Posted by WARREN MOSLER on March 3rd, 2011
Government, desirous of provisioning itself, does it as follows:
1. It imposes nominal tax liabilities payable in it’s currency of issue.
2. This serves to create a population desirous of obtaining the funds needed to pay the tax.
3. The real tax is then paid as government transfers real resources from private to public domain by spending it’s otherwise worthless currency, hiring its employees and buying the goods and services it desires to provision itself and function as directed by the legislature.
4. Prices paid by government when it spends defines the value of the currency, and therefore the terms of the real taxation.
Therefore, the hiring and compensation of public sector employees is the real taxation, which is a legislative function.
Letting individuals negotiate the terms of their taxation other than through the legislative process makes no sense whatsoever.
This is not to say that public employees can not have representatives to make their case before the legislature, much like any tax payer or group of taxpayers might address the legislature.
And this is not to say public employees should not be treated well, well paid in real terms, or abused.
It is to suggest public employee compensation be recognized as part of the real process of taxation of the electorate and treated accordingly by all parties involved.