When President Obama proposed to freeze Federal Government pay for two years I thought he was taunting us with an April Fool’s joke in November. I mean really. Is the public supposed to take the President seriously after he signed off on a 3.9% 2009 pay hike when Armageddon hit in 2008 while attacking the private sector for getting paid too much? Not only did all Federal Government employees get a 3.9% pay hike in 2009, they also got another 2.9% pay hike in 2010! In other words, while practically all of America suffered through the financial crisis with pay cuts and job losses, Federal Government employees raked it in! We’re talking the percentage of Federal Government employees making over $100,000 jumping from 14% to 19% during the meltdown. Sweet!
If President Obama listened to the hoards of people who implored him to reign in spending and treat people equally, perhaps he wouldn’t have lost many of his key staff as well as lose his party’s mid-term November elections by a landslide. But, what’s done is done and it’s important to realize that change in the government is on its way.
Hypocrisy is bad. The government can’t raise taxes on people in a recession and avoid paying taxes like Tim Geithner did. Shame on the government for telling people and organizations they make too much when the government themselves keep giving themselves raises and providing massive pensions to boot. The Dow Jones was down 150 points before Obama’s announcement, and rallied to close down only 39 points after his speech. See what happens when we begin to eradicate double standards?
OUTLOOK JUST GOT BRIGHTER
I’m starting to believe very strongly that 2011 is going to be a wonderful year for the US economy. Corporate earnings are picking up, which will ultimately lead to increased hiring. But, what’s most encouraging is the fact that the American Government is returning to honesty and equality! Anti-business policies have just paralyzed small business owners who employ 90%+ of all Americans. When you think your taxes are going up, you don’t expand because you aren’t sure what your costs will be. An unclear regulatory environment is a DISASTER for employment.
President Obama has finally come to admit that he can’t tell others to cut costs without setting an example himself, simply because nobody will listen. It is wonderful that the government is finally trying to set a good example for the citizens it governs. An honest American government is great for the economy. Maybe miracles do happen!
Readers, how encouraged are you that the government will actually start leading by example? What more can the government do to show they aren’t just selfish politicians who are only looking out for themselves? Why do people continue to let things slide with government officials who serve us?
Notes: The pay freeze does not affect Congress or their staffs, defense contractors, postal workers or federal court judges and workers. The reason? They are more special.
Extending the tax cuts for the middle class will cost ~$3 trillion over 10 years compared to ~$500-700 billion in cost if extended for the top income earners.
Advice to President Obama & Congressional Leadership: Compromise and raise the income limit for tax increases to $1,000,000. There is no way any millionaire will complain (publicly at least) about a 4% income tax hike. Furthermore, nobody, Republicans included will feel sorry for millionaires and find the tax hike unreasonable. Remember, someone making $300,000 in Manhattan is like making $100,000 in Iowa who would not face tax increases under President Obama’s existing $250,000 threshold. Different parts of the country have different costs of living, surprise!
I just want to point out that many of the people hit by the wage freeze will be the innovators and scientists that spent many years making very little money and have been forced to relocate to God-forsaken parts of the country for the sake a creating a brighter future for this country. Additionally, many of these have not received compensation increases for years. Furthermore, it is unclear that how much of the deficit will be affected – somewhere between nothing to maybe one percent, but the long term cost of failing to foster and support innovation and technology in this country means that long term the deficit will grow and America will continue to decline.
Financial Samurai says
You believe many Federal government works are innovators and scientists? I’m curious to see any statistics backing this up. Thnx.
Where's My Elephant? says
The national laboratories are staffed with innovators and scientists who have all had their salaries frozen.
you be the bank says
coming in late, but wanted to weigh in. why is it that everyone thinks that the wealthy won’t care to give up some of their money…in most all cases the wealthy are wealthy because they worked hard and out of anyone they deserve to keep their money because it was not handed to them.
Financial Samurai says
That’s a good point that we’ve failed to address! Perhaps it’s notfair to assume that all people are opposed to getting taxed more, and would welcome more taxation for whatever reason.
The thought is basically whether you or someone else is better at handout your own money.