It will keep it from growing by $2 billion in the next year. It isn't much, but it is something. I haven't gotten a raise since January 09.
So when Obama came into office, the amount of federal workers making less than $150k per year was more than 0.5% and now it's less 4.5%? What on earth does that tell us? If it was 2% the whole time, that would mean that it never changed? Or perhaps it went from 99% down to 0.6%? Or maybe it went from 0.6% to 4%?
I'm directing at this stupid, cynical, vapid proposal that the Admin came up with. Why not? Your little links, if you haad any, don't have anything to do with it either, you're just making a general proposition that everybody is feeling pain...so therefore federal employees should arbitrarily be punked as well. Well, first off "everybody" is not feeling pain....as the little links show, Second, how does freezing government wages solve the problem of stagnant middle class wages? I honestly don't understand this logic at all. The middle class is getting squeezed, wages are stagnant, income inequality is rising.....so let's freeze a bunch of other middle class government workers wages too...how does this even remotely address the problem you are alluding to? It doesn't, if anything it makes it worse. It's cutting off your nose to spite your face.
Is the government running a balanced budget right now? How many companies would be as severely in the red as the .gov and still hand out raises? This isn't meant to punish workers in the government, it's a side effect of bad management. The entity they work for is in bad financial shape. It makes no sense to me to increase their wages. If a boat is sinking because of too much water, it never makes sense to add more water to the boat, regardless of how little impact you think it will have.
I don't understand this statement. Corporations are doing very, very well. If the middle class workers (us) are not seeing associated raises, the only rational explanation is corporate greed, not the "economy".
Given that there's no real inflation right now, I tend to agree with this move in concept. If you're running a massive deficit and cost of living hasn't gone up, raises don't make a lot of sense from a long-term government efficiency perspective. That said, it seems really inefficient as a solution to the budget problem and pisses off a lot of people. From a choices perspective - weighing similar cost items against each other - I think this is a negative at a time when you're arguing for more stimulus and/or middle tax cuts to put more money into the hands of the middle class. This is basically the opposite of exactly what you're trying to accomplish with those policy goals. Which is better for the US economy? An extra bomber or raises for 2 million federal employees? I would argue the latter when deciding what to cut. From a political perspective, if I were the President and committed to this, I would have negotiated it as a tradeoff to get something I wanted from Republicans (say, extension of unemployment benefits) and announced it in conjuction with something I got that I wanted.
http://yglesias.thinkprogress.org/2010/11/corporate-profits-not-actually-at-record-high/ http://www.newser.com/story/106036/us-corporate-profits-reach-record-high.html http://voices.washingtonpost.com/political-economy/2010/11/corporate_profits_hit_record_r.html
I think this is probably only half related to the deficit problem and half political. I believe its intent is to piss people off. Getting people angry about not getting pay increases and then having the GOP holding out for cutting the taxes of millionaires paints them in a bad light, and might make them more willing to compromise on that. The same is true of the employment benefits that expire today. The GOP wouldn't be willing to extend these benefits which we know have a greater effect on the economy than tax cuts for the wealthy but are going to champion the idea of giving millionaires a tax break. It's time to call their bluff and see if they are really willing to put their money where their mouth is regarding the deficit.
^^^Good grief justtxynk. I'm not proclaiming this corporate utopia, but certainly there is a recovery, and profits are climbing upwards. The argument that the lack of private sector raises validates Obama's plan is dubious accordingly. In my opinion.
I'm not sure it's really greed universally. Certainly in banking where the bankers are getting the huge bonuses, there is a big element of that. But for the rest of the businesses, they aren't paying that money out to executives either - they are just holding on to it. From a corporate perspective, I would argue this is simply smart business: 1. If you don't have to pay people more in this economy, why would you? That will just get you into a mess down the road when other companies start raising wages and your employees are unhappy that you aren't doing so further. It's not really greedy to simply pay reasonable market rate. 2. Similarly, in regards to hiring as opposed to raising wages, if you don't need employees to service your demand, there's no logical reason to just hire for no reason. Companies became more efficient during the recession, which sucks for employment as a whole, but it actually is smart business. 3. If the companies fear all hell breaking loose down the road - and I suspect a lot do - then it makes sense to hoard the cash. That lets them weather a future downturn with less turmoil.
I don't think Obama's plan is valid because of the lack of private sector raises. I think the plan is valid because the government is in horrible financial shape and it doesn't make sense to increase pay to government workers under those circumstances. The argument is enhanced in my opinion by the fact that the private sector isn't handing out raises or hiring new employees at notable rates either. It isn't like inflation is driving up the cost of living and thus creating an environment where a lack of a raise is akin to a paycut either.
Well, first off, it's entirely fallacious and misleading to compare the a non-profit entity like the government with a for profit entity. They are not the same, nor do they have the same objectives. Governments aren't established to make profits, rather they're established not to be profitable insofar as they provide goods and services that the private sector is unwilling due, largely becaue they are not privately profitable. Second, to answer your question, many, many many companies do this - Pretty much every single company in the world makes extensive use of both long term and short-term debt, in far more exotic and creative ways than the government, and effectively have much higher leverage ratios - and pay increases are a regular feature of their compensation structure. Look at Goldman Sachs and their massive pay packages - they are currently carrying $524 billion in long & short term debt, against $13 billion of profits last quarter - do you think this means no more pay raises at goldman sachs?
These are good points and I won't dispute them. I will say however that the term "corporate greed" is really redundant. Corporations are designed solely to accumulate the most power and money possible - they are instruments aimed solely at facilitating greed on a massive scale. As such your points are valid and rational, but only inasmuch as we admit the perverse incentives underlying them.
I would argue that what companies are doing is exactly what individuals are doing - strengthening their balance sheets. One of the things lost in all the economic turmoil is that people have been paying down debt instead of spending. This is part of the reason why the economy is not picking up, but it's actually very healthy long-term. People freaked out in this crisis, and they don't want to be as unprepared in the future (this also occurred to a much larger extent during the Great Depression when we created a generation of savers). Businesses are essentially doing the same thing. Instead of going on spending sprees as soon as they make money, they are getting their own finances in order and building in more safety for the future.
Certainly true - corporations ARE designed to maximize profits. So I guess we're really just talking about relative greed to their "normal" greediness.
Even further lost is the fact that a lot of the debt reduction in the last year is not paid down debt, rather it's debt that's just been completely written off by the creditor as uncollectible.
