Part of the reason I think we should be talking about the big picture of government, what size we want it to be, or what size is the right size for it to be, is that I think that our money isn't being spent wisely. Let me repeat my premise from the previous post: any government agency of any stripe that is spending money is spending YOUR money that they took out of YOUR pocket. Some of this money is well spent, in my opinion. Some of it is not well spent. Government is a big and complex organization that unfortunately does not seem to understand the concept of value for money. But if we put a cap on the size of government, then that concept would have to come into play, wouldn't it?
For salaries alone, check this out: http://www.fin.gov.on.ca/en/publications/salarydisclosure/2010/ .Read it, you'll be shocked that so many public servants make over $100,000, and this is just Ontario! Elementary school principals make more than $100k. The president of EHealth made a half million dollars last year! The average judge makes $245,000. How much do you make? How much tax do you pay? Are you getting value for your money?
Tuesday, November 30, 2010
Things we should be talking about, part one
Political dialogue (in Canada and the U.S., anyway) is for the most part boring. The reason for this is that politicians are usually not talking about anything that matters to us, and that the dialogue itself is a play that was written decades ago.
Politician A: This is my position.
Politician B: I reject your position!
(etc)
As for the first part of my argument, most of the issues that the federal or provincial Parliaments word on do not have a direct result on our day to day lives. As you may or may not know, most of the interactions you have with these govermnents is directed by regulation, not law. Laws and regulations are both written by bureaucrats and they can be so complicated that it would not be a stretch to say that most lawmakers don't always know what they are voting for when they do vote. U.S. Senators sometimes take pride in this. Municipal governments are much closer to us than federal or provincial because they actually have to decide the hard stuff, like whether someone can build a gas station or apartment complex next to your house. That is why any municipal town hall is more likely to be more emotional than any federal leaders' debate.
So what should our leaders be talking about? How about: How Big Should Government Be?
Should the net size of the Government of Canada, provincial governments (including municipal governments), and Crown corporations be capped at any specific size? Should it be at x thousand dollars per capita, or 30% of the Canadian economy, or should it be allowed to grow organically?
I think I need to give some context to this question, in order to tell you why I think it is one of the key questions facing us today:
The world economy, and especially the economies of the United States and the EU, have been stagnant since the financial collapse of 2008, when irresponsible lending practices by various banks in the US and around the world proved unsustainable. Instead of allowing the (huge) banks in question to fail, the US government took on the majority of the debt itself, ballooning its already huge annual deficit. But this didn't solve the problem. GM, which had been teetering on the brink for years, was about to go bankrupt when sales declined by 30% in a matter of weeks as financing dried up. So the government stepped in and added to its deficit (Canada and Ontario were in on this one, too.) Gross U.S. public debt now stands at its highest percentage relative to GDP since the end of World War II (93%, http://en.wikipedia.org/wiki/United_States_public_debt)
But it was all worth it, right?
I'll tell you right now I don't know the answer to that question. That was a lot of money and things still don't look very good, do they? My issue isn't that the stimulus was done, or that it worked or didn't, but that no one, no one!, asked the question "how big do we want government to be?"
Because governments don't create money, they only spend it.
Most people think that I am exactly wrong when I say that. Governments create our currency, have fiscal policy, control interest rates in a roundabout way, of course they create money! Unfortunately, that's wrong. Let's be clear: ALL GOVERNMENTS ON ALL LEVELS ARE TAKING YOUR MONEY OUT OF YOUR POCKET AND SPENDING IT ON YOUR BEHALF. If no one worked, or had savings, or spent money, the government wouldn't have any money. Total government spending in Canada is today about 40% of our economy, down from about 53% in 1992 (again, thanks Wikipedia). That means that for every $100 spent (not earned) in Canada, a government agency spent $40. Essentially, 40% of our economy is just us spending our own money in such a way that it doesn't create any new money.
So is 40% the right number? I don't know, but my gut tells me it's still too big. I'll get into why I feel this way in another post.
Politician A: This is my position.
Politician B: I reject your position!
(etc)
As for the first part of my argument, most of the issues that the federal or provincial Parliaments word on do not have a direct result on our day to day lives. As you may or may not know, most of the interactions you have with these govermnents is directed by regulation, not law. Laws and regulations are both written by bureaucrats and they can be so complicated that it would not be a stretch to say that most lawmakers don't always know what they are voting for when they do vote. U.S. Senators sometimes take pride in this. Municipal governments are much closer to us than federal or provincial because they actually have to decide the hard stuff, like whether someone can build a gas station or apartment complex next to your house. That is why any municipal town hall is more likely to be more emotional than any federal leaders' debate.
So what should our leaders be talking about? How about: How Big Should Government Be?
Should the net size of the Government of Canada, provincial governments (including municipal governments), and Crown corporations be capped at any specific size? Should it be at x thousand dollars per capita, or 30% of the Canadian economy, or should it be allowed to grow organically?
I think I need to give some context to this question, in order to tell you why I think it is one of the key questions facing us today:
The world economy, and especially the economies of the United States and the EU, have been stagnant since the financial collapse of 2008, when irresponsible lending practices by various banks in the US and around the world proved unsustainable. Instead of allowing the (huge) banks in question to fail, the US government took on the majority of the debt itself, ballooning its already huge annual deficit. But this didn't solve the problem. GM, which had been teetering on the brink for years, was about to go bankrupt when sales declined by 30% in a matter of weeks as financing dried up. So the government stepped in and added to its deficit (Canada and Ontario were in on this one, too.) Gross U.S. public debt now stands at its highest percentage relative to GDP since the end of World War II (93%, http://en.wikipedia.org/wiki/United_States_public_debt)
But it was all worth it, right?
I'll tell you right now I don't know the answer to that question. That was a lot of money and things still don't look very good, do they? My issue isn't that the stimulus was done, or that it worked or didn't, but that no one, no one!, asked the question "how big do we want government to be?"
Because governments don't create money, they only spend it.
Most people think that I am exactly wrong when I say that. Governments create our currency, have fiscal policy, control interest rates in a roundabout way, of course they create money! Unfortunately, that's wrong. Let's be clear: ALL GOVERNMENTS ON ALL LEVELS ARE TAKING YOUR MONEY OUT OF YOUR POCKET AND SPENDING IT ON YOUR BEHALF. If no one worked, or had savings, or spent money, the government wouldn't have any money. Total government spending in Canada is today about 40% of our economy, down from about 53% in 1992 (again, thanks Wikipedia). That means that for every $100 spent (not earned) in Canada, a government agency spent $40. Essentially, 40% of our economy is just us spending our own money in such a way that it doesn't create any new money.
So is 40% the right number? I don't know, but my gut tells me it's still too big. I'll get into why I feel this way in another post.
Introduction to me.
The hardest part of starting is starting. I dread the ususal "this is my first blog post" style of personal essay, because most of what that is about is the blooger's attempt to lose the self-conscious aspect of thinking their thoughts are actually interesting enough to someone else to write down. After all, diaries still exist, don't they?
For me what I want to speak of are the big and small issues that affect me (us) every day, but I feel that some context is in order. We live in the era of slanted news, after all, where who you get your news from is more important than what that news is. This is not new, as I would like to cover later, but it is important to me that you (reader, whoever you are) know that I do not support any particular political party and I like to think that I can be objective about what is going on in our world.
Of course that last phrase is a hard one to live up to. I am a married father of two girls, have lived my whole life in and around the city of Ottawa, I'll be forty years old next year (aaargh!), and I am a small business owner. Add those things together and obviously I already have a way of looking at the world. I call myself a small-c conservative, if that helps. I am interested in politics but not political maneuvering or the minutiae of daily political "news cycles". I think elections matter, although I don't think any one person (Rob Ford, Stephen Harper, Obama) can screw up the world any worse than it already is. I believe in the pendulum effect when it comes to life, as in, what gets worse this year will get better next year, but I am worried that I am wrong (another topic I want to cover soon). I believe that the world of today (post-2008 economic disaster, pre-2011 crash or recovery) is at a tipping point and things are about to get a whole lot worse before they get better.
One other thing: I don't plan to share this with anyone until I get a few posts under my belt, so if this small post doesn't float your boat, remember, the hardest part of starting something is actually starting it.
For me what I want to speak of are the big and small issues that affect me (us) every day, but I feel that some context is in order. We live in the era of slanted news, after all, where who you get your news from is more important than what that news is. This is not new, as I would like to cover later, but it is important to me that you (reader, whoever you are) know that I do not support any particular political party and I like to think that I can be objective about what is going on in our world.
Of course that last phrase is a hard one to live up to. I am a married father of two girls, have lived my whole life in and around the city of Ottawa, I'll be forty years old next year (aaargh!), and I am a small business owner. Add those things together and obviously I already have a way of looking at the world. I call myself a small-c conservative, if that helps. I am interested in politics but not political maneuvering or the minutiae of daily political "news cycles". I think elections matter, although I don't think any one person (Rob Ford, Stephen Harper, Obama) can screw up the world any worse than it already is. I believe in the pendulum effect when it comes to life, as in, what gets worse this year will get better next year, but I am worried that I am wrong (another topic I want to cover soon). I believe that the world of today (post-2008 economic disaster, pre-2011 crash or recovery) is at a tipping point and things are about to get a whole lot worse before they get better.
One other thing: I don't plan to share this with anyone until I get a few posts under my belt, so if this small post doesn't float your boat, remember, the hardest part of starting something is actually starting it.
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