THE BLOG

It's Not Raining, We're Getting Peed on (II): The Scam of the Deficit Crisis

11/30/2010 09:17 am ET | Updated May 25, 2011

Yesterday, I kicked off a series of posts about the phony deficit/debt "crisis" with an excerpt from the introduction to my new book, It's Not Raining, We're Getting Peed On: The Scam of the Deficit Crisis. Today, I'll continue with a part from the first chapter called, "Stupid".

In honor of the mind-boggling decision by the president to single out public employees' pay for attack, I'm actually going to go a bit out of order here.

Stupid Statement #6: Public sector workers get lavish pensions.

The average pension for a transit worker in New York is about $20,000-a year. Living most of your working life under ground--whether you drive a train or walk inside a tunnel to do maintenance--is a job choice that very few of the people who attack transit workers' "generous benefits" would ever make. Other city workers' pensions are in the low 30s. And firefighters' pensions average around $70,000.

Ask yourself this: How many times have politicians fallen over each other as they rush, to get the maximum PR value for their own careers, to the site of a fire or a shooting, where a cop or firefighter has died. They stand in front of cameras and microphones and spout the words "the ultimate sacrifice"...but now those very politicians are saying that firefighters or policemen, having survived the day-to-day grind and threats on the job, should not get to have a decent pension so they can live out the rest of their lives in some semblance of dignity and respect.

Let's check out teachers' pensions. Most teachers' pensions mix years of service and age; the majority of their pension plans offer full retirement after age 60 or 62--and, if most kids were like you and me in grade school or high school, don't you think they earn every penny? Look at yourself in the mirror: you were not a picnic to deal with in school.

Lavish pensions for teachers? In California, the average pension for a retired teacher with more than 30 years of service is $5,526. That's a "high-end" pension: a bit over $66,000 a year. Shoot across the country to Maryland's Carroll County school district and you'll find this: if a teacher with a Masters degree, who has worked for 25 years at the top salary of $76, 895, decides to call it a career at age 62, the teacher's annual pension would be $28,605 plus Social Security. Yup: totally yacht-buying, Mercedes-driving, private-plane flying retirement, huh?

A teacher in Kentucky? Well, retiring at 62 with 25 years on the job gets you an annual pension of $32,920--but you don't get Social Security (some states have crazy laws that bar a teacher from getting both his or her modest public pension--that goldmine of $32,920--and Social Security).

In the public sector, the crazy propaganda blaming workers for "generous pensions" is covering up the real scam: city and state governments are not facing budget deficits because of "generous pensions". The budget shortfalls come courtesy of the Madoff-Rubin-Mozilo cocktail of financial shenanigans and the politicians who have voted for tax cut after tax cut that allow the richest people in society to escape paying their fair share.

New York, for example, would easily have billions more in revenue to use for basic services if the wealthiest people in the state paid a fairer share of the dues that should be required in a decent society.

What an irony: the very people who escape paying higher taxes in New York are some of the very people who were at the helm of the financial industry which, with its spectacular collapse, wiped trillions of dollars in wealth held by regular people who believed, in the absence of a real pension, that their 401(k)s would provide a decent retirement.

Oh, those "free marketeers" are so clever with their bait-and-switch strategy. They whip up a frenzy in the press about "generous" public employee benefits, making people just go wild with anger--and then the regular people forget that their own pensions in the private sector are evaporating or went "poof" thanks to the Bernie Madoff crowd.

Again, here we go again, back to the classic Henry Ford strategy that divides one half of the working class against the other half. People are blinded and distracted--they just forget about the transit worker who gets them to work, the firefighter down the street who their kids look up to, the teacher who taught a high-school freshman geometry, and the rest of the army of people who make our society run.

Stupid Statement #2: Out-of-control government spending caused the deficit and the debt to explode in the past couple of years because we've had a socialist president.

Ok, I threw in the "socialist" for a few laughs. Only someone without a grip on reality--or unwilling to look at pesky facts--would call the current president a "socialist". Let's focus on the less wacky claims.

If you want to wring your hands about the bigger government deficit, don't go pointing the finger at the president or Congress. Instead, you can thank Goldman Sachs, Angelo Mozilo, Robert Rubin and the rest of the smart boys who built a financial system that was a mix of a floating casino, Ponzi scheme and fool's gold paradise--all patched together by lies, deceit and a healthy dose of massive public indoctrination of the wonders of the "free market".

What's the connection?

The collapse of the financial system--thanks to the greed and incompetence of the people running it--is the principal reason today for a larger deficit. The collapse gave us:

• A weaker economy so money wasn't coming into the Treasury as fast (because millions of unemployed people don't pay taxes).

• A weaker economy that called on us to aid our fellow citizens with more aid such as unemployment insurance and food stamps.

• Bailouts of Fannie Mae, Freddie Mac, AIG, and other companies that went belly-up (cost: roughly $243 billion in 2009, according to the Congressional Budget Office).

So, when you hear the crisis fanatics say we have no money because we have a "structural deficit" (meaning, we are spending too much money each year because the crisis fanatics say government is too expensive), it's just not true. It's a lie.

We have a bigger deficit now because we let a bunch of Wall Street gamblers play fast and loose with the rules.

Angry? You have a right to be. So, let's round up the ringleaders of the financial casino and throw them in jail--instead of letting them keep their jobs, earn millions more and get hired to advise the government (all of which has happened).

But, remember this fact: government "overspending" did not cause the government deficits and long-term debt we now have.

Tomorrow, just in time for the Catfood Commission's report, I'll write a bit about the forces behind the deficit-debt hysteria, followed by a discussion of how we can get money that we need, easily, irrespective of the deficit-debt hysteria.

If you want the book, you can buy it on Kindle and Nook, with more formats coming in the next day or so. But, you can also just download it FOR FREE. All the links are here.

The book's Facebook page is here. "Like" it if you are so inclined. It would be much appreciated.