Tag Archives: big government

Libertarian views on government

For many libertarian-minded people, Ronald Reagan’s observations on government probably comes closest to their perceptions of “government.”  Former U.S. President Reagan stated:  “I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer, just as liberalism is a misnomer for liberals… The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom, and this is a pretty general description also of what libertarianism is.”

Here are a dozen quotes, from some of history’s great thinkers, that best describe the biases libertarians hold against big government – well, government in general:

  • All government is an ugly necessity. – G. K. Chesterton
  • That government is best which governs least. – Henry David Thoreau
  • In a healthy nation there is a kind of dramatic balance between the will of the people and the government, which prevents its degeneration into tyranny. – Albert Einstein
  • Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master. – George Washington
  • Government can’t give us anything without depriving us of something else. – Henry Hazlitt
  • You can’t give the government the power to do good without also giving it the power to do bad – in fact, to do anything it wants. – Henry Browne
  • The government solution to a problem is usually as bad as the problem. – Milton Friedman
  • Government does not solve problems; it subsidizes them. – Ronald Reagan
  • Which is the best government? That which teaches us to govern ourselves. – Johann Wolfgang Von Goethe
  • Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. – Frederic Bastiat
  • For in reason, all government without the consent of the governed is the very definition of slavery. – Jonathan Swift
  • Man is not free unless government is limited. – Ronald Reagan

 

 

 

It seems there is no end to taxing Canadians

Canadians are spending more and more on government. In fact, we are spending more on government than we do on our families!

The Fraser Institute produced a new research study that shows the average family brought in $77,381 in 2013, paying out 41.8 per cent of that in total tax, and 36.1 per cent on life’s necessities such as food, clothes and housing. Compare that to 1961, when the numbers were $5,000, 33.5 per cent and 56.5 per cent, respectively. Check out this video: Families spend more on taxes than food, clothing and shelter combined.

Charles Lammam, resident scholar in economic policy at the Fraser Institute comments, “Over the past five decades, the total tax bill grew much faster than the cost of basic necessities, so now taxes eat up more income than any other single family expense.

“With more money going to the government, families have less to spend on things they care about, to save for education and retirement, and to pay down household debt.”

In releasing the Fraser Institute report, Lammam observes: “While there’s no doubt that taxes help fund important government services, the real issue is the amount of taxes that governments take compared to what we get in return. With almost 42 per cent of income going to taxes, Canadians should ask whether they get the best value for their tax dollars.”

And this is exactly the inquiry picked up by Sun columnist Lorne Gunter who questions the absurd reasoning of entitled politicians, unaccountable bureaucrats and champions of big government spending. Gunter writes in his column “Tax to death”:

“Governments have too much money brought on by nearly unlimited taxing and borrowing power. This almost-limitless stream of cash (coupled with too much faith in the infinite goodness of government) has created a mentality among politicians and public-sector workers that they are doing the work of angels and thus are entitled to gold-plated pay, perks and pensions.”

Gunter points out that today public-sector workers (civil servants as well as teachers, nurses, police officers and others) have higher pay than their private-sector counterparts, plus richer pensions, shorter workdays, better benefits and greater job security.

“Whereas the average family used to spend much more on the basics than on taxes, today it spends way more on taxes. Canadians work far harder to feed, clothe and house public-sector workers than they do to feed, clothe and house their families. There is something horribly distorted about that.”

Hear, hear! It is high time that Canadians begin to curb the gross appetites of big government. The interesting questions to ponder in light of this Fraser Institute report are:

When it comes to taxes in Canada, just what are the limits?

At what point will individuals begin to react and do more than grumble to their accountants?

The cost of Ontario’s public sector pay increases

Ever wonder what a pay increase to an Ontario public sector worker (i.e. teacher, firefighter, white-collared bureaucrat) costs a taxpayer? It was recently explained in this manner with a modest sum of $100…

If a public sector employee receives a raise of $100, paying the average of nearly 50% in combined taxes in Ontario, that person would have made a gain of $50 in personal income.

But net gains in taxes come entirely from the private sector, so in order to not fall further behind, the government would have to recover from the private sector the $50 it did not claw back in taxes from the public worker.

Since one in five workers in Ontario is a provincial government employee, that leaves four private sector workers to pay enough in taxes to replenish the public coffers.

While the Ontario public sector worker would have made a net gain of $50 in personal income after taxes, the private sector workers in Ontario must each pay $12.50 in extra taxes to cover that raise, a net loss to them.

Now, this equation only takes into account the Ontario bureaucracy and public sector workers. Consider further that in Canada almost 40 % of the population is part of the public sector comprised of all levels of government.

(ed. – SOURCE: http://www.torontosun.com/2014/06/16/the-public-pays-for-public-sector-wages )

10 Facts to Contemplate regarding Ontario’s Election

The day after the night before – and I am both irritated at how the election played out with the public sector unions ruling the day; and I am troubled about what the next 4 years will bring with a Liberal majority government. We all work hard; pay our fair share of taxes; and should expect that the tax money is not being misspent, wasted or unaccounted for. Here are ten facts that were exposed during the election that should give pause to any taxpaying Ontarian.

  1. With its unbridled public sector spending and growth, the Liberal government doubled the Province’s debt in just 10 years. It has grown to a total of $291.9 billion; the debt increases by $400 a second, $25,000 every minute and $1.5 million every hour. This is a fiscally undisciplined, tax-and-spend government.
  2. Ontario is now in a worse fiscal situation than the State of California (that is on the brink of bankruptcy and has had municipalities declare bankruptcy). The Ontario government spent 9.2% of its revenues paying off interest on debt in 2011/2012, more than three times higher than California’s 2.8%. On a per person basis, every Ontarian owes $20,166 compared to $4,282 for every California resident.
  3. It is going to cost Ontario $ 1,000,000,000 ($1 billion) every month to service its debt. That is money going to pay financial institutions and not going to government programs and services like bettering our health care and education.
  4. The Liberals grew the public sector by 17.6 per cent; 300,000 new government sector positions added in the last 10 years. More alarmingly, Ontario teachers, police, firefighters all enjoy pay and pensions that make them the highest paid public sector earners in the world for the jobs they are doing. And today, approximately 40% of our population in Ontario is public sector. One word: unsustainable.
  5. Our healthcare mess is not going to be addressed. There is the never-ending multi-year E-HEALTH development project; the ORNGE air ambulance fiasco; and the establishment of new inefficient LHIN bureaucracies that have cost us billions. This is money that should have gone directly into delivering front line health care. The diagnosis for our Province’s healthcare is anything but hopeful.
  6. The Liberal energy programs and policies will cost us dearly. We already know that our hydro rates will rise 42% in the next few years – and natural gas prices will rise this year by 40%. This is while the Liberals offer subsidized hydro to New York & Michigan. The total cost of Ontario’s subsidies for wind and solar power is $46 billion – which we will continue to pay for the next decade. In the years ahead, our energy costs are going to zap us.
  7. The Liberal’s “election budget” which they will now pass, is digger us further into a hole from which our generation of taxpayers will likely not to climb out of. There’s $29 billion for transit and roads; $11 billion for hospitals; $11 billion for schools, $2.5 billion for corporations; a new pension plan to save us from ourselves, and on, and on, These are 10-year commitments, and with the new debt level and increased monthly debt-financing load, it all adds up to “no chance” of the government hitting its promised, balanced-budget target by 2017-18.
  8. For a government that spends like this one does, it should not be surprising to know Premier Wynne will impose new taxes. We can expect in the years to come the taxes she has already hinted about (prior to the election): raising HST to 14 cents, adding new gas taxes at the pump; and introducing new taxes on employers and employees to pay for a pension plan scheme. All these tax hikes will shakedown more money from our pockets.
  9. And there is no tax relief. When the Liberals brought in the Harmonized Sales Tax in 2010, they extended the reach of the province’s 8% sales tax to a wide range of goods and services to which it did not previously apply. Among those items were the cost of electricity, home heating fuels and gasoline. As the cost of those services rises, all household owners and consumers will be hit over and over again by that 8% provincial sales tax.
  10. Literally billions of dollars have been lost and wasted. The mismanagement and scandals of the last ten years will never be explained. There will be no atonement for E-Health, ORNGE, Green Energy, power plant cancellations, etc. Is it also any wonder when a scandal-plagued government is returned with a majority mandate that people become disengaged with politics and disrespectful of politicians? Is it any wonder, we have become increasingly agitated to pay our taxes?

 

A no-nonsense approach to big government

Why is it that Canadians are apathetic when it comes to responding to the ills of big government? We accept the unbridled increases in government spending, increases in programs and services, and the unexplainable antics of our politicians and bureaucrats. Without question, we accept taxes; we accept increased taxation and the imposition of new taxes. All of this “big government getting bigger” is greeted by Canadians will nothing more than a shrug.

 

Yet, should we not expect more if we are providing the tacit approval for our government’s habitual overspending? We are a Nation living beyond its means with every fiscal deficit, satisfied to have our politicians make decisions on our country’s financial and economic fate with no thought as to how the taxpayers’ will pay for their promises.

 

This siren cry comes on the day when the federal government delivers its annual budget. As a Canadian who does care for our current standard of living and that of our children’s, I would like to expect the government be more accountable and responsible with our country’s books. The federal Conservatives have done an adequate job managing our economy through a series of serious, rough patches with the world markets. However, they are responsible for raising our federal debt as a result of continuous deficit financing. They are also responsible for growing our Ottawa bureaucratic corps to an unprecedented size.

 

So, from this frustrated Canadian’s vantage point, here are three principles that our governments would do well to adopt. Think about this no-nonsense approach when Finance Minister Jim Flaherty delivers his statement today.

  • Commit to no more than what can be paid for. When you finds yourself in a hole, you should stop digging… no more deficit spending… no more living on credit… balance the numbers and begin to pay our own way. We must stop spending the next generation of Canadians’ money.
  • Right size our government. Cut unnecessary programs and services and resist all urges to further government intrusions into public and business affairs. Also, make an earnest attempt to cut the paper-pushing, middle-management of the federal bureaucracy. (“Ottawa fat-cats” need to be put on leash and put on a diet.) Right-sizing our government in the year 2014, means cutting the bureaucracy, and cutting programming and services.
  • Practice full public accountability. The public has a right to know where public money is spent. So, open the books of MPs, DMs, government agencies, everyone (the misappropriation of funds isn’t restricted to the Senate of Canada). Also, report the real costs of government promises – from the next tax credit to woo suburban voters, to the next ice breaker or jet fighter. And give Parliament the time and resources to properly review government expenditures, line-by-line. 

Read more like-minded rants as I grind my axe in By George posts tagged “big government.”

taxes4

Big Government = Big Costs (Taxes)

It’s budget week with federal Finance Minister Jim Flaherty poised on Tuesday afternoon to deliver another financial statement on the country’s fortunes (and its debts). It is time for Canadians to reflect, ever so briefly, on our Nation’s economy and our government’s interventionist actions in an attempt to improve our lot.

For us at By George, it is time to chime in with our sad refrain about accountable government, responsible spending and a reduced bureaucratic corps. This libertarian theme is one that readers of By George Journal will recognize.   

Our big government and its big debt

Is it not time to demand accountability?

The Costs of our Big Governments

More on Big Government

Welcome to Canuckistan

 

With respect to Mr. Flaherty’s act as the master federal magician, the Canadian Taxpayers Federation’s latest plea to balance the budget and take steps to be more responsible with government spending could not be made any clearer. Here are the facts as assembled by the CTF:

       Canada’s federal debt is growing at a rate of $863 per second. That’s $52,000 per minute and $3.1 million per hour. This level of borrowing is costing Canadians not just the principal, but interest each year. In fact, the federal government spends $31 billion per year just paying the annual interest on the debt.

       Between 1997 and 2008 the federal government was running surplus budgets and paying down our debt. Every cent and more of that $105 billion paid-off during the decade has now been re-borrowed and spent. Canada’s federal debt has risen from $457 billion in 2008 to over $600 billion.

CTF urges the Finance Minister to curb government spending and balance the federal budget as promised this fiscal year, 2014-15.  To read more on the CTF’s plea to the federal government, click here: Balance the Budget

 

Sage Political Advice

OLYMPUS DIGITAL CAMERAHere’s sound counsel for our politicians today:

 

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome will become bankrupt. People must again learn to work instead of living on public assistance.

 ~ a quote from Roman statesman, Cicero, in the year 55 BC.

 

Obviously, we’ve learned nothing in thousands of years.

 

Or, we simply ignore history and are destined to repeat it.

A Striking Analogy: The Taming of Wild Pigs

There was a chemistry professor in a large college that had some exchange students in the class. One day while the class was in the lab, the professor noticed one young man, an exchange student, who kept rubbing his back and stretching as if his back hurt. The professor asked the young man what was the matter.

 

The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country’s government and install a new communist regime.  In the midst of his story, he looked at the professor and asked a strange question. He asked: “Do you know how to catch wild pigs?”

 

The professor thought it was a joke and asked for the punch line.  The young man said that it was no joke. “You catch wild pigs by finding a suitable place in the woods and putting corn on the ground.  The pigs find it and begin to come every day to eat the free corn.

 

“When they are used to coming every day, you put a fence down one side of the place where they are used to coming.  When they get used to the fence, they begin to eat the corn again and you put up another side of the fence.  “They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side.  “The pigs, which are used to the free corn, start to come through the gate to eat that free corn again.

 

“You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom.  They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.”

 

The young man then told the professor that is exactly what he sees happening in America (ed. – It occurred decades ago in Canada). The government keeps pushing us toward socialism and keeps spreading the free corn. While we continually lose our freedoms, just a little at a time.

 

There are two truths to remember:

1.      There is no such thing as a free lunch and

2.      You can never hire someone to provide a service for you cheaper than you can do it yourself.  

If you see that all of this wonderful government ‘help’ is a problem confronting the future of democracy in America, you might want to send this analogy onto your friends.

(ed. – This account was from our e-mailbag. Thank you to Claude Bennett for sharing this thought-provoking missive.)


 

Our big government and its big debt

The Throne Speech yesterday stated the Canadian Federal Government will be getting serious about curbing its out-of-control spending habits. (That’s good. It’s about time!)

 

It is a fact that, today, we have the largest federal bureaucracy that we have ever had. And to maintain the bulging size of government and its programs, the government overspends at an alarming rate – the worst that it has ever spent. The federal government’s annual deficit spending is digging us deeper down into a hole that many of us will not live long enough to climb out of. Here are the numbers:  Canada’s federal debt is growing at a rate of $863 per second – $52,000 per minute – $3.1 million per hour.

 

Between 1997 and 2008 the federal government under the guidance of PM Jean Chretien and Finance Minister Paul Martin was running surplus budgets and paying down our debt. However, I find it unfathomable (as a fiscal conservative) that the Conservative Government of Stephen Harper has raised Canada’s federal debt from $457 billion in 2008 to over $600 billion. Since 2008, the Conservative government has borrowed $161 billion, bringing the federal government’s debt burden to $618 billion.

 

Recently released figures from the federal government reveal that the total debt outstanding in Canada at the end of June 2013 was $5.408 trillion. The numbers for last fiscal year tell us that, from July 1, 2012 to the end of June 2013, the total debt outstanding in Canada increased by $306 Billion. For that 365 day period the total debt outstanding in Canada increased at a rate of $838 Million per day.

 

Need we worry when we hear these facts? These bald numbers mean little to the average “I’m-living-paycheque-to-paycheque” Canadian. However, we should realize this: that the mounting figures signal a sorry fiscal state. The average Canadian couldn’t rack his credit cards this high! Yet, Canadians are now strapped with huge hangover costs of a Big Government that has spent for years (and decades previous) like a drunken sailor.

 

So, there is reason to be hopeful with what Stephen Harper shared with us in the Throne Speech. Just perhaps our chief economist PM and his much-celebrated Finance Minister have come to realize their spending spree must end.

More in the By George Journal on the ugly truths of Big Government  

10 of Ronald Reagan’s quotes on Big Government

  • Government is like a big baby – an alimentary canal with a big appetite at one end and no sense of responsibility at the other.
  • Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving; regulate it. And if it stops moving, subsidize it.
  • Government is not the solution to our problem; government is the problem.
  • Either you will control your government, or government will control you.
  • We are a nation that has a government – not the other way around…. It is time to check and reverse the growth of government, which shows signs of haven grown beyond the consent of the governed.
  • Status quo, you know, that is Latin for “the mess we’re in.”
  • When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation.
  • Nations crumble from within when the citizenry asks of government those things which the citizenry might better provide for itself.
  • Man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics. As government expands, liberty contracts.
  • The best view of big government is in the rear view mirror as we leave it behind.

 

10 quotes on government spending

  • “Government does not tax to get the money it needs; government always finds a need for the money it gets.” – Ronald Reagan
  • “The real goal should be reduced government spending, rather than balanced budgets achieved by ever-rising tax rates to cover ever-rising spending.” – Thomas Sowell
  • “Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers.” – Ron Paul
  • “Government does not have a revenue problem; government has a spending problem… it is time that we begin to fine tune our focus and decide what the priority of government ought to be.” – Marsha Blackburn
  • “Increased government spending can provide a temporary stimulus to demand and output, but in the longer run higher levels of government spending crowd out private investment or required higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.” – Martin Feldstein
  • “Borrowing and spending is not the way to prosperity.” – Paul Ryan
  • “Economy does not lie in sparing money, but in spending it wisely.” – Thomas Huxley
  • “Lower taxes, less government spending on domestic programs and fewer regulations mean a better economy for everybody.” – Larry Elder
  • “Government is taking 40 percent of the GDP. And that’s at the state, local and federal level… Look, at some point, you cease being a free economy, and you become a government economy.” – Mitt Romney
  • “Deficits are a problem… the problem is not the size of the deficit, it’s the size of government’s claim on our economy.” – Ronald Reagan

 

Is it not time to demand accountability?

       Let’s review our nagging, on-going dialogue about big government and the call for accountability with our governments’ spending practices. Here’s an equation that Canadians should know well enough, especially after having just completed their income tax filing this week.  

 

Big Government* = Ever-Increasing Taxes

(* – synonymous with out-of-control-spending, mismanaged budgets and bulging bureaucracies)

 

       Many will claim this is nothing but a cynical and simplistic view of our Canadian governments. Perhaps so. It is certainly cynical for it smacks of irritation for what is transpiring here in Canada – and elsewhere in debt-ladened United States and Europe.

       It is a sad reality that today, because of our Big Government, Canadian families are spending more money on taxes than on food, clothing, and shelter combined.  The Fraser Institute reported earlier this week that in 2012, 42.7 per cent of an average family’s income went towards taxes (including all types of taxes imposed by federal, provincial, and local governments). Canadians spent less than that – 36.9 per cent – on food, clothing, and shelter combined. Read this for yourself: SAD.

       Today we brace ourselves for Ontario’s budget announcements. Really, what more can the McGuinty/Wynne Government throw at Ontarians? This sorry Government has a record that screams mismanagement: ORNGE scandal, eHealth Ontario boondoogle, a $585 million price tag to cancel a gas plant during the past election. Then there are the costs of the Liberal’s Green Energy Act that will smack Ontarians with energy hikes of 40–50% in the next few years. Under the Liberal era, Ontarians’ debt load has almost doubled to $250-billion – and in a few years, we will be suffering worst fates than Greece’s current financial mess. With this quagmire, what can we expect as far as Ontario taxes are concerned? The only relief we might be spared today is due to the fact an election is in the wind. So, the Liberals will settle for kicking the can a little further down the road…

       Our By George question to ponder: Why are Canadians so apathetic when it comes to demanding fiscal responsibility of their politicians and their governments?

       Our point is simply that there needs to be greater accountability. As Big Government gets bigger – accountability is becoming critical.  There would be few complaints in paying “our fair share” of taxes if Canadians were witness to responsible government spending and a fiscal accountability within both political and bureaucratic circles. What is agitating for many, though, is the knowledge that there are gross wastes in government spending and we only know a small fraction of the whole story.

       Today our national debt has climbed over $600 billion. Every day Canadians are paying more to service that debt. We live with growing, multiple levels of bureaucracies, over-governed and over-regulated. Our government has never been bigger – and it keeps getting bigger.  Is it not time to discuss government accountability and a fiscally responsible approach to digging out?  Is it not time to start questioning where our taxes are going and demanding answers from both our politicians and bureaucrats?

The Costs of our Big Governments

It has become annoying that our political leaders today take no notice of just how big and intrusive Government has become for Canadians. It is equally irritating that they do not recognize (and, in many instances, try to rationalize) just how much government costs its citizens.

 

Government has become too big, too costly. FACT: our Federal Government oversees the largest and most expensive federal bureaucracy Canada has ever known. What is most troubling is that the government has grown under a Conservative watch – and these “able fiscal managers” have done little to trim the rank and file, done little to curb government spending.

 

Another FACT: This past weekend, Ontarians were presented a new Liberal Premier whose answer to our Province’s ailments is to increase government activity. Kathleen Wynne is about to give us more of the same of Dalton McGuinty’s fiscal policies – the same policies that ballooned Ontario’s debt, sunk its credit rating and labeled the Province: “Have-Not”. Wynne is all about tax and spend; her agenda is greater dollars to health care and transportation projects, new universally delivered programs for both drugs and child care – and a balanced budget? Very Liberal-esque.

 

FACT: Increased government comes at a cost. Given our federal and provincial governments spend more than they tax, the governments are deferring the payments for today’s services and programs to future taxpayers: our children and grandchildren.  Simple question:  When will Canadians wake up to this fact?

 

As a splash of cold water to the face, By George Journal offers a few observations from Ronald Reagan’s January 1981 inauguration speech. Here’s a refreshing view on the role of government that should be heeded by our political leaders today. Reagan’s bons mots:

  • “…great as our tax burden is, it has not kept pace with public spending. For decades, we have piled deficit upon deficit, mortgaging our future and our children’s future for the temporary convenience of the present…. to continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals.”
  • “You and I, as individuals, can, by borrowing beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we are not bound by that same limitation?”
  • “We are a nation that has a government—not the other way around. And this makes us special among the nations of the Earth. Our government has no power except that granted to it by the people. It is time to check and reverse the growth of government which shows no signs of having grown beyond the consent of the governed.”
  • “It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government.”

 

Here’s a final observation about the exorbitant costs of government today – and the fact that nobody has their eyes on the till when it comes to spending taxpayers’ dollars. This is but one tangible example of the unfathomable costs of government taken from our headlines this week (there are so many similar examples of government expense that go unreported and unnoticed). Think about what you could do with a million dollars.  $1,000,000.   Now, take a look at the latest from Ottawa:  It cost taxpayers exactly $1,061,448 to ship armour-plated limousines to India last year for Prime Minister Stephen Harper’s official visit, documents from the Department of National Defence have revealed. – National Post

 

More on Big Government

WARNING: What follows is another axe-grinding session regarding one of our greatest irritants: big government and our politicians’ inabilities to control spending and cut into the ever-growing, bloated bureaucracy. 

The last few weeks have brought into focus, once again, how our Canadian elected officials have learned little from the fiscal mismanagement of many of the countries in Europe, not to mention the economic mess south of our borders. Both the federal and Ontario budgets were inadequate responses to the serious financial challenges Canada faces. The federal Conservatives delivered a milquetoast approach to government spending and public sector cuts, rather than the definitively conservative response that was required. And, ignoring the siren calls of restraint, the Dalton McGuinty’s Liberals simply continued to dig Ontarians into a deeper, larger debt hole.

Here are some points of fact about the recent budgets that signal those storm clouds on our Canadian horizon have darkened and become ever-more ominous.

Federally:

  • The $5-billion cut from departmental budgets is, in reality, less than 2.0 per cent of program spending – not 12% reduction (in real spending per capita by fiscal 2017.) Finance Canada’s bean counters stayed up many nights to bake up this 12% figure – adjusting for inflation and population growth to 2012 and counting all previously announced savings.
  • The announced 12% (2%!) cut is applied to the all-time, single year spending record set by the Conservatives in 2010, when spending rose more than $37-billion in a single year. (One must hope the government can find cuts from these uncontrollable increases.)
  • Program spending under the successive Harper Governments has risen from $175 billion to $243 billion – a 40% increase in 6 years. Each year, the government has run a deficit and, today, the national debt is now more than $580 billion.
  • Andrew Coyne of the National Post points out:  “All that the Tories are proposing to do is to roll back some of the increased spending that they themselves introduced. The public service from which the Tories pledge to trim 19,000 employees is the same one to which they added more than 30,000.”
  • Barbara Yaffe of the Vancouver Sun writes of the bloat in Ottawa:  “Call it the civil service cycle. Ottawa has been growing and shrinking its workforce as though playing an accordion. And taxpayers should be furious.”
  • Yaffe’s research: The firing and hiring Ottawa-style is costing Canadians BIG TIME. Canadians today are paying cumulative severances since 1995 to a group equivalent in size to the population of Kamloops, BC – about 70,000. In the private sector, a laid-off worker might get two weeks severance pay for each year with the company. Ottawa is expected to offer almost six months’ pay after just one year of service, plus cash to go back to school.
  • Here are the numbers: Under Chretien, bureaucracy cuts from mid-1990’s to 2000 were 40,000 total. Then, in 2000, the Ottawa payroll went back up 19,000 in one year. In the decade following 2000, the core public service (excluding the RCMP and military) grew by 34 per cent. When military and RCMP personnel are included, growth in the overall public service was 25 per cent.  That compares to Canada’s population growth since 2000 of 13 per cent.

 

In Ontario:

  • With a deficit of nearly $16 billion this year, Finance Minister Dwight Duncan stuck with a Liberal fiscal plan to run deficits for another five years (until 2017/18). These deficits will increase Ontario’s debt to more than $315 billion from $238 billion today — this after the debt has already increased by over 70% since the McGuinty Government took office in 2003.
  • In this Liberal fiscal plan, remarkably, there is no planned cut overall government spending. To balance the budget by 2017/18, the McGuinty Government banks on revenue growth forecasts averaging 3.7% annually. On the spending side, Duncan proposes to hold program spending growth to an average rate of 0.7% (both projections totally unrealistic!).  Consider last year’s Ontario budget promised to hold program spending growth to 0.4% for 2011/12, yet spending has increased 2.5%. This same government increased program spending at nearly double the rate (6.3%) of economic growth from 2003/04 to 2011/12.
  • In some of the government’s big ticket areas, spending will increase significantly over the next three years: health care of 6.3%, in K-12 education of 5.2%, and in social services of 8.0%. (With these increases, holding overall spending to an average of 0.7% is out of the question.)
  • As a result of the budget, credit agencies have move quickly to criticize the Province’s fiscal plan. Moody’s downgraded the Province’s credit rating and Standard & Poor issued new warnings. These credit downgrades will affect Ontario’s cost of borrowing – which means more money to service our growing costs of government and our debt.
  • If there were a Ministry of Debt in the Province of Ontario, it would be the third largest ministry with a budget today of $10.6 billion – our interest payments on our debt. 
  • Christina Blizzard of Sun media sums up the criticism of McGuinty’s Liberal budget: “His party came out with an irresponsible, unsupportable budget that didn’t tackle the major causes of his overspending – full-day kindergarten, subsidies on hydro bills, tuition cuts, etc.  Economist Don Drummond provided McGuinty and Finance Minister Dwight Duncan with a road map to get us out of their mess. They threw the map out the window – and we’re heading over a cliff.”

MPs Should Note This Example From The Past

This week MPs return to Ottawa to debate the federal budget. One of the central arguments on Parliament Hill in the days and weeks to come will revolve around Canadian pension reform. We are told, by way of setting an example that MPs are looking at their own gold plated pensions and perks of the job.

For those MPs pre-occupied with reviewing their own pensions, the story of American Harry Truman’s approach to his Office and retirement is a stellar example from the past. It is to be expected that MPs will not follow this former U.S. President’s actions; yet, it is hoped they may emulate Truman’s principles of fairness and his rejection of assumed privilege (or as we have come to know it north of the border – “Dingwall’s entitlement”).

Here’s a tribute / a lament to a past era and a long-since-gone breed of politician:

     Harry Truman was a different kind of President. He probably made as many, or more important decisions regarding our nation’s history as any of the other 42 Presidents preceding him. However, a measure of his greatness may rest on what he did after he left the White House.

     The only asset he had when he died was the house he lived in, which was in Independence Missouri. His wife had inherited the house from her mother and father and other than their years in the White House, they lived their entire lives there.

     When he retired from office in 1952 his income was a U.S. Army pension reported to have been $13,507.72 a year. Congress, noting that he was paying for his stamps and personally licking them, granted him an ‘allowance’ and, later, a retroactive pension of $25,000 per year.

     After President Eisenhower was inaugurated, Harry and Bess drove home to Missouri by themselves. There was no Secret Service following them.

     When offered corporate positions at large salaries, he declined, stating, “You don’t want me. You want the office of the President, and that doesn’t belong to me. It belongs to the American people and it’s not for sale.”

     Even later, on May 6, 1971, when Congress was preparing to award him the Medal of Honor on his 87th birthday, he refused to accept it, writing, “I don’t consider that I have done anything which should be the reason for any award, Congressional or otherwise.”

     As president he paid for all of his own travel expenses and food.

     Good old Harry Truman was correct when he observed, “My choices in life were either to be a piano player in a whore house or a politician. And to tell the truth, there’s hardly any difference!”

Our politicians’ rhetoric of restraint – let’s hope they mean it

This week ‘Big Government’ was back in the news with various Canadian political leaders suggesting it’s time for restraint.  (ed. – They now are considering what to do with the barn door long after the horse has galloped out of sight.)  

Sun News has responded to these new cautionary messages from the PM and some Premiers like Dalton McGuinty with heightened skepticism and a dose of deserved ridicule.

But, before we get to the news, let’s refresh our memories on how deep our hole is.  Our national debt clock is clicking over at an incredible pace:  http://www.debtclock.ca

Brian Lilly of Sun TV takes the Federal Government to task in his Lilley’s Pad blog:  Cut gov’t spending now and cut deep – First cut must be deep  He comments:

     The Harper government spends too much money and has spent too much since it came to power. This needs to stop….  With a federal debt of more than $577 billion, getting control of government spending is imperative. If the cutting is going to be serious, it will mean cutting full government agencies, boards and corporations.

Christina Blizzard pulls no punches in her dislike of McGuinty’s newfound restraint messaging. In her Toronto Sun column,  Hang your head in shame, McGuinty she writes:

     Having the Liberal government preach restraint and the need to find new ways of doing things is a bit like the guy who kills his parents then wants sympathy because he’s an orphan.

     When it comes to fiscal mismanagement, Premier Dalton McGuinty’s wounds are all self-inflicted.  He and Finance Minister Dwight Duncan have recklessly dug this province into a massive black hole of irresponsible over-spending.

***   ***   *** 

Q – So, why should Canadians be concerned about how big our governments have become? 

A – Because we are paying dearly for it now – and will be for years to come.

Consider federal government pensions for our bulging civil service.  The federal public-sector pension plan has about 561,000 members (317,000 active workers, 180,000 retired employees and almost 60,000 survivors).  Federal civil servants currently contribute 35% of pension service costs, with the government (as the employer) contributing 65%.  A recent report released by the C.D. Howe Institute said federal public-sector pension plans are $227-billion in deficit and, if left untended, Canadian taxpayers will be on the hook to bail out rich civil-servant plans.

Again, it’s all surreal as Canadians begin this discussion while countries like Greece implode under the weight of their civil service.

The Canadian public sector is unsustainable – a train wreck ready to happen – as we’ve pointed out in past posts:

(For a complete listing of our posts on the thread of Big Government, you can read dozens of articles – tagged ‘big_government.’)

Developing through 2012…

Welcome to Canuckistan

You’ve heard our lament before: Big Government just keeps getting bigger.

In Canada, this reality has transferred our once-enterprising country into a state centered economy, where a growing number of Canadians are on the public-dole and/or receiving government cheques of one kind or another.  What’s troubling is there are no siren cries that our growing public sector and the costs of big government come at a price.

The Ontario economy is bulging with no signs of restraint. The federal government (under a Conservative Government!?) is the largest it has ever been – costing Canadians more than it has ever had to pay. We’ve become working zombies with no enterprise, content to redistribute our wealth from one public-sector workers’ paycheque to another. Doesn’t this sound similar to one of those satellite States in the former U.S.S.R.? Why yes! Welcome to Canuckistan!

Here are some facts from recent news articles to put Canuckistan into perspective:

  • Federal spending jumped 22 per cent in the first five years the Harper Conservatives were in power. Federal expenditures in 2010-11 totalled $270.5 billion, compared with $222.2 billion in 2006-07. Unbelieveable!
  • In its June budget, the Conservatives projected an increase in the federal debt to $610-billion by 2015-16 from $533-billion in 2010-11, an increase of $57-billion in five years. Now, just months later, the debt is expected to reach $641-billion by 2015-16. 
  • Total provincial debt is already expected to reach $487-billion this year. Add this to the federal debt that’s currently at $586-billion and Canadians are leaving over a trillion dollars ($111,000 per Canadian family) in debt for the next generation to pay. With the federal government and nearly all provinces expecting deficits into the foreseeable future, the total level of debt will increase significantly.
  • All provinces (save Saskatchewan) expect to run deficits over the next several years. Provinces such as British Columbia and Manitoba currently have the smallest deficits among the provinces (0.4% and 0.6% of GDP). At the other end of the spectrum is Ontario, with a $16.3-billion deficit (2.6 % of provincial GDP), a number so large it makes up more than 64% of the total deficits recorded by all the provinces in 2011-12, even though the province represents only 38% of total Canadian GDP.
  • Ontario Government’s debt is $16 million this year; McGuinty’s government has raised the provincial debt by more than $100-billion since 2003 without once curbing spending. Total debt is heading toward $300-billion. Unsustainable!
  • Measured on a comparable basis using OECD numbers, Ontario’s net debt-to-GDP ratio — debt as a percentage of annual economic production — will hit 40% within a few years to place Ontario on par with Spain.
  • One-in-five Canadians (20.2%) now work for one level of government or another, for a Crown corporation or for a publicly funded institution such as a school or hospital. In real numbers, there are more than 3.6 million public sector employees out of a total of about 18 million working Canadians.
  • About 86% of families and 79% of persons not living in families received some form of government transfer in 2009. The total amount transferred to all Canadians increased 10% in 2009.
  • People in the bottom two quintiles of income in Canada (the people in the bottom 20% and the next-lowest 20%) — so 40% of the population — receive nearly 60% of their income from government of one form or another.

Want to read more on this? We suggest Lorne Gunter’s column, We’re all addicted to big government in the National Posthttp://fullcomment.nationalpost.com/2011/11/28/lorne-gunter-were-all-addicted-to-big-government/

It’s the math, stupid

We received this e-mail yesterday – leaving us muttering aloud if this is actually the case…  

Can you imagine running the country with these numbers?

United States Tax revenue: $2,170,000,000,000

Fed budget: $3,820,000,000,000

New debt: $ 1,650,000,000,000

National debt: $14,271,000,000,000

Recent budget cut: $ 38,500,000,000

Now, remove 8 zeros and pretend it’s a household budget.

Annual family income: $21,700

Money the family spent: $38,200

New debt on the credit card: $16,500

Outstanding balance on credit card: $142,710

Total budget cuts: $385

Sorta brings the issue “home” doesn’t it?

(ed. – Thanks to Pat George for this eye-opener, especially given the daily international headlines.)  

Ontario: The Unbridled Big Government

Expect in the months to come to witness our big Ontario Government become BIGGER.  We only need look at a few developments this week to see that we will be getting the government we deserve, having just given Dalton McGuinty the free reins to tax and spend.  

So, now, here’s what we can expect through the next four years. Our public sector will continue to grow; public sector spending will increase. Our Ontario debt will increase.

Our Ballooning Ontario Debt  

Canada’s liberal-leaning national magazine Maclean’s conveniently waited until after the Ontario election to reveal their damning expose of the Liberals’ fiscal policy:

Why Ontario is poised to become Canada’s Greece

Under McGuinty’s watch, Ontario’s debt has almost doubled to $230 billion

http://www2.macleans.ca/2011/10/17/why-ontario-is-poised-to-become-canada%E2%80%99s-greece/

Here’s an excerpt from this piece:

     Traditionally known as the engine that drives Canada, Ontario is in danger of becoming the Greece of Confederation—if Greece happened to account for more than a third of Europe’s economy.  Under McGuinty’s watch, Ontario’s debt has almost doubled to $230 billion, due to massive stimulus spending as well as unrestrained growth in health care and education. And it will continue to rise despite announced plans for greater austerity. By the time a balanced budget is contemplated in 2017, the province will have added an additional $67 billion in new debt. On a per capita basis, the current provincial deficit is almost twice as large as that of its next nearest wastrel, New Brunswick….

Our Ontario Energy Prices to Rise

We will also come to realize the hurt from high energy costs as a result of the Liberals’ energy policies. Brace yourself – from Monday’s paper:

     … average consumer using 800 kwh a month would pay $2.11 more for the electricity alone. On the overall electricity bill, which includes other charges including transmission, the increase is 1.8%, the OEB said.  But energy analyst Tom Adams pointed out via Twitter, if just the cost of electricity is looked at, the increase is 4.3%….

     The reason for the cost jump is more expensive power coming online in the next year, including refurbished nuclear units at the Bruce Generating Station and increased wind generation.  Under the government’s Green Energy Act, wind and solar generation, along with other forms of renewable power, are subsidized.  The Ontario Power Authority will pay up to 13 cents a kwh for wind power, far more than the cost of power from hydroelectric plants or coal-burning plants.  (SOURCE:  http://www.torontosun.com/2011/10/17/ontario-hydro-rates-going-up )

So, we might as well just throw our wallets into the pile… there’s going to be four more years of Big Government in McGuinty’s Ontario.

Ontario Liberals’ run-away train wreck

The Ontario Liberals have proven themselves neither managers of the Province’s economic engine nor of our public purse. Their big government ways have placed Ontarians and future taxpayers and businessmen in a difficult position.

The accumulated effect of the Liberal’s big government ways over the past eight years have cost us dearly. Already, their economic policies have seen the Province gone from “have” to “have-not” status.  Liberals’ focus on nanny-state priorities have left Ontarians initiative to drift. The once humming economic engine of Canada has become a sputtering, choked-off remnant of itself.

Each second of Liberal economic management costs us $685. It’s criminal that the Liberals have amassed a provincial debt that now totals over $224 billion. This works out to over $18,000 per person. It is a fact that in their two terms in office, the Liberals have accumulated more debt than all previous governments combined!

How have the Liberals accumulated this debt in less than eight years?  It is Dalton McGuinty’s systematic, underhanded approach to the management of public sector – an approach that can only be summed up in the phrase “labour peace at any cost.”  Toronto Sun political reporter Christina Blizzard recently accounted for the Liberal’s record in a column entitled: Ontario has a debt crisis.

     They’ve increased spending on government programs by more than 70% and doubled the province’s accumulated debt.

     Public sector salaries are out of control. With those salaries comes the ticking time bomb of cushy, defined benefit pensions.

     Despite a stern finger-wagging from Finance Minister Dwight Duncan and a pledge to freeze civil servant salaries in the 2010 budget, only a handful of government workers actually had their pay frozen. Ontario provincial police, got an 8.5% pay hike — a deal that has municipalities across the province up in arms, as they know it sets a precedent for their forces. The government negotiated a secret deal with OPSEU that gave them 1.75% in 2009, 2% in 2010, 2% this year — and 3% next year. The big teacher unions weren’t included in the pay hike. Their contracts, conveniently, aren’t up until next year. Same with the province’s doctors.

     You only have to look at the annual so-called “Sunshine List,” of people making more than $100,000 on the public dime to see how salaries have soared. When the Liberals took office eight years ago, 20,249 people were on that list. The latest list of 2010 salaries show that number has more than tripled — with 71,478 people on the list.

Read Blizzard’s full column here:  http://www.torontosun.com/2011/09/17/ontario-has-a-debt-crisis

Dalton McGuinty is steering a run-away-train wreck of his own making. Here is hoping that next week Ontarians chose to jump the track on this disastrous course.