nomad Posted October 4, 2010 Report Share Posted October 4, 2010 View from California: The US lags Europe in austerity measures, but it is coming. We have a huge, well paid public sector, who can retire far earlier than the private sector with very generous pension payments for life. We also spend a lot of money on entitlements. The public sector is in a bubble. What used to be lowish paying jobs with good benefits and lifelong security have turned into great paying jobs with tons of benefits, lifelong security – far better than the private sector. It’s a tough bubble to prick for obvious reasons. However, we can’t afford the salaries or pension payments anymore. They were calculated on the basis of great growth. California, where I live, is particularly exposed and doing little about it. We are getting close to voting on a budget (months late and getting close to IOUs again) and the end result of all the negotiations seems to be adopting a “rosier” forecast for growth and “hope” that the Federal government will give us more money than previously projected . . . We are cutting spending too ($7.5 bln) and it is getting increasingly tough in CA. The schools are suffering, public services etc. However the real problems aren’t being tackled. The number of people working is being cut, but real efforts to reduce the cost of employing a person are not. The private sector who have been hammered by the recession are angry about this. Chances are when the elections come in November, it will be on a mandate to cut costs and reduce the debt. So what will happen to housing? If the public sector gets hit, housing may get hammered again. Or will it be possible for the gov’t to inflate our way out of this? Therefore being able to afford the salaries and pensions without making difficult decisions . . . Link to comment Share on other sites More sharing options...
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