By Les Dunaway
In “The States – America’s PIIGS? ” we talked about the debt / spending problems that various US states and cities face. An insightful look at the underlying cause is found in “What’s Your State’s Deadweight Ratio?” by William Baldwin in the Mar 16, 2011 Forbes.
Mr Baldwin writes
“The structural problem is that government has too many mouths to feed. It’s possible to quantify that problem. The result is a metric that I call the Deadweight Ratio. It tells you how many beneficiaries of government spending there are for every private sector job.”
Political subdivisions – nation, state, county, city – employ public safety people. Those people represent the minimum burden that the productive people must carry in exchange for that safety. Then there are elected officials and their staffs; we can discuss if and how much they should be paid, but they, like government itself, are a necessary evil. Beyond that comes teachers, sanitation workers, transportation workers, … None of which are providing Constitutionally authorized services. These are the deadweight Mr Baldwin references – the deadweight that is crushing nations, states, counties, cities across the US and across the world.
Georgia is, unfortunately, in the upper third of the list [below]. If we want to avoid joining California in bankruptcy, we must begin to reduce our Deadweight Ratio.
A good first step would be a careful look at what services we want government to provide and how those can best be delivered. Many cities have gotten into and back out of the cable-tv business – at the expense of the taxpayers on both ends. No rational person can argue that cable-tv is a proper function of government.
Political subdivisions must provide for public safety. However, there is no need for every little town to have a police force and a fire department. These functions can be provided at the county level, for example. The next group to be considered are elected officials. These officials must also have some staff.
Consider a city: we need a mayor and a city council and some staff. The staff can be provided by Manpower or some such. All other services can be provided by competitively-bid and regularly audited contracts. The same principle applies to counties, states and the national government. This approach addresses major problems that cities and states across the US face – current cost is reduced, pensions and benefits are eliminated (they are provided by the staffing company).
“In a Southern California Suburb, Layoffs for Nearly Half the Staff” outlines a move in this direction. This story recounts some of the teeth-gnashing involved in such a move. However, if our cities, counties and state will begin now to move in that direction, we can avoid the crash-program that Costa Mesa had to endure.
| State & local | ||||
| Contributors | government | Medicaid | Deadweight | |
| workers | recipients | Ratio | ||
| thousands | thousands | thousands | ||
| Mississippi | 877 | 222 | 750 | 120.7 |
| New Mexico | 635 | 167 | 501 | 117.9 |
| California | 11918 | 2137 | 10511 | 113.0 |
| Arkansas | 973 | 199 | 692 | 98.9 |
| Louisiana | 1566 | 333 | 1097 | 98.6 |
| Arizona | 2045 | 363 | 1456 | 96.1 |
| Maine | 506 | 91 | 350 | 94.4 |
| New York | 7272 | 1387 | 4955 | 93.5 |
| West Virginia | 621 | 130 | 392 | 93.0 |
| Alaska | 244 | 69 | 121 | 91.2 |
| Oklahoma | 1253 | 291 | 719 | 90.0 |
| Alabama | 1541 | 329 | 919 | 89.7 |
| Vermont | 256 | 50 | 158 | 88.1 |
| Tennessee | 2257 | 388 | 1447 | 87.5 |
| South Carolina | 1509 | 308 | 892 | 86.4 |
| Kentucky | 1499 | 293 | 834 | 82.3 |
| Michigan | 3311 | 589 | 1856 | 79.6 |
| Washington | 2315 | 475 | 1163 | 78.4 |
| Wyoming | 216 | 67 | 78 | 77.1 |
| North Carolina | 3244 | 642 | 1646 | 77.1 |
| Georgia | 3271 | 570 | 1685 | 75.6 |
| Delaware | 357 | 60 | 185 | 73.9 |
| Texas | 8829 | 1684 | 4170 | 72.7 |
| Idaho | 497 | 108 | 213 | 71.7 |
| Hawaii | 505 | 93 | 217 | 70.7 |
| Ohio | 4365 | 713 | 2067 | 69.1 |
| Massachusetts | 2815 | 398 | 1403 | 68.6 |
| Illinois | 4890 | 774 | 2323 | 68.5 |
| Missouri | 2258 | 398 | 1002 | 68.2 |
| Florida | 6256 | 989 | 2842 | 66.6 |
| Rhode Island | 410 | 52 | 195 | 65.1 |
| Oregon | 1344 | 273 | 513 | 64.9 |
| Indiana | 2405 | 401 | 1023 | 64.4 |
| Wisconsin | 2348 | 399 | 990 | 64.2 |
| South Dakota | 335 | 68 | 123 | 64.0 |
| Iowa | 1241 | 242 | 470 | 63.1 |
| Montana | 351 | 77 | 111 | 61.2 |
| Kansas | 1092 | 238 | 353 | 61.0 |
| Maryland | 2162 | 367 | 753 | 59.9 |
| Pennsylvania | 5019 | 662 | 2090 | 59.4 |
| Connecticut | 1406 | 232 | 530 | 59.1 |
| Minnesota | 2255 | 388 | 786 | 57.2 |
| Nebraska | 795 | 154 | 241 | 55.7 |
| Colorado | 1900 | 344 | 554 | 53.3 |
| North Dakota | 313 | 73 | 69 | 53.1 |
| Utah | 1017 | 182 | 291 | 52.9 |
| Virginia | 3108 | 536 | 863 | 52.3 |
| New Jersey | 3296 | 582 | 954 | 51.9 |
| New Hampshire | 537 | 93 | 144 | 49.1 |
| Nevada | 982 | 138 | 247 | 43.5 |
