Deconstructing "Progressive " thought

[john10]

>I did not misrepresent Harper as anything, I just stated facts.

Please do not assume the readership here to be naive.  Facts void of necessary context are misleading and misrepresentative of truth, leading to incorrect conclusions.  Save the lawyerly approach in the courtroom, where "the whole truth" is something to be avoided if it weakens one's position.  Here, be complete.  "All you said" is the sort of partial truth intended to sway public opinion: suited to the propagandist and the politician, but unseemly and ill-befitting an honest person.

I stated two basic, simple facts. Those facts are not a misrepresentation of the truth, they are the truth: the Conservatives raised income taxes and are the highest-spending government in the history of the country.

The problem here is that these facts make you uncomfortable. So, when you ask me to provide "context" and to be "honest", what you really want me to do is provide justification. But the thing is there's no need for it. There is nothing inherently wrong with the two facts I stated; unless your political views are that the government should spend less and never raise taxes, in which case of course those facts will be disagreeable. But don't tell me that I'm not being honest for simply stating the truth.

And as I said, my post was specifically in response to Thucydides, who likes to present 'progressives' (the Liberals) as fiscally irresponsible.

>I'm not sure what you mean exactly, could you clarify.

Brison and Ignatieff have been riding the high horse lately, criticizing the Conservatives for behaving almost exactly as the Liberals did and intend.

What are you referring to specifically? I'm not sure what you mean. Precisely what behaviour are the Liberals reprimanding the Conservatives for?

I understand the basic arguments favouring income tax cuts over comsumption tax cuts; I agree that a $12 billion income tax cut would be better.  The point - that the return of $12 billion to private spending rather than public is the advantage - stands.

I'm pretty certain that the Martin platform proposed income tax cuts of the same scale, so no, you can't simply say  'well they cut taxes so they have the moral and economic advantage,' especially if those tax cuts are universally decried as stupid, visionless and sub-optimal for the economy.

We also have not seen the Conservatives governing with a majority.  When the Conservatives have a majority and spend profusely, then you may state that the Conservatives are not seriously interested in reducing spending.  Until then, we can't know what "interests" the Conservatives.  But we do know that the Conservatives have not advanced any proposals for major new spending programs.

The Conservatives have been in government for almost three years now. Don't you think we can use that as a measure of how they govern? As I said, I have not seen any indication that the Conservatives are interested in cutting spending seriously. Is there anything really incorrect with that statement? Other than token amounts of a few dozen millions here and there (arts subsidy programs), what major programs do you think the Conservatives would cut if they had a majority?

There is grave doubt that the Liberals offered a better fiscal vision.  Dion's Green Shift involved a lot of hand waving between "take money from here" and "put it there" that made it clear that the Liberals were aiming to restore their vote-buying flexibility: the Green Shift was not truly revenue neutral.  Similar initiatives were announced in the outline spending plan of the coalition. The Liberals find it hard to sway voters with promises of new spending when there is no margin in the budget, and harder when along with the voter candy they must explain where they intend to cut expenses (spending) or increase revenues (taxes) to make up the difference.  I find it highly unlikely that the Liberals are concerned with sound fiscal management: the Liberals are concerned that the year-end pork fund has been removed from play.

I find it very likely. There is scarcely a better example of fiscal responsibility in the Western world than the way they governed from 1993 to 2006. In comparison, the Conservatives have exhibited very poor fiscal management from the get-go: income tax increases, GST tax cuts, diesel fuel tax cuts, tax credits that have largely inframarginal impacts and are thus basically subsidies (for schoolbooks, public transit, sports registration fees, low-income children's artistic activities). None of these things are egregiously bad by themselves, but together, they illustrate how bereft of fiscal vision this government really is.

 

[Fabius]

John10
        You continue to state that the Conservatives have raised income taxes. Yes the tax rate was 15.25% in 2006 vice 15% in 2005. However that was the only year that the basic income tax rate went up. Further it returned to 15% in 2007 and has remained there. To say that the Conservatives have raised the income tax rate is to imply that that rate is now higher than it was when they first formed the government and that is inaccurate.

 

[john10]

>The best that can be said about the conservatives is that they are attempting to slow play this whole issue

I agree; situating the estimate on cap-and-trade is the best option if one intends only to stall until it is clear that neither is required, because cap-and-trade is complex and justifies interminable wrangling.

Look, I'm not a scientist so I don't have the background, knowledge and training to evaluate competing claims about climate change. As a layman, all I can do is trust the experts to conduct rigorous research, debate, criticize the methodology and look to the policymakers to implement appropriate policy to deal with it. The current scientific consensus is that man-made climate change is indeed a problem and that it needs to be dealt with.

The fact is that the Conservatives publicly agree with this consensus, have participated in all the international conferences about it, and have put forth a plan for dealing with it. Given this, what is more likely?

That they think climate change is an important issue and want to deal with it.

OR

that they believe it's basically a hoax, that the scientific consensus is wrong, that according to their own rigorous scientific evaluation, the world is hurtling down an expensive path to solve a problem that doesn't exist.

If you truly believe the second option, and they are in fact concealing their real views and think that it is absolutely wrong-headed to do anything about carbon emissions and bad for Canada, why are they going along with something they think is really bad for the country? What kind of leadership is that? Why wouldn't they have just presented their view and its scientific basis (criticism of the climate change believers' methodology, alternate explanations, etc.)? That would be leadership. If the government of a G7 country announced that according to the evaluation of its scientists, man-made climate change is not a problem, and that they were withdrawing from Kyoto/Bali because it has no scientific basis, people would take notice.

But no, instead, the Conservatives have said they agree with the international scientific consensus and want to tackle climate change. This leads me to believe that they do indeed think it's a problem, but maybe I'm just silly.

 

[john10]

John10
        You continue to state that the Conservatives have raised income taxes. Yes the tax rate was 15.25% in 2006 vice 15% in 2005. However that was the only year that the basic income tax rate went up. Further it returned to 15% in 2007 and has remained there. To say that the Conservatives have raised the income tax rate is to imply that that rate is now higher than it was when they first formed the government and that is inaccurate.

No, it doesn't imply anything, it's just a statement of fact. It's a fact. A fact.

 

[john10]

Having been around to observe politics since the 1980's (prior to that I was not equipped to know or understand what was happening; I will go with people like Edward Campbell's observations) I am not imagining anything about how the Liberal Party of Canada operated. In fact, once you start asking the question of where the unaccounted for 20 to 40 million dollars from ADSCAM is, then you can append another descriptor to the Party and its operatives.

Actually, I don't. The Liberals were great fiscal managers. They took the measures to balance the government's books and pay down some of the debt.

The fact that an insignificant (that's right, insignificant) amount of money ($20-40m) was wasted or unaccounted for does not change that.

Speaking of adscam, do you still contend that Paul Martin knew about it?

You are also quite free to search through the various fora for where I have said the CPC are paragons of fiscal restraint (hint; I didn't);

My mistake, sorry. But for the sake of everybody knowing each others' positions, you would certainly disagree with me that the Liberals have been great fiscal managers whereas the Conservatives have been putrid and feckless, no?

 

[Kirkhill]

John10:

I have to admire you.  In the same sense that I admire salmon. Both of you exercise yourselves swimming upstream. 

Have you ever seen a spawned out salmon?  Pretty rough shape. 

It's not the kind of exercise I choose to indulge in.

 

[2 Cdo]

Actually, I don't. The Liberals were great fiscal managers. They took the measures to balance the government's books and pay down some of the debt.

Cutting transfer payments is an easy way to balance a budget. You pay my mortage and I will now claim to be debt free. :

The fact that an insignificant (that's right, insignificant) amount of money ($20-40m) was wasted or unaccounted for does not change that.

Only a Liberal apologist would consider 20-40 MILLION an insignificant sum of money. What would you call a BILLION wasted on a useless registry that accomplished nothing.

Speaking of adscam, do you still contend that Paul Martin knew about it?
My mistake, sorry. But for the sake of everybody knowing each others' positions, you would certainly disagree with me that the Liberals have been great fiscal managers whereas the Conservatives have been putrid and feckless, no?

See above ref. fiscal managment. :

 

[john10]

John10:

I have to admire you.  In the same sense that I admire salmon. Both of you exercise yourselves swimming upstream. 

Have you ever seen a spawned out salmon?  Pretty rough shape.   

It's not the kind of exercise I choose to indulge in.

Well, it's just talking on an internet message forum. What's the worst that can happen? 

 

[john10]

Cutting transfer payments is an easy way to balance a budget. You pay my mortage and I will now claim to be debt free. :

Sure, the provinces were burdened, but those are the choices that have to be made when you're spending more than is coming in. What do you suggest they could have done to get rid of the deficit while maintaining the same level of welfare and and health services (the things that were cut in those provincial transfers)? Raise taxes? Perhaps, but they already had to raise them a fair bit.

In the end, the Liberals got the job done, and Canadians seem to appreciate it, re-electing them to two majority governments.

Only a Liberal apologist would consider 20-40 MILLION an insignificant sum of money. What would you call a BILLION wasted on a useless registry that accomplished nothing.

20-40 million is an insignificant amount of money. Consider that the total spending of the federal government is about $200bn. So 20m is 1% of 1% of total spending in a year. The gun registry was indeed a big waste of money. Overall, the Liberals were great fiscal managers, getting rid of our annual $30bn+ deficits and paying down some debt.

 

[aesop081]

20-40 million is an insignificant amount of money.

As a taxpayer, that amount is not insignificant. The circumstances of the disappearance of that money make it even more significant.

Overall, the Liberals were great fiscal managers, getting rid of our annual $30bn+ deficits and paying down some debt.

I paid down allot of my debt this past year but i think you will have a tough time finding someone to agree that i am a great fiscal manager. I don't spend money i don't have but that doesn't mean that the money i do spend, is spent wisely.

 

[john10]

As a taxpayer, that amount is not insignificant. The circumstances of the disappearance of that money make it even more significant.

It is insignificant in the context of a $200bn budget. Yes, of course it's terrible what happened and I agree the culprits should be held to account. But in the end, the scale of the theft/abuse/loss is an insignificant amount of money.

It's like calling someone who makes $40,000 and pays his mortgage, provides for his family, and saves in an RRSP a bad fiscal manager because three years ago he threw $4 down into the toilet. That's what $20-40m is --- 1-2% of 1% the budget.

 

[DONT_PANIC]

It is insignificant in the context of a $200bn budget. Yes, of course it's terrible what happened and I agree the culprits should be held to account. But in the end, the scale of the theft/abuse/loss is an insignificant amount of money.

It's like calling someone who makes $40,000 and pays his mortgage, provides for his family, and saves in an RRSP a bad fiscal manager because three years ago he threw $4 down into the toilet. That's what $20-40m is --- 1-2% of 1% the budget.

If it was his own money, he can do whatever he wants with it; if he stole the $4 from his neighbor and flushed it down, then I'd expect him to be accountable.

 

[Brad Sallows]

>The problem here is that these facts make you uncomfortable.

Not at all.  I understand how the spending was increased, and I am delighted when the causes of most of an increase are intergovernmental transfers (restoring some of what was cut a few years back) and inflation adjustment.  I am not delighted when the cause is a year-end candy shower.  I understand those additional, detailed "facts".  I understand what happened to the income tax "increase", how much it cost, and how long it persisted.  Now that we've established the meaning behind your snapshot-in-time facts and how relevant they are to a useful debate on government finances, we can move on to the Liberal record as fiscal managers.

Year	Revenue	Expenditure	Op Balance	"Interest"	Net	YoY % Spending Increase	Spending as %GDP	"BoC Rate"
1990	119,685	108,550	11,135	45,034	-33,899	4.592	22.6	12.06
1991	126,086	114,544	11,542	43,861	-32,319	5.522	23.1	8.40
1992	124,486	122,173	2,313	41,332	-39,019	6.660	23.3	6.17
1993	123,873	122,304	1,569	40,099	-38,530	0.107	22.3	4.75
1994	130,791	123,238	7,553	44,185	-36,632	0.764	21.7	5.15
1995	140,257	120,856	19,401	49,407	-30,006	-1.933	21	6.83
1996	149,889	111,327	38,562	47,281	-8,719	-7.885	19	4.26
1997	160,864	114,785	46,079	43,120	2,959	3.106	17.9	3.15
1998	165,520	116,438	49,082	43,303	5,779	1.440	17.5	4.67
1999	176,408	118,766	57,642	43,384	14,258	1.999	16.5	4.50
2000	194,349	130,566	63,783	43,892	19,891	9.936	16.2	5.27
2001	183,930	136,231	47,699	39,651	8,048	4.339	15.9	4.10
2002	190,570	146,679	43,891	37,270	6,621	7.669	16	2.46
2003	198,590	153,676	44,914	35,769	9,145	4.770	15.6	2.94
2004	211,943	176,362	35,581	34,118	1,463	14.762	16.3	2.27
2005	222,203	175,213	46,990	33,772	13,218	-0.652	15.2	2.63
2006	235,966	188,269	47,697	33,945	13,752	7.452	15.4	3.94

Dollar figures (revenues, expenditures, op balance, interest, net) are in millions of dollars.

The government revenue/expenditure/cost of debt figures are from the Dept of Finance's web site.  I can't remember from where I pulled historical Bank of Canada rates.  "Interest" is what the government states as the cost of servicing its debt.  What I euphemistically call the "BoC Rate" is the average obtained by summing the rate as it was for each month and dividing by 12.  I don't remember exactly which rate; I included them to illustrate the trend in the cost of debt.  (The value for 1981 was 16.71, which was about the highest in the last 35 years.)

So what qualifies the Liberals as great money managers?  Well, they inherited a healthy operating surplus from the Conservatives except for the pre-election dip (which I don't think had much to do with the election; see the anemic revenue growth compared to preceding years - Gulf War I and other interesting events, perhaps).  The Conservatives firmly established a general trend in which each successive year's revenues increased more than the expenditures.  The Liberals cut expenditures in exactly three years - 1995/96, 1996/97, 2005/06 - for a whopping $11 billion and everything else is the magic of falling interest rates and productivity growth (revenue growth).  The explosive year-over-year spending growth from 2000 onward speaks for itself.  Basically, the Liberals rode a healthy economy and spent heavily.  If they had been great, or even merely good, money managers, then more of those net surpluses would have been used to lower the net federal debt.

I took those figures and ran a what-if: historical revenues, hold the year-over-year spending growth to 2% [edit: from 1999 onward], $10 billion revenue growth in 2007 and 2008 and respective interest rates averaging around 3.5% and 3.0%.  Given that, the 2008-09 budget would have had a $100+ billion surplus and the debt would be reversed to a nearly $80 billion capital fund.  Of course, long before that there would have been calls for significant tax cuts.  But it shows what real fiscal discipline and good management could have done.

 

[john10]

Thanks for the table Brad, very informative.

Not at all.  I understand how the spending was increased, and I am delighted when the causes of most of an increase are intergovernmental transfers (restoring some of what was cut a few years back) and inflation adjustment.  I am not delighted when the cause is a year-end candy shower.  I understand those additional, detailed "facts".  I understand what happened to the income tax "increase", how much it cost, and how long it persisted.  Now that we've established the meaning behind your snapshot-in-time facts and how relevant they are to a useful debate on government finances, we can move on to the Liberal record as fiscal managers.

Yes, clearly they have, since you've been telling me that I have to be honest and do 'full-disclosure', when all I was doing was making a few statements in response to Thucydides. When I write basic facts like the Conservatives being the highest spending government in history and raising income taxes, I do not have to qualify them. The only reason you think I should have to is because in your view, those things are negative.

Specifically, what do you mean by "end of year candy"? Which Liberal spending would you qualify as belonging to this category? Would you qualify the Conservative tax credits for sports registration fees as similar candy?

So what qualifies the Liberals as great money managers?

  They balanced the budget. They had to do unpopular things to get it done (cutting provincial transfers and raising taxes), but they forged ahead and did it for the country's fiscal health. By comparison, the Conservatives have squandered the surpluses on a stupid GST tax cut that is almost universally decried by economists.

Well, they inherited a healthy operating surplus from the Conservatives except for the pre-election dip (which I don't think had much to do with the election; see the anemic revenue growth compared to preceding years - Gulf War I and other interesting events, perhaps).  The Conservatives firmly established a general trend in which each successive year's revenues increased more than the expenditures.  The Liberals cut expenditures in exactly three years - 1995/96, 1996/97, 2005/06 - for a whopping $11 billion and everything else is the magic of falling interest rates and productivity growth (revenue growth).  The explosive year-over-year spending growth from 2000 onward speaks for itself.  Basically, the Liberals rode a healthy economy and spent heavily.  If they had been great, or even merely good, money managers, then more of those net surpluses would have been used to lower the net federal debt.

As your table showed, under the Liberals, spending as a percentage of GDP declined from 22% in the Mulroney years to 16%. Most of the spending increases were inflationary (just as much of the increases under the Conservatives today have been inflationary) or simply keeping up with the rate of economic growth, so I really don't see why you have a problem with that. In any case, why do you like provincial spending but not federal spending? That I really don't understand.

I took those figures and ran a what-if: historical revenues, hold the year-over-year spending growth to 2% [edit: from 1999 onward], $10 billion revenue growth in 2007 and 2008 and respective interest rates averaging around 3.5% and 3.0%.  Given that, the 2008-09 budget would have had a $100+ billion surplus and the debt would be reversed to a nearly $80 billion capital fund.  Of course, long before that there would have been calls for significant tax cuts.  But it shows what real fiscal discipline and good management could have done.

The Liberals did exhibit good fiscal discipline and management. That they did not do exactly you wanted them to in terms of debt reduction does not change that overall, they managed very well. Given the standard you have given for good fiscal management, you must think the Conservatives have been absolutely terrible. But no, you praise them for the GST tax cut ("economic and moral advantage" as you say). How do you square that?

Also, I'd like to know specifically what you're referring to when you say the Liberals are reprimanding the Conservatives for what they would do themselves, and if you truly believe that the Conservatives are concealing their true beliefs about climate change.

 

[a_majoor]

Deconstructing john10's arguments, they are clearly based on the premise that taxpayers wealth belongs to the State, to be disposed of as the State sees fit. (This is also the source of Micheal Ignatieff's "argument" that tax cuts limit the ability of the State to raise revenues. Thats the whole point of cutting taxes.)

As a small l libertarian, and following classical liberal thinking, I see taxpayer wealth as belonging to the taxpayer, who is buying certain services that are more efficiently provided by a third party, such as a neutral arbitrator (the courts) and full time protection (the Police force and the Military); since I am paying my wealth, then I do have every right to be outraged when it is misappropriated, regardless of what percentage it is of the budget. I also have every right to be outraged when the State uses its power to seize more of my wealth to pay for things that can (and should) be provided by the private sector, and political pork paid to political supporters or to buy voter support is also inappropriate use of my wealth.

As well, playing bugetary shell games, like offloading spending of the provinces, peanalizes me, since I have to use my wealth to pay for these services, regardless if I am paying the Federal government, the Provincial government or the Municipal government. A local city politician (Councilor Gina Barber, for those who like to Google these things) actually said that London's $200 + million dollar wish list for Federal funding should go to items that would otherwise be funded by London taxpayers. Although she said this without irony, she was not seriously proposing taxing citizens of other nations. There is only one taxpayer, and politicians shifting the blame for tax increases on other politicians rather than cutting spending and reducing overall State intervention in the economy is the mark of responsible fiscal management.

 

[Brad Sallows]

>When I write basic facts like the Conservatives being the highest spending government in history and raising income taxes, I do not have to qualify them. The only reason you think I should have to is because in your view, those things are negative.

They aren't necessarily negative; details matter.  You and I understand your facts to be essentially meaningless trivia, but I don't like other readers to get wrong impressions from throwaway sound bites.  Readers who make it this far should no longer be in any danger of mistaking whether the Conservative record is "positive" or "negative".  The title "highest spending government in history", even in constant dollars, is unexceptional: there seem to be only 6 budget years in the past 48 for which that year's budget did not crown anew the current government with that title.  If I find figures going back longer, I am confident the trend is similar.  By a more important measure - spending as a % of GDP (ie. what we can afford) we can see that the "highest spending government in history" is not to be claimed by any recent governments.

>Would you qualify the Conservative tax credits for sports registration fees as similar candy?

Was it announced as new spending charged to the current FY as the year end approached?

>They balanced the budget.

"They" did not.  Stated your way, the implication is that 100% of the historical imbalance was redressed by "their" action.  It is a tiresome myth.  The numbers show it not to be the case.  As I've written here and elsewhere, now and before, the move from net deficit into net surplus resulted from a combination of government policies and legislative and economic change over a period spanning more than 10 years.  The last person to carry the torch is not credited with the entire journey.

The surplus was not "squandered"; the budget was brought closer into balance.  Overtaxation is poor fiscal management along with overspending.  If the Liberals had resolutely paid every surplus dollar against the debt, then I would not consider it overtaxation.  But they did not, and accordingly can only be assessed "weak C-" as fiscal managers.

What I wrote amounts to this: if the purpose of taxation in excess of today's spending is not to pay for yesterday's spending, then a GST cut is better than no tax cut at all.  By all means, raise the GST and cut income taxes.  Regardless, if the GST cut "squandered", then so did Martin's various income tax cuts.

Ignatieff and his minions have been whining about the projected deficit, but the amount of spending is close enough to what they proposed.  My message to them is not to b!tch about deficits and debt when they talk about spending at least $30 billion and failed to lessen the debt when they had control.

 

[john10]

Deconstructing john10's arguments, they are clearly based on the premise that taxpayers wealth belongs to the State, to be disposed of as the State sees fit.

Nope. Precisely what makes you think that? Because I criticize bad tax policies and tax cuts that are basically subsidies (GST instead of income tax cuts, tax credits for sports registration fees, etc.)?

(This is also the source of Micheal Ignatieff's "argument" that tax cuts limit the ability of the State to raise revenues. Thats the whole point of cutting taxes.)

The argument is a very good one. If the Harper budget was to cut taxes that undercut the government's ability to raise revenues, you need to propose proportionate spending reductions. Otherwise, what you get is what happened in the US: large tax cuts with no attendant spending reductions leading to huge deficits, even without the war spending. In any event, the point is moot, since the Harper government acted in a responsible way by not proposing substantial tax cuts that were not accompanied by proportionate long-term spending cuts.

As a small l libertarian, and following classical liberal thinking, I see taxpayer wealth as belonging to the taxpayer, who is buying certain services that are more efficiently provided by a third party, such as a neutral arbitrator (the courts) and full time protection (the Police force and the Military); since I am paying my wealth, then I do have every right to be outraged when it is misappropriated, regardless of what percentage it is of the budget.

Of course you can be outraged. Did I ever say the opposite? No, of course not.

I said it's silly to say the Liberals were bad fiscal managers on the basis of a completely insignificant (that's right, insignificant) amount of money being stolen. And I'm right, it is silly. But your hatred of the Liberals blinds you, in the same way that you say that Paul Martin knew about the theft, on the basis of absolutely nothing, and that you seem unable to hold the Conservatives to the same standards in terms of government spending and taxation.

I also have every right to be outraged when the State uses its power to seize more of my wealth to pay for things that can (and should) be provided by the private sector, and political pork paid to political supporters or to buy voter support is also inappropriate use of my wealth.

That's just democracy, Thucydides. Canadians have voted for governments (Liberal and Conservative) that believe in these levels of government spending, and have indicated through the democratic process that they are willing to bear the attendant taxation levels.

As well, playing bugetary shell games, like offloading spending of the provinces, peanalizes me, since I have to use my wealth to pay for these services, regardless if I am paying the Federal government, the Provincial government or the Municipal government.

I'm not quite sure what you mean here. I know a lot of conservatives complain about the Liberals' reduction of transfer payments, but didn't these affect areas (welfare and healthcare) that conservatives would precisely like to see less public spending on?

There is only one taxpayer, and politicians shifting the blame for tax increases on other politicians rather than cutting spending and reducing overall State intervention in the economy is the mark of responsible fiscal management.

Isn't that what the Liberals did by reducing transfer payments? Since when are transfer payments these sacred items that should never be touched?

And please answer this question, how would you characterize the Harper Conservatives' record in terms of fiscal management?

 

[john10]

Brad Sallows,
I have the feeling I'm discussing with shadows here. You have no consistent approach to what you think constitutes good fiscal governance. On the one hand, the Liberals did not cut the debt enough. On the other, having surpluses indicates overtaxation and the Conservatives have the "economic and moral advantage" for cutting the GST, against the universal advice of economists. If the Liberals increase spending, they're irresponsible. If the Conservatives propose a fiscal stimulus package, it's the fault of the "talking heads on TV".

They aren't necessarily negative; details matter.  You and I understand your facts to be essentially meaningless trivia, but I don't like other readers to get wrong impressions from throwaway sound bites.  Readers who make it this far should no longer be in any danger of mistaking whether the Conservative record is "positive" or "negative".  The title "highest spending government in history", even in constant dollars, is unexceptional: there seem to be only 6 budget years in the past 48 for which that year's budget did not crown anew the current government with that title.  If I find figures going back longer, I am confident the trend is similar.  By a more important measure - spending as a % of GDP (ie. what we can afford) we can see that the "highest spending government in history" is not to be claimed by any recent governments.

You don't seem to understand that my post was directly at Thucydides in a thread started by him in which he derisively expresses his views of "progressives." I just gave him some food for thought about those more ideologically in line with him. The only reason you're being so uptight about that precise statement (rather than any other one) is because it makes you uncomfortable, and you think it needs to be 'clarified'. Why would you deny this? I have no problem with talking about it, but please don't act as though it doesn't make you uncomfortable that the Conservatives are the highest spending government in history.

Of course it's no big deal that the conservatives are the highest spending government in the history of Canada in nominal dollars. It's completely normal, and most of their spending has been utterly reasonable and responsible. Note that I have no opinion on the question of the fiscal stimulus. I simply do not have the advanced macroeconomic knowledge to have an informed opinion on the matter.

>Would you qualify the Conservative tax credits for sports registration fees as similar candy?

Was it announced as new spending charged to the current FY as the year end approached?

The time of the year it was announced is irrelevant, no? What matters is whether it was policy that had real benefits and whose aim was to get votes. It's not any better if it's announced in one month rather than the other. So I'll ask my question again. Do you think tax credits for sports registration fees is good policy, or basically just "candy"?

>They balanced the budget.

"They" did not.   Stated your way, the implication is that 100% of the historical imbalance was redressed by "their" action.  It is a tiresome myth.  The numbers show it not to be the case.   As I've written here and elsewhere, now and before, the move from net deficit into net surplus resulted from a combination of government policies and legislative and economic change over a period spanning more than 10 years.  The last person to carry the torch is not credited with the entire journey.

Sure the Mulroney Conservatives got the ball rolling with the great GST tax implementation, but in the end, the Liberals balanced the budget. You need to stop being so wary of reality and the facts. The Liberals balanced the budget. The statement needs no qualification. It's just the truth. Really. The Liberals did a great job balancing the budget. The Mulroney conservatives did a great job pushing through terrifically unpopular but sound and wise policy tools to help them do it (the FTA, GST, NAFTA).

The surplus was not "squandered"; the budget was brought closer into balance.  Overtaxation is poor fiscal management along with overspending.  If the Liberals had resolutely paid every surplus dollar against the debt, then I would not consider it overtaxation.  But they did not, and accordingly can only be assessed "weak C-" as fiscal managers.

The Conservatives had the choice to use the surplus to pay off the debt, and chose a GST tax cut instead (and instead of an income tax cut). What grade do you give them?

What I wrote amounts to this: if the purpose of taxation in excess of today's spending is not to pay for yesterday's spending, then a GST cut is better than no tax cut at all.  By all means, raise the GST and cut income taxes.  Regardless, if the GST cut "squandered", then so did Martin's various income tax cuts.

No, because income taxes are more productive and beneficial to the economy than GST tax cuts. There is no "economic and moral advantage" to doing bad taxation policy.

Ignatieff and his minions have been whining about the projected deficit, but the amount of spending is close enough to what they proposed.  My message to them is not to b!tch about deficits and debt when they talk about spending at least $30 billion and failed to lessen the debt when they had control.

Precisely what whining are you talking about? I haven't seen them whine about the projected deficit -- they're the ones who have been asking for it.

Again, I have to ask, what do you think is the Conservative leadership's true opinion about climate change? Is it a serious issue that must be dealt with soon (their public position) or is it a scientifically unfounded and exaggerated scare that will soon blow over?

 

[Brad Sallows]

The false dilemma does not stand.  There is no "on the one/other hand"; you misunderstand what I thought was explained clearly: "if the purpose of taxation in excess of today's spending is not to pay for yesterday's spending, then a GST cut is better than no tax cut at all."

1) Good fiscal policy for any person or organization is: revenues >= operating expenses + cost of debt (interest) + principal payment against debt.  2) Good fiscal policy for governments includes: spend the least necessary amount, and leave the balance of economic activity to private spending.

In accordance with those principles, here are some approaches to fiscal policy ranked least to most preferable:
1) deficit operating balance (revenues < operating expenses) (F)
2) deficit net balance (revenues < operating expenses + cost of debt) (D)
3) surplus net balance, but with much of expended on "March Madness" (end of FY contingency or other spending) (C-)
4) surplus net balance matching within a reasonable margin of error a modest contingency (a couple of billion dollars) planned at start of fiscal year, with any sizeable excess returned to taxpayers as rebates and removed from following budgets (C)
5) surplus net balance, with overwhelming fraction of surplus paid against debt principal (B)
6) As (4), but with no significant debt (A)

Note that (3) is not the same as planned spending, such as announcing for the next year a new tax credit.  (3) is only possible at fiscal year-end, by definition.

From the data I have from the Public Accounts, going back to FY 61-62, these are the general patterns:
1961-1974: (2)
1975-1986: (1)
1987-1996: (2)
1997-2008: (3)

The accumulated federal deficit stood at $487,524 million at the end of 1993; at $562,881 M at the end of 1996; at $481,499 M at the end of 2005, and at $457,637 M at the end of 2007.  That amount represents the 1975-1986 and prior deficit operating balances, plus interest, minus some modest recent principal payments.  It represents public overspending from 20-30 years ago.  I believe it was a mistake not to reduce that amount further during favourable economic times; therefore, I do believe the Liberals did not cut the debt enough; since the unforecasted surplus amounts that were not paid against the debt were not destroyed, it follows that the government overspent.

You have a gift for leaving out the details in order to state what you imagine to be "facts" or statements of argumentation.  Surpluses are overtaxation only if the surplus amounts are not used to close accounts on prior spending.  Deficit spending is simply a transfer of future revenues (taxation) into the present.  The only proper use (and requirement) for a surplus is to effect that transfer of revenues when the future becomes the present.  As long as current revenues (taxes) pay for budgeted current and past spending, that is not overtaxation. If, however, the government is too weak-minded to eschew the temptation of "March Madness", then it is simply overtaxation.

If a government finds its budgets result in overtaxation, it has a moral obligation to return the excess to taxpayers.  It is also widely accepted - the CPC, LPC, and NDP all agree - that private spending in a free market economy is preferable to public spending when the publc agency doesn't have any particular - which is to say, at minimum planned and budgeted - purpose.  I haven't disputed that an income tax cut was preferable to a GST cut in the prevailing economic circumstances.  Had the Conservatives done so, it would only have increased the economic advantage.

Since you don't occupy my mind, it would be safer for you to not claim to understand my emotional state - you will be less the fool than you currently are making yourself out to be.  It isn't the fact of the Conservatives being the highest spending federal government (in raw dollars) in history that disconcerts me; the superficial prating of morons, promulgating myths for other morons to cherish, does.  I have no problem bringing more complete truth to half-truths, and context to facile sophomorism.  If you're not bothered or uncomfortable or in any other distressed emotional state due to additional data and conclusions, then we are in agreement: both of us are "comfortable", and the discussion doesn't need to end with the last "fact" with which one person happens to be "comfortable", without the addition of other "facts" which make him "less comfortable".

If we may set aside the amateur hour psychology, I consider tax credits for sports registration fees, and many of the other credits (which are, really, public spending) are "candy".  But my point, to get back on it, wasn't about the issue of whether governments spend on voter "candy": my point was the immorality and poor economic practice of end-of-fiscal-year spending sprees when the money should be either paid against debt, or returned to the taxpayers from which it came.

I realize the Liberals balanced the budget.  For those unclear: the Liberals balanced the budget; the Liberals balanced the budget; the Liberals balanced the budget.  Yet the discussion need not end there, although doubtless there are many - Ignatieff comes to mind - who would like people to just take away that single statement and chant it like a mantra.  What interests me is not that the Liberals balanced the budget, but that so many people should believe it was an exceptional achievement.  Economic circumstances brought the net deficit within reach (within the limitations of what was politically possible), and the government of the time took the obvious action.  In the event, it took an 8% spending cut.  Two years earlier, during the first budget year of Chretien's government, it would have taken a 30% spending cut.  I find it much more interesting to understand that evolution of circumstances than to simply be a Liberal cheerleader.

And with the announcement of recent job loss figures, I see the Liberals are now whining that even more should be spent, and it should have been spent sooner.  You can forget about deflecting me from my opinion that the Liberals are doing anything more productive than whining about what should or could be done; it is all electioneering.

 

[Infanteer]

I don't consider myself a Conservative cheerleader, but how strong are the claims pointing to current CPC policies when you consider that they have operated under a minority government the entire time.  The Liberals governed under over a decade with a solid minority and, as Brad Sallows pointed out, governed "good" but not "super".  The Conservatives have governed for a few years and, as a minority government, have been somewhat beholden to those Liberals that are so eager to point and sneer.  Should the Libs (and the NDP) be somewhat accountable for the accusations you lob at Harper's government seeing how they had a very real hand in actually put the budget through?