A decade ago, New York City faced a dramatic rise of children placed in fos ter care. Even more alarming was the kind of family breakdowns that got them there.
Nearly 85 percent of children were put in protective homes because their parents, or usually parent, were drug addicts, alcoholics, convicts, or guilty of abuse. The traditional causes, poverty and neglect, accounted for only 15 percent of cases.
The findings struck me as a metaphor for our times. We live in an age of unprecedented plenty, yet each day brings fresh evidence we are being undone by problems we create. By our choices, we are screwing up a very good thing.
Consider the current decline and fall of New York. The city and state are careening from one crisis to another, with the worst certainly to come. Crime is the only thing making a comeback.
Yet the alarmist talk of “doomsday” budgets and “crippling” service cuts makes truth a casualty. The Big Lie is that City Hall and Albany don’t have any money.
By any historic measure, they are filthy rich. The windfall they take in would make Tammany Hall blush and was inconceivable just a few years ago.
New York City will spend over $63 billion this year. In Mayor Bloomberg’s first year, 2002, it spent $41 billion.
That’s an increase of 57 percent in unadjusted dollars. Thanks to unrelenting tax and fee hikes and the economic boom, revenues, including state and federal aid, grew by as much as $5 billion a year.
The city spent it all, and then some. Only once, last year, did it spend less than the year before. That decrease was under 3 percent, though it seemed draconian to hear the wailing over minor cutbacks.
Even now, $63 billion is apparently not enough to maintain essential services. On this broken model, nothing can be.
Like parents who lost their kids because they self-destructed, the city is perpetually broke because it is addicted to binge spending. And too much of what it spends is a handout to well-connected interests and advocates that doesn’t benefit the public.
Data assembled by the Independent Budget Office tell how bad it is, and how much worse it’s getting.
Medicaid costs over $5 billion a year and is expected to rise 7 percent a year.
Debt service will double, to $6.3 billion, in three years.
The city spent at least $5.5 billion on the homeless in eight years, and the number of street people keeps growing.
Pension costs were $1.4 billion eight years ago, and will be $7.1 billion next year.
The price of labor is prohibitive. The city pays its workers so much, and has so many, it can no longer afford them. Fringe benefits are going up 8.5 percent annually.
Each 1 percent raise costs $300 million a year, yet Bloomberg gave raises of 4 percent through the recession. He proposes hikes of 2 percent from now, but no union has agreed.
Why should they? They know the culture of government demands you spend what you don’t have. Besides, union members vote, so they are coddled.
Of the 173,000 city jobs lost in the recession, only 20,000 were in government. Which means fewer private workers shoulder the ever-higher cost.
A study found the city could save $1.4 billion a year just by matching its benefit package to prevailing private ones. So far, not even a “maybe” from City Hall.
Beyond wasted money, we pay another price for fiscal follies. After years of historic drops, murders and shootings are up more than 20 percent this year.
Bloomberg, who talked of further cutting cops to balance the budget, now concedes he may already have gone too far.
He got that right. Again and always, behavior is the problem.
Health-care catastrophe starts now
In one of her Mad Hatter moments, Speaker Nancy Pelosi claimed the health-care takeover was “really a jobs bill” and would put 400,000 people to work “almost immediately.”
There’s no sign of a hiring spree yet, though the IRS will need an army of auditors to enforce the mandate that every American buy insurance. And government being what it is, thousands of paper shufflers will sign up to, well, shuffle paper.
Still, there’s plenty of early action. It’s just that none of it is good.
In a clear signal the real world doesn’t believe the takeover is “deficit neutral,” the cost of government borrowing immediately went up as buyers grew skittish about more US debt. Families will get hit because interest rates on mortgages and other loans will likely rise, too.
The corporate fallout came fast, too, with some blue-chips counting big losses.
AT&T says the takeover will reduce its profits by $1 billion, joining a growing chorus that includes manufacturers Deere and Caterpillar. The firms say the new law eliminates tax savings they got for providing prescription-drug benefits to retirees.
Facing a new tax on medical-device products, Medtronic warned it might eliminate a thousand jobs through layoffs. Verizon cited new costs in announcing it will likely reduce the health-care benefits of its workers. How’s that for irony?
Wait, there’s more. Days after Mayor Bloomberg complained the law will siphon $6.5 billion a year from city taxpayers and send the cash to Washington, a number of states chimed in with concerns about the costs of expanding Medicaid. Most states are already squeezed, and now they will have to either raise taxes or cut other services to pay for the new mandate.
It is tempting to blame the fallout on the “law of unintended consequences.” But that wouldn’t be fair or accurate.
Many critics warned the plan would be a jobs killer and costs would explode, swamping the states and the federal government with red ink. It’s already happening, and this is just the start of translating the fine print.
In this case, the devil really is in the details.
O bumbles Muddle East
Because the White House has linked its dealing with Israel to its Iran policy, Obama critics are returning the favor.
The best summation comes from readers.
Several ask: Why is Obama more upset about Jews building houses in Jerusalem than he is about Muslims building a nuclear bomb in Iran?
Keep your answers short and civil, please.