State Spending

I thought this passage from Kevin Williamson’s NRO post was something that people should keep in mind:

California isn’t spending its money on trains, just as the Federal Highway Administration does not spend its money on highways, and the Department of Defense does not spend its money on aircraft carriers, military bases, and tanks.

California’s government, like the federal government and most other state and local governments, spends its money on salaries, benefits, pensions, and other forms of employee compensation. The numbers are contentious — for obvious political reasons — but it is estimated that something between half and 80 percent of California’s state and local spending ultimately goes to employee compensation. (Interesting analysis here.) That is where the money goes.

I don’t have a problem with teachers, police officers, and firefighters being paid one or even two standard deviations above median. However, when their pay puts them into the top 1% of income earners, I don’t know how we’ll be able to afford it, especially when their pensions, a substantial fraction of their ending wage, will be paid for decades after they’ve stopped working. And when their pay catapults them into the top .1% of income earners, as is the case with many university presidents and sports coaches, that skepticism is even stronger.

Here’s what Illinois’s state spending looks like:

The 20% of the state’s budget that goes to Medicaid goes to pay salaries, too—the salaries of healthcare providers that provide services to the poor. That might be acceptable if the spending is effective but there are reasons to believe that’s not the case.