Magazine February 22, 2010, Issue

Fatted Leviathan

The General Motors logo outside its headquarters at the Renaissance Center in Detroit, Michigan, August 25, 2009. (Jeff Kowalsky/Reuters)
The time bomb of runaway benefits for government employees

The collapse of the housing market has been an object lesson for America. Households and banks borrowed too much on expectations of continuing appreciation in real-estate prices. This extra borrowing inflated a bubble until it burst. By discounting the future too optimistically, we let the good times roll away.

The collapse of Chrysler and GM has been another object lesson. Management and unions pledged too many worker and retiree benefits on expectations of continuing demand for their gas-guzzlers. By discounting the future too optimistically, they let the good times roll away.

The private sector is now rethinking its unrealistic optimism. It has

In This Issue

Articles

Features

Books, Arts & Manners

Sections

The Week

The Week

Air America has ceased operations: Talent on loan from God still trumps talent on loan from Al Franken

Recommended

The Latest