A Government Spending Its Way Into Prosperity? Just Joking



   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    Ontario is a relatively small jurisdiction, but it demonstrates all the failures of liberal assumptions; the toadying to public employee unions, spending money without regard to fiscal responsibility, the belief that all government activity, no matter how nonsensical, will lead to economic progress, the silly use of “investment” to relabel spending, and etc.

National Post
Terence Corcoran

The road to fiscal hell

One of the great destructive conceits of modern political economy is the underlying assumption that governments manage and control economic activity. Every budget by national or regional governments comes with false claims that the fiscal actions taken—to raise taxes or lower them, to spend more here or less there, to launch new initiatives or to re-shuffle old assets and programs—will deliver new jobs, new wealth and new prosperity.


      This is the same regime which promised to become a “world leader” in “green energy” and spent billions of dollars on solar, wind and biomass, all the while bragging about “green jobs.” They’ve stopped bragging about green jobs and we hear no more about how many there are. Real enterprise doesn’t talk about jobs, it talks about product and profits.

Ontario’s latest Liberal festival of debt, deficits and taxes is full of such nostrums. “We will create jobs and grow the economy by investing in our people,” Finance Minister Charles Sousa declared in a budget that in fact does little more than add new burdens on current and future taxpayers while adding nothing to growth. New taxes on the “rich” and small businesses, new spending on infrastructure, a new $2.5-billion Jobs and Prosperity Fund that supposedly will lead to the development of a strategy to support advanced manufacturing-or so say the Liberals’ union backers.


    Has a government initiative ever picked an economic winner that did not require continued government subsidy?

These annual fraudulent rituals, despite the claims of politicians, add little if anything to jobs and growth. Instead they build debt and pave the way to fiscal hell. The more governments expand their fiscal interventions, the greater the burden on voters. A decade of Ontario Liberal budgets—from 2005 to 2015 and beyond—has loaded $9,000 in new debt per capita, or $40,000 for each family of four, with more to come. Do the math: Net debt per capita is now heading $80,000 per family.

Ontario taxpayers will eventually have to pay for this debt, heading for $700-billion, plus pay higher interest charges as rates rise in the future. They will also be asked to pick up the cost of a new provincial pension plan, essentially a pension tax that is described in the budget as a growth and jobs creator.

Debt to GDP will top 40% this fiscal year, up from 26% a decade ago. In other words, for every $100 of annual GDP the province will now carry $40 in debt. The assumption is that all this debt, brought on by annual deficits totalling almost $100-billion over the last few years, has provided Keynesian stimulus to the economy, helping the province pull out of the 2008 slowdown.

And there’s the fraud, really. The deficit explosion did not produce the results predicted or promised when it was launched by the McGuinty/Wynne Liberals in 2009. The debt/ GDP ratio was then forecast to rise to only about 34% and then fall to 30.5% of GDP by 2015. Well, 2015 is here and the debt burden is now 40% of GDP.


  Missing a target by 9.5%, or, measured another way, one quarter, or, measured another way, one third–close enough for government work.

Jobs and growth are not created by government spending, deficits and debt. The evidence is clear, the lesson not learned.


     This follows from the “postmodern” political assumption that, “All that you do is profane, all that we do is sacred.”

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies


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