you that this is DEFINITELY the case.

Yeah I saw plenty of this during my work for the government as well.

Posted

As an employee in the health care system, I can tell you that this is DEFINITELY the case. And the most wasteful, sloth excessive spending and money lost is in the higher income managerial sector.

Furthermore, the waste from the managerial sector because they deploy resources, causing a ripple effect to their ineffectiveness.

Another possibility that is almost never considered is redeployment. How much is spent on Indian and Northern Affairs ? Do we even know ?

I Googled "Indian and Northern Affairs" and "Budget" and couldn't find it within 10 minutes.

http://www.google.ca/search?hl=en&safe=off&client=firefox-a&hs=Rhz&rls=org.mozilla%3Aen-US%3Aofficial&channel=s&q=%22indian+and+northern+affairs%22+budget+2010&btnG=Search&meta=&aq=f&aqi=&aql=&oq=&gs_rfai=

In any case, it's billions. What is done with that money ? Who is working on what ? It's very difficult to find out.

Posted

The salary cuts are more important symbolically and politically, rather than for their economic impact. Many people may get annoyed at the government and its employees if they continue to keep their jobs and receive high salaries while much of the rest of the economy and workforce is seen to suffer. By reducing government salaries, they hope to avoid this kind of political problem.

I would say that salaries need to be set at market rates, but so should staffing levels. And the link between deputy minister and the minister needs to be changed to make the DM more accountable to the public directly.

Posted

As an employee in the health care system, I can tell you that this is DEFINITELY the case. And the most wasteful, sloth excessive spending and money lost is in the higher income managerial sector.

Not even Krugman would argue that there is no waste in government.

It is the size of the waste that is debatable.

As David Frum states - even if you were to assume that the entire US civilian government workforce had a productivity of 0% and you fired them all (while still, somehow, conducting the same business as usual), it would still only decrease the deficit by 25%.

This is not to say that government productivity isn't important - it's just saying that in terms of fighting the deficit it is a non sequitur to argue that cutting government salaries by 5 or 10% will have much impact on the deficit.

It won't. It's a rounding error.

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

Posted

I would say that salaries need to be set at market rates, but so should staffing levels. And the link between deputy minister and the minister needs to be changed to make the DM more accountable to the public directly.

For a guy who could see the trees for the forest in a thread about certain creeps getting old age security pensions while in jail, I'm surprised at your micromanaging attitude in this thread.

The point here is simple folks: if slaying the deficit is so important to you then there are bigger fish to fry to achieve that goal.

Find the fish and fry them rather than trying to make silly, and immaterial, arguments on political grounds rather than on fiscal policy grounds.

IOW, prioritize - start with the big stuff and work your way down to the small stuff.

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

Posted

This is not to say that government productivity isn't important - it's just saying that in terms of fighting the deficit it is a non sequitur to argue that cutting government salaries by 5 or 10% will have much impact on the deficit.

And, again, productivity at doing what ? In too many cases the system is run with an eye to what is playing in the newspapers or - worse - on television news. There is less effort to make the details of what work is being done.

In the age of the web, we have the opportunity to detail - department by department - what people are doing and how much it costs so that people can see what their money is being used for.

As with healthcare, though, there appears to be little interest in the details.

Posted (edited)

As with healthcare, though, there appears to be little interest in the details.

Because the attention of the public is easily diverted to other issues, by means of entertainment. People are bombarded with more info about Tiger Woods than anything truly relevant. Let them have entertainment...

Besides that there is outright lies and subversion of the truth. In the "eHealth" scandal in Ontario, we heard there was going to be an investigation. This appears to have been only said to appease the curious and once the issue has dropped off the media radar, we didn't get to hear much anymore, but the fact is that this investigation has been quietly dropped. There will be no overhaul of the tender process in Cancer Care Ontario, after all. It's evident that the fat cats in CCO and the province all feed from the same dish.

Edited by Sir Bandelot
Posted

The real problem is people wanting to delve into details that have very little impact (even in aggregate) on the deficit.

If fighting the deficit is important to you then you must deal with the big things like raising taxes, cutting programs etc...

This is not to say that I want an overpaid and under productive civilian government workforce.

It simply means that there are bigger priorities than, oh, there's 3 too many management positions here, and, oh, she's overpaid by 17.2983% over there. (Yes, this is mild sarcasm).

I also think that most people can't do what Michael suggests.

I have a hard enough time looking after my own personal finances and my business operations and then I'm supposed to find a way to make a DM more accountable when he/she knows more about the department then I would ever care to know?

Huh?

No, really, huh?

Surely I have better things to do like consider Tiger Woods game (on and off the golf course) and the use of cliches like "damn lies," "fish to fry" and "forest for the trees" than do that. ;)

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

Posted

Because the attention of the public is easily diverted to other issues, by means of entertainment. People are bombarded with more info about Tiger Woods than anything truly relevant. Let them have entertainment...

That's the standard thought on the topic, and while I do agree I want to point out that there's a significant number of obsessives like me (hello MLW ?) that would do a good job of sinking their teeth into substantial information.

Would the public find out about it ? Maybe, eventually, hopefully, if those most interested follow...

Besides that there is outright lies and subversion of the truth. In the "eHealth" scandal in Ontario, we heard there was going to be an investigation. This appears to have been only said to appease the curious and once the issue has dropped off the media radar, we didn't get to hear much anymore, but the fact is that this investigation has been quietly dropped. There will be no overhaul of the tender process in Cancer Care Ontario, after all. It's evident that the fat cats in CCO and the province all feed from the same dish.

This also goes to the media and the people for letting these things go.

Posted

The real problem is people wanting to delve into details that have very little impact (even in aggregate) on the deficit.

If there is a single large problem then it could be more effectively dealt with. It should also be obvious. Yet generation after generation the issue remains. One can also say that a thousand small abuses adds up to a very big level of abuse. The devil is in the details, as the saying goes...

Inefficiency and corruption exist at all levels in government, due to many factors including lack of accountability, and general apathy of all involved including the public. This can only go on so long, of course until the bloated monster raises it's ugly head (no, not you msj...)

Posted

If there is a single large problem then it could be more effectively dealt with. It should also be obvious. Yet generation after generation the issue remains. One can also say that a thousand small abuses adds up to a very big level of abuse. The devil is in the details, as the saying goes...

Perhaps you need to re-read Krugman, Frum and my posts again.

Your points have already been addressed.

In aggregate, even assuming that every single dollar spent on civilian government workers was wasteful, it would be a small part of the deficit and the overall budget.

Let's assume that 25% of government spending on salaries is wasteful (still a number likely too high). Then we are still talking a drop in the bucket.

Look at Frum's post and see for yourself.

Inefficiency and corruption exist at all levels in government, due to many factors including lack of accountability, and general apathy of all involved including the public. This can only go on so long, of course until the bloated monster raises it's ugly head (no, not you msj...)

Sure.

Or, we can ask our politicians and ministers to keep an eye on accountability while they make actual hard decisions about what taxes should be raised and what programs should be delivered (and how).

That will have more impact to the overall effectiveness/efficiency of our tax dollars than micromanaging accountability to political rhetoric levels.

That is also more interesting to citizens than the micromanaging of government departments by internet wielding curmudgeons.

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

Posted

Or, we can ask our politicians and ministers to keep an eye on accountability while they make actual hard decisions about what taxes should be raised...

Yes, just what we need, more taxes!

Posted

Yes, just what we need, more taxes!

I didn't mean to necessarily raise taxes.

What I meant is - how the government should raise taxes in the first place.

Income taxes, consumption, tariffs, fees etc....

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

Posted

I don't know if the following will help but I did find this and it shows the expenses of the government. It NOT an up to date and for some reason the government never shows PRESENT info just past. http://www.governmentexpenses.ca/

Yes, I was involved with a group like this - maybe the same one - that got together to comb websites and compile information.

Posted (edited)

I didn't mean to necessarily raise taxes.

What I meant is - how the government should raise taxes in the first place.

Income taxes, consumption, tariffs, fees etc....

The less people we have sitting around whose jobs revolve around figuring out how to tax us, the better, in my opinion.

Edited by Bonam
Posted

They need to determine what's being done now, and what we want to do and make a roadmap.

Oh, I agree.

But then, I'm not the one arguing for more micromanagement of our civilian government workforce. :P

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

Posted

The less people we have sitting around whose jobs revolve around figuring out how to tax us, the better, in my opinion.

And you continue to miss the entire point of this thread.

And I'm not surprised, at all....

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

Posted

And you continue to miss the entire point of this thread.

And I'm not surprised, at all....

The point of the thread was that cutting salaries for government employees would not have a significant impact on the deficit. I agree, and stated in a prior post that the move is primarily political in nature.

Now we're on to discussing issues beyond the original point of the thread. You believe there is value in having a large number of government officials sitting around figuring out how to properly tax us. I do not believe there is value in this. My opinion is that we would be better served by cutting taxes and reducing or eliminating many government programs. Perhaps it would take a few people who would figure out how best to cut these programs, but the net effect would be less government employees not more.

Posted

I didn't mean to necessarily raise taxes.

What I meant is - how the government should raise taxes in the first place.

Income taxes, consumption, tariffs, fees etc....

No...this will not solve the structural problem for the long term. Entitlements must be reigned in.

The same 1990's excitement over $400 hammers and $640 toilet seats (defense contracts) must be hammered home for the present and looming costs of popular entitlement programs.

Item: California has over 3,000 government retirees with pensions over $100,000 per year. Sweet union contracts and party politics has made for this and many other unsustainable fiscal monsters.

Economics trumps Virtue. 

 

Posted

No...this will not solve the structural problem for the long term. Entitlements must be reigned in.

I agree.

Of course, entitlements go beyond government pension plans - it includes a cold hard look at the sustainability of things like pharmacare, social security etc.... but that may mean hiring more actuaries at inflated salaries so we better not do that. :blink:

But, once again, we need to look at a bigger picture than merely "if I cut 10% from the civilian workforce" it will lead us out of deficit type of mentality.

The math simply does not support that argument.

If a believer demands that I, as a non-believer, observe his taboos in the public domain, he is not asking for my respect but for my submission. And that is incompatible with a secular democracy. Flemming Rose (Dutch journalist)

My biggest takeaway from economics is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. Morgan Housel http://www.fool.com/investing/general/2016/01/14/things-im-pretty-sure-about.aspx

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