Across the country people have seen their retirement funds halved. Companies have tightened their belts as they sought to rein in spending and remain profitable. As a result, many workers have lost their jobs and unemployment is bumping 9 percent, the highest rate in years.
Salary reductions, reduced shift lengths, forced vacations and job cuts have forced families to cut back on their spending. Even those who have not yet lost jobs or faced cutbacks on their paychecks are spending less and saving more, hoping to set up a buffer against the news that another job is lost.
Yet as the personal (individual families) and private (businesses) sectors cut their spending, increase their savings and pay down their debt and cut their workforce the government—at least on the Federal level—is doing just the opposite.
In April, private sector employment fell by 611,000 jobs, according to the United States Department of Labor (DOL). That leaves 13.7 million people in the country unemployed. But, Federal government jobs increased by 66,000 the same month.
And spending? A new budget more than $3 trillion; stimulus package $787 billion; Troubled Asset Relief Program (TARP) $700 billion; and it all adds up to more spending this year than all the previous years combined spending in U.S. history.
And what about those people who are voting to spend this money—your money—while you struggle to make ends meet and look toward the possibility of working an additional 10 years just to recover your lost retirement? Have their retirement funds taken a similar hit?
Not on your life. You see, the pensions of the president, senators and congressmen don’t work like yours and mine.
Rather than going into an IRA or 401(k), theirs is managed by the government. They are backed by the full faith and credit of the U.S. Participants (senators and representatives) put in their contributions and the federal government makes an employer contribution to cover any balances, according to Pete Sepp, vice president for Policy and Communications of the National Taxpayers Union.
The operations of those retirement funds are overseen by federally funded boards, Sepp said.
So, is it any wonder that politicians on the Federal level seem unconcerned about the state of the economy beyond the political ramifications on the next election cycle?
Now you know why Federal-level politicians aren’t showing the same angst as most people over the state of the economy. “The fundamentals of the economy are strong,” Senator John McCain said during the presidential election. Now President Barack Obama says the same thing.
And it is if you work for the Federal government where when you need a little cash all you have to do is fire up the printing press for another run.
But on Main Street, auto dealers, coffee shop owners, gift shop owners, restaurateurs, blue collar workers and white collar workers all have a different take. And it shows once again that there is a standard for “them” and one for the rest of us.