The US Public Sector is so big that the economy cannot support it and needs to be cut back, Sam Zell, chairman of Equity Group Investments, told CNBC this week.
Health Care and salaries provided for some public employees are “unrealistic” and at the moment are probably double what they are in the private sector, Zell said in an interview.
“The Old Games was very simple. If you worked for the goverment, you had job security, you got a longer pension,” he said. But over the past 10 years, a job in the public sector is paying significantly more and the benefits ” are literally bankrupting the states.”
New York Governor David Paterson told CNBC that the state needed to balance its budget by cutting spending and reducing the size of the public sector.
Austerity measures have stated in Europe with protesters across the continent taking to the streets. On Tuesday, Greek protests turned violent, with police firing tear gas at demonstrators who were throwing sticks.
Critics have slammed Greek Public Sector Workers for not accepting austerity measures to help their country go through difficult times, but Zell said the Greeks were not the only ones against austerity.
“How are they any different from the public employees in New Jersey?” he said.
The US could have the same fate as ancient Rome if there is no reform in the public sector, Zell warned. ” How did Rome fall?” Zell asked. Rome fell because people agitated for “more entitlements, more entitlements, more entitlements, until there was no more Rome,” he said.
The goverment should stand back, reduce regulation and reduce impairments faced by people trying to better themselves, according to Zell.
| “I think the MOST siginficant issue of America is that this country is built on aspiration. The greatest loss we can have is loss of aspiration,” he said, ” Effectively, ambition, aspiration, these are what create opportunity, not goverment programs.”
The Business sector needs to have confidence that the administration is taking the right measures to create jobs, Zell said. the key to US Economic Growth has been the predictability of its business climate and this is something that must not be destroyed, he said.
Zell also added that European officials have no authority to tell the US to spend cautiously , because, despite recent austerity measures, Europe has not solved its debt crisis.
” I don’t think they have any basis….to lecture us,” he said. ” We need to be careful that we don’t follow them…in their inability to control goverment costs.” (credit a.oprita cnbc)
We all are faced with economic challenges…and are hoping that the overall economic conditions improve…which will certainly boost Real Estate….. I am interested in reading your views…….Do you agree with Sam Zell? What are your thoughts and ideas on our Economy and Commercial Real Estate ?