This chart compares K-12 education expenditures per pupil in each of the world’s major industrial powers. As we can see, with the exception of Switzerland, the United States spends more than any other country on education, an average of $91,700 per student between the ages of six and fifteen.

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How much more stimulus money is spent in swing districts? A lot. Using the data from Recovery.gov and data about swing districts, we see on the chart below that swing districts on average have reported spending $13.5 million more of stimulus funds than non-swing districts. The numbers are the following:

Stimulus funds to the average swing district: $437,371,451.46

Stimulus funds to the average non-swing district: $423,870,363.65

Swing district premium: $13,501,087.81

The list of swing districts comes from the Real Clear Politics  map of congressional districts.  They have a breakdown of  districts using a dark blue to dark red scale and toss-up districts are in gray.  They also do a very credible breakdown based on polling to show which districts belong where.  Check it out here. The Recovery data comes from recovery.gov and is available for download here.

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The debate agitating many in New Jersey right  is whether or not the state’s Governor, Chris Christie, is actually doing much to reform the state as it needs to be. I have to say that I wasn’t impressed with him during his campaign for the Republican nomination against Steve Lonagan. Having no interest in the politics of politic, he sounded like a big government Republican to me.

With that in mind, I was nicely surprised by the turn that Christie’s campaign against Corzine took and by some of his policies. He talked about small government, the need for reforming New Jersey, rejected the millionaire tax, capped property taxes and proposed budget cuts. But now that I am catching up on New Jersey reforms, I am skeptical again.

Let’s start with by comparing Christie’s FY 2011 $29.3 billion budget to Corzine’s FY 2010 budget of 29.8 billion. Given today’s economic climate, a 1.5% cut is not one that deserves immense praise. However, for a second I thought, “spending cuts are spending cuts and better that than nothing.”

That’s until I came across the alternative budget prepared by Americans for Prosperity called New Jersey Taxpayers’ Budget FY 2011. The AFP budget adds up to $25.9 billion. That’s $2.4 billion less than what is proposed by Governor Christie. Plus, they did this, without raising taxes. Unlike Christie’s budget.

That’s right, as part of a compromise on the budget, Christie made a deal with Democrats: he will put back millions into his budget (to buy things such as keeping open Hagedorn Psychiatric Hospital in Hunterdon County, funding for cultural sites including the Battleship New Jersey and the Newark Museum, more funding for projects in Urban Enterprise Zones) in exchange for  a series of new tax and fee hikes are being put forward as supplemental bills.

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That’s because when the entire country is hurting and the private sector continues to lose jobs, bureaucrats are being hired.

The following chart makes that case. Since the beginning of the recession (roughly January 2008), some 7.9 million jobs were lost in the private sector while 590,000 jobs were gained in the public one.  And since the passage of the stimulus bill (February 2009), over 2.6 million private jobs were lost, but the government workforce grew by 400,000.

Plus, as you know, according to the latest numbers from Bureau of Economic Analysis, the average federal civilian worker now earns double what private-sector workers earn when factoring in wages and benefits ($119,982 vs. $59,909). And the gap is increasing.  According to Chris Edwards of the Cato Institute, in 2000, the average federal worker earned 66 percent more in total compensation than the average private-sector worker. By 2008, that ratio had risen to 100 percent. That’s serious money.

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Violent protests by public employees  in Greece who are upset that they might have to give up their 13th and 14th months salary is the ultimate sign of dependency. The private sector behaved slightly better but still opposed the changes (“We want the government to take back these measures which freeze our pay rises and force us to stay longer in the workforce,” said Maria Grigoropoulou, a cosmetics store employee. )

These guys seem unable to conceive that they could take care of themselves for a change and not just receive money from the government in exchange for nothing. And yet the Greek austerity plan isn’t that austere ( some wage cuts for public workers, a three-year freeze on pensions and a second increase this year in sales taxes and the price of fuel, alcohol and tobacco,) especially compared to the self-imposed austerity plans in Lithuania and Latvia.

With that in mind, let’s look at what’s happening in the United States. Obviously, we are not Greeks. Yet, the level of dependency is growing in America. Check out this chart.

On this chart we can see the changes over time in the composition of personal income in the United States since 1929. The most notable trend is the increase in the portion of personal income coming from government transfers (mainly social Security payments, unemployment benefits, food stamps, and personal and business tax credits.)  And the increase isn’t minor: the proportion of total personal income constituted by government money has grown from 0.9% to 17.2%.

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During recessions, people lose their jobs,see their salaries reduced or frozen and find that life is harder than it used to be. Well, that’s if you work for the private sector. As I am mentioned here, since the beginning of the recession, the private sector have lost many jobs while the public sector managed to gain some. Also, data shows federal workers earned more money for occupations that exist both in government and the private sector, and that’s before  the value of health, pension and other benefits are included to the value of the compensation.

Today, I look at the increase in compensation during the recession between the private and the public sector. This chart above compares percent changes in public and private worker compensation within each of the five largest sectors in the United States during the 12 months ending March 2010. Compensation includes health and retirement benefits (roughly 30% of compensation), salary (roughly 70% of compensation), and legally required benefits such as payments for Social Security and Medicare.  The sectors examined here employ over 65 million workers, or nearly half of all employed Americans. These sectors are (in order from largest to smallest by total employment): Office and Administrative Support, Sales, Food Preparation and Service, Production, and Transportation and Material Moving.

Across the sectors examined, compensation costs in the private sector increased 1.78% from March 2009 to March 2010.  Public sector compensation increased by 8% more than its private counterpart at a level of 1.92%.

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The Associated Press has a story this morning called “Unemployment challenges Obama’s economic narrative.” No kidding.

I never get tired reminding stimulus advocates that before the stimulus bill was passed, the president scared the bejesus out of many people by claiming that if the Stimulus bill wasn’t passed, unemployment would reach 8.8 percent. Also, his team promoted the idea that the stimulus would create 3.3 million jobs (not just saved). They even had numbers and a model to prove it.

So the president got his cash, $789 billion which grew to $862 billion, and unemployment kept going up. It even passed 10 percent at one point and is now stagnating at 9.7 percent–where it’s scheduled to stay for a while.

And it’s not the only “job bill” that was passed. There was one in March 2020 ($18 billion) and another one in April 2010.

By the president’s own logic, the stimulus failed. That’s why he  has shifted his argument. Sure, the economy lost jobs, he now says, but without the stimulus it would have lost nearly 2 million more jobs. How you go about proving that this is not true is impossible and this is why it’s not powerful. It doesn’t make it right.

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On Wednesday, I testified before the Congress about the biggest Rip-Off of the century.  And I can’t say that anyone really cared.

I was arguing that the deceptive  accounting techniques used by  the federal government–techniques that would send anyone to jail in the private sector– is hiding the fact that $4 trillion (more than the federal government spends in a year) is unaccounted for. Well, it’s accounted for but as if the money still exists, when in fact, it has been gone for a while. And guess who will be stuck with the tab?

Okay, now bear with me because it’s a little geeky. However, I promise that this is a story worth reading  about (if you like sickening stories that is).

Remember Al Gore’s lock box or FDR’s bank-account-with-your-name-on-it? Yes, the lock box in which your payroll taxes were supposed to go to produce interests until you can get it back in the form Social Security and Medicare payments when you are old and sick. Well, as it turns out, the federal government had the key of that lock box and helped itself with the $4 trillion accumulated to pay for its daily consumption of wars, Prescription Drug Bill, Freddie and Fannie and ACORN and else.

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According to the Joint Committee on Taxation, it’s not happening. The Hill reports

“Taxpayers earning less than $200,000 a year will pay roughly $3.9 billion more in taxes—in 2019 alone—due to healthcare reform, according to the Joint Committee on Taxation, Congress’s official scorekeeper.

The new law raises $15.2 billion over 10 years by limiting the medical expense deduction, a provision widely used by taxpayers who either have a serious illness or are older.

Taxpayers can currently deduct medical expenses in excess of 7.5 percent of their adjusted gross income. Starting in 2013, most taxpayers will only be able to deduct expenses greater than 10 percent of AGI. Older taxpayers are hit by this threshold increase in 2017.

Once the law is fully implemented in 2019, the JCT estimates the deduction limitation will affect 14.8 million taxpayers — 14.7 million of them will earn less than $200,000 a year. These taxpayers are single and joint filers, as well as heads of households.”

Here is more, as if this wasn’t enough. Over at the Washington Examiner Marie Grace Turner gives a list of the new taxes brought to you by “Obamacare.”

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I received many emails on Friday and this weekend about the data published here showing that on average Democratic districts are getting almost twice the amount of stimulus money than Republican districts. Republican districts also received smaller awards on average. The average dollars awarded per Republican district is $260,675,663, while the average dollars awarded per Democratic district is $471,533,539.

Several readers asked if the difference could be explained by the fact that Democratic districts have many more people than Republican districts have. So I looked at the numbers and here is the result. It’s not.

Republican districts get $362 per capita on average

Democratic districts get $692 per capita on average

Also, on average, Democratic districts received one-and-a-half times as many awards as Republican ones. Democratic districts also received two-and-a-half times more stimulus dollars than Republican districts ($122 million vs. $46 million). Of course, there are more Democratic districts than Republican districts in the Congress.

Is the politics part of the allocation decision?

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Yesterday The Hill reported  that Speaker Nancy Pelosi said that “keeping a Democratic majority in the House is ‘too important to the country,’” which is why “she had no intention of ceding control of the House in this fall’s elections, despite Republican optimism that they can win control of the chamber.” Appearing on PBS, Pelosi addressed potential Democratic losses due to Sunday’s health care vote, “I’ve said if passing this bill means I have to walk out of my office that night, it would be with the greatest pride.” However, she cautioned, “I haven’t any intention of losing the Democratic majority.”

Sure. Here is another reason Mrs. Pelosi might want to keep a democratic majority. That’s because, as it turns out, based on my new analysis of the Recovery.org data, Democratic districts are getting 1.8 times more money on average than Republican districts. Using Recovery.gov data, and cleaning it up seriously to be able to use it, we find that Republican districts are getting on average $260.6 million in stimulus awards while democratic districts are getting on average $471.5 million. The average is award per district is $385.9 million.

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Here is an idea:  Greece is getting ready to sell some of its assets to pay for its gigantic debt (Corfu and the Parthenon are not on the auction block yet), and the US should do the same. According to the Financial Statement of the United States, there is about $2.6 trillion of stuff we could sell (See  Page 49 of the report, it’s page 69 of the whole document). A few items on my list:

Loans receivable and mortgage backed securities:  $540  billion
TARP direct loans and equity investments: $240 billion
Property, plant, and equipment: $784 billion
Freddie and Fannie preferred stocks: $65 billion

I would add California, New Jersey and maybe New York: $500 billion (The three states have a lot of debt and many  high maintenance people living there so I am not sure how much we can get for them).

What’s on your list?

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Based on the Recovery.gov data, more than two third of the 594,754.3 jobs “created or saved” with the stimulus funds were “created or saved” in the Department of Education (see chart).  Basically, what the administration meant by shovel ready projects was funding for your next door teacher.

Now, let’s recap some of findings and news of the previous weeks.

1. Most jobs are created in the Department of Education

2. In 2009, for the first time ever, more public-sector employees (7.9 million) belonged to a union than did private-sector employees (7.4 million) despite there being five times more wage and salary workers in the private sector.

3. A third of all union jobs are in Education

4. 33 percent of the education industry is unionized

5.  The union boss, Andy Stern, was appointed to be on the president’s debt commission.

It all makes sense, doesn’t it?

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Study this USA Today chart and cry:

According to USA Today:

“Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.”

And let’s just add insult to injury:

“These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.”

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Based on this data , I am thinking that the good life starts the day one gets a job as an employee of your local Labor Union and in fact those overpaid financial sector people might want to change jobs!

This table, based on data from the Bureau of Labor Statistics, shows  the changes in the wages in three sectors: the private sector, the Labor Union industry and the financial industry. According to the BLS, the Labor Union industry “comprises establishments primarily engaged in promoting the interests of organized labor and union employees.” That’s basically all the guys who work in a Union.  The financial industry is “The Finance and Insurance sector comprises establishments primarily engaged in financial transactions (transactions involving the creation, liquidation, or change in ownership of financial assets) and/or in facilitating financial transactions.” So the Goldman Sacks, AIG and others.

As one can see clearly here since the beginning of the recession, private sector employees have seen their wages grown by 3.3 percent (roughly the rate of inflation.) The financial sector employees have been slightly better off with wages growing at a 4.1 percent rate.

Meanwhile, wages in the labor unions have continued to increase. And not by 5 percent or 7 percent but by over 24.9 percent!!!

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Okay, I will admit that I am obsessed with this one particular truth:  The stimulus bill and all the stops that the federal government pulled to save the economy and create jobs didn’t not help the private sector employees. On the other hand, it did show support for its own employees.

Encouraged by Reason Magazine’s founder Manny Klausner, I made this chart this morning based on Bureau of Labor Statistics data that shows the change in employment in the private and the public sectors during the last two years.

Warning: the number of public employees is on the right hand-side of the chart and the private employees are on the left.

Warning 2: This chart is not claiming that public employment was ever higher than private employment.

However, it is showing without a doubt that during the last two year the number of public employees has increased from 22.3 million in January 2008 to 22.4 million in January 2010, after peaking at 22.6 million in July 2009.  Not that impressive you will say. Well, excuse me but it certainly beats being a private employee during that same period of time. The number of private jobs decreased from 115.5 million in January 2008 to 107 million. That’s a lose of 8.7 million jobs in the private sector while the public sector gained almost 100,000 jobs.

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Last week, the Huffington Post (here) was all over this  new study showing that low-income workers got hit more severely during the recession than high-income workers (low-income workers suffer an over 30 percent unemployment rate, workers making about $138,000, only a 3.2 percent.)

The data in this study, which turned out to be quite misleading, certainly makes for nice populist headlines. But it is hiding the true debate that we should be having. And that’s not that low-skill workers are vulnerable to recession (duh) but that public-sector employees still have jobs and private employees don’t.

Look at the data:

In this chart, I compare seasonally adjusted unemployment rates across segments of the economy, dividing these segments using the super-categories designated by the Bureau of Labor Statistics. The chart compares the unemployment rates in January of 2009 (blue) with the unemployment rates in these same sectors a year later (yellow). (FYI, the difference would be even more dramatic if I had used not seasonally adjusted data)

In both years, the unemployment rate within the government has been small relative to the level of unemployment within the entire economy, and particularly so relative to the private sector.   In the course of a year, government employment has decreased by 296,000 jobs to 4.3% unemployment; during the same period, employment in the private, non-agricultural, sector has decreased by 2.3 million jobs to 11.1%. (And if you look at not seasonally adjusted unemployment data, the lose of private jobs reached 3.1 million and the lose of public jobs is roughly 70,000. That’s quite a gap.)

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Greece is in big troubles.  Its economy is in bad shape, its debt is massive and its future is quite bleak. Interestingly, other European nations do not seem very eager to come to its rescue. The 27-country EU block, led by Germany and France, have promised some support package for the country but it comes with strings attached and  a lecture on how Greece must get its act together by slashing public sector wages and other spending.

Yet, instead of being grateful, Greece’s prime minister, George Papandreou, is mad as hell. First, he refuses to be treated like a lab animal (hey, I am watching to see what a country’s collapse looks like). Second, it’s not its fault. According to him,  it’s the fault of the European Commission “for failing to crack down on the previous conservative government’s “criminal record” in falsifying statistics.”

Remind me, where have I heard that the previous administration is exclusively to blame for the sad fiscal outlook of a country?

What would happen if the EU failed to extend a bailout package to Greece and if the country went bankrupt? There isn’t any doubt that, if Greece defaults it be painful and it would have very ugly consequences for the people who invested in that country. Not to mention the consequences this fall would have on Spain, Portugal and Italy.

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The definition of insanity is to keep doing the same thing over and over again and expect different outcomes.  The different versions of the jobs bills circulating in Washington DC these days are perfect example of that point.

See for instance, the  jobs tax credit for hiring new workers idea. What a brilliant example of bipartisan nonsense that is. Pushed by President Obama during his State of the Union address earlier this month and most recently picked up by Senators Schumer and Hatch.

Still no one seems to wonder, why would employers pay a new worker $40,000 to earn a $5,000 credit unless that worker generates at least $35,000 of revenue? Even when the advice comes from economists at the National Federation of Independent Businesses, the largest association of small business owners in the country, it is ignored by the President and Congress.

This about it this way:

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Wednesday, the Washington Post reported: “For months, economists and government watchdogs have warned that the job-creation reports should be taken with a heavy grain of salt. . . . Trying to count the number of jobs created or saved may have been a fool’s errand that needlessly undermined the credibility of the overall reporting effort.”

No kidding. Now, the AP reports that the White House

has abandoned its controversial method of counting jobs under President Barack Obama’s economic stimulus, making it impossible to track the number of jobs saved or created with the $787 billion in recovery money. Despite mounting a vigorous defense of its earlier count of more than 640,000 jobs credited to the stimulus, even after numerous errors were identified, the Obama administration now is making it easier to give the stimulus credit for hiring. It’s no longer about counting a job as saved or created; now it’s a matter of counting jobs funded by the stimulus.

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