Ontario Budget 2014 -- Election

[cybercoma]

Except the banks weren't lending and people aren't borrowing because they're afraid of the economy. Companies aren't expanding and investing in hiring or expansion because there isn't a base of people with enough money and confidence to drive demand. So yeah, the government taking money from those holding onto it and giving it to working-class people to spend and signal to companies where they need to hire and expand is a benefit to the economy.

[Argus]

Yes it would actually. It would stop the wealthy from stockpiling their money and put it into the hands of those that would create demand for industry, further encouraging them to stop sitting on the handouts the government has been giving them over the years.

Yes, that worked so well in Greece...

[cybercoma]

It works quite well in many countries.

[Argus]

It works quite well in many countries.

Name one. You don't fix your economy by hiring more public servants and borowing the money to pay for them.

[CPCFTW]

Except the banks weren't lending and people aren't borrowing because they're afraid of the economy. Companies aren't expanding and investing in hiring or expansion because there isn't a base of people with enough money and confidence to drive demand. So yeah, the government taking money from those holding onto it and giving it to working-class people to spend and signal to companies where they need to hire and expand is a benefit to the economy.

What are you talking about? We're talking about the corporate cash reserves after the recession, not during. You seem lost.

Banks are happily lending again and all the corporation's stockpiled cash is being lent through banks to consumers who are able to buy cars and houses and start businesses at record low interest rates.

When the corporations find projects that they want to spend that cash on (pipelines perhaps?), they will draw down on that capital and there will be a little less money for banks to lend so their revenues might be squeezed (except that they will likely be financiers for most large capital projects).

The point is that corporate cash stockpiles aren't sitting idle any more than your bank deposits or GICs are. The corporations/you are lending that money to others through the banking system.

Edited June 7, 2014 by CPCFTW

[cybercoma]

Name one. You don't fix your economy by hiring more public servants and borowing the money to pay for them.

You don't fix your economy with any magic bullet. So I fail to see your point.

[cybercoma]

What are you talking about? We're talking about the corporate cash reserves after the recession, not during. You seem lost.

Banks are happily lending again and all the corporation's stockpiled cash is being lent through banks to consumers who are able to buy cars and houses and start businesses at record low interest rates.

When the corporations find projects that they want to spend that cash on (pipelines perhaps?), they will draw down on that capital and there will be a little less money for banks to lend so their revenues might be squeezed (except that they will likely be financiers for most large capital projects).

The point is that corporate cash stockpiles aren't sitting idle any more than your bank deposits or GICs are. The corporations/you are lending that money to others through the banking system.

People aren't borrowing. That's the point.

[MiddleClassCentrist]

Name one. You don't fix your economy by hiring more public servants and borowing the money to pay for them.

Fire all the public servants.

They don't have jobs and can't contribute to the economy.

Every business they used to support with their money suffers.

Watch what happens to the economy.

If people have no money to spend, the economy crashes. See "The Great Depression"

Public sector workers are not the drain that conservative minded people think they are... They provide more jobs to more people. You could argue that maybe their salaries be reduced but, just by providing more jobs where more money changes hands and lets more people contribute to the economy is a good thing.

It's not like paying public sector workers is "dead money", that money gets spent in the economy they work in.

Giving Corporations lower taxes is often dead money because all foreign owned money is essentially leaving the country when dividends are paid out, or the corporation takes the profit from lower taxes in Canada to invest in more sweat shops in the Philippines.

I've said it before, and I'll say it again. The real way out of this mess hasn't been addressed by any of the parties. We need a strong investment in new entrepreneurs with innovative ideas. That is how you create jobs in this new economy. Throw a million dollars at an established corp and very few jobs will be created. Throw a new entrepreneur $50-100k and they still need to hire everyone associated with the business operation.

Edited June 7, 2014 by MiddleClassCentrist

[CPCFTW]

People aren't borrowing. That's the point.

Really? Home sales and bank revenues seem to disagree with you.

[CPCFTW]

Fire all the public servants.

They don't have jobs and can't contribute to the economy.

Every business they used to support with their money suffers.

Watch what happens to the economy.

If people have no money to spend, the economy crashes. See "The Great Depression"

Public sector workers are not the drain that conservative minded people think they are... They provide more jobs to more people. You could argue that maybe their salaries be reduced but, just by providing more jobs where more money changes hands and lets more people contribute to the economy is a good thing.

It's not like paying public sector workers is "dead money", that money gets spent in the economy they work in.

Giving Corporations lower taxes is often dead money because all foreign owned money is essentially leaving the country when dividends are paid out, or the corporation takes the profit from lower taxes in Canada to invest in more sweat shops in the Philippines.

I've said it before, and I'll say it again. The real way out of this mess hasn't been addressed by any of the parties. We need a strong investment in new entrepreneurs with innovative ideas. That is how you create jobs in this new economy. Throw a million dollars at an established corp and very few jobs will be created. Throw a new entrepreneur $50-100k and they still need to hire everyone associated with the business operation.

Fortunately we don't base our policy decisions on feel-good economics like this.. Well for the most part.

The thing you neglect is that if there were no public sector jobs with inflated salaries and demand was reduced, then prices would also be reduced. That's basic economics. Rather than creating a privileged class of workers that brings down the standard of living of the poor who aren't fortunate enough to get a public service job, we'd have a larger class of private sector "poor" with a much higher standard of living (because of reduced prices).

I'm not arguing for no public sector jobs BTW.. Just following your hypothetical.

[MiddleClassCentrist]

Fortunately we don't base our policy decisions on feel-good economics like this.. Well for the most part.

The thing you neglect is that if there were no public sector jobs with inflated salaries and demand was reduced, then prices would also be reduced. That's basic economics. Rather than creating a privileged class of workers that brings down the standard of living of the poor who aren't fortunate enough to get a public service job, we'd have a larger class of private sector "poor" with a much higher standard of living (because of reduced prices).

I'm not arguing for no public sector jobs BTW.. Just following your hypothetical.

I was not arguing to support inflating salaries. Just the existence of having more jobs available and how it helps the economy regardless of whether they are public or private jobs.

Heck, I've argued that we should pay Teacher's more in line with what their qualifications would earn in the private sector. (I believe it was earlier in this thread too)

Those Arts, History, Anthropology, Gym, etc teacher's making 80-90k/year would barely ever crack 50-60k in the work force.

In contrast, Science, Computer Engineering, Computer Programming, Physics, Math, Accounting, Business, etc teachers could very well be pulling in 75k+ in the private sector.

On TheGlobeandMail.com a few years back there was a good app to estimate the value of an investment in a degree on the impact of your working yearly salary. An average male with high school only is worth about 35k/year, 5 years after graduation. A male that takes Art as a degree is actually only worth 25k/year after 5 years past graduation... Spending 4 years in an art degree program make you worth 10k/year less than if you just graduated high school and went into the work force.

Edited June 8, 2014 by MiddleClassCentrist

[CPCFTW]

I was not arguing to support inflating salaries. Just the existence of having more jobs available and how it helps the economy regardless of whether they are public or private jobs.

Heck, I've argued that we should pay Teacher's more in line with what their qualifications would earn in the private sector. (I believe it was earlier in this thread too)

Those Arts, History, Anthropology, Gym, etc teacher's making 80-90k/year would barely ever crack 50-60k in the work force.

In contrast, Science, Computer Engineering, Computer Programming, Physics, Math, Accounting, Business, etc teachers could very well be pulling in 75k+ in the private sector.

On TheGlobeandMail.com a few years back there was a good app to estimate the value of an investment in a degree on the impact of your working yearly salary. An average male with high school only is worth about 35k/year, 5 years after graduation. A male that takes Art as a degree is actually only worth 25k/year after 5 years past graduation... Spending 4 years in an art degree program make you worth 10k/year less than if you just graduated high school and went into the work force.

That's kind of funny. I would think it is because Arts grads put themselves above working a minimum wage position, whereas a high school grad will usually soldier on in a menial minimum wage until they become a supervisor or manager or make some connections and find a career they are underqualified for.

What I was saying though is that if there is less demand then prices are lower, so saying we have to tax free enterprise to dole out to a public sector to support demand doesn't really make sense... it just inflates prices.

But, in support of your position, a large public sector does flatten the business cycle (trade off less variance in growth for slower growth - like buying bonds instead of stocks). But at some point, someone has to come in and stop the public sector from bankrupting itself.

Edited June 8, 2014 by CPCFTW

[Argus]

You don't fix your economy with any magic bullet. So I fail to see your point.

The point is that to hire a public servant you either need to take that money away from people, which acts as a disinsentice to buy goods and services, or borrow it, which would go on top of an already very high debt. Neither of these is good for an economy.

[Argus]

Fire all the public servants.

That sounds more than slightly crazy, and not something anyone is advocating.

Public sector workers are not the drain that conservative minded people think they are... They provide more jobs to more people.

All public sector jobs are an expense, in terms of the balance books of the national economy. They provide no benefit to the health of an economy. They are simply the cost of doing business, like overhead. That doesn't mean they're not necessary, for they certainly are. You can't operate a business without employees, after all. But reducing your overhead makes your business more profitable. Reducing overhead for a national economy means less taxes are needed and more money is in the hands of those who earn it by producing goods and services.

Like a business, you can reduce your overhead by too much, and when you do that actually cuts into the health of your business. But no government in Canada is anywhere close to going that far. Even Hudak's promise to reduce 'overhead' by 100,000 jobs would not be anywhere near sufficient to have a negative impact on the services which are necessary to the health of the province and its economy.

[Boges]

Wynne is saying "A vote for Andrea Horvath, is a vote for Tim Hudak".

That sounds pretty desperate to me.

That with the unions that are plastering the airwaves with lies, I have to think the internal polls are saying something different than the published polls.

[MiddleClassCentrist]

That sounds more than slightly crazy, and not something anyone is advocating.

Sometimes looking at extremes helps us understand the overall effect.

All public sector jobs are an expense, in terms of the balance books of the national economy. They provide no benefit to the health of an economy. They are simply the cost of doing business, like overhead. That doesn't mean they're not necessary, for they certainly are. You can't operate a business without employees, after all. But reducing your overhead makes your business more profitable.

Public Sector jobs aren't a drain on the economy. The economy relies on people spending money, that is the essence of an economy. It's not like public sector workers buy all of their products directly from China to export Canadian dollars elsewhere. Because that would be a real drain on the economy, and that is what our big corporations that modern conservatives favour, do.

Canadian corporations have record stockpiles of dead money. Giving them more money at the expense of public sector jobs is not going to create jobs. They will export that money into foreign investments and dividends to foreign shareholders. They aren't investing in Canada now when our corporate tax is already extremely low, and they won't invest in Canada when our corporate tax is a bit lower.

Eliminating 100,000 jobs to put money into big business with reduced taxes, as modern conservatives love doing, isn't going to get us out of this mess.

If Hudak said, I will eliminate 100,000 jobs and take that money to invest in new Canadian entrepreneurs with innovative ideas, he'd get me to buy into his plan a little bit. Because it might actually just work. Investing in our entrepreneurs is how you grow an economy, and how you create Canadian jobs.

That being said, Ontario already has a low per capita public sector workforce compared to other provinces and you could create those Jobs just by investing in entrepreneurs without firing the public sector workforce.

[Argus]

Public Sector jobs aren't a drain on the economy. The economy relies on people spending money, that is the essence of an economy.

Except that the money for those salaries has to be taken out of the economy first, taxed away from people, in order to be processed, and then given to other people. There is NO benefit to the economy from that. Quite the contrary.

Canadian corporations have record stockpiles of dead money. Giving them more money at the expense of public sector jobs is not going to create jobs.

I do not generally agree with tax cuts for the corporate sector, but there is not a one for one ratio here. The cost of the corporate tax cuts is not nowhere near as much as the cost of employing a hundred thousand people.

[Moonbox]

Public Sector jobs aren't a drain on the economy.

Said no worthwhile economist ever.

Public Sector jobs aren't a drain on the economy. The economy relies on people spending money, that is the essence of an economy. It's not like public sector workers buy all of their products directly from China to export Canadian dollars elsewhere. Because that would be a real drain on the economy, and that is what our big corporations that modern conservatives favour, do.

The economy relies on money being spent on value-adding activities. The idea that paying a salary alone is of benefit to the overall economy is an intellectually bankrupt concept and the essential pillar of lousy economic policy. When the government pays for a public sector job that isn't required, or pays too much for a public sector job, it is in fact taking money out of the economy that could have been used for value-adding activities that actually grow the economy.

Using your logic, we could hire 100,000 public servants and have them each making $100,000/year digging holes in the ground and filling them. This would, according to you, benefit the economy because these new public servants would spend that money back into the economy, right?

The idea is completely absurd.

[Mighty AC]

Kind of like the ideas that tax cuts for corporations and the wealthy create jobs. I also find it odd that conservative types like to talk job creation so working people can spur the economy yet simultaneously seek to erode wages, benefits and therefor disposable income.

Wealthy people don't create new jobs because they pay less personal tax or save a few bucks on the corporate tax bill. They hire people when demand forces them to add more workers.

[Mighty AC]

When? Cite? At the debate when he was challenged on how many he would get rid of he said "None".

Hudak has said there will be fewer teachers and he has said he would give 10,000 support workers their pink slips. When stating 'none' he is relying on public ignorance of two terms. Spec Ed teachers, who we are already short of, will not be fires. They are different than Educational Assistants who also work with special needs children. EA's earn a fraction of what teachers make and assist with kids that have special issues that prevent them from being in a classroom full time. Tim will be firing EA's, Early Childhood Educators and regular teachers.

http://www.theglobeandmail.com/news/politics/hudak-vows-to-cut-100000-public-sector-jobs-if-tories-win/article18580284/

http://www.thestar.com/news/ontario_election/2014/05/28/who_are_the_11_million_public_servants_tim_hudak_is_talking_about.html

Explain why, please. If they've already got a 1 to 1 ratio of EA's to special needs students how can that possibly get any bigger in a special school? How can it not get smaller? And a desk and a room cost the same wether it's for special needs students or anyone else. On a macro scale there's no cost increase.

There isn't a 1 to 1 ratio of EA's to special needs students. In certain classes, some special needs kids receive 1 on 1 support, yet in others they can get by without extra help. Also many EA's work in specific learning resources areas within the school and when a student can't handle being in a class because something has triggered a problem, they leave and go for assistance in that area. Those EA's may deal with small or larger groups of special needs students depending on the day.

Transportation costs are also huge. Bussing or cabbing students from all over a school district to one specific school is very, very pricey. Plus, you've now created another building with additional overhead and administration costs.

[CPCFTW]

Kind of like the ideas that tax cuts for corporations and the wealthy create jobs. I also find it odd that conservative types like to talk job creation so working people can spur the economy yet simultaneously seek to erode wages, benefits and therefor disposable income.

Wealthy people don't create new jobs because they pay less personal tax or save a few bucks on the corporate tax bill. They hire people when demand forces them to add more workers.

Tax cuts for corporations have proven to be very effective at creating jobs actually. Just because companies are profitable and have cash doesn't mean jobs aren't being created.

Refer to the bottom of this link for a list of studies on the effects of taxes on gdp growth:

http://taxfoundation.org/article/what-evidence-taxes-and-growth

[MiddleClassCentrist]

Said no worthwhile economist ever.

Well, if you want to discount anyone who disagrees with you. Blind partisan faith is the kool aid of modern conservatives.

"Paul Krugman, a Nobel Prize-winning economist and liberal New York Times columnist"

The most obvious support for Krugman is rooted in common sense. If you’re looking at how money flows from a worker to a grocery store (or a car dealer or a landlord), it doesn't matter if the money comes from a government or private-sector worker. Assuming the two workers live in places with the same cost of living and exhibit the same spending preferences, they will both spend dollars on housing, food, cars, gasoline and other items in the same way. The technical term for this is a "multiplier" -- the portion of a dollar of wages or salary that ricochets around the larger economy, supporting private-sector jobs.

You can read more at http://www.politifact.com/truth-o-meter/article/2013/feb/15/government-jobs-vs-private-jobs-which-help-economy/ if you'd like.

The economy relies on money being spent on value-adding activities. The idea that paying a salary alone is of benefit to the overall economy is an intellectually bankrupt concept and the essential pillar of lousy economic policy. When the government pays for a public sector job that isn't required, or pays too much for a public sector job, it is in fact taking money out of the economy that could have been used for value-adding activities that actually grow the economy.

Using your logic, we could hire 100,000 public servants and have them each making $100,000/year digging holes in the ground and filling them. This would, according to you, benefit the economy because these new public servants would spend that money back into the economy, right?

The idea is completely absurd.

Teacher's add a whole lot of value to an economy. They are public servants. They would add this value if they are private sector as well. It doesn't matter which sector they are in. Whether private or public, they are adding value.

Edited June 10, 2014 by MiddleClassCentrist

[Mighty AC]

So your way to save money is by taking all the students currently under the Catholic boards and putting them under the public boards. How exactly would this save money given most studies I've heard of claim not only that Catholic schools provide better educations but do so more efficiently and effectively? Getting rid of teacher testing is just a guarantee of lousy teachers, and on a macro scale that costs us money. In fact, we should be making it much easier to fire nonperforming teachers.

Catholic schools are far less diverse than public school populations. As a result their SES (Socioeconomic status) numbers are higher and their ESL numbers are lower. Wealth and language skills translate into results every time, it's not magic. Since we already tabulate SES, researchers predict what the EQAO scores will be every year, before the test happens...for free. It doesn't make sense to create student anxiety, spend millions of dollars and a week of class time every year to tell us what we already know. EQAO is expensive...with no upside.

School boards are the biggest money waters in the education system. Eliminating the separate school system erases all of the Catholic board offices and the associated bureaucracy as well. Eventual savings of merging our wasteful and ridiculously unfair system are estimated at a billion dollars per year. McGuinty didn't have the balls to do what was right on this...and apparently Hudak is a coward as well.

In addition, I would like to see school boards be audited regularly with the semi-annual reports made public.

[MiddleClassCentrist]

Except that the money for those salaries has to be taken out of the economy first, taxed away from people, in order to be processed, and then given to other people. There is NO benefit to the economy from that. Quite the contrary.

That's not actually true because the economy is more complex than that.

Is a private teacher contributing more to the economy than a public teacher?

Is a private nurse contributing more to the economy than a public nurse?

The answer is that at very minimum, their jobs contribute equally to the economy.

[Big Guy]

I believe that all of the issues have been aired and those who follow politics have made up their minds. I have already voted so have no real dog in this race but am still an interested observer.

Personally, I prefer a minority government to take power after this election. But I do not think that it will happen.

I think that the crucial vote will be made by those who are not sure when they get into the voting booth. They will have to choose from Mike Harris, Bob Rae or Dalton McGuinty. I think they will hold their noses and vote Liberal.

I predict a Liberal majority - to my chagrin.