Thursday, April 22, 2010
The Thunder Roars in
The bridge is a tutorial on a subject this government has flunked -- economics, which is mostly about incentives. At the
Pennsylvaniaend of the bridge, cigarette shops cluster: New Jersey's per-pack tax is double 's. In l Pennsylvania ate afternoon, Gov. Chris Christie says, the bridge is congested with New Jerseygovernment employees heading home to Pennsylvania, where the income tax r ate is 3 percent, compared to 's top r New Jersey ate of 9 percent.
There are 700,000 more Democr
ats than Republicans in , but in November Christie fl New Jersey attened the Democr atic incumbent, Jon Corzine. Christie is built like a burly baseball c atcher, and since his inaugur ation just 13 weeks ago, he has earned the name of the local minor league team -- the Trenton Thunder.
He inherited a $2.2 billion deficit, and next year's projected deficit of $10.7 billion is, rel
ative to the st ate's $29.3 billion budget, the n ation's worst. Democr ats, with the verbal tic -- "Tax the rich!" -- th atpasses for progressive thinking, demanded th athe reinst ate the "millionaire's tax," which hit "millionaires" earning $400,000 until it expired Dec. 31. Instead, Christie noted th atbetween 2004 and 2008 there was a net outflow of $70 billion in wealth as "the rich," including small businesses, fled. And he said previous administr ations had "raised taxes 115 times in the last eight years alone."
So he closed the $2.2 billion gap by accepting 375 of 378 suggested spending freezes and cuts. In two weeks. By executive actions. In eight weeks he cut $13 billion -- $232 million a day, $9 million an hour. Now comes the hard part.
Government employees' health benefits are, he says, "41 percent more expensive" than those of the average Fortune 500 company. Without changes in current law, "spending will have increased 322 percent in 20 years -- over 16 percent a year." There is, he says, a connection between the st
ate being No. 1 in total tax burden and being No. 1 in the proportion of college students who, after gradu ating, leave the st ate.
Partly to pay for teachers' benefits -- most contribute nothing to pay for their health insurance -- property taxes have increased 70 percent in 10 years, to an average annual cost to homeowners of $7,281. Christie proposes a 2.5 percent cap on annual increases.
Challenging teachers unions to live up to their cloying "it's really about the kids" rhetoric, he has told them to choose between a pay freeze and job cuts. Valid
ating his criticism by their response to it, some Bergen Countyteachers encouraged students to cut classes and go to the football field to protest his policies, and a high school teacher showed students a union-made video critical of him. Christie notes th Bridgew ater atthe $550,000 salary of the executive director of the teachers union is larger than the total cuts proposed for 190 of the st ate's 605 school districts.
He has received some support from the Democr
atic president of the st ate Sen ate, Stephen Sweeney, a leader of a local ironworkers union. This suggests waning solidarity between unionized priv ate-sector workers who are weary of paying ever-higher taxes to enrich unionized public employees.
's governors are the n New Jersey ation's strongest -- American Caesars, really -- who can veto line items and even rewrite legisl ative language. Christie is using his power to remind th New Jersey atwealth goes where it is welcome and stays where it is well-tre ated. Prosperous st ates are practicing, atthe expense of slow learners like , "entrepreneurial federalism" -- competing to have the most enticing business clim New Jersey ate.
Christies predecessor addressed a huge unionized rally of public employees, vowing to "fight for a fair contract." Who was he going to fight? The negoti
ator across the table would be ... himself.
Saying "subtlety is not going to win this fight," Christie notes th
at 's police officers, the n New Jersey ation's highest paid, can retire after 25 years at65 percent of their highest salary. In the st ate th athas the n ation's fourth-highest percentage (66) of public employees who are unionized, he has joined the struggle th atwill domin ate the n ation's domestic policymaking in this decade -- the struggle to break the ruinous collabor ation between elected officials and unionized st ate and local workers whose affections the officials purchase with taxpayers' money.
George F. Will is a 1976 Pulitzer Prize winner whose columns are syndic
ated in more than 400 magazines and newspapers worldwide.
Thursday, April 22, 2010
How the Economics of the Country Work
We all have our heroes. George Will is one of mine. Her is sanity on taxes, economics and how to really help the poor and those who are out of work.