Comments on: The buzz on Jerry Brown’s May budget revision

By: Elwood

Elwood — Wed, 18 May 2011 20:54:18 +0000

http://www.youtube.com/watch?v=qLkhx0eqK5w

By: John W

John W — Wed, 18 May 2011 20:49:45 +0000

Re #9

Who’s arguing? Of course there are intangible, indirect benefits to eliminating unnecessary positions, functions etc. That doesn’t change the validity of my observations. If you want to call everybody who holds a government job or loses one a “drone,” go for it.

By: Elwood

Elwood — Wed, 18 May 2011 19:37:03 +0000

Re: #8

Pretty strained.

You don’t mention the benefit to the taxpayer of having one less government drone on his/her payroll.

By: John W

John W — Wed, 18 May 2011 08:06:22 +0000

Re: #7 Elwood, I think you missed my point. I’m not arguing against laying off government employees, but simply pointing out that, in the short run, the government does not save as much money from laying off employees as a company would. A company laying off people to improve the bottom line doesn’t care if its business decision results in lower tax revenue to the government. Not the company’s problem. Hence, in terms of the company’s goals, laying off a $50k employee results in as much as $50k profit improvement. Of course, if the employee is a salesperson, and the layoff results in the loss of $500k in sales production, that would be a dumb business decision. My point was that, if the government lays off a $50k employee to help balance a budget, it will not result in the same net cost savings that a company would achieve. The government will lose the income tax that employee would have paid, lose sales tax revenue when the employee cuts back on spending, and lose the multiplier effect due to the reduced spending. If the employee is involved in generating revenue to the government — tax collections, traffic tickets etc., that’s another possible offset to the savings from not paying the salary anymore. Unemployment benefits indirectly impact a company too, since those benefits are paid with unemployment insurance taxes (FUI and SUI) paid by the employer. However, those taxes have already been paid, so it doesn’t reduce net savings from laying off the employee.

By: Elwood

Elwood — Wed, 18 May 2011 02:36:27 +0000

Re: #5

Please explain how the layoff of a private sector worker does not result in “lower tax revenue to the government, payment of unemployment benefits, and less spending in the economy”.

By: rew

rew — Wed, 18 May 2011 00:27:18 +0000

Reply to #5, I buy your argument. You don’t want to waste goverment money with dumb spending on needless jobs. But you do need to keep people working somehow – if you can , if they aren’t working you have to pay thier unemployment, food stamps, pay for thier health care and so forth. Work is critical, it’s so important to our society that people have a job, jobs bring dignity to peoples lives, not just money

By: John W

John W — Tue, 17 May 2011 21:11:28 +0000

Re: #1

Short-term, the public sector layoffs are definitely a significant drag on the economy at a time when we are trying to get more traction. Unlike a business, where a layoff equals pure cost savings to to the company(less one-time costs for any severance pay), the net savings from a government layoff are far less, since they also result in lower tax revenue to the government, payment of unemployment benefits, and less spending in the economy. Long-term, if the layoffs are intelligent restructuring of government functions (a huge if), they should benefit the economy in numerous ways.

By: Elwood

Elwood — Tue, 17 May 2011 18:17:31 +0000

“Frankly I don’t see how laying off more goverment workers will help economic recovery, the private sector is starting to create jobs, but this positive uptick is being negated by public layoffs. We need to keep people working, jobs will get us out of economic doldrums, not layoffs.”

For the simple minded, let me explain the difference between public and private employment. Government workers are paid by your and my tax dollars. Private sector employees are paid from profits of business.

And let us now sing one more chorus of:

Steal from the rich,

Give to the poor,

etc.

By: Pablo

Pablo — Tue, 17 May 2011 04:41:46 +0000

Why can’t the LA Times find at least one political or labor leader who will counter the cutters with a call for taxing the rich? Those leaders are out there, in the Green Party and the Peace and Freedom Party, and their voices need to be heard now more than ever. The Democrat-Republican plan does nothing to improve conditions for the poor, the homeless, the unemployed, seniors, or children with no health care. Tax the rich and their corporations.

By: Pablo

Pablo — Tue, 17 May 2011 04:34:07 +0000

As part of the “grand compromise” Brown and the GOP propose big reductions in state employee pensions and a spending cap. Yes, real grand. So public sector workers will take a double hit: a loss of pension benefits while paying more taxes. So much for the myth of the powerful public employee unions we keep hearing about. For all their backing of Gov Brown and the Democrats, he wants to impose an unfair two-tier pension scheme and reduce benefits for state workers. That’s not a compromise. A compromise would be the republicans agreeing to raise taxes on folks with incomes over $250,000, really raising taxes on the super rich, closing tax loopholes that allow corporations to pay no taxes, and changing Prop 13 to allow corporate property to be taxed at a fair rate. Why isn’t Brown pushing for the upper class to compromise and sacrifice instead of ‘balancing the budget on the backs of workers’ as his incompetent predecessor was accused of doing?