As the entire nation confronts the problem of unfunded mandates and bloated government spending, individual states are doing the same.

Republican governors Chris Christie (New Jersey) and Scott Walker (Wisconsin) are letting government unions know that they can no longer expect to receive the kind of benefits and pensions they were falsely promised by union leaders and past state politicians whose campaigns were funded by union coffers. These governors are handling the displaced anger of union members who are only beginning to experience a little of what private sector workers have known for years. They know that increasing taxes will only cause businesses to leave their states and wreak further hardship on taxpayers already reeling from a struggling economy. Governors Christie and Walker are letting union members know that they are not entitled to exceptional treatment when the state is “broke.”

Democratic governor Andrew Cuomo (New York) wants to cut his state’s budget for the first time in 17 years. He proposes to fire nearly 10,000 state workers unless they agree to $450 million of savings, and plans to close a $10 billion deficit without raising taxes or borrowing. His proposed cuts include Medicaid spending and aid to schools. Cuomo’s message is clear: the state of New York can no longer spend beyond its means.

On Wednesday, Connecticut’s new governor, Democrat Dannel Malloy, presented his first budget, one that includes a $1.5 billion tax hike in the first year and only slightly less in the second year of the two-year cycle. The tax increase is one of the largest in the state’s history, and one that will hit, primarily, middle class families. The governor hopes to raise income taxes, the state sales tax, and taxes on cigarettes, gasoline, alcohol, and estates. Malloy’s budget would eliminate a $500 property tax credit, a “tax-free” shopping week prior to school’s opening, and a sales tax exemption for clothing, haircuts, pet grooming, non-prescription drugs, car washes, and many other items and services. The governor and his advisers are referring to this tax hike as “shared sacrifice” in a state that is already one of the highest taxed in the nation.

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In my last article, we began a discussion of GOV2.0.  Over the next couple weeks, I’ll sketch some sexy details.   Commenters, keep tossing out your ideas.

Tea Partiers!  Here’s how to save every state budget.  Let’s hoist our pirate flag high.

In New York City a movie ticket costs $15 – about $7.50 a hour.   Three months later it is out on DVD, and you can own it for $15.  Twenty eight days later, you can put it, along with thousands of other movies, in your Netflix queue for $9 a month.  Eighteen months later, it plays on HBO, along with a great show about having multiple wives, for $10 a month.

Or, if you prefer, you can download a watchable copy of the movie the day it comes out for free… because a lone pirate secreted a HDcam into a theater and jacked into the hearing impaired outlet in his seat.

The movie cost $150MILLION to make.  The hooligan did it for free.

And oh, by the way, if your kid is still buying music, you might sit her down for a talk about the virtues of sharing.

For the rabid capitalist, it is crucial to recognize that property rights emerge from the scarcity of the atomic.   There is value in creative ownership, but let’s be rational… if we could copy land, food, and oil, the concept of “ownership” would be radically different; there would be riots in the streets if limits on these staples were artificially enforced.

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There are two distinct sectors in the economy: the private sector and the government sector.  The private sector is the productive part of the economy.  Competition in the private sector promotes greater efficiency, productivity and innovation than the public, or government, sector is capable of.  Yet it is government employees who are the highest paid and have the most job security.  This helps explain why so many states are facing acute, budgetary crises.

A new report by Chris Edwards of the Cato Institute highlights the sharp disparity between public and private compensation.  Despite producing very little compared to their private counterparts, public sector employees of state and local governments averaged 45 percent more per hour in wages and benefits.  And because government never shrinks, public employees are “rarely terminated for cost-cutting or job performance reasons.”

\Unionization appears to be a factor in public sector pay.  With a few exceptions, Edwards shows that the states with the highest public pay advantage also have the highest share of union workers.  But whatever the cause may be, the excessive pension plans provided by states has placed taxpayers in a virtual stranglehold.  Unless cuts are made, they are the ones who will have to pony up to provide for public sector workers.

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First, a brief congratulations to all on having seemingly killed the public option. Without our efforts, it would be en route to becoming law. Now there will not be a government owned, government run and government subsidized insurance company that will put all others out of business.

But the current proposal Reid is loudly trumpeting is horribly flawed as well.

It has all of the old flaws (minus the public option) in that the government, through the Secretary of Health, will decide who gets what treatment at what cost and will force rationing through an artificial scarcity on all people, particularly the elderly. And it still has such high premiums for young uninsured people that it will compete with student loans for the honor of being their number one headache.

But the compromise itself is flawed:

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