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Wednesday, August 11, 2010

Congress Buys Votes

This story was amusing. The House of Representatives was called back into session, from summer recess, to pass an emergency stimulus/bailout bill. The bill was stalled in the Senate, but it was passed after the House adjourned.

This spending bill provides stimulus/bailout money to state governments. This will prevent the layoff of teachers/police/bureaucrats, before the November election.

Why is this bill an "emergency"? This is flagrant vote-buying. State employees are unionized. They vote as a bloc. They usually vote Democratic. An extra 1%-2% might make a difference in close Congressional races.

Even though 51% of the vote is required to get elected, a bloc of 2% is a huge swing. This enables unionized State employees to have a huge influence.

Some people say "If you work for the government, you shouldn't be allowed to vote." I'd extend that to indirect State employees. Working for a large financial institution, I'm an indirect State employee.

This is one problem with voting and high taxes. More than 50% of the people work for the government, directly or indirectly. That makes it *IMPOSSIBLE* to achieve real reform by voting. If State employees vote as a bloc for "big government", then reform *CANNOT* occur.

"More than 50% of the people work for the State!" is possible because:

  1. Not every worker has equal productivity. Highly skilled workers pay more than their "fair share" of taxes. In addition to taxes, the difference between the value of my labor and my salary is profit for the State. For example, my headhunter/pimp probably gets paid more per hour of my labor than I do.
  2. Some State employees produce some useful goods, albeit at above-market prices. Workers in the State electricity/telephone monopoly produce useful goods, while receiving above-market wages. Their State subsidy is the difference between "fair salary" and "actual salary" and not "entire salary". However, unionized indirect State employees tend to identify with the State.
This "emergency" spending bill is a flagrant example of Congress buying votes. The cost is paid by productive workers in the form of higher inflation. You should keep your long-term savings in physical gold and silver, to prevent theft via inflation.

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