At what cost a Liberal government?

[d_rawk]

Conversation piece.

Strange, isn't it? Along with other Canadian journalists, CBC anchor Peter Mansbridge (to cite only one example) uses the word “massive†to describe the $700-billion (U.S.) economic rescue package in the United States – but declines to use it to describe the cost of Liberal Leader Stéphane Dion's election promises. Why this deference? Most analysts say that Mr. Dion's promises would cost $80-billion (Canadian). Based on population numbers and using the usual 10-to-1 conversion ratio, Mr. Dion's promises would thus cost the U.S. equivalent of $800-billion in supplementary spending. If the U.S. credit crunch expenditure is massive, Mr. Dion's campaign promise expenditures must necessarily be massive, too.

Throw in a high-speed train service between Toronto and Montreal, which Mr. Dion has endorsed but hasn't promised (at a cost of another $20-billion), and the Liberal Leader – his promises again expressed in cross-border conversion – hits $1-trillion in campaign commitments, making the credit crunch relief operation look quite restrained and, in an odd way, less important than the restoration of Liberal rule in Canada.

In this relative kind of comparison, useful in keeping things in perspective, Mr. Dion's election promises exceed the cost of the U.S. government's emergency credit crunch bailout. Yet Mr. Dion's promises exceed the U.S. bailout in absolute terms – when compared on a per-capita basis. Mr. Dion's promises would increase government spending by $2,424 for each man, woman and child in the country; the U.S. emergency funding package would increase government spending by $2,330.

The definitive cost of Mr. Dion's promises, of course, can't be known. Some promises defy analysis. He has promised, for example, to provide long-term debt money (through a new federal agency) at subsidized rates of interest “to all levels of government†– an innovation that would essentially provide a Liberal government with its very own central bank. You can't really calculate the cost of such novel, experimental expenditures.

Yes, there are qualifications to make. Mr. Dion's infrastructure promise, for instance, commits $70-billion across 10 years. The cost of campaign promises are generally calculated on a four-year basis. Mr. Dion's four-year increase in expenditures is only $54.5-billion (cross-border equivalent: $545-billion). But why not use a 10-year base for campaign promises? The increased spending remains for as long as these promises, once made, are kept. And these promises, when kept, tend to be kept forever.

On a 10-year basis, expressed in here-at-home numbers, Mr. Dion's promises would cost $176-billion – or $17.6-billion a year; expressed in our cross-border comparison, they would exceed $1.76-trillion. Mr. Dion's promises suggest a 10-year increase in federal expenditures (from the current election alone) of $5,333 for each man, woman and child in the country.

There is another factor to keep in mind. In the U.S. bailout, the government will buy mortgages at discount prices, will eventually sell these assets back to private investors and will perhaps make a profit in the process. On a 10-year timetable, the U.S. emergency expenditures could possibly be negligible – precisely as kindred expenditures proved to be in the savings and loan crisis of the 1980s. In Mr. Dion's promises, on the other hand, the government simply increases expenditures forever, which would probably require either higher taxes or a return to deficit spending.

The other opposition parties have their own ambitious campaign promises. NDP promises and Green Party promises, combined with Liberal promises, would collectively cost more than $100-billion (based on four years of these expenditures). It's probably a good thing that these three left-of-centre parties can't work together. Conservative promises in this campaign have been remarkably, well, conservative. So far, with the release of his election platform yesterday, Prime Minister Stephen Harper has made only $8.6-billion in promises, a mere $260 per capita (based on four years of these expenditures).

In these circumstances, we must hope for a majority government. The country can't afford too many more minority governments. In the last minority transition, the Conservatives increased budgetary expenditures to $220-billion in 2007 from $208-billion in 2006 – a one-year increase of $12-billion; a four-year increase of $48-billion; a 10-year increase of $120-billion. Alternatively, expressed in cross-border comparison, this transition-year Canadian increase in federal spending equates to a $1.4-trillion expenditure in the United States. The practice of buying power is essentially a bipartisan phenomenon.

Majority governments, though, can procrastinate, which is one of the most valuable attributes that any government can possess – whether it arises from astute political judgment or from routine bureaucratic practice. (Someone once observed that the bureaucrat who delays a $100-million program by one week saves his or her salary for an entire year.) The party that dithers on its promises can save billions – or, expressed again in cross-border comparison terms – tens of billions. The party that dangles election promises skillfully enough can even use them, as former prime minister Jean Chrétien famously demonstrated, in election after election.

link to source

[ollie]

That's some wonky math methinks.

[Thorgnor]

Do people walk on their heads and hamburgers eat people in Rand MCNally?

Edited October 9, 2008 by Guest

[Birdy]

*shakes head*

lose, lose situation here.

Thanks for posting d_jango, I enjoyed the read and didn't find anything wonky about it.

[Booche]

The air we breath and the arts are a lose lose situation under a Harper gov't.

[ollie]

Thanks for posting d_jango, I enjoyed the read and didn't find anything wonky about it.

Wonky in that it's not a simple 10:1 ratio. I mean, the author just pulls that out of his ass with no support, then runs with it as if it's fact. Kills his entire premise.

[Birdy]

I don't really think he was trying to do anything with this article other than point out a 10:1 ratio. Premise doesn't seemed to be killed.

[ollie]

I don't really think he was trying to do anything with this article other than point out a 10:1 ratio. Premise doesn't seemed to be killed.

Re-read what I wrote. He pulls the 10:1 ratio out of his ass with no supporting arguments for it.

The premise of the article is that Dion's proposed spending would cost more than the US bailout. If there's no support for the ratio then the figures are wrong and the premise is bust.

Nevermind that a government's budget and the bail out are not exactly the same thing. Of course the bail out is a sexy topic so who cares, right?

[Thorgnor]

I kinda find the idea of $700 million sexy.

Edited October 9, 2008 by Guest
ollie's right... apples and oranges.

[d_rawk]

Nevermind that a government's budget and the bail out are not exactly the same thing.

This part struck me as well. Comparing budgetary figures with some other known amount that is in the headlines - the bail out money - makes for an interesting angle, but I couldn't really square it in my head. It seems like the real measure would be to compare relative planned budget expenditures with the equivalent in the US, if you were after useful data. It seems to me that the author isn't quite after useful data, just a way of saying "hey you thought *that* was a lot of money, well look at *this*".

"You think your weekly groceries are expensive? Well look at my monthly rent!" A bit of apples and pears, there.

But still, it does give some pause as to relative expenditures by party.

For the 10-to-1 ratio, I gave him the benefit of the doubt. Reynolds has been writing on economic issues for so long I'm willing to let it slide given that he has probably made a defense of that ratio in the past.

[Thorgnor]

I take a trip accross the border with eight thousand dollars in my pocket. Is my eight-thousand Canadian dollars worth eighty-thousand in the United States... ooohhh, I see.

[color:purple]excellent economic reasoning

Edited October 9, 2008 by Guest

[ollie]

For the 10-to-1 ratio, I gave him the benefit of the doubt. Reynolds has been writing on economic issues for so long I'm willing to let it slide given that he has probably made a defense of that ratio in the past.

Fair enough. I only wanted to point out that it wasn't supported in the article so to a Reynolds n00b like me I have to take it with a grain of salt. Then the odd correlation made me question it more.

[d_rawk]

I take a trip accross the border with eight thousand dollars in my pocket. Is my eight-thousand Canadian dollars worth eighty-thousand in the United States... ooohhh, I see.

I think he is talking per-capita equivalents of tax pools.

[Velvet]

I kinda find the idea of $700 million sexy.

I wish the word "billion" was banned from the media. It's so easy to throw around numbers like 20 million or 20 billion, and in a 30 second news report the average listener could easily confuse the two figures. In fact (of course) 20 million and 20 billion are ridiculously far from being the same.

I was thinking about that $800 billion bailout. That's 800 thousand millions. Sounds like a lot more that way, doesn't it?

800 billion.

Take $800 (a figure most of us can actually comprehend) and change it to 800 loonies. Spread them around on your driveway. Now think that each one of those loonies is actually $1,000,000. That's an insane amount of money!

Now imagine that in 1,000 driveways around town.

Why do I feel like Yours Truly all of a sudden?

[Thorgnor]

Fuck, I find the idea of $70 sexy.

[Hux]

Those numbers are hilarious.

[SaggyBalls]

I love you too, Velvet.

[Thorgnor]

I find your vest hilarious. I love hux.

[SaggyBalls]

So At what cost a COALITION Liberal Gov't?

[Thorgnor]

any.

[boiler]

So At what cost a COALITION Liberal Gov't?

I don't think we're going to have a coalition liberal gov., rather a coalition multi-party gov. A couple ministers from here, a couple from there etc.

Nothing could be better for our country than to have 50 members who have been elected to separate Quebec...actually helping to make Canada a better place.

[can-o-phish]

Before the election on October 14th I didn't think that Canadian politics could be any worse but over the past week our so-called "leaders" have managed to take our government to an even lower point...recording phone conversations and distributing to the media; forming a coalition government between two parties that didn't win enough votes for either to become a minority government; looking to a separatist party to help form a coalition...that's just the tip...for gawd's sake the Liberal Party doesn't really have a leader...and for that fact, by definition, NONE of our parties actually have a "leader"...

Definition:

A simple definition of leadership is that leadership is the art of motivating a group of people to act towards achieving a common goal.

Put even more simply, the leader is the inspiration and director of the action. He or she is the person in the group that possesses the combination of personality and skills that makes others want to follow his or her direction.

In business, leadership is welded to performance. Effective leaders are those who increase their companys' bottom lines.

Or, maybe we do have leaders as our parties seem to be in it for themselves and seem to have forgotten what they are supposed to be doing...looking after our country and also providing inspiration for all Canadians...

I read this person's letter recently and couldn't agree more...we have a pathetic three ring circus at a time when our country truly needs leadership...

A little decorum from Ottawa, please

LETTER TO THE EDITOR

A little decorum from Ottawa, please

Nov 20, 2008 04:30 AM

When we send people to Ottawa to run our country what do we see? Do we see respect? Do we see co-operation, compromise or even amicable discussion? No. We see none of what we teach our children in kindergarten.

Politicians don't go to Ottawa to make Canada a better place, politicians go to Ottawa to pursue their own goals, represent their party, try to get their policy through and try to ensure the other guy doesn't get his policy through.

No matter what is best for our country, politicians can't seem for the life of them to get along, no one has all the answers, except teenagers and politicians.

We hear all the time that the PM is working with the opposition, but is he really? Or is he simply trying to find a chink in the armour so he can get his policy through?

What about the opposition? Are they fulfilling their job of keeping the government accountable? Hardly. Following the same tricks used by our PM, they try and find the chink in the government's armour to get their piece of policy through. Once weakness is spotted they pounce.

This isn't compromise, co-operation or respect. It's disrespectful, disgraceful and spits in the face of every Canadian who puts faith in their government.

What's best for Canada doesn't come from one individual or one point of view, it comes from compromise – doing what's best for Canada rather than what's best for my career or my party. What's best for Canada is a government that works together rather than works apart, compromises, co-operates, respects one another, commits to respect one another, commits to follow the simple rules that we learned back when we knew what was right and what was wrong, when we knew how to get along.

What do we have in politicians? Not the morals I want running my country.

Christopher McMillan, Calgary

[AD]

hear hear *raps knuckles on desk to drown out dissenting voices*

[SmoothedShredder]

I can see a conservative majority from here. A coalition with no clear mandate wants to take over the country in an economic crisis. The markets are speaking right now... they are not impressed.

Shit is getting fucked up now. And things were relatively good there for a while.

Sheeeeeeeit.