Tuesday, November 30, 2010

If You Can't Beat 'Em, Join 'Em???: Obama Freezes Federal Employee Pay

To Cave or not to Cave? That is the question that was answered yesterday when President Obama agreed to take a page from the Republican talking points and freeze Federal employee salaries for 2 years - an undeniable step towards SHRINKING government. And as we all know, the Republicans love the idea of shrinking government.  As the Wall Street Journal reports:

it is more than this Administration has ever been willing to consider, and it suggests that Mr. Obama, post-midterm-shellacking, realizes he must show some willingness to restrain the growth of government.

But does this move really help anything?  As the LA Times reports:

The move would affect 2 million federal workers and save about $5 billion over two years.

The national debt is currently running at about $13 Trillion, and the annual deficit is currently running at about $1 Trillion/year in the red.  That's 12 zero's:  1,000,000,000,000.  Cutting $5 Billion off of the deficit is literally like paying $5 bucks on your credit card bill when you owe a thousand dollars.  So clearly this is a symbolic gesture to a symbolic request, which sends the message that Obama has catered to the Republicans in spite of his Democratic base who has blasted the move:

American Federation of Public Employees President John Gage yesterday derided President Obama's federal pay freeze as a "slap at working people."

Did Obama make the right move here economically?
Did Obama mkae the right move here politically?
Does the general public which voted on November 2 actually believe that Republican policies are good for the economy?
Is it smart policy to succumb to the same ideology that created the deficit in the first place?

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