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You are here: Home / Politics / Domestic Politics / That Explains A Lot

That Explains A Lot

by John Cole|  August 3, 20066:04 pm| 85 Comments

This post is in: Domestic Politics

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If you ever wondered why the government doesn’t seem very aggressive in chasing down and punishing corporations who employ shady accounting tactics, I think I have the answer. They are afraid of charges of hypocrisy:

The federal government keeps two sets of books.

The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.

The set the government doesn’t talk about is the audited financial statement produced by the government’s accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included — as the board that sets accounting rules is considering — the federal deficit would have been $3.5 trillion.

Congress has written its own accounting rules — which would be illegal for a corporation to use because they ignore important costs such as the growing expense of retirement benefits for civil servants and military personnel.

Last year, the audited statement produced by the accountants said the government ran a deficit equal to $6,700 for every American household. The number given to the public put the deficit at $2,800 per household.

If that doesn’t make you sick to your stomache, I don’t know what will. And before we start the ‘fiscal conservatism’ catcalls:

Congress and the president are able to report a lower deficit mostly because they don’t count the growing burden of future pensions and medical care for federal retirees and military personnel. These obligations are so large and are growing so fast that budget surpluses of the late 1990s actually were deficits when the costs are included.

The Clinton administration reported a surplus of $559 billion in its final four budget years. The audited numbers showed a deficit of $484 billion.

In addition, neither of these figures counts the financial deterioration in Social Security or Medicare. Including these retirement programs in the bottom line, as proposed by a board that oversees accounting methods used by the federal government, would show the government running annual deficits of trillions of dollars.

Truly, a bipartisan scandal.

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Reader Interactions

85Comments

  1. 1.

    The Other Steve

    August 3, 2006 at 7:16 pm

    You didn’t know this?

  2. 2.

    Perry Como

    August 3, 2006 at 7:27 pm

    Yeah, this is nothing new. People said Clinton balanced the budget, but anyone that cared to look knew it wasn’t true. But there is a huge difference in the total debt that we have now versus the Clinton years.

    In other fiscally conservative news, Federal workers average pay is twice that of the private sector.

    New data was released today by the U.S. Bureau of Economic Analysis on federal employee wages and benefits. The data for 2005 shows that compensation for the average federal civilian worker ($106,579) is now exactly double the average compensation in the U.S. private sector ($53,289).

    Nothing like massively increasing the size of government and passing out pay raises all around!

  3. 3.

    John S.

    August 3, 2006 at 7:29 pm

    The Clinton administration reported a surplus of $559 billion in its final four budget years. The audited numbers showed a deficit of $484 billion.

    I wonder how other presidents compare. Including the current one. Because if the black parts of this graph are equivalent to a $484 billion deficit, I shudder to think what the red parts actually are.

    I mean, a $760 billion deficit for 2005?? That just blows my mind.

  4. 4.

    jg

    August 3, 2006 at 7:34 pm

    The Clinton administration reported a surplus of $559 billion in its final four budget years. The audited numbers showed a deficit of $484 billion.

    Wasn’t our first tax cut based on the gov’t running a surplus? They lied about that too?

  5. 5.

    Andrew

    August 3, 2006 at 7:56 pm

    Yeah, really bipartisan. Clinton’s yearly debt was 400 billion. Bush has us at 4 trillion. I see no difference whatsoever.

  6. 6.

    John S.

    August 3, 2006 at 8:08 pm

    I see no difference whatsoever.

    Don’t nitpick so much, Andrew.

    $484 Billion / 4 years = $760 billion * 1 year

    Who ever thought they’d long for the days of $120 billion a year deficits?

  7. 7.

    Richard 23

    August 3, 2006 at 8:08 pm

    The democrats also had the house and the senate all through Clinton’s two terms as I recall. So it is bipartisan. Good call, John.

  8. 8.

    Andrew

    August 3, 2006 at 8:20 pm

    Er, quadrennial deficit.

    Billions, schmillions. What’s important is that we don’t pay minimum wage workers more than 5.15 an hour.

  9. 9.

    jg

    August 3, 2006 at 8:24 pm

    How will this effect Paris Hilton’s inheritance?

  10. 10.

    Zifnab

    August 3, 2006 at 8:38 pm

    I’m wating for someone to suggest the US Government declare bankruptcy.

  11. 11.

    John S.

    August 3, 2006 at 8:39 pm

    What’s important is that we don’t pay minimum wage workers more than 5.15 an hour.

    Unless we lower the Estate Death Tax!

    The two issues are obviously linked.

  12. 12.

    Perry Como

    August 3, 2006 at 8:44 pm

    I’m wating for someone to suggest the US Government declare bankruptcy.

    nah, Helicopter Bernanke will just crank up the printing presses.

  13. 13.

    srv

    August 3, 2006 at 8:45 pm

    DoD hasn’t passed an audit in something like 20 years. We’ll never have the slightest idea where 25% of the funds for the Iraq war have gone.

    If you want to get rich and never get charged, the Green Zone is where you want to be.

  14. 14.

    Zerthimon

    August 3, 2006 at 8:55 pm

    Andrew Says:Yeah, really bipartisan. Clinton’s yearly debt was 400 billion. Bush has us at 4 trillion. I see no difference whatsoever.

    In addition, neither of these figures counts the financial deterioration in Social Security or Medicare.

    Clinton’s yearly debt according to the Treasury Department’s audited finanical statement was $484. Bush’s is $760. We don’t know what Clinton’s would have been if SS and Medicare were included.

    So yea it is bipartisan, although obviously Bush is worse.

  15. 15.

    KC

    August 3, 2006 at 9:06 pm

    Wait. I thought the government regularly used the SS surplus to hide the deficits we running? Isn’t that common knowledge? The article is a bit misleading on that point. The author includes SS and Medicare together as problematic, but it’s really Medicare that’s the problem. SS, after all, is funded as a pay-go system; we pay payroll taxes to support it. That’s why it’s such a sham that our govenment borrows against it. Doesn’t anyone remember Al Gore’s “lockbox?”

  16. 16.

    Pb

    August 3, 2006 at 9:17 pm

    KC,

    Doesn’t anyone remember Al Gore’s “lockbox?”

    Not nearly enough people even *understood* Al Gore’s “lockbox” at the time. But he was right, we did have a need to protect Social Security, especially as the surplus grew (as projected). Another more recent tactic that USA Today didn’t mention, though, is that of ‘emergency supplementals‘, aka Iraq (and Afghanistan and Katrina):

    In theory, emergency spending bills are for one-time, unforeseeable calamities. In practice, Mr. Bush has financed the entire war in Iraq, as well as the war in Afghanistan, with emergency supplemental requests that totaled $248 billion over the last three years. With no sign yet of a troop reduction in Iraq, the costs are likely to exceed $80 billion in 2006.

  17. 17.

    Perry Como

    August 3, 2006 at 9:22 pm

    DoD hasn’t passed an audit in something like 20 years

    Yeah, they’re missing over $2.3 trillion according to Rumsfeld. And that was back in like 2001.

  18. 18.

    Nutcutter

    August 3, 2006 at 9:30 pm

    Not nearly enough people even understood Al Gore’s “lockbox

    And yet … when Bush the Misdirector suggested that the lockbox, which is actually a cache of bonds, was nothing more than “pieces of paper stuffed into file boxes” … his proposed remedy was to throw them away and put the money into …. the bond market.

    The bond market … the very one that would be trashed the day the government decided not to honor zillions of dollars worth of its own bonds. Or did I miss something?

    In any event, every time Bush talked about, public support for the idea went down. So in some elemental way, people understood that throwing away the contents of the lockbox was not in their interests.

  19. 19.

    Ancient Purple

    August 3, 2006 at 9:34 pm

    I wonder if this will be the second reason Mr. Cole will use to justify voting GOP this November, since there is no difference between the two when it comes to spending like drunken sailors on leave (because $400 billion = $4 trillion).

    Just wondering.

  20. 20.

    KC

    August 3, 2006 at 9:45 pm

    Honestly, the whole mess is a joke. What I can’t get over is the fact that the conservative party keeps winning elections partly on the mantra of “fiscal responsibility.” I mean, it’s the Republicans right now who are working to create a fiscal crisis. Put it all together: reduce auditors for rich people, continue to give rich folks all kinds of crazy tax cuts while arguing the cuts pay for themselves, pass a new medicare entitlement, all while going to war–this is simply a recipe for disaster. I mean, I used to be a conservative until I realized that being conservative meant advocating policies that one knew were just crazy, but one could push nevertheless by using catchy lingo.

  21. 21.

    John Cole

    August 3, 2006 at 10:03 pm

    I wonder if this will be the second reason Mr. Cole will use to justify voting GOP this November, since there is no difference between the two when it comes to spending like drunken sailors on leave (because $400 billion = $4 trillion).

    I wonder how long I will have to put up with this kind of tired crap.

  22. 22.

    Nutcutter

    August 3, 2006 at 10:03 pm

    February 12, 2003.

    Back in Washington, US officials who are quietly – and gingerly – making plans for postwar Iraq dismiss comparisons to the imperial MacArthur. The last thing they want to emulate in Iraq is the seven-year occupation of Japan. In fact, some officials at the Pentagon and State Department tell NEWSWEEK they hope to be able to withdraw US troops in as little as 30 to 90 days after President Saddam Hussein’s ouster – if Iraq’s military can be swiftly purged of his henchmen and turned into a pro-Western security force. That, they admit, is optimistic; more “realistically,” says a Pentagon official, the talk is of a maximum five- to six-month occupation. “The plan is to get it done as quickly as possible and get out,” says Lt. Col. Michael Humm, a spokesman for the Pentagon’s chief planner, Defense Undersecretary Douglas Feith.

    While this is not a war thread, I thought that this, via DKos, was a good fit for “Those Amazing Crazy Lying Sonsabitches in Washington!”

  23. 23.

    Nutcutter

    August 3, 2006 at 10:06 pm

    I wonder how long I will have to put up with this kind of tired crap.

    Things are looking up. I’m not using that harangue any more. That’s a start.

    The way I look at it is, for this cycle at least, I want your vote on our side. I figure if you don’t know that by now, and have reason to consider it, more crap from me won’t make any difference.

  24. 24.

    KC

    August 3, 2006 at 10:09 pm

    What I’m interested to know is if Dems take the House and Senate and actually do some work to balance the budget, will Republicans give them credit for it? Or, if they do get control, then do nothing to balance the budget, will Republicans just go along with it? Just curious.

  25. 25.

    Nutcutter

    August 3, 2006 at 10:12 pm

    they hope to be able to withdraw US troops in as little as 30 to 90 days after President Saddam Hussein’s ouster – if Iraq’s military can be swiftly purged of his henchmen and turned into a pro-Western security force. That, they admit, is optimistic; more “realistically,” says a Pentagon official, the talk is of a maximum five- to six-month occupation

    Doncha just love that?

  26. 26.

    Richard 23

    August 3, 2006 at 10:15 pm

    I wonder how long I will have to put up with this kind of tired crap.

    Until November 2006?

  27. 27.

    Nutcutter

    August 3, 2006 at 10:25 pm

    What was Ehud Olmert thinking, in those Churchillian speeches of his, when he told us Hezbollah would think twice before firing missiles? Think twice? The very next morning, they launched 210.

    What was Ehud Olmert thinking, in those Churchillian speeches of his, when he told us Hezbollah would think twice before firing missiles? Think twice? The very next morning, they launched 210.

    I think that this will be remembered as the era of Failure of Government.

    Is there a government anywhere that has any idea what the fuck it is doing?

  28. 28.

    Nutcutter

    August 3, 2006 at 10:26 pm

    Sorry, botched the blockquote. Please replace my second above with this …

    Olmert cannot ignore the reality of the blood on the ground. His statements, suggesting that one of the war’s achievements is that Nasrallah will no longer want to fire missiles at Israel, shatter under the test of reality. Hezbollah is continuing to fire almost to its heart’s content.

  29. 29.

    Zifnab

    August 3, 2006 at 10:37 pm

    I wonder how long I will have to put up with this kind of tired crap.

    Haha. So long as the sun rises in the east, moss gross on the north side of trees, and Democrats decide to wave the bloody hanging chad.

  30. 30.

    Jon H

    August 3, 2006 at 10:52 pm

    “I’m wating for someone to suggest the US Government declare bankruptcy.”

    You’re too late, it already happened. That hotbed of liberal moonbats, the Federal Reserve Bank Of St. Louis recently put out a paper to this effect by Professor Laurence Kotlikoff of Boston University.

    “According to his central analysis, “the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds”.”

  31. 31.

    Perry Como

    August 3, 2006 at 10:55 pm

    “According to his central analysis, “the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds’‘.”

    Well, yeah. But TAX CUTS!

  32. 32.

    HH

    August 3, 2006 at 11:08 pm

    And the last pro-Clinton talking point (“What a great economy!”) dies a sad lonely death…

  33. 33.

    Pb

    August 3, 2006 at 11:11 pm

    I wonder how long I will have to put up with this kind of tired crap.

    Probably for as long as I have to put up with this kind of tired crap:

    Truly, a bipartisan scandal.

    Look, despite Gore’s efforts to call attention to this back in 2000, long-standing government accounting practices are not a ‘scandal’ now–the ballooning of the deficit is a scandal now. This was a scandal back when Vietnam was a scandal. The scandal now is Iraq. If you want to talk about this now, you might as well talk about Bush’s national guard record, or Clinton’s draft dodging.

  34. 34.

    Andrew

    August 3, 2006 at 11:35 pm

    All I know for sure is that the gun-hating liberals are going to be at a serious disadvantage when civilization collapses after the housing bubble bursts and China wants to collect on its t-bonds.

  35. 35.

    Broken

    August 3, 2006 at 11:40 pm

    And the last pro-Clinton talking point (“What a great economy!”) dies a sad lonely death…

    You wish.

    Even going by Cole’s numbers, Clinton ran 1/10th the deficit, held inflation in check, and created 22 million jobs. Manufactoring jobs actually INCREASED (only time in the last four presidencies). Middle class wages went UP, even accounting for inflation.

    And what’s inflation at these days? 4% and climbing. And the CPI doesn’t properly weigh housing and energy costs.

    Maybe that is why Clinton’s job approval polls have steadily increased for six years since he left office.

  36. 36.

    Nutcutter

    August 3, 2006 at 11:43 pm

    If you want to talk about this now, you might as well talk about Bush’s national guard record, or Clinton’s draft dodging.

    Well, Pb, there is one foolproof way to put a silver lining on the cloud of a dumb thread:

    Threadjack.

    We all know what’s important today. Just post about that. Whatever you think it is.

    Every thread is an open thread. By rule. By Darrell rule. So, fight back against assonance.

  37. 37.

    sglover

    August 4, 2006 at 12:01 am

    New data was released today by the U.S. Bureau of Economic Analysis on federal employee wages and benefits. The data for 2005 shows that compensation for the average federal civilian worker ($106,579) is now exactly double the average compensation in the U.S. private sector ($53,289).

    Errrrmmmmmm….. I made a quick scan of the Cato link, and particularly the Department of Commerce site that it links — seems like a rather, ahem, glib assertion. I strongly suspect that Cato is playing some of its usual semantic and statistical games. As far as I can tell, their methodology isn’t much more sophisticated than this: We take the average salaries of the federal workforce, which contains a very high proportion of specialized professional or technical jobs — and we compare that to the entire wage-earning population of the United States. How dare those lawyers and benefits auditors and fisheries biologists make more than the floor-walker at Home Depot! The statists have run amok again!!

    I’m guessing that you could play similar games by, say, comparing salaries of doctors and nurses with the wages of all “health care workers” — defined to include the guy who restocks the soda machine in the interns’ break room. All in all, this Cato product looks like yet another instance of think tank “research” — superficial and shoddy, even by the standards of apples and oranges comparisons.

  38. 38.

    Pb

    August 4, 2006 at 12:03 am

    Nutcutter,

    Well, Pb, there is one foolproof way to put a silver lining on the cloud of a dumb thread:

    Threadjack.

    We all know what’s important today. Just post about that. Whatever you think it is.

    Well, I do like to stay somewhat on topic where possible, and I do try to keep up with the economic issues–maybe that’s why this particular argument seems so very tired to me. I must have talked about this here before, no?

    The CBO regularly publishes more than enough good numbers for any truly interested party to figure out what’s what. However, apparently those interested parties generally have not included the news media, nor has it included John Cole, at least until now. So let’s make this short:

    The Social Security surplus has been positive and increasing since 1983, for demographic reasons. In 1989, it first broke $50 billion dollars. By 1996, it first broke $60 billion dollars. Since then, it has rapidly ballooned–breaking $100 billion dollars by 1999, and reaching an all-time high of $173.5 billion dollars in 2005. This has skewed the “Total” accounting of the deficit (vs the “On-Budget” accounting of it).

    Even so, you can clearly see that by either measure, we still ran surpluses in 1999 and 2000 (the next number to quibble about would be the “Public Debt” vs the total national debt, which is also readily available public information)–obviously we’re nowhere close now, even with the greater difference between the estimates. And *that’s* the real scandal here, as are the reasons behind it–mainly tax cuts for the rich and unnecessary and expensive war and profiteering, neither of which is bipartisan.

  39. 39.

    jg

    August 4, 2006 at 12:03 am

    I wonder if this will be the reason… to justify voting GOP this November, since there is no difference between the two when it comes to spending like drunken sailors on leave (because $400 billion = $4 trillion).

    There is a difference. In one case we all pay taxes in the other case some people get to not pay taxes.

  40. 40.

    Nutcutter

    August 4, 2006 at 12:09 am

    And that’s the real scandal here, as are the reasons behind it—mainly tax cuts for the rich and unnecessary and expensive war and profiteering, neither of which is bipartisan.

    Agreed.

  41. 41.

    The Other Steve

    August 4, 2006 at 12:24 am

    Quick responses to various bits…

    Zifnab wrote:

    I’m wating for someone to suggest the US Government declare bankruptcy.

    You won’t have to wait too long. The Republican plan since Reagan has been to bankrupt the nation, blame it on Social Security and Medicare so that they can eliminate the programs. Drown in the bathtub, biotch.

    John Cole wrote:

    I wonder how long I will have to put up with this kind of tired crap.

    80 years – your age = ?

    KC wrote:

    The author includes SS and Medicare together as problematic, but it’s really Medicare that’s the problem. SS, after all, is funded as a pay-go system; we pay payroll taxes to support it. That’s why it’s such a sham that our govenment borrows against it.

    Again, that was part of the plan. This came from Greenspan back on the Blue Ribbon commision to save Social Security started by Reagan. The idea was to tax all the hard working people a little bit extra, this would then be used to help pay down the deficit(which was caused by reducing taxes for Paris Hilton and her friends). This would create a whole lot of IOU’s for the Social Security fund, so that in the future(actually about 5 years from now when the Baby Boomers start retiring), when the SS payments have to tap the SS reserves, we’d be covered and not have to raise SS taxes some more.

    But as I said, the Republicans have no plan to pay back those IOUs. They’re going to blame the Democrats for reneging on the promise to the generations. That’s how they operate.

    KC wrote:

    What I’m interested to know is if Dems take the House and Senate and actually do some work to balance the budget, will Republicans give them credit for it?

    No. It’ll be because of Bush’s tax cuts and the wonderful growth they created. Unless it doesn’t go well, then it’ll be the fault of the Democrats.

    This is how Republicans play the game. Reagan’s recession and the first Bush recession were blamed on Carter. The second Bush recession was Clinton’s fault. The 8 years of growth we had under Clinton… that was because of Reagan’s tax cuts and his vision and wisdom.

    Andrew wrote:

    All I know for sure is that the gun-hating liberals are going to be at a serious disadvantage when civilization collapses after the housing bubble bursts and China wants to collect on its t-bonds.

    Naw. I saw a Glock and a Springfield M1 down at Gander Mountain I have my eye on.

    In other fiscally conservative news, Federal workers average pay is twice that of the private sector.

    No way. I’m making 3 times as much money as I was working for the USDA-SCS.

  42. 42.

    Ancient Purple

    August 4, 2006 at 12:52 am

    I wonder how long I will have to put up with this kind of tired crap.

    Let it never be said that I don’t have at least some level of respect for our gracious host.

    I will stop that line of wondering.

  43. 43.

    Perry Como

    August 4, 2006 at 1:15 am

    All in all, this Cato product looks like yet another instance of think tank “research”— superficial and shoddy, even by the standards of apples and oranges comparisons.

    Look at the ratio increase over time:

    The ratio of average federal to average private compensation increased from 1.51 in 1990, to 1.68 in 2000, to 2.00 today.

    So even comparing professionals to the larger private workforce, on average, Federal pay has doubled in the last 16 years. That probably points to two things: Federal wages going up while the average worker wage is remaining stagnant or declining.

    My guess is the massive increase in Federal government may have something to do with that. Alot more $100k+ wonks writing papers on how necessary it was to remove tarrifs in Iraq as soon as we took out Saddam.

  44. 44.

    Perry Como

    August 4, 2006 at 1:26 am

    Federal pay has doubled in the last 16 years.

    Er, not doubled. You know what I mean :)

  45. 45.

    Pb

    August 4, 2006 at 1:52 am

    Perry Como,

    Now take a look at CEO compensation over the past 16 years…

  46. 46.

    DecidedFenceSitter

    August 4, 2006 at 6:18 am

    As far as Federal Worker Salary goes, I know that at least at my level of junior employment, the equivalent GS ratings 7,9, or 11 (depending on how you count my experience), is generally about on par with what I am earning, the low end is generally a touch lower than what I’m earning, the high end is moderately higher than what I’m earning, and as far as corporate work goes, I could be at the bottom end of my pay rung because I’m working for a small company.

  47. 47.

    John S.

    August 4, 2006 at 8:25 am

    In a surprise move, the Democrats didn’t fall for the latest GOP scam:

    A Republican election-year effort to fuse a cut in inheritance taxes on multimilllion-dollar estates with the first minimum wage increase in nearly a decade was rejected by the Senate late Thursday.

    Ane even bigger surprise is that Bill “Video-Diagnosis” Frist is still full of shit:

    “This death tax punishes everyday Americans by forcing them to give up their business, to give up their farms,” he said.

    And, is that a spine I see forming?

    “This is a cynical ploy on the part of the Republican leadership in an election year,” Cantwell said in a statement.

    “The American people won’t fall for it,” said Senate Minority Leader Harry Reid, D-Nev.

    More importantly, the elected representatives of the American people didn’t fall for it.

  48. 48.

    Barry

    August 4, 2006 at 8:27 am

    Jesus Christ, John. Aside from the fact that the article is flat-out lying about Social Security, which is in fine shape under any likely economic assumptions, the government isn’t a private corporation.

  49. 49.

    demimondian

    August 4, 2006 at 8:32 am

    They got ya, Perry. The averages run by the Cato institute don’t weight for the kinds of work involved, and also don’t weight for the cost of living in the area of employment. If you look at federal salaries in and near the major concentrations of Federal workers, and compare them to the salaries of private sector workers in the same area, you’ll see a different pattern.

    Then there are the starvation wages payed to members of the military — private-sector -mercenaries–soldiers-security guards in Iraq get payed a lot more.

  50. 50.

    danelectro

    August 4, 2006 at 8:41 am

    i haven’t time to look at the charts today, but the first paragraph states federal employee pay *and benefits*. i’m curious just how much better (monetarily) federal benefits are over the private sector.

  51. 51.

    chopper

    August 4, 2006 at 8:49 am

    right on, demi. i’m a federal civilian employee. my job is in the DC metro area, which has a high-ass cost of living. that’s where a helluva lot of federal employees work.

    BTW, the same job in the private sector pays about 20K/yr more.

  52. 52.

    chopper

    August 4, 2006 at 8:50 am

    federal benefits depend. health benefits, despite what people tell you, typically aren’t better than what a lot of people get in the private world.

    now, you wanna talk about vacation time, overtime etc…

  53. 53.

    sglover

    August 4, 2006 at 8:53 am

    So even comparing professionals to the larger private workforce, on average, Federal pay has doubled in the last 16 years. That probably points to two things: Federal wages going up while the average worker wage is remaining stagnant or declining….

    The ratio of average federal to average private compensation increased from 1.51 in 1990, to 1.68 in 2000, to 2.00 today.

    Again, these are specious, or at best extremely suspect, assertions. Unless you misphrased your comment, comparing the averages you cite is pretty nearly nonsensical, for the reasons I mentioned above. Even if we took it at face value, it ignores certain pertinent realities. For instance, as more and more government functions are farmed out to contractors, it doesn’t seem especially odd that the civil service population would skew even more toward higher-salaried auditors and administrators. If so, the (supposedly) higher government salaries would be the result of federal workforce trends that outfits like Cato ordinarily applaud. Why am I not surprised that they’d want to have it both ways?

    Show me something like median incomes for genuinely comparable jobs in the public and private sectors, and maybe we can talk. But the manner in which Cato tosses these ginned-up numbers around ought to make you suspicious about their analytical skills or their intellectual integrity, or both.

  54. 54.

    Zifnab

    August 4, 2006 at 8:55 am

    What I’m interested to know is if Dems take the House and Senate and actually do some work to balance the budget, will Republicans give them credit for it?

    I think the real question is that if Democrats balance the budget and get some real work done, will they give themselves credit? Historically, Democrats have been too busy apologizing and nail-biting over doing the right thing. Opposing bad Republican policy, demanding accountablility and transparancy, balancing budgets and paying for expenditures (like tax cuts).

    Back in 2000 Al Gore and George Bush both presented the country with big fat pie charts telling everyone in America what the US Government would be doing with the windfall surplus. Gore’s proposal involved an $800 billion plan encompassed in a pie chart with dozens of little slices – a bit for Medicare, a bit for education, a bit for the deficit, a bit for defense, a bit for welfare, a bit to grow on – each with a very real and well-considered purpose. Bush’s proposal involved a $1.4 trillion plan encompassed in a pie chart with one really big slice entitled TAX CUTS. It must have taken Karl Rove 8 seconds to put that pie together.

    Al Gore was called boring, stingy, and too intelligent when he presented his plan. After all, money set aside for disaster relief? Why the hell would we need that?

    George Bush was applauded for being so refreshingly honest and so genuine and simplistic with a plan that was sure to win the hearts and minds of all America.

    Democrats need to take credit where credit is do. They need to be offending conservatives with their amazingly well prepared and researched accountability plans, not defending the plans from right wing talking points. Its how we win on Global Warming – presenting facts from dozens of research journals and climate experts – in the face of Inhofe’s knee-jerk claim of “hoax”. Its how we can win in Iraq – quoting Generals and troops on the ground and military veterans – in the face of Cheney’s “turning the corner”. And its how we win on the budget. Democratic solutions are the best solutions and we’re damn proud of it.

  55. 55.

    Zifnab

    August 4, 2006 at 8:58 am

    They got ya, Perry. The averages run by the Cato institute don’t weight for the kinds of work involved, and also don’t weight for the cost of living in the area of employment. If you look at federal salaries in and near the major concentrations of Federal workers, and compare them to the salaries of private sector workers in the same area, you’ll see a different pattern.

    Then there are the starvation wages payed to members of the military—private-sector mercenaries-soldiers-security guards in Iraq get payed a lot more.

    Cato better hope they never raise the minimum wage, or their numbers might get thrown off entirely.

  56. 56.

    Catsy

    August 4, 2006 at 8:59 am

    Until November 2006 2046?

    Fixed.

    ;)

  57. 57.

    Steve

    August 4, 2006 at 9:13 am

    Jesus Christ, John. Aside from the fact that the article is flat-out lying about Social Security, which is in fine shape under any likely economic assumptions, the government isn’t a private corporation.

    Yay! Someone gets it.

  58. 58.

    demimondian

    August 4, 2006 at 9:18 am

    John, FWIW, the Government has a unique mechanism by which it can control the size of the debt: devalue the currency. It’s kind of the nice thing about being a sovereign entity, you know.

  59. 59.

    Pb

    August 4, 2006 at 10:39 am

    Remember what I was saying before about Iraq being funded through emergency supplementals? Well, Harper’s and Daily Kos have noticed too. I’ll expect to see John Cole outraged about this scandal in a few years.

  60. 60.

    demimondian

    August 4, 2006 at 10:53 am

    I’ll expect to see John Cole outraged about this scandal in a few years.

    Yeah, about two years after the Democrats take control of all three branches of government, so he doesn’t have to blame the real architects of the policy.

  61. 61.

    Perry Como

    August 4, 2006 at 10:58 am

    Even if we took it at face value, it ignores certain pertinent realities. For instance, as more and more government functions are farmed out to contractors, it doesn’t seem especially odd that the civil service population would skew even more toward higher-salaried auditors and administrators. If so, the (supposedly) higher government salaries would be the result of federal workforce trends that outfits like Cato ordinarily applaud. Why am I not surprised that they’d want to have it both ways?

    If Cato changed its methodology of comparison between 1990, 2000 and 2006, I can see accussing them of fudging the numbers. And I’m not sure how comparing the average pay of federal civilian workers to the average pay of private workers is having it both ways.

    Cato wants smaller government. Increasing the size of federal government by dishing out more jobs, at a higher salary, to federal civilian workers isn’t cutting the size of government. It’s still shoving tax dollars to government jobs.

  62. 62.

    Perry Como

    August 4, 2006 at 10:59 am

    Remember what I was saying before about Iraq being funded through emergency supplementals? Well, Harper’s and Daily Kos have noticed too. I’ll expect to see John Cole outraged about this scandal in a few years.

    McCain and some other Senator brought this up in the Rumsfeld hearing yesterday.

  63. 63.

    Nutcutter

    August 4, 2006 at 11:18 am

    Democrats need to take credit where credit is do. They need to be offending conservatives with their amazingly well prepared and researched accountability plans, not defending the plans from right wing talking points. Its how we win on Global Warming – presenting facts from dozens of research journals and climate experts – in the face of Inhofe’s knee-jerk claim of “hoax”. Its how we can win in Iraq – quoting Generals and troops on the ground and military veterans – in the face of Cheney’s “turning the corner”. And its how we win on the budget. Democratic solutions are the best solutions and we’re damn proud of it.

    Hear, hear.

    And we’ve just described the entire rationale behind DKos and the netroots movement. The right has poisoned the politics of politics as usual. The answer lies in …. telling the truth, not in being sucked into the contrived arguments that the right gins up. The truth is, the right can’t govern. It is good at bamboozling 51% of the voters under certain conditions, but it has no idea how to govern. Hopefully, starting in January, we’ll take some of the pressure off them.

    It won’t be that long after that that we’ll be trying to figure out how to free ourselves of the Bidens and Clintons …. hopefully the Lieberman will be history. There are still some entrenched Old Dems who need to get their comeuppance. But first things first.

  64. 64.

    sglover

    August 4, 2006 at 12:07 pm

    If Cato changed its methodology of comparison between 1990, 2000 and 2006, I can see accussing them of fudging the numbers. And I’m not sure how comparing the average pay of federal civilian workers to the average pay of private workers is having it both ways.

    I think I’ve pointed out to you, in more detail than anyone should really need to, why this Cato study is probably disinfo. I suggest you review such concepts as ‘average’, ‘median’, and ‘comparable’.

  65. 65.

    RSA

    August 4, 2006 at 12:11 pm

    Federal workers average pay is twice that of the private sector.

    This strikes me as typically slanted, verging-on-dishonest Cato material: Pick the highest compensated segment of government (ignoring the much lower numbers for non-civilian federal employees and others — there are almost ten times as many state and local employees as federal civilians) and compare with the private sector average. An accurate summary would say, “The highest-paid segment of federal, state, and local government employees, constituting 9% of all government workers, makes twice the average pay of employees in the private sector, over all industries (including retail).” But that wouldn’t be ideologically correct, now, would it?

  66. 66.

    Zifnab

    August 4, 2006 at 12:17 pm

    Is Lobbyist considered a public sector or private sector job?

  67. 67.

    Perry Como

    August 4, 2006 at 12:18 pm

    Would it be dishonest to compare the average rate of increase between non-salaried workers and salaried workers? Or what about what Pb pointed out upthread? Compare CEO compensation versus average worker salaries?

    As long as the methodology is consistent and you are labelling what you are comparing clearly, I don’t see a problem with making the comparison. You can say the comparison is irrelevant, but I don’t see how it’s dishonest.

  68. 68.

    RSA

    August 4, 2006 at 12:29 pm

    Fine, if leaving out context to convey a specific impression is irrelevant rather than dishonest, I’ll say it’s irrelevant. I’ll then add that the author of the study is ignorant and incompetent [when compared to Nobel-prize winning economists] and probably ugly as well [when compared to People Magazine’s 10 sexiest men]. Honestly.

  69. 69.

    Perry Como

    August 4, 2006 at 12:45 pm

    Fair enough. The next time I hear someone bitch about CEO compensation I’ll label it irrelevant or dishonest, since people are comparing highly skilled jobs held by a small minority to unskilled jobs held by a much larger group.

    This game is fun!

  70. 70.

    Pb

    August 4, 2006 at 12:57 pm

    Perry Como,

    Yeah, you missed the point. Compare the rise in CEO compensation over the past 16 years (or, for that matter, the past 40 years…) to the rise in federal salaries–if not in general, then at whatever level you so choose.

  71. 71.

    DecidedFenceSitter

    August 4, 2006 at 1:11 pm

    Actually, regarding CEOs, what I find most telling is the difference between the CEO’s salary and the lowest paid employee’s salary.

  72. 72.

    Perry Como

    August 4, 2006 at 1:13 pm

    Yeah, I’m pretty dense here. A comparison of CEO compensation to the compensation of the lowest paid workers is often brought up to show how CEO compesation is out of control. Since the positions being compared are compeletly different, I don’t know how that is any more honest or relevant than the comparison Cato is making.

  73. 73.

    demimondian

    August 4, 2006 at 1:22 pm

    Perry, you do need to be pretty careful. My salary has more than doubled in the last decade, and my net compensation…well, it’s done better still. The feds have hired a lot of people like me in the last decade, and even if their salaries have doubled, their total compensations haven’t done what mine has done. More than that, the feds have shifted their worker market basket as they’ve outsourced more and more routine work. As a result of both of those factors, the Cato study is clearly flawed.

    Whether their results are irrelevant or dishonest depends on whether they didn’t think those facts through, or deliberately omitted them. I don’t know the people involved, so I can’t guess which one it is. WHich do you thiink it is?

  74. 74.

    Perry Como

    August 4, 2006 at 1:22 pm

    Man, I’m a typo machine today. Maybe the three martini lunch really did go out of style.

  75. 75.

    RSA

    August 4, 2006 at 1:25 pm

    The next time I hear someone bitch about CEO compensation I’ll label it irrelevant or dishonest, since people are comparing highly skilled jobs held by a small minority to unskilled jobs held by a much larger group.

    You would be well-advised to do that, and for more than the specific reason you give. In the link DFS provides to CNN Money we find this:

    The report also compares the growth in average CEO pay – which was $11.8 million in 2004 – to the growth in the minimum wage.

    You have to follow two links to a PDF report and read the first couple of pages to find that

    In 2004, average total compensation for CEOs of 367 leading US corporations was $11.8 million, up 45 percent from $8.1 million in 2003 and $2.0 million in 1990.

    The impression given in the Money article is completely misleading (“verging on dishonest”, as I wrote originally) in that it suggests we’re talking about the CEOs of all the companies in the U.S., when we’re only really talking about fewer than 400 people. Even if you think that CEO salaries are out of whack, as I do, this is not the way to make the case. (DFS’s point about the difference per company still remains a good one.)

  76. 76.

    Perry Como

    August 4, 2006 at 1:33 pm

    demi, Cato has a paper about the study here: http://www.cato.org/pubs/tbb/tbb-0605-35.pdf

    You may disagree with the positions put forth in the paper, but I don’t see how they are being dishonest. They are simply working with the raw stats provided by the DoC.

  77. 77.

    Zifnab

    August 4, 2006 at 1:48 pm

    Yeah, I’m pretty dense here. A comparison of CEO compensation to the compensation of the lowest paid workers is often brought up to show how CEO compesation is out of control. Since the positions being compared are compeletly different, I don’t know how that is any more honest or relevant than the comparison Cato is making.

    I’d be more interested in knowing the difference between CEO salaries and the salaries of the lowest paid management position. And then that management position against the lowest paid worker.

    If management on a whole is just getting a hefty hike in pay raises, this could insinuate a number of conclusions – management as a whole likes to pay itself alot, management is a more demanding job today than it was X years ago and requires more money to get people interested, more people with higher education degrees are entering into management positions, more management positions are opening up in high paying industries, etc.

    If CEOs specifically are getting a hike while lower level managers are getting left in the dust with their non-salaried fellow employees, then perhaps this does, in fact, suggest a tread of greed or gross corporate mismanagement at the highest levels of corporate power.

    Since part of the definition of “manager” is the rule against unionizing (as we saw in the California nursing union scandal) there should be a fairly well-defined cut-off point in terms of industry.

  78. 78.

    sglover

    August 4, 2006 at 2:20 pm

    People who listen to the Cato Institute — and, evidently, the host of this site — would probably do well to stroll over here.

    Look, Andy Sullivan is jumping on this “Oh my God, *two* sets of books!” pseudo-outrage. That ought to be another big warning that somebody’s misunderstanding some pretty elementary facts — Sullivan’s made a career of that.

  79. 79.

    Pb

    August 4, 2006 at 4:10 pm

    Perry Como,

    Yeah, I’m pretty dense here.

    Boy, I’ll say. Nice job not comparing the increases I mentioned, by the way, killer stuff. You’ve got a job waiting for you at CATO!

    You may disagree with the positions put forth in the paper, but I don’t see how they are being dishonest. They are simply working with the raw stats provided by the DoC.

    Ah, yes. Let’s look at these stats, shall we? Say, Table 6.6D. Wage and Salary Accruals Per Full-Time Equivalent Employee by Industry [Dollars], for starters.

    Now let’s talk about fair comparisons. According to this table, in 2005, the average Private Industry employee made $43,917 a year in salary. Meanwhile, the average Government employee made $48,900 a year. Whoops, let’s just talk about Federal employees instead–they made $63,816 a year! But wait, what kinds of jobs are these–management positions? Well apparently the civilians in the General Government are the highest paid, at $71,114 a year. How does that compare to management positions in the private sector? Not well, apparently–*those* positions paid $86,413 a year!

    In short, if CATO’s point here is that federal government salaries (especially at the top) have ballooned, and that they shouldn’t do that, that’s one thing. But it’d be foolishly naive to think that the private sector is any better at this–in fact, it’s often worse (especially at the top). Unfortunately, it’s the ‘free market’ idiots like CATO who all too often push such naive sentiments. Don’t let them play you for a fool too.

    Finally, I’d like to see them release a report about how well CATO employees are doing relative to the average Private Industry employee… now that’d be interesting reading.

  80. 80.

    Perry Como

    August 4, 2006 at 4:38 pm

    In short, if CATO’s point here is that federal government salaries (especially at the top) have ballooned, and that they shouldn’t do that, that’s one thing.

    That’s what I understood their point to be.

    But it’d be foolishly naive to think that the private sector is any better at this—in fact, it’s often worse (especially at the top).

    Tell me about it. I’ve worked for some useless, overpaid managment in my career. And I’m not even talking about the executive levels.

    Unfortunately, it’s the ‘free market’ idiots like CATO who all too often push such naive sentiments. Don’t let them play you for a fool too.

    I’m not a dogmatic free market type (I’d trade my kingdom for Norquist’s head on a pike…). I think Cato does some interesting work that I sometimes agree with. I like their anti-Drug War and anti-Police Militarization stances the most. The economics stuff is occassionaly interesting. If I want to read a real hoot, I’ll go over to Mises.

    I guess I failed to articulate what I thought their point was. “In short, if CATO’s point here is that federal government salaries (especially at the top) have ballooned, and that they shouldn’t do that, that’s one thing”, pretty much sums up how I was reading it.

  81. 81.

    RSA

    August 4, 2006 at 4:43 pm

    If I want to read a real hoot, I’ll go over to Mises.

    Oh my God. That stuff is enough to give you an aneurysm. Confident, tightly constructed arguments in a complete, self-referential vacuum.

  82. 82.

    Perry Como

    August 4, 2006 at 4:50 pm

    Oh my God. That stuff is enough to give you an aneurysm. Confident, tightly constructed arguments in a complete, self-referential vacuum.

    The best is to read Greenspan circa 1960s. Total Randian on economics. Then, well, we know what Greenspan did.

  83. 83.

    RSA

    August 4, 2006 at 5:04 pm

    I think we’re still finding out what Greenspan did.

  84. 84.

    HH

    August 5, 2006 at 12:01 am

    And what portion of that can’t ultimately be traced to the internet bubble, etc.?

  85. 85.

    Birkel

    August 6, 2006 at 10:29 am

    Using normal accounting procedures for a government is about three shades of stupid.

    How does the government value its assets: federal parks, bridges, roads, buildings, vehicles, etc?

    How should the value of those things be depreciated?

    What goods or services are they selling? At what price? What is the COGS?

    Et cetera, et cetera, et cetera…

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