California's Challenge

The biggest fiscal challenge in America’s public sector today, most requiring of a centrist solution, confronted first in California, is that the main cause of budget deficits are the ever-rising costs for government employee benefits. There are tens of millions of government employees in the USA, millions just in California.

Don’t think how California may or may not handle this challenge doesn’t matter. More than anywhere else in the world, California creates technology which creates productivity creating wealth. Our leaps in technology are only beginning to be translated into more per capita wealth. We are ready to spend poverty into the ground and we just don’t know it, and California leads the way.

Most Democrats and Republicans alike in California and elsewhere in the USA are guilty of fiscal and moral neglect because they won’t confront the financial insustainability and fundamental inequity of raising taxes to maintain government employee benefits while simultaneously curtailing government benefits for the rest of us, such as social security. Trillions of dollars and the structure of our society are at stake.

Big ideas from the center can solve this fiscal challenge of the future. For example, we can provide more security for all American workers through merging all public employee pension funds with the social security fund as well as with all government disability funds and unemployment compensation funds. If you’re a citizen and you’re not working you get it, whether you’re retired, disabled, or unemployed. Citizens either work or don’t work. If they don’t work, they get social security, which would complement and compete with supplemental 401K and IRA-type funds and the like in the private sector.

Big idea Democrats (or fiscally conservative Republicans) might also merge health benefits for government employees with merged medicare, medicaid, and workmans compensation funds, extending this universal health-care fund to all age groups and allowing holders to keep individual accounts which would also complement and compete with supplemental funds available from the private sector.

When it comes to taxpayer-funded disability, unemployment, healthcare and retirement benefits, all American workers should get the same deal, and doing this would improve America’s economic health. That is a big idea. And we can afford it.

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Cygnus atratus

Countries who have done this, countries whose governments have adopted policies that reflect mixed-capitalism and who perhaps are in the political center, such as Germany, France and many others, have had stronger currencies, healthier trade balances, and less government debt. What’s so bad about that? Their products often demolish ours in global sales, because their manufacturers don’t have to worry about providing health care, pensions, workman’s comp., or any of that. These programs are all offered at a federal level to all citizens equally. Why not let every citizen have health and retirement security if it makes it easier for us to create jobs and eliminate the trade deficit?

This is the centrist, healing and revitalizing vision that Democrats and unions, Republicans and corporations alike should see; the huge economic benefit we all get along with the price of reform. If you are a member of a public union it is hard to imagine you will immediately feel good when you will see that while a merged system would be solvent and available for everyone, your own pension benefits might be reduced somewhat.

With California Governor Schwarzenegger’s failed but highly-visible attempts at reform, and subsequent fiscal exposes written both by legislative analysts and investigative reporters, California has become the first state in the USA to confront the challenge of how to reconcile increasing taxes in order to increase pay and benefits for public workers while at the same time benefits such as social security for private workers are being reduced. And the inevitable leap to reform across America that ensues will be California’s latest contribution to the culture of this land.

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