Barak Hoover Obama


Anyone want to defend this as multi-dimensional progressive chess?

President Obama will announce a two-year freeze in the wages of federal employees Monday, with the intention of saving $60 billion over the next 10 years.

This is exactly the wrong thing to do in a deflationary environment. A terrible, terrible idea.

This is definitely (spare) Change we can believe in!

Note bene: Most of the Federal Employees who make more than $150k a year are doctors with the VA. Why punish our soldiers?


Sean Paul Kelley November 29, 2010 - 12:19pm
( categories: Economics: USA )

The guy is Reagan, without the flexibility in policy decisions.

zot23 November 29, 2010 - 12:33pm

From the NYT:

"By announcing it on Monday, the president effectively will preempt Republicans who have been talking about making such a move once they take over the House and assume more seats in the Senate in January.

The number of federal workers making more than $150,000 a year has grown ten-fold in the past five years and doubled since Mr. Obama took office, USA Today reported earlier this month. Since 2000, federal pay and benefits have increased 3 percent annually above inflation, compared with 0.8 percent for private sector workers, according to data cited by the newspaper."

Point 1: So because the GOP wants to do this in January, Obama decided to preempt them by doing the same thing?!? So he gets credt for...being a Republican in advance?

Point 2: The comments about the wage increases in Federal worker salaries are off the mark. The point isn't that government workers are paid too much, or get too many raises - the real issue is why non-Federal workers don't get appropriate wage increases. Wages should outpace inflation: that's how you make people better off in the long run. The "solution" here is to drag everyone down into the hopeless salary stagnation that non-government workers have suffered in for decades.

Nick Steno November 29, 2010 - 12:34pm

This Republican thing: now he has it down to where he does not even have to fight them, just give them what they want right away. Heck, lets not just extend the tax cuts for billionaires, let's double it!

I totally agree with your point regarding salaries. Right now, J6P in envy and jealousy wants all the gov workers to suffer like he has suffered by getting their own wages and benies whacked. But you are right, the issue ought to be turned around: corporations are reporting record profits yet continue to cut wages and benefits.

Zman1527 November 29, 2010 - 12:43pm

I was dumbfounded when I saw this; especially since the unions and the public service unions went out and busted a gut to get things going for the Democrats, etc. And things like this will just get the GOP saying 'boy, we can do that one better and cut 5% off the top of all those people's money -or de-fund all federal programs by 5% across the board and insist that it has to come out of worker pay only.

jrittenhouse November 29, 2010 - 1:10pm

...(cues up Nirvana...)

Just what Dems need, with an incoming Republican Congress more polarized than with Clinton. At least it seems that so far, Obama keeps his fly zipped.

it might not be change I can believe in, but compared to McCain/Palin or Romney/Huckabee, I'll still vote for 'im (a little smoke-n-mirrors still beats a clear kick in the balls, imo)

"In theory, theory is the same as practice. In practice, it ain't." -- Yogi Berra

justadood November 29, 2010 - 12:51pm

You mean "pre-emptive" clintonian triangulation. This guy can't even wait until the opponent puts his bet down before he folds.

I think the pattern emerging here is that he really is evil.

For my money, he may (or may not) be a good bit smarter than Bush, and certainly not handicapped with dyslexia and Bush's verbal ticks (although certainly not a gifted orator), but he is every bit as callow and narcistic. That's what people get for thinking "how can we go wrong with a black ivy leaguer?". What did this guy know about policy or economics or history or anything other than promoting himself to the beltway insiders before he ascended to the preznitsee?

maqmigh November 29, 2010 - 11:25pm

Then this would seem much less hypocritical than the times when these folks, with their super duper health plans, decide that everybody else does not get to have even minimal health care in the US!

creativelcro November 29, 2010 - 12:53pm

for a couple years... :(

Bolo November 29, 2010 - 1:40pm

...haven't seen one since I started where I presently work (3-year anniversary coming up in April)...but it beats the alternative--I don't wanna be out of work again...at my age, in this environment, one would just as soon step in front of a train.

Being out of work for more than 6 months, with the GOP looking for every means possible to cut off the unemployment bennies you've paid into for years (so that they can redirect the funds to their cronies)...no income, no prospects, and no hope for governmental assistance. That'd be a pretty tough row to hoe....

"In theory, theory is the same as practice. In practice, it ain't." -- Yogi Berra

justadood November 29, 2010 - 2:26pm

is precisely defense spending, and that is what is preserved from cuts at this point.

At $700 billion, the Defense bill has doubled since 2001. At minimum defense spending should be brought back to 2000 levels, or at $350 billion annually.

THAT would be a $350 billion savings year in and year out. What we cannot afford is this new super-sized military budget.

With that kind of saving we can probably afford the $6 billion a year that a spending freeze saves. The reality is that its not savings at all, because departments cover the 'savings' with staff cuts and raises continue apace.

In the present reality, it is a public cut that can be announced and accomplished by fiat within the Executive.

Scotjen61 November 29, 2010 - 1:55pm

Unfortunately, defense-related individuals have infiltrated the entire system and seem to be able to maintain a high level of paranoia that justifies the 700B/year.

creativelcro November 29, 2010 - 2:26pm

If your vote in the House or Senate is against any budget or part of for that budget (appropriations bill), you get no Federal Funds spent in your district.

Easy to accomplish:

"The spending for your district is under review for possible and not yet approved."

Synoia November 29, 2010 - 2:29pm

Shows that he's willing to break down our economy further, but he's not willing to cut the part of our system that is most unproductive and represents far and away the largest pool of potential savings.

Shutting down the war machine would be the single biggest step we could make, both towards balancing the budget and towards improving our security.

_______________________________________________________________

"In the netherlands most of us do not ware a helmet. Also most of us do not have a gun. Still we get very old." - jojo

chalo November 29, 2010 - 3:43pm

The only thing shrinking is the likelihood that bonds will get paid back. Energy prices up, commodities up, food up, real estate varies, where is all this deflation?

Let me play devils advocate that I think this is a decent idea, given that today the Federal Reserve is barely able to execute it's Ceremonial Magic POMO electronic money creation. It sucks that the civil service professionals are not getting stepped up the salary grades, but we don't have the money, and this is happening at all levels of government.

I like the idea that SEC pornsurfers and other assorted fail operators don't get salary steps. My friend in the Navy makes like $17K salary, he keeps stuff working a lot better than arsonists & jacobins at the shadier agencies.
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Hongpong.com

HongPong November 29, 2010 - 5:29pm

has nothing to do with it. The government is freezing its employees' salaries, which reduces the aggregate demand they can command, and thus withdraws funds from the private sector that would have been spent without the freeze. This will hurt the economy to some degree and may reduce government tax receipts, possibly nullifying the originally intended effect.

Granted, the freeze is very small in the grand scheme of things--but that's also a big reason as to why this is being proposed. Obama's "triangulating."

Edit: We still get salary steps, just not COLA. So, federal employees will go up from a GS-8 to a GS-9, but they won't see those levels adjusted for inflation. At least, that's what I read in the President's announcement.

Bolo November 29, 2010 - 6:47pm

Thanks re steps vs Cost of Living Adjustment . Anything to reduce the $ of electronically magicked bonds is better for us, safer.
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Hongpong.com

HongPong November 29, 2010 - 8:08pm

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