Specific Argument in Response to the Differing Perspectives on New Jersey's Budget Crisis

New Jersey's Budget Crisis Matt Bai and David Leonhardt agree that the rising cost of state government and the lack of fiscal restraint on the part of local and state government leaders has lead us to the budget crisis that many states are facing in these uncertain economic times.

There are three lessons to be learned from these two articles; local and state governments need to become more efficient, contracts negotiated with public employee unions need to be reasonable, realistic, and affordable, and American's need to lower their expectations of what the government is able to do with the resources available. Matt Bai gives three reasons for New Jersey's current financial woes, first the state sends 40% of its annual budget to municipalities and school districts in order to compensate for the shortfall in revenue from local property taxes.

Second, the state doesn't have the recourses to cover its pension obligations to teachers and other state workers. Finally, the cost of healthcare for public employees is close to $3 billion annually and rising fast. All three of these problems can be attributed to a lack of fiscal responsibility on the part of our elected officials.

As Bai quotes Governor Christie of New Jersey, "it's time to for someone to tell these workers the truth, which is that the state is simply never going to have the money to make good on its commitments." Leonhardt hopes, "The states' current fiscal crisis will end up being the spark that forces government to improve." Bai calls the people of New Jersey a, "glass-half-full kind of people, have assumed an improbably healthy return of 8.25% annually on the state pension fund.

The actual return over the last 10 years averaged only 2.6%." This unrealistic assumption has lead Christie to complain that "teachers, cops and firefighters… are driving up local taxes beyond what the citizenry can afford, while also demanding the kind of lifetime security that most private-sector workers have already lost." Leonhardt states, "The real problem with most union contracts for public workers is not the money -- it's almost everything else." Contacts which delay actual costs have obvious political benefits.

"Both politicians and union leaders have decided that generous future benefits offer the easiest way to hold down spending and still satisfy workers. The result is government pay that's skewed too heavily toward pensions and health insurance." Unfortunately, these deals are not reasonable, realistic or affordable. Americans need to be realistic about what the government is capable of doing. Leonhardt notes, "Americans' [have a] collective desire for low taxes and generous government benefits.

We want our politicians to promise us tax cuts, strong military, safe streets, good schools and unchanged Medicare and social security. And promise it all they do." In Bai's article Governor Christie put it this way, "What I think that public-sector employees have to do is look at what's going on around them, look at all the pain around them, and understand that no one hates them, but they want them to sacrifice like everyone else. It's that simple." Poor government.