When the takers outnumber makers, you’d best take notice

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Jim Waters

December 10, 2012

When the takers outnumber makers, you’d best take notice

By Jim Waters Bluegrass Institute The Richmond Register Mon Dec 10, 2012, 12:15 AM EST

You’re either a maker or a taker.

A free marketplace – which used to operate with much less government interference – allows makers to turn rocks into roads, crops into meals and ideas into patents.

Without makers, takers don’t have a paycheck, pension or food stamp. With fewer takers, makers could keep more of the fruits of their labor, which would greatly benefit our commonwealth and our whole country – especially about now.

So, which are you?

Not all takers are “bad;” neither are all makers “good.” But this is not about assigning moral value to the two groups. Rather, it’s simply acknowledging that anyone who receives a political perk requires someone in the private sector to produce and pay taxes so there’s enough money in government’s coffers to pay for it.

While the federal government can crank its presses and print money like the paper it is, no such option exists in Frankfort. Our state government cannot give absolutely anything to anybody without first taking from someone else.

What’s worse, the more takers take, the fewer resources makers have to invest in private sector activity like capital development and job creation that fuel economic growth.

This is what makes Kentucky’s politicians mooching at the public pension trough so intolerable.

State senators like the retiring Tim Shaughnessy of Louisville is the latest in a growing line of politicians to become eligible for a big pension boost he supported in a 2005 bill.

House Bill 299 allows Shaughnessy, who made less than $50,000 as a state legislator, to apply the $160,000 salary he received with the Kentucky Community and Technical College System to his legislative pension – even though his salary as a lawmaker was nowhere close to that amount.

A conservative estimate reveals that Shaughnessy’s legislative pension will be nearly $75,000 more per year for an annual total of $103,400.

With cost of living increases and up to five years of “air time,” Shaughnessy’s legislative pension could, because of HB 299, be $90,000 higher and total more than $125,000 annually.

Shaughnessy joins former senators Charlie Borders and Dan Kelley, along with House Speaker Greg Stumbo, Circuit Judge David Williams, Agriculture Commissioner James Comer and recent Labor Cabinet Secretary J.R. Gray as some of Kentucky’s biggest takers.

Ironically, many of these same politicians hypocritically claim to be committed defenders of taxpayers and the free market even while stuffing cash into every pocket they can find with every single dollar they can take – money that’s removed from the productive sector.

Because of such hypocrisy, Kentucky’s private sector could be in even more danger than present-day numbers suggest.

Forbes.com recently reported that Kentucky is one of 11 states qualifying for its “death spiral list” because it has a taker-to-maker ration of 1.05 to 1, and is in the bottom half of states when it comes to “large debts, an uncompetitive business climate, weak home prices and bad trends in employment.”

According to the report, Kentucky has a higher taker-to-maker ratio than even Illinois, a state especially known for its corruption, excessive taxation and under-accounting for promises to government employees.

When takers outnumber makers, taxes go up and employers leave.

After all, employers with a payroll of 100 people would likely much rather have to only support, say, 82 takers in Texas than 105 in Kentucky.

The Forbes.com report notes that when employers and prosperous citizens – who also don’t want to support such a large cache of takers – leave, it “just makes matters worse for the taxpayers left behind.”

Jim Waters is acting president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.freedomkentucky.org/bluegrassbeacon.

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