"Privatizing Government Often Turns Out to Be More Costly"

http://www.washingtonpost.com/blogs/ezra-klein/post/study-privatizing-government-doesnt-actually-save-money/2011/09/15/gIQA2rpZUK_blog.html

Important points from it, especially those I bolded:

"Project for Government Oversight decided to do something different than the usual method of comparing public- and private-sector salaries. Instead, the group scrutinized the actual contracts that were awarded to companies for specific tasks and compared them with what it cost the government to do the same job in-house. They looked at 550 contracts — all deemed “fair and reasonable”— for 35 different jobs across government agencies, from auditors and engineers to food inspectors and groundskeepers.

As it turned out, the private contractors cost more in 33 of those 35 jobs. On average, the service contracts paid private employees 83 percent more than the government would pay a federal employee doing the same job (and that’s even taking into account health care benefits, pensions, and so on). There’s a long debate about whether workers in the private sector actually make less than their federal counterparts, but it turns out this is all beside the point. The POGO analysis found that private contractors working with the government make, on average, twice as much as a comparable private-sector worker.

Maybe the most stunning revelation in the report is that the federal government doesn’t have a solid system for determining how much money it saves or wastes by outsourcing various functions to private firms.

And this seems like something we’d like to know: Since 1999, the number of federal workers employed by the government has stayed roughly constant at about 2 million. But the number of private contractors has ballooned, from 4.4 million to 7.6 million in 2005 (these numbers turn out to be surprisingly difficult to pin down, since records on contractors are fairly unreliable). Last year, the government spent some $320 billion on service contracts. And yet there’s no ready way to tell whether this outsourcing boom is actually saving taxpayers money."

Obama's Jobs Bill: It's Changing Who Bears the Burden of Taxes

http://www.nytimes.com/2011/09/14/business/economy/white-house-offers-tax-plan-for-jobs-bill.html?ref=politics

Much of the Jobs Act is a reduction in the payroll tax, on both employers and employees (and our textbook says that the tax on employers ultimately comes out of compensation that would be paid to employees). Obama seeks to pay for it by closing various tax loopholes for the rich and for corporations. Especially given the latest data showing the middle, working and poor classes having their real income go down, and income gaps getting bigger and bigger, making the tax code more progressive in this fashion is a very good idea.

First Post, September 9

This article from the New York Times, "Families Feel Sharp Edge of Budget Cuts," http://www.nytimes.com/2011/09/07/us/07states.html?_r=1&scp=3&sq=budget%20human&st=cse,

is about the human consequences of budget cuts. It shows that the dry discussion in the textbook about the size of government, about government's growth and decline in different sectors, which sounds so abstract, is really about human lives, and often the difference between a life of decency and one of constant stress. I'm happily surprised to see it in the New York Times; last year I wrote a paper about how the Times too often treated the budget in mathematical terms, making it seem like it's just these crazy politicians making too much spending, rather than that spending having significant consequences.