H/T to “The Lone Ranger”
OK, maybe that headline is a bit premature….let’s consider:
This interesting article from FedSmith.com recently came to my attention. It represents, I believe, some sensible warnings to federal employees regarding the risks they are likely to face as the budget and sovereign debt crisis continues…..errr, escalates.
To any average citizen, of course, it has become rather obvious that the costs associated with a bloated public sector are simply unsustainable. More aggravating to many taxpayers, some good portion of those costs have evolved from a combination of excessive compensation growth and defined benefits programs for public sector employees, who now earn substantially more than their private sector counterparts….I mean bosses.
Naturally, these issues are greatly overshadowed by the growing funding gap for social security and medicare. Still, does anyone here really think that public employees are going to be allowed to keep getting richer than the rest of society without a little blowback? I didn’t think so.
At any rate, the author of the above-cited article, Ralph Smith, provides a well-balanced word of warning to his readers, who are largely comprised of federal employees. Notably, he warns federal employees to expect the government to tap into the G-Fund backing for the federal Thrift Savings Plan (or TSP).
The G-Fund is comprised of short-term government securities and is funded directly by federal employee contributions. (It is not a defined benefit program.) As of year-end 2009, the G-Fund was estimated to have an asset value of $118.7 billion and, as such, may represent an irresistable plum ripe for the picking to help alleviate the current fiscal (and debt ceiling) crisis. Mr. Smith notes (and warns his readers) of the probable legal (and historical/international) precedents for such an action.
In truth, its really not all that different, after all, than the perennial sacking of the Social Security “trust fund”, now is it? Not surprisingly, Smith cites a survey that showed overwhelming (84%) opposition to such an action. Presumably, some of the 16% were merely trusting enough to expect the feds to repay the “loan”.
From this, we – meaning the “ordinary citizen” – might take away that the federal employee is likely to be reduced to the status equivalent to the “ordinary citizen”. Of course, the ordinary citizen’s 401k isn’t backstopped in any way by the feds. And, while I must give credit to the author for framing the issue in such a balanced manner, he’s clearly swimming upstream with most of his audience.
Few among us have quite yet come to the realization that the road forward is utterly cratered with various forms of hard and soft default, not to mention outright theft. Least of all, this awareness has seemed to have hardly made a dent in the consciousness of the average public employee (or their unions).
But, that’s often the way of things in any entitlement culture. Those who become the most dependent on it also become the most unrealistic, gullible, and, of course, “active at the feed trough”. To one extent or another, almost all of us have been similarly duped.
Public employees are no different than the rest of us. They are, of course, simply members of the greater society, even if their entitlement ranking has outpaced that of the average citizen. We might hope for a bit of humility and sacrifice from those who would call themselves “public servants”. But, we’ll just have to wait to see if it actually happens.