Mr. Paul Krugman is playing a shell game and is hoping that readers won’t notice that he palmed the ball and dropped it down his sleeve. He makes audacious claims and veiled ad hominems through abusive analogy, without using as much as an ounce of empirical evidence. He conveniently stabs Mr. Romney with a stiletto, and then tries to blame the Euro crisis on him. What does a capsized boat in the Mediterranean have to do with too many bloated dead cows in the United States?
The U.S. Census Bureau collects some of the most accurate statistics on state and local governments. While it is true that the overall state and local government workforce has decreased by 2% since 2000, the costs of compensating personnel have skyrocketed faster than the rate of inflation. In 2000, state and local governments spent $47 Billion on full-time employee compensation. In 2010, they spent $65 Billion for an increase of 38%(11.4% faster than inflation). I don't know about you, but the quality of the services I get from my state and local governments have not improved over the last decade.
Given that Mr. Romney was not just addressing President Obama's plan to further "stimulate" local economies, by increasing federal funding to local government to hire more personnel, but also criticizing the increasing size of government in general, we should also note that according to the Office of Personnel Management, the federal government increased in size by 267,000 employees, 14.4%, between Sept. 2007 and Sept. 2011. Consequently, this means that the cost of running the federal government is also increasing. While an observant Obama supporter might note that part of this increase occurred under President Bush's administration they would be wrongly presuming that conservative voters unanimously supported this wrongheaded decision back then--two wrongs do not make a right. At what point is Mr. Obama going to stop blaming George W. Bush and Republicans in Congress and start take responsibility for his poor stewardship?
In practice, Mr. Obama's plan is little more than a ploy to buy-off public union support. As an
industry, education alone is a significant employer in the United States. According to the U.S. Office of Employment and Unemployment Statistics, in the Bureau of Labor Statistics, there were approximately 7.9 million people, or 5.4% of the entire U.S. workforce, professionally involved in education in 2008. The best estimates for the number of schoolteachers range between 3.67 million and 3.89 million, or 2.5% to 2.7% of the total U.S. population. To put this into perspective, slightly more than 1 in 20 working adults in the United States were involved in education and slightly less than 1 in 40 were actively teaching. The number of small donations and votes reaped from public unions during an expected low-turnout year could be quite the coups d'état for Mr. Obama.
Mr. Obama thinks he can keep handing out blank checks to cronies and sycophants without consequences, but he is wrong. The interest payments on our deficit are already putting a serious squeeze on discretionary spending. Federal student loans are only the first casualty of the growing deficit pinch on basic entitlements; it is only a matter of time before Social Security and Medicare get plundered. The obvious next step from the liberal playbook for Mr. Obama to take will be to eviscerate the defense budget, leaving our nation open to attack--but that's okay because the U.S. hasn't made many enemies in the last two decades. He will then kill the goose who laid the golden egg by taxing the profit motive into oblivion. As we have seen in regions of Europe, when there aren’t any entrepreneurial incentives and investors flee, no more jobs are created and the country begins to circle the drain.