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Wednesday, February 23, 2011

The battle between GOP governors/legislators and public employee union members and their Democratic legislators continues in state capitols across the country. As in Wisconsin, Democratic legislators in Indiana have now left their state to prevent a quorum. What are the real stakes involved in this battle?

First, the political stakes are enormous. The union movement in general, and public employee unions in particular, are one of the pillars of the Democratic Party, as left-wing columnist Harold Meyerson points out in this piece assailing what he calls a GOP war against unions waged at the behest of their corporate masters. Markos Moulitsas believes this "war" will backfire on the Republicans as it will cause them to lose Republican and Independent voters who are union members. I happen to think that while it may cause some losses from conservative leaning public employee union members (think cops and firefighters), it will generate even greater enthusiasm from Tea Party supporters and those who earnestly believe that deficits and debt are an existential threat to our general prosperity.

Second, moving beyond the political calculations, it must be pointed out that the real-world economic consequences are even larger than the political ones. Unless we are saved by a huge economic upsurge, as happened in the mid-1990s, tax revenues will continue to lag behind expenditures. States will continue to be squeezed by pension and health care obligations. Since there is no process for states to go into bankruptcy, eventually state legislatures will have to raise taxes or cut spending to get into balance. If the unions win this round of political combat (by which I mean if the Democrats win back some legislatures and governor's mansions in 2012) , taxes will have to go up, and in some states substantially. I suspect if that happens an even larger voter backlash than just seen will swamp the Democrats in 2014, and we will be right back to where we started.

I suspect the GOP will prevail in some states, get some sort of mushy compromise in others, and fail in still others. As we are seeing in the case of the big federal entitlement programs, the can will get kicked down the road. Inevitably, though, we will have to deal with these issues, one way or the other.

Jonah Goldberg says the problem is the ability of public employees to join unions. He believes that should be outlawed (as it once was).

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