Four years ago, I asked if newly-elected New Jersey Governor Phil Murphy would be the first to tell the truth about Generation Greed.
Telling his new constituents exactly what share of their state income taxes, local property taxes, transit fares and toll payments were going not to public services and benefits they were getting today, but rather to costs shifted forward to the present by past New Jersey politicians, and the older and former state residents and special interests they had pandered to. Costs from past debts, inadequate past infrastructure investment, and underfunded and retroactively enriched public employee pensions. The tell would be to reduce taxes, tolls, and transit fares to a level that only reflects the public services and benefits that the State of New Jersey and its local government are providing to New Jerseyans today. So people would see what the public services they are now getting actually cost. And then fund all the costs from the past with a separate, additional income tax, property tax, transit fare and toll surcharge that everyone could see. The Generation Greed surcharge. It would be right in their face, not in some report no one reads, day after day and year after year.
Governor Murphy (like the rest of them) chose not to go that route. And despite an economic upturn, stock market bubble, and gusher of federal money that the later-born will be sacrificed to pay back someday, that temporarily made his options and decisions much less painful than they could have been, and will ultimately be, he was nearly thrown out of office, barely winning re-election against Republican challenger Jack Cittarelli. Meanwhile, Democratic New Jersey Senate President Steve Sweeney has apparently been ousted by a truck driver and politician novice running a low-cost campaign.
The top issue, according to pollsters, was taxes. Even though New Jersey’s total state and local government tax burden, as a percent of state residents’ personal income, doesn’t come close to what we’ve been forced to pay in New York. Even at their lower tax total, today’s New Jerseyans apparently don’t feel they are getting fair value for their money. Well of course they aren’t.
Three years ago, I did an update (with data through FY 2016) of my series of analyses of the extent to which each state’s future (with New York City and the Rest of New York State analyzed separately) has been sold out by the self-dealing of the richest generations in U.S. history, those I have identified as Generation Greed.
Those who have also provided their children, on average, with less stable families than they themselves received, lower private sector pay and benefits, and a massive federal debt with diminished federal old age benefits when they become old themselves. The victimization of the later-born increases with every Congress and Presidential Administration, including the current one based on what I can tell and read about.
As the negotiations continue, less and less money goes to the non-$billlionaire later-born, who will end up paying for it all, and more and more for today’s seniors, the richest in history. Repeating the scam of the Trump tax cuts.
As for my state-by-state analysis of intergenerational inequity at the state and local government level…
The worst-off state in FY 2016, out of 50 states plus the District of Columbia (a “Sold Out Future” rank of 51) was Rhode Island, where debts, past capital construction shortages and pension underfunding totaled 82.1% of Rhode Island residents’ 2016 personal income. Other states where older generations have most victimized those coming after include (in order from the worst) Illinois, with a burden of 75.8% of that state’s residents’ personal income in FY 2016, Connecticut at 72.9%, Ohio at 68.7%, Michigan at 66.0%, and Kentucky at 63.5%. After adjustments to credit it with a share of Port Authority of New York and New Jersey investment, New Jersey came next at 63.1%, with Pennsylvania at 61.5%, and Massachusetts at 56.2%.
Despite its high state debts, including having virtually of its transportation “trust” fund revenues go to pay debts and not transportation, New Jersey’s financial debt burden was not that great, because the state’s local governments hadn’t borrowed as much. But its past infrastructure investment level had been low, to keep gas taxes and other taxes low, and its pensions were drastically underfunded, despite public employees themselves paying their share. Thus the state’s position, once again, near the top on the “Sold Out Future” list.
I’m working on an update to this information through FY 2019, using Census Bureau government finances data through that year released last summer, and updated Bureau of Economic Analysis local area personal income data set to be released next week.
Thanks to decades of generational self-dealing there really is nothing to do but allocate the blame – or spin it, something Republicans seem pretty good at doing at the national level. While not admitting, let alone solving any real problems. But if Murphy had wanted to tell the truth, he would have had a reasonable shot at deflecting the blame to New Jersey Republicans.
Most people in that state know that former Republican Governor Christie Whitman floated a huge bond and slashed contributions to the state’s public employee pension funds so she could cut (or rather defer) taxes.
Many know, and others could be told, that New Jersey’s big, future-crushing retroactive pension increase was enacted in the administration of Republican Governor Donald DiFrancesco.
And most New Jerseyans are aware that former Republican Governor Chris Christie gutted funding for mass transit, and so mismanaged what was left that a train eventually crashed in Hoboken and valuable equipment was left in a flood plain during Superstorm Sandy.
Even so, however, Murphy apparently didn’t want to take the risk of telling New Jerseyans how much they had been screwed by decisions made in the past, that benefited people in the past, with some benefitting a hell of a lot more than most. Once that reality is out from under Omerta, and under discussion, who knows where that discussion might lead? Who knows what evidence might be uncovered? Who knows how the later-born might react? As of now people are just surly, and can easily be lied to and led into blaming each other on culture war grounds. What if that ended?
For one thing, today’s New Jerseyans might find out that before Christie Whitman former Democratic Governor Jim Florio cut contributions to the state’s public employee pension funds, jacking up the presumed future rate of return to cover the generational theft. And that former Democratic Governor Jim McGreevy, rather than lose popularity by painfully reversing the cashing in of New Jersey’s future, doubled down on it to gain popularity to advance his own career. Before resigning in a sex scandal, but saying people should support him because he is “a gay American.”
And if, as is the case at the federal level (for now, but perhaps not for long), later-born and current residents of New Jersey can be made to understand that Republicans carry a greater than average share of the blame for their betrayal, the Republicans could always point across the river at New York. Where compared with New Jersey we have paid, and paid, and paid, and paid in the highest state and local tax burden, and voted for Democrats over and over, and still ended up in the same place, or actually worse. But then the Democrats could point at Kentucky, Oklahoma and Kansas, and both parties could point at Illinois.
In the end people might realize that you had a generation of politicians, still in charge, in both parties who all agreed on one thing. That the way to pay off their interest groups without getting in trouble in the short run was to rob the future. The same generations that, in greater numbers than any prior, were not there for their children in childhood, and who now insisted that those disadvantaged children be made even worse off, to give them even more than they had provided their own parents had received, in old age. They still want to take more out, and put less in.
Perhaps Murphy saw my post from four years ago. On the TV news I saw an excerpt from his inauguration speech. “Instead of talking about those problems no one ever does anything about…” he said, and then went presumably on to talk about everything but.
I also e-mailed links to a prior version (through FY 2012) of the Sold Out Future ranking, and copy of the related spreadsheet with all the data, to noted public television broadcaster and New Jersey government analyst Steve Adubato’s organization.
Maybe you should talk about what New Jersey, and the incoming Murphy Administration, is facing due to past policies, and how that is similar to other places, I wrote.
Send us your tips and information and well take a look and get back to you, the website said at the time. But they never did. I e-mailed again, noting I hadn’t heard from them. I still haven’t.
Connecticut’s Ned Lamont didn’t take the bait either, when I repeated the same post almost word for word a year later.
No one wants to talk about how, to what extent, and why later-born Americans have been made worse off than those who came earlier, and will become worse off still, to benefit those who came earlier.
I have a brother-in-law who lives in New Jersey, not far from the place where Murphy is from, and is a successful small business person. He nonetheless has absolutely no idea who his state legislators are, and what his state government has done. But eventually, when the cost increases to some point, more New Jerseyans, more Americans, are going get mad enough to come out and vote. Some of them, suddenly waking up to how much worse off they have ended up, could be conned into the most simplistic, tribalistic explanations available – conveniently deflecting the blame from those who actually benefitted from their disadvantage. That’s how you get desperate working people turning to someone like Donald Trump. “What have you got to lose?”
You would think that at some point telling the truth about Generation Greed would become irresistible to someone, even if both Republicans and Democrats, businesses, governments, unions, the media and even prior generations of family members end up being identified as the culprits.
In the early 1980s, when I was in college, the Reagan income tax cuts sent the federal deficit soaring for the first of three times. Social Security benefits, having been increased for those older a decade earlier, were then cut for those born later (with the retirement age increased from age 65 to 67). The regressive, worker-only payroll tax was jacked up – especially for the self-employed many Millennials would be later forced to become – just as we were about to start our careers, so we’d pay the higher rate the entire time. In the private sector, the “deindustrialization” recession led millions of workers with less seniority, who had already seen their paychecks cut relative to inflation, lose their jobs. Large companies across the economy enacted “two tier” wage and benefit policies, with sweet deals preserved for incumbents but much lower pay and benefits for the later hired. With the family breakdowns of the 1970s having already happened, the suicide rate for those in their teens and 20s soared.
My peers who were paying attention knew we were screwed. But at the time all those who were screwed were in their 20s – a small minority. And at least in the short run, those who were college educated, or at least the graduate school educated, did OK. So after a while they stopped paying attention to what was happening (and happening and happening) to the less well educated, and what their own future might end up like in old age, and just lived richly on the credit card. Let’s just worry about ourselves, many concluded. So Generation Greed was followed by Generation Apathy, those at the back-end of the Baby Boom and Gen X.
Now it is nearly four decades later. The Millennials are even worse off, with even the college and graduate school-educated people worse off than similar people had been decades ago. And those who have been put on the wrong end of every public policy and economic and social trend include everyone who is under the age of 64. Just about everyone.
You would think that some politician, some media outlet, would see an opportunity to tell the truth and become the champion of, the voice of, just about everyone. And yet the Omerta holds.
New Jersey Governor Phil Murphy decided to join in not telling the truth about Generation Greed, perhaps because he was afraid that New Jersey would shoot the messenger. And as a result, some the ever-increasing sense of dissatisfaction ended up attaching itself to him. Had a real recession caused a budget crisis that really caused the cost of the past to manifest itself, it would have been even worse for him. As it is he barely survived, after spending a lot of time talking about Trump.
The way things keep going for more and more Americans, the Democrats need Trump and the Republicans need the “left-wing” Democratic snobs like the Taliban needs ISIS. Support us or it will be even worse even faster!