Monday, November 29, 2010

Don't freeze federal pay, cut it.... including military pay

Obama beat me to the punch on this freezing of federal pay thing. But as usual, the system is treating the symptoms and not the disease, as I have said recently about other federal action.

Also alluded to in a recent post, I believe the real problem in federal spending is not federal employees. It is too convienant and too easy to scream "cut the Feds' pay!" and hope that solves the problem. The fundamental problem is with taxpayers, who want more than they pay (and are getting it thanks to reckless print and/or borrow and spend policies). To blame and cut the salaries of federal employees in the face of such a debt is merely a distraction. It is a bit like trying to address the threat of morbid obesity by yelling at a Burger King billboard. Ok, yes, the billboard is part of the problem. But the bigger problem is caused by your own overindulgence. If you let the billboard complaint distract you, instead of going to the gym and changing your lifestyle- you'll be fat forever- and forever won't be long.

Federal employees make great scapegoats, but even firing them all would not remedy the debt problem.

In reality, federal employees have not really gone up in number over the past few years. Their salaries have, as has been reported, but that's to be expected as the size and complexity of the federal government grows and the number of bean counters contracts. The work is more and more difficult.

Of course, there are more than enough wasteful federal employees and unnecessary federal positions (been to an airport lately?), but chopping federal pay is only a small part of the larger problem.

And keep in mind, what the Spender in Chief is proposing is merely freezing federal pay increases. There are no plans on the table to cut federal salaries, let alone jobs.

And this freeze would not apply to the military.

A special word about the military, diplomatic, and intelligence workers: some of them do very, very difficult work and are not paid enough. Some of them- possibly many of them- do relatively easy work and are paid more than is merited. Additionally, overseas payments- salaries given to people who spend the money off-base or away from an embassy in a foreign country, is an immediate loss to the national GDP. At least when some wasteful federal program spends money in Duluth it stays at home. But dollars spent by a soldier at a bar in Bavaria are going right into German pockets. You won't see them again until the Germans start trading Euros for US imports.

Another problem with always giving exceptions to pay freezes and cuts to military personnel is that it puts them in a special class. "Support the troops" becomes the rebuke for any call for commonsense and unless one belongs to that special class and there is no questioning the benefits they receive. Do we really want a country where the military is beyond question, and insulated from market realities?

Ironically (there is irony all over the place in the world of federal spending) the soldiers who most deserve assistance are likley not going to benefit all that much from this exemption. Most grunt level soldiers already receive such low pay that their real benefits are in kind: housing, health care, education benefits. It is the Major back in the States who pulls down $75,000 per year specializing in logistics procurement who will see the windfall- not the Marine in Khost.

If Obama were serious about paying down the debt, and not just pushing back the inevitable by getting the deficit to an almost palatable level- he would institute an across the board spending cut, including a cut on contract spending. Contracting is- as discussed in my last post- largely responsible for the decrease in the number of federal workers, after all. Ironically, we have cut wasteful federal positions by outsourcing inefficiency to the private sector (before you snap about how federal contracting is the free market at work, ask yourself "is the USG really a free market actor?").

So, by all means, stop raising the pay of federal employees. But make it apply to all of them- and then cut salaries too. Lay off a bunch of them too, keeping in mind the need to do it sensibly.

But most importantly- stop spending on the rest of government. No more spy satellites, no more ski resort subsidies, no more loans to Israel or grants to research protein supplements for puppies. Cut it all. Use the Constitution as a guide. And when you are done- cut a little bit more.