It seems to me that Ralph Klein of Alberta and Dalton McGuinty of Ontario are cut from the same cloth, and both seem engaged in a race to run their provinces into the ground. Neither has a clue what they are doing and both spout goals which their policies seem designed to prevent. Being a charitable person, I won’t assume that these men are pathological liars and crooks, rather, that they are probably well-meaning men who have unwittingly (in every sense) engaged in a stupidity contest.
Albertan provincial government has not always been so bad. In 1995, it spent $1,578 per capita, or about 87% of the average, but by 2000 that had reached $2,242 per capita, or 102% of the average. The principal cause of wealth is, to paraphrase Thoreau, government getting out of the way of enterprise. This is why the USA, despite having fewer natural resources and having suffered more destruction than Latin America, is far wealthier today, due to an average government spend of 21% of GDP since 1870, compared to (for instance) Brazil, currently under a so-called reformed government that spends 40% of GDP. If there’s any doubt, the old and popular Brazilian saying, “we progress at night when the politicians sleep” should clue you in. This is also why the USSR, suffering destruction in WWII roughly equivalent to the USA in the so-called Civil War, was never able to rebuild as well, and why Hong Kong, Singapore and Taiwan are economic powerhouses despite basically being rocks in the sea.
Klein, faced with increased revenues, has unwisely decided to spend them. McGuinty, faced with a need for increased revenues (as if governments ever really decreased revenues), unwisely has decided to raise taxes. Both, apparently, have never heard of the Laffer curve, and if Hollywood actors like Ronald Reagan and Arnold Schwarzenegger can grasp this, why is it beyond career politicians? McGuinty has had this rudely demonstrated to him - his increased taxes have netted him a lower revenue and an increased defecit.
Neither seems to know the first thing about economics. Both are apparently dedicated to a big State role in the economy, with the massive inefficiency that creates. Neither seems to be willing to work on downsizing the government although McGuinty has a real need to, since his expenditures already exceed a revenue that is, apparently, so far along the Laffer curve that he cannot increase revenue by further taxation at all. Rather than pare the government down, though, he’d rather go beg in Ottawa. Klein has a real opportunity to shrink government, since without a deficit to pay off and good revenues, now is the time for him to announce some privatization and more tax cuts. But he views the extra money as a windfall to be spent as he sees fit, rather than as money expropriated from people who would almost certainly like it back, especially if Klein can’t see an immediate use for it.
Both premiers are tax-and-spending their economies into the ground. Ontarian disposable income hasn’t increased in six years, and hasn’t increased by more than $1500 in over 13. Alberta, with a smaller government, has grown slightly better, but still lags behind the USA - in 2001, for example, Albertans had an average disposable income of $22,000 (1997 Canadian dollars) compared to (PDF file) $25,000 for Oregon or $28,000 for California. Opportunity has come knocking at Klein’s door, but rather than answer it he decided to hide behind the sofa and pretend to be out. The knock on McGuinty’s door, however, is a collection agency, and McGuinty is just going to run up his credit card balance some more, despite barely being able to make his minimum payments. Both premiers are demonstrating gross ignorance, and as to who is the greater idiot, time will tell. The sad thing is that Canadians in both provinces are going to end up paying the price of this stupidity, while the idiots themselves can rest assured that whatever happens, they’ll be OK.
Speller wrote:
I could care less about Ontario, but being an Albertan, it matters to me what the Klein government does.
It amazes me how many people didn’t notice that socialism was completely discredited in the 20th century. I call these folks ‘prophets of a failed philosopy’. Usually they claim socialism works, it just hasn’t been tried properly or purely .
Progressives pursue their agendas because of how they ‘feel’ about the world around them, empirical data dosen’t matter.
Many people feel as they do, as adolescents. Life experience usually replaces the utopian illusions with a more practical view. They somehow failed to grow up.
They’re not idiots, just retarded.
Posted on 18-Jul-05 at 10:58 am | Permalink
Candace wrote:
Looking at your comparison chart, what was taken into consideration with respect to federal taxes? Moving from BC to AB, and comparing similar taxable income years, I paid $5,950 MORE in taxes in BC than I did in AB. I had higher child care costs, yet paid more. BC has recently (since I left, I’m SURE that was the impetus) lowered their taxes, but they are still significantly higher than AB.
So I guess I’m saying that yes, CA and OR would have more disposable income, but that would be the feds & the provinces taking their less-than-fair share. AB not only has a 10% flat tax, but gives personal credits of almost 14k - BC the last year I lived there? 8% of your taxable income. Nothing for dependants (AB you can claim an “equivalent” for an additional 13-14k) On average, my 10% flat tax has been more like 5%. In BC, it was roughly 60% of my federal tax bill.
Yes, Ralph is spending. But he hasn’t for many years, and you can’t tell me our infrastructure is in good shape. Fort Mac, which is a big part of our financial engine, can’t expand if the highways & infrastructure surrounding it aren’t improved, and SOMEBODY has to pay for that. Given that our surpluses are from royalties on o&g, I personally don’t have an issue with taking that cash and investing it back into the province.
Is it time for Ralph to retire and yet some new blood lead the way? Most definitely. But I would argue that he’s hardly spending us into oblivion; we’ve got what, 12 billion in the Heritage Fund? Exactly how big do you see growing that?
Posted on 18-Jul-05 at 11:56 pm | Permalink
R.D. wrote:
I can’t believe anyone on this site would knock king Ralph…
Posted on 19-Jul-05 at 1:03 pm | Permalink
Speller wrote:
Ralph isn’t king. It could have been worse. Albertans think they’re voting conservative. Nancy McBeth could be premier.
That said, Mr. Klein tamed deficit spending and eliminated the provincial debt. For now.
Social spending, especially new or expanded programs, have ramping costs.
Fact is,… Albertans(not Ontarians) can afford this, right now, in this economic environment. The question is,… is it sustainable.
It’s a gamble. I’ve done some gambling. But never anything I could’nt pay easily if I lost.
It’s not about your annual income tax Candace. It’s about the future that your children, grandchildren, and even we have.
The Heritage Fund is around $20 billion. It has accrued value, but the royalties which formerly fed it have been diverted into general revenue. Thus, the fund has achieved a virtual stagnation under the Klein regime.
Some credible estimates, if the oil royalties had been fed into the Heritage Fund instead of raises to public union employees(not to mention loans to Africa), project the fund would be been valued at about $85 billion.(with accrual)
Albertans could build a country on that sum.
Why do you suppose the Heritage Fund exists?
It exists to provide a future for Albertans when the oil either runs out or they invent cold fusion tommorow.
Maybe it exits so we can be masters in our own house.
Posted on 19-Jul-05 at 11:04 pm | Permalink