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All things are not equal

Originally Published in the Frederick News-Post

Economic & Fiscal Policy

by Marta Hummel Mossburg

OP-EDS

Only women of a certain height and weight can be models. Only a few of those who want to play professional sports will make it. Only one person can win "American Idol." Few could achieve investment returns like Bernard Madoff. As the record shows, even he couldn't.

Likewise, public-sector jobs are not the same as private-sector jobs in how they affect the economy, despite what Gov. Martin O'Malley says.

On CBS' "Face the Nation," he said recently that "the public sector continues to be a drag on the economy because, in 16 of the last 18 months, we've had public-sector job losses."

For those individuals who lose a public-sector job it means a loss of income. But public-sector jobs do not generate revenue, they take wealth that was created in the private sector and redistribute it.

To call them the same is like equating debt with cash. Most sane people would prefer to have a lot more of the latter than the former.

Very few people would disagree that we need a certain number of government jobs. Maintaining the rule of law and defending the nation from outside aggressors are two crucial functions of government that people of almost any political persuasion agree are necessary.

But government remains a cost, not a creator of wealth.

That is why the trend in Maryland government is so troubling. Forget federal government jobs -- the reason the state is so wealthy at the expense of taxpayers across the nation -- let's just look at state and local jobs.

According to a recent analysis of federal employment data by Governing magazine, Maryland lost almost 59,000 private-sector jobs from January 2008 through April 2012. At the same time, the state added 4,700 jobs and lost 3,600 local government jobs, for a net gain of 1,100 government positions. (Governing magazine notes that most states with big private-sector job losses cut government workers, unlike Maryland.) The private job losses mean that a smaller number of people making money are supporting a larger number of people who do not at the same time the state faces yearly deficits, increased debt payments and massive unfunded state pension liabilities that economists Joshua Rauh and Robert Novy-Marx estimate will cost each Maryland household an extra $818 per year to make whole.

Add to those issues the fact that the national economy is slowing along with the state's, which has lost jobs the last three months, and the picture is not good.

Maryland does not exist in a vacuum. It needs more people making money, not more people who live off other people's money. This is not about competing political worldviews, but about simple math.

The fact that the majority of Maryland's legislators do not understand this makes them look like soldiers trying to attack a fighter jet with bows and arrows. The problem is we will all be victims when they lose.