Cutting government salaries to slay deficits

[BubberMiley]

Fine...but I don't care either way...do whatever the hell you please in Canada.

You say you don't care about what happens in Canada, but your post count says otherwise.

[bush_cheney2004]

You say you don't care about what happens in Canada, but your post count says otherwise.

I don't care....my interest lies only in the permanent American state of mind that permeates most threads. Why else would I be here? I am just a dumb American....right?

[GostHacked]

I am just a dumb American....right?

This is one of the few times I will agree with you.

[August1991]

This is not to say that government productivity isn't important - it's just saying that in terms of fighting the deficit it is a non sequitur to argue that cutting government salaries by 5 or 10% will have much impact on the deficit.

It won't. It's a rounding error.

How can anyone disagree with you, msj?

---

All government spending in Canada amounts to about 50% of GDP but about half of this spending involves transfers between people. The other half involves governments hiring people to provide a service/good for Canadians. (These are rough numbers.)

msj, you quote Krugman in the US where the military is much larger and the State control of health care is smaller.

In Canada, our government is a mammoth hospital with an insurance scheme attached. Link

Would cutting government employees salaries/benefits save money? Yes.

----

More generally though, msj you miss a broader point. The more public employees we have, the more government spending we have. I think this is particularly true when the public employees work in the health/social field.

msj, you argue that a cut of 5% in the pay of public sector employees will save little. I argue that such a cut will mean fewer public sector employees who can design fewer schemes to spend taxpayer money. The 5% salary cut will save, say, 10% in government spending. Why? With fewer public employees, there will be fewer schemes to spend money.

Moreover msj, you miss the effect of government regulation. The cost of government bureaucrats is not merely in their salaries. It is also in their power to regulate.

---

Last point msj. More government, no. Better government, yes.

We have too many civil servants. We need far fewer, doing far less, but doing it better.

IMV, government administration should take no more than 10% of GDP and government insurance schemes no more than 15%. We could achieve a civilized, sustainable, growing society with such numbers.

[Michael Hardner]

I argue that such a cut will mean fewer public sector employees who can design fewer schemes to spend taxpayer money. The 5% salary cut will save, say, 10% in government spending. Why? With fewer public employees, there will be fewer schemes to spend money.

Absolutely.

It's important to note, thought, that nobody knows if 5% is the required cut, or if it's 50% or it 50% more is needed.

There is something called 'rightsizing', which means magically making the business fit exactly what needs to be done. I say magically because you need a crystal ball to know what the hell government DOES do these days.

[Handsome Rob]

Absolutely.

It's important to note, thought, that nobody knows if 5% is the required cut, or if it's 50% or it 50% more is needed.

There is something called 'rightsizing', which means magically making the business fit exactly what needs to be done. I say magically because you need a crystal ball to know what the hell government DOES do these days.

One must not forget that you also need 18 people of varying ethnicity & religious background making 25% above market wage, 4 supervisors making 4 times more to watch them, the necessary oversight officials, the representative from CUPE, and the minister to wonder WTH he's supposed to be doing to accomplish such a task under government watch.

Edited April 14, 2010 by Handsome Rob

[msj]

How can anyone disagree with you, msj?

I know, I know... you're all so dumb and me so smrt!

---

All government spending in Canada amounts to about 50% of GDP but about half of this spending involves transfers between people. The other half involves governments hiring people to provide a service/good for Canadians. (These are rough numbers.)

msj, you quote Krugman in the US where the military is much larger and the State control of health care is smaller.

In Canada, our government is a mammoth hospital with an insurance scheme attached. Link

Would cutting government employees salaries/benefits save money? Yes.

----

More generally though, msj you miss a broader point. The more public employees we have, the more government spending we have. I think this is particularly true when the public employees work in the health/social field.

msj, you argue that a cut of 5% in the pay of public sector employees will save little. I argue that such a cut will mean fewer public sector employees who can design fewer schemes to spend taxpayer money. The 5% salary cut will save, say, 10% in government spending. Why? With fewer public employees, there will be fewer schemes to spend money.

Moreover msj, you miss the effect of government regulation. The cost of government bureaucrats is not merely in their salaries. It is also in their power to regulate.

---

Last point msj. More government, no. Better government, yes.

We have too many civil servants. We need far fewer, doing far less, but doing it better.

IMV, government administration should take no more than 10% of GDP and government insurance schemes no more than 15%. We could achieve a civilized, sustainable, growing society with such numbers.

I wasn't specific enough and should have used the words "ceteris paribus."

I do think many people think that we can simply cut government salaries and keep the same number of staff doing the same things.

And, once again, the math proves that the savings are diddly squat.

Now, if we want to go into getting the government to only do certain things and stop regulating us to death - I agree.

We probably could chop large sections out of government budgets and lay off staff who shouldn't have a government job to begin with.

But that takes political leadership which isn't coming to a town near you.

As for other ideas - well, there's always "Reagonomics" where the politicians lie about the effectiveness of tax cuts long past the expiry date of a Laffer curve while undermining future taxpayers with deficit and entitlement program after deficit and entitlement program.

And then they turn around and say we can't afford all of this etc...

Well duh.

It's because taxpayers bought into endless entitlements and then we bitch like little girls and try to hold onto our entitlements by blaming waste, over staffing, under productive government employees and over regulation rather than look at the real costs of those entitlement programs.

Sure, they all play a role but those costs are overstated while our governments continue to understate the real deficits these programs create.

Take a look at the Congress Budget Office website for a few months to get an idea of what I'm talking about (unfortunately, Canada's budgetary officer isn't up to the same standards yet but one day we hopefully will have a proper GAAP look at such program legacies).

For me what's happening to taxpayers over the next several decades is just like the housing bubble in the US and the one in Canada: we all (well, not all of us, but enough) knew we would have to pay the piper some day - higher mortgage payments, higher taxes, less services.

We just chose to ignore it today and push it off to another day.

Eventually, that day comes.

So, rather than fiddle, I think Krugman and Frum would both agree that we should tackle the problem head on - raise taxes if we want to keep our entitlement programs, or make changes to those programs to deliver less for less.

And, if this leads to laying off government employees - well, so be it. In the US growth in government employees during the Bush years and into Obama's presidency has been absurd anyway.

[Oleg Bach]

IF billions are lost on installing a puppet government in Afghanistan - that suddenly goes south taking the cash with them - then it is fair not to take away food allowances from the poor--and it is fair to peel off a few grand from some dull eyed cabinet ministers who are about as smart as some welfare clients...wait - from my observation the toothless white trashers are perhaps a little brighter.