16 July 2014 0 Comments

Pennsylvania Pensions Pennsylvania Government Spending: What? Me, Worry?

 What, if any, any downside to more government spending, more government borrowing and higher taxes on the private, productive sector?

What, if any, is the impact of reducing spending, reducing borrowing and lowering taxes on the private, productive sector?

Is there any way to reduce government spending and government borrowing so that higher taxes will not be necessary?

There are billions and billions of other spending. Focusing on only one spending category, pensions,  diverts attention from other opportunities to reduce spending. Bureaucracies are expensive.

Pensions cannot be cut retroactively so they will continue to drive need for more taxes. I think higher taxes mean lower productive growth and lower wages. But I could be wrong …maybe more state and city spending will increase productivity and increase wages. What do you think? Is there more opportunity elsewhere?

I think recent events in Harrisburg tell us that Union Democrats and Union Republicans dominate the legislature. In any event, the unions cannot bargain away vested pensions. As I have pointed out, billions can be cut elsewhere. Pensions are here to stay.

  It may be that you are on a sinking ship and don’t know it. There are many thinks we don’t know that we don’t know: the Unknown Unknowns. On the other hand, maybe  I  am inferring too much fiscal pessimism from the numbers. 

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