May 10, 2010

Eventually, We'll Have to Stop Hoping That Time Hasn't Run Out

Justin Katz

At some point, it has to stop being relevant to argue about what Rhode Island has to do to "break out of its death spiral," as former Economic Development Corp. head Michael McMahon puts it, and start talking about how to rebound from the collapse. There's something of a sense of fruitless repetition to McMahon's suggestion for Rhode Island:

The only costs that are meaningful enough to have an impact are costs related to employment and social services. Some may challenge this approach on "moral" grounds. But this is not a moral issue. Rather, it is economic reality.

If Rhode Island is to break out of its death spiral, it must be prepared to do the following:

  • Reduce existing pension and health-care costs to retirees by 10 percent across the board.

  • Change retirement-benefit plans for all current employees from defined-benefit to defined-contribution and increase the age at which workers can begin receiving benefits to 65.

  • Require all workers to pay 20 percent of their health-care costs.

  • Consolidate Rhode Island's school and municipal districts (fire, police, mayor/town manger etc.) into five entities, roughly along existing county lines — Providence, Kent, Washington, Bristol and Newport.

  • Reduce social-service payments by 3 percent per year over the next five years.

I'm increasingly persuaded that the numbers destiny is written — meaning that there are just not enough people left in Rhode Island's "productive class" (upwardly mobile working and middle class private sector residents) to force change through political means. That leaves only revelation; enough of the people invested in the system have to be persuaded that they're going to lose more by not fixing the problems than by accepting the fact that their own deals with the system are the problems.

Pensions, social service payments, all of it, will be gone when the state collapses. It's not an either or. You cannot keep what you're getting, and the only question is whether the state has to collapse around you or you make yourself part of the solution.

But it's very, very hard to take make that leap of faith. Before Tiverton's financial town meeting, I had a pleasant and interesting conversation with a teacher with whom I last spoke during last year's contract negotiations. He understands that the state needs to change the way it does business, but he's not persuaded that it should begin, as I always say, from the bottom up. That is, from his union's concessions up through the State House's policies.

In the comments to my initial post about the financial town meeting, a local parent explains that he's made the decision to back his children's education. But that backing quickly becomes indistinguishable from backing the system as it stands — the system that has locked our public schools into a failing model and our economy into decline. If he accepts a 10% increase in taxes every year, as he claims to be willing, for the sake of his children, he'll rapidly be paying more than a private school tuition each year in additional taxes just to support growing labor costs. And if we should have learned anything over the last decade, it's that public sector unions controlling the levers of government will never say, "OK, we've got enough."

Which, I guess, is to say that Rhode Island is done. We can and should keep writing the same essays over and over again, about how to fix the problem, but at this point, they're all objections for the record. Our fervent hopes should focus, instead, on a quick collapse and rapid recovery.

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"a local parent explains that he's made the decision to back his children's education. ... If he accepts a 10% increase in taxes every year, as he claims to be willing, for the sake of his children..."

Was he willing to accept that 10% additional before his children were in the schools? Would he accept that for the rest of his life, for the sake of other children? For the sake of his grandchildren?

It's often funny how people get involved when their kids are in school and then back away when they're not. It's pretty selfish. And that's not how the society, with regard to public education is set up. It's set up that everyone shares the burden equally.

I wonder if he's also willing to pay an extra 10% a year to senior citizen services? An extra 10% a year to RIte Care? Or any other public service.

Posted by: Patrick at May 10, 2010 7:55 AM

The other day I responded to a call for chest pain in the parking garage of Rhode Island Hospital. It was six-thirty am, the homeless shelter 1/4 mile away had cleaned out the place, as they do every morning.

I arrived to find two of the shelters 'full time' residents, both men in their early forties complaining of chest pains.

An ekg, oxygen, IV, nitro and aspirin x2 later I delivered them 1/16 th of a mile to the emergency room where they underwent more extensive testing. The bill for the rescue run will be at least $500.00. each, paid by the taxpayer. I have no idea what the hospital bill will be, but it will be in the thousands. Multiply that scenario by 100 every day and watch the numbers add up.

Below is my response to Mr. McMahons editorial, from the comments section of the Projo. If I sound bitter, that is because I am.

"About 70 percent of the cost of government (state and municipal levels) in Rhode Island is spent on personnel (active and retired) and social services."

Until the Michael McMahon's learn the difference between "personnel," ie workers and "social services" ie. not workers, the problems will continue.

What is the percentage of state dollars for employees? What is the percentage for social services? Why not separate the two, then decide how best to cut costs.

I love the part about reducing 20% here and 10% there for the workforce, followed by the very politically courageous reduction of 3% for "social services."

But I should know by now to expect this kind of nonsense from an executive director, current or prior of the RIEDC.

Posted by: michael at May 10, 2010 8:31 AM

One more thing, both patients were treated and released, after breakfast, with no medical problems.

Posted by: michael at May 10, 2010 8:36 AM

I'm willing to bet that you have seen these people before and you will see them again. That is because we have such perverse incentives that are so accomodating to this behavior. We need to make it very uncomfortable for those sucking off the system. That is all they understand. Those who argue that is meanspirited will be in for a rude awakening when the whole system collapses and we can't give ANYBODY assistance, no matter how deserving.
We absolutely need to cut funding for social services. There are way too many people who take up residence in this state and make a lifelstyle out of living off our generosity, essentially becoming wards of the state, because of our overly generous welfare benefits, all cloaked in the stupid liberal mantra of caring for the neediest. These liberals are too stupid to see they are being taken advantage of. We need to gut these programs so we cause the bloodsuckers to leave Rhode Island and go somewhere else.
I know, I'm a mean, nasty person. Too bad! I'm merely telling the truth!

Posted by: Mike Cappelli at May 10, 2010 8:53 AM

The state is too far gone. We are becoming, and will continue to become East Detroit.
The reason is simple-people with businesses and money can switch instead of fighting. So sane people move out of the state-taking their votes with them.
The result is that the unholy coalition of government tit suckers and brain addled wealthy communists ("progressives") runs the state and will continue to do so.
On the positive (sic) side, like California, the system is not so slowly running out of money so the changes are being slowly made. The problem is that the state, unlike sanely governed ones, is always behind the ball because the changes are made grudgingly and insufficiently. The goal of the Smith Hill Crooks being only to delay collapse long enough to get cousin Seamus, Manny, Roland, Mario (and increasingly Tyrone, Jose and Van) on the government tit.

Posted by: tommy cranston at May 10, 2010 9:18 AM

“A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.”

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.”

– Alexis de Tocqueville

Rhode Island's coming fiscal collapse is a preview of what will occur nationally when Social Security, Medicare-Obamacare etc. go belly-up.

Unlike the 1930's, when we didn't have an entitlement class, today's recipients of "benefits" won't stand peaceably in soup lines. Canned goods, shotguns and gold will be the hot commodities in the United States of Weimar.

Posted by: Ragin' Rhode Islander at May 10, 2010 10:58 AM

Fortunately, unlike the original Titanic, there are plenty of lifeboats still available out of Rhode Island if only you have the courage to pack up your sinking passenger room and board them with your family.

Don't be a hero. Let the union and political captains in the GA go down with the ship.

Posted by: Dan at May 10, 2010 12:43 PM

You guys are funny...I come here for a laugh and a pick-me-up!

I would bet if you ever delved a bit into those horrible homeless people who you think need punished more because it is too easy for them to suck off the system, you might learn a thing or two.

I'd bet than a number of them served their country in Vietnam. Maybe some Gulf War vets by now too.

Lots of stories - probably a different one for each person.

Michael, my suggestion for you would be to give up your public job and take one where you actually care about the people you are serving. When I have to wake up in the morning and do work which is against my grain, I change my livelihood. You might be a great body mechanic, but with friends like you, the homeless don't need any more enemies.

Posted by: Stuart at May 10, 2010 1:13 PM

Stuart, you have zero idea of the work I do, and have been doing for nearly twenty years, or the way I treat the homeless. Your commentary is worthless.

Posted by: michael at May 10, 2010 1:35 PM

>We need to make it very uncomfortable for those sucking off the system. That is all they understand. Those who argue that is mean spirited.........

I guess, Michael, you didn't understand that your words could have consequences. Notice all your "friends" jumping up and down about punishing those homeless people more......

Just saying....think about it.

Posted by: Stuart at May 10, 2010 1:42 PM

Mike Capelli is no friend of mine. He is, however, correct in this instance. I am in the proverbial trenches with the homeless five days a week. For every person who legitimately needs some kind of help there are three abusing the generosity of our society. And three is a conservative estimate.

And, if the consequences of my words alleviate the abuse, fraud and outright thievery going on then I shall continue to write them.

Posted by: michael at May 10, 2010 2:02 PM

You are incapable of dealing with the truth. You stupid liberals have this noble notion of yourselves. How pathetic you are. You can't see past your nose, to see how downright destructive your perverted policies actually are. Dumb, dumb, dumb!
Rationalize it however you wish, but wrapping it with creative vocabulary doesn't change what it is.
Stupid liberal policies, wrought with perverse incentives, bring about their end much faster than any end brought about by conservative policies.

Posted by: Mike Cappelli at May 10, 2010 2:54 PM

I guess, Mike, that you value your words and the actual point you try to make by how many times you use the word "stupid" or "liberal".

I doubt it sways many, but hope you enjoy it.

Despite the BS rhetoric, neither you nor Michael has presented a sane and reasonable way which you think things should be.

It is so very easy to find fault with everything, but so difficult to fix even the smallest thing. It proves absolutely nothing that you know how to tear everything and everyone apart. Nothing.

However, dumping on the homeless is a new low even for you guys! What happened? No jews, blacks, hispanics, unions or other easy targets today?

Posted by: Stuart at May 10, 2010 5:14 PM

Au contraire, Stuey.
I have you stupid liberals to dump on - will for the forseeable future. Furthermore, I have a fix - gut the welfare programs so that only the truly needy get the help. Then we can rid the state of the legions of fat, lazy welfare Mommas that your idiotic policies have created. Oh, I know its bitter medicine, but you have only yourself to blame for creating this mess. You just can't fathom the thought that you oh so noble liberals have actually created these policies that have produced nothing more than the laws of unintended consequences. How could this possibly be? It's simple - you are stupid f'n liberals. It's a disease and you got it big time! You will never get it.

Posted by: Mike Cappelli at May 10, 2010 5:47 PM

"However, dumping on the homeless is a new low even for you guys! What happened? No jews, blacks, hispanics, unions or other easy targets today?"

This statement is might unliberal Stuart. There are plenty of homeless jews, blacks, hispanics and union members to pick on.

You are amusing, Stuart, I'll give you that. Simple, but amusing.

Posted by: michael at May 10, 2010 6:26 PM

>>I have you stupid liberals to dump on

I have broad shoulders - knock yourself out. Meantime, I will continue earning money, paying taxes, helping people and doing everything I can to make the world a better place.

I'll leave folks like you to kick the homeless around and whip them into shape. Good thing we have tough guys like you around, because I could not stomach it myself. We libs are a bit queasy about dumping on know, that compassion and empathy thing!

Unlike Justins friends here, we actually believe in the idea of "the meek shall inherit the earth" and that "If you wish to be complete, go and sell your possessions and give to the poor".

You might say we have the real religion.

Posted by: Stuart at May 10, 2010 9:16 PM

Oh yeah, the meek shall inherit the earth. Problem is, by the time you stupid liberals are done there is nothing worth inheriting.

Posted by: Mike Cappelli at May 10, 2010 9:59 PM

>There is nothing worth inheriting.

There is plenty of free oil for you, M, in the Gulf right now......courtesy of the Right WIngers and their attitudes toward silly things like "safety" and "regulation".

Plenty of dirty air and polluted streams for you too, courtesy of big business lobbying.

I know people in the EPA, and it was made very clear when Cheney was boss that there were to be NO new regulations. The results are in - dead miners, dead drillers, millions of gallons, disasters on a biblical scale, etc.

Meantime, you should be happy. Taxes on your rich friends are the lowest in 60 years! What's not to like?

What you are looking at now, my friend, is right wing world brought to us by Reagan in the start, but by Newt and Friends and Bush/Cheney for the last 14 years. If you like the way things are as a result of that, then you are on the right path.......

Hey, give a homeless guy an extra kick for me today, will ya? And post it on youtube? You might feel like a bigger man.

Posted by: Stuart at May 11, 2010 10:53 AM
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