This is a rush transcript from "Glenn Beck," July 27, 2010. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: I have some good news and some bad news. And it's only one story that is the macrocosm of so much of what is so wrong with America right now. It's happening in a town just outside of Los Angeles, California, a town of about 37,000 people. It is called Bell.

It is the one of poorest communities in L.A. County where the average salary is about $30,000 a year. That's important to remember, the average person in this county — $30,000 a year.

Well, now, here is where the problem comes in — the city manager is making nearly $800,000 a year. Really? The police chief there is pulling down $457,000 a year. Now, to give you some perspective, that is more than double what the police commissioner in New York City earns. That's a city of eight million people.

The Los Angeles Times ran a story disclosing those and several other unbelievable city employee figures. And needless to say, some of the residents were a little less than pleased.

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UNIDENTIFIED MALE: What we would really like to do is see every of you in jail. I'd like to see all of you in orange jumpsuits.

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BECK: Gang, this is what is coming. This is what is coming because this is all over the country. You have to ask yourselves how did city manager Robert Rizzo's salary wind up at over $750,000 a year when he started in 1993 at a starting salary of $72,000 a year?

Wow, he must be good. By the way, this is — I was going to say he's a good-looking man. Then, I realized — does he kind of look — this is a mug shot. It was taken in March after he was arrested and charged with a misdemeanor drunk driving.

But back to the salary and why it is so inflated. You see, the city council voted themselves several raises. And they were able to exempt themselves from a state salary limit through a little-noticed city ballot measure during special election that attracted fewer than 400 people to vote.

Oh, and the language on the ballot measure didn't say anything about, you know, city council members raising their own salaries. No. How did this happen?

Well, believe it or not, California is ahead of the country. Why? Because progressivism first took root out there. Progressives have been doing this now for 100 years out in California. And it is — I mean, look at state — the state of the state. It's in awful condition.

What they did is — they wanted to go to direct democracy. These ballot proposition initiatives? That's not really what our Founders put together. We don't live in a democracy. Every single one of our Founders warned against democracy because they said it would fail, because people — they don't have time to do everything.

They don't have time. Have you ever read a ballot proposition and, like, "I don't really even know what that one means." But you vote anyway. That's why our Founders set up a republic. We elect leaders who then vote on our behalf.

The problem is the democracy isn't working out and the republic isn't working out because they are corrupt. Well, after the salaries made the national news and raised the ire of the good citizens of Bell, Rizzo and the police chief resigned.

Rizzo wasn't exactly contrite about being caught with both hands and his head in the cookie jar. Here's what he said, quote, "If that's a number people choke on, well, maybe I'm in the wrong business. I can go into private business and make that money."

Well, good. Then do it. "This council has compensated me for the job I have done." What did you do, fatso, to earn that? I guarantee, Rizz, you are in the wrong business, siphoning off that kind of money from a hard-working public.

You should be in community organizing, or maybe, labor union. Is ACORN hiring anymore? The problem now is, he and other massively-overcompensated officials also voted themselves quite comfortable pensions.

Rizzo stands to pocket $600,000 every year for the rest of his life. The police chief will now have to try to make end's meet struggling on just $411,000 a year for life.

I think that citizen was right. They should go to jail. This is just the most egregious example of public officials raping you, and on top of it, the public being saddled with unsustainable pensions that wind up collapsing the system.

And it's not just happening in California. In virtually bankrupt New York, 738 educators are collecting city pensions of more than $100,000 a year and three make more than $200,000 a year.

Union pensions at G.M. and Chrysler helped drive those auto manufacturers to the brink of disaster and into the loving arms of the federal government where they're currently going through your wallet to take that. I could go on and on and on.

It is happening in every city, every state, every branch of the federal government, in Washington, D.C. It has taken a tiny town of 37,000 to shine a little light on this unsustainable American plague.

In Bell, the city council members, facing an unhappy group of taxpayers, unanimously agreed Monday to give their controversial $96,000 a year salary up. Instead — by the way, notice how many Hispanics and minorities are in here. It is almost like — it's almost like you can't call these people racists.

Isn't that weird? Anyway, they're not going to draw their $96,000 anymore. They're going to draw now $673 a month. That is a 90 percent increase. I'm sorry — decrease.

It is time now for the rest of us to show up in D.C. and demand the same thing, except on a much, much, bigger scale.

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