While the Liberals were recently touting their success in raising literacy rates among our school age children, they were just as aggressively down-playing the three-year drop in numeracy rates.
The conspiracy theorists here at the NB Conservative are wondering if maybe lower numeracy scores aren't one of the objectives of the provincial Liberal party. After all, why would Liberals want New Brunswickers to be good with numbers? If more people understood the size of the provincial deficit this year they would be a lot more pissed off about it.
In December, the Graham Grits are going to produce a follow-up budget to the last deficit balloon they released only 7 months ago. All accounts are that it is going to be full of rosy predictions and very light on difficult choices.
Of course the fewer the number of people who understand just how bad their number are the better for them. So don't count on any extra budget money going towards math education.
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Wednesday, October 14, 2009
What Did You Expect?
After a week of traveling around New Brunswick, the Finance Minister has announced some surprising news - all the people who came to the pre-budget meetings want the government to spend more money.
These meetings were not recorded or televised so we will have to take his word for it. But from the sounds of things there were plenty of union reps at all the stops encouraging more spending on government programs.
Then again, Mr. Byrne, what did you expect?
The Liberal government put out a pre-budget questionnaire that asked people how soon they would like to see the deficit paid off: 3 years from now, 4 years from now, or 5 years from now.
That's right - they told the public that balancing the books immediately was not even an option.
So when you tell people in advance you want to keep spending and borrowing more money that we have - why would people come to your meetings with ideas for spending less?
These meetings were not recorded or televised so we will have to take his word for it. But from the sounds of things there were plenty of union reps at all the stops encouraging more spending on government programs.
Then again, Mr. Byrne, what did you expect?
The Liberal government put out a pre-budget questionnaire that asked people how soon they would like to see the deficit paid off: 3 years from now, 4 years from now, or 5 years from now.
That's right - they told the public that balancing the books immediately was not even an option.
So when you tell people in advance you want to keep spending and borrowing more money that we have - why would people come to your meetings with ideas for spending less?
Saturday, March 28, 2009
Why Should I Care About the Deficit?
It's a simple formula: Today's deficit = tomorrow's tax increase.
You may think the money you borrow doesn't have to be repaid. Businessmen know better. In the world they inhabit, businesses with cash flow problems are businesses in trouble.
1. Tomorrow's tax increase = today's bad investment climate.
2. Today's bad investment climate = less investment today.
3. Less investment today = fewer jobs today, and tomorrow.
DEFICITS KILL JOBS, BECAUSE THEY KILL THE INVESTMENT THAT CREATES JOBS.
Oh, but you say, if tax rates are lowering, doesn't that encourage investment? Only stupid investment.
Let me give you a practical example. Suppose I offer you a stove that uses a special kind of fuel. Right now the fuel is cheaper than the alternative, but three years from now it will probably cost much more than the alternative. Would you pay money for a new furnace which burns my temporarily cheaper fuel? No you wouldn't. Would you invest in a province which temporarily has a lower tax rate, but which has deficits leading to a higher tax rate in the future? Answer: you would ONLY if you plan to get out before the tax rate goes back up.
In other words, you'll create some short term jobs, but if you're planning to create long term wealth from an ongoing investment, you'll seek a financially stable (low debt/low tax rate) jurisdiction.
Can you see now how the Liberal approach encourages short-term, handout-dependent industries?
Oh but you say, if there's growth, we won't need to raise tax rates, the growth will take care of that. That's true, and also unlikely to happen. The more investment you attract, the further you can spread the tax burden, and the lighter it is on everyone. Deficits push away investment, and the remaining industries know that. What do you think works harder, a horse in a team of 8 or a horse in a team of 4? Who do you think is more likely to be taxed higher in the future, a business starting in a low-debt jurisdiction or one starting in a high-debt jurisdiction.
Psychologically, we tend to heavily discount future events. We'll pay those bills later (or our grandchildren will), so why worry now? This ignores the reality of investment, which is: TODAY'S HIGH DEFICIT IS KILLING JOBS TODAY. Not when the debt comes due, not 10 years from now, but RIGHT NOW.
You may think the money you borrow doesn't have to be repaid. Businessmen know better. In the world they inhabit, businesses with cash flow problems are businesses in trouble.
1. Tomorrow's tax increase = today's bad investment climate.
2. Today's bad investment climate = less investment today.
3. Less investment today = fewer jobs today, and tomorrow.
DEFICITS KILL JOBS, BECAUSE THEY KILL THE INVESTMENT THAT CREATES JOBS.
Oh, but you say, if tax rates are lowering, doesn't that encourage investment? Only stupid investment.
Let me give you a practical example. Suppose I offer you a stove that uses a special kind of fuel. Right now the fuel is cheaper than the alternative, but three years from now it will probably cost much more than the alternative. Would you pay money for a new furnace which burns my temporarily cheaper fuel? No you wouldn't. Would you invest in a province which temporarily has a lower tax rate, but which has deficits leading to a higher tax rate in the future? Answer: you would ONLY if you plan to get out before the tax rate goes back up.
In other words, you'll create some short term jobs, but if you're planning to create long term wealth from an ongoing investment, you'll seek a financially stable (low debt/low tax rate) jurisdiction.
Can you see now how the Liberal approach encourages short-term, handout-dependent industries?
Oh but you say, if there's growth, we won't need to raise tax rates, the growth will take care of that. That's true, and also unlikely to happen. The more investment you attract, the further you can spread the tax burden, and the lighter it is on everyone. Deficits push away investment, and the remaining industries know that. What do you think works harder, a horse in a team of 8 or a horse in a team of 4? Who do you think is more likely to be taxed higher in the future, a business starting in a low-debt jurisdiction or one starting in a high-debt jurisdiction.
Psychologically, we tend to heavily discount future events. We'll pay those bills later (or our grandchildren will), so why worry now? This ignores the reality of investment, which is: TODAY'S HIGH DEFICIT IS KILLING JOBS TODAY. Not when the debt comes due, not 10 years from now, but RIGHT NOW.
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