Twenty Fallacies

[August1991]

Welcome to an experiment, and a work in progress. The following points are common fallacies of posters to this forum. Common sense and intelligence diverge. If you disagree, want to participate and comment, go ahead and post.

The Twenty Fallacies

First Fallacy: The media decides what we think

Second Fallacy: Democracy means one person, one vote

Third Fallacy: Canada should have a Made-in-Canada Oil Price, and Quebec should have low electricity prices

Fourth Fallacy: Good Governments balance their budget

Fifth Fallacy: Small Canada must trade cautiously with the Big US

Sixth Fallacy: Job Creation is a measure of economic performance

Seventh Fallacy: The GST is a bad tax

Eighth Fallacy: Profit is a bad word

Ninth Fallacy: Modern Governments are deprived of resources

Tenth Fallacy: It is because individuals are different that it is wrong to generalize

Eleventh Fallacy: Free Trade means a race to the bottom

Twelfth Fallacy: SUVs are bad because they consume too much gasoline

Thirteenth Fallacy: Governments can do no good

Fourteenth Fallacy: Chance is a Black & White Issue

Fifteenth Fallacy: Kyoto is about protecting the environment

Sixteenth Fallacy: Canada is a progressive country

Seventeenth Fallacy: Foreign Wars are good for US corporations

Eighteenth Fallacy: Le déséquilibre fiscal is French for "Let's pick Alberta's pocket"

Nineteenth Fallacy: Markets are from Mars, Government is from Venus

Twentieth Fallacy: Why do Farmers, Students and Indians get so much?

Twenty-First Fallacy: All people are born equal

Edited January 16, 2008 by August1991

[theloniusfleabag]

Dear August1991,

I suppose better wording might be.."the media doea it's utmost to influence what we think". If the medium couldn't influence, it wouldn't be used by advertisers.

[Melanie_]

I'm interested in where you might take this, August. But I just want to point out that I didn't say the media decides what we think, but rather that they decide what they think will be of interest to us, and therefore will sell more newspapers. For example, in today's Winnipeg Free Press there is a full page story on the bombs in London, and another half page op-ed on the same topic. There is also a tiny 2 inch hidden story about Ethiopian bandits raiding a village in Kenya, resulting in a clash that killed 71 people, including 2 dozen children. Why are their deaths not given as much coverage? Is this not also a terrorist attack? (Actually, not enough details are given to understand what the motivations were.) My argument is not that it isn't relevent to us, or that the people close to this tragedy aren't as outraged as those affected by other tragedies (as Argus would argue), but rather that we will not have access to their reaction via our local media because it isn't seen as being of interest to us. We will never hear about this massacre again (and many papers may have decided not to carry it at all - what other massacres do we not hear about?)

I'm looking forward to your ideas.

[Riverwind]

First Point:The media decides what we think

All media organizations are caught in a vicious circle were they are forced to choose stories and biases that will not offend their target audience. Because if they do offend someone, that person is likely to find another source for news. The result is we see independent islands of media preaching to converted (left or right wing) and each group seeing the other as sadly misinformed/ignorant people.

At one level I don't blame people for seeking media sources that make them feel comfortable. I find it very difficult to read the National Post at times because the coverage (IMV) is so ridiculously biased. It would be much easier to get my news only from sources that make be feel comfortable.

I short the media does not decide what we think - it just tries to figure out what we alredy think and repeats that to us without challenging our sensibilities.

[crazymf]

I know nothing of the media's inner workings. I'm a consumer.

The issue is terrorism, don't really know what it is, but it's bad. George Bush is going to be our saviour because he really goes to bat for the little guy. Somehow, it's REALLY important that they find that missing girl in Aruba, because she may be the missing link to finding Bin Laden. They've been looking for that guy for while because he knows where the nukes are that Saddam misplaced.

You get my point?? I rest my case.....

[August1991]

Second Fallacy: Democracy means one person, one vote

The word "democracy" is so misunderstood but the idea of "one person, one vote" is truly a travesty.

For what follows, forget everything you learned in high school civic classes. IMV, it's idealistic claptrap.

First, one man, one vote means that people cannot express the strength of their feelings for an issue or a candidate. Some people feel strongly about the environment, others merely care about it and some care not at all. A vote is a black & white choice when life in fact is a question of degree, and even colour. Unfortunately, there is no functioning way to get people to reveal their true feelings honestly in a vote of any complexity. At best, we simplify things down to a ballot of several choices - often a choice of only two. (Imagine, for a second, what would happen if a ballot asked how "strongly" you felt about a particular candidate. If you're going to vote in favour of a candidate, you would be wise to vote "strongly" or not at all. You have no interest in choosing a middle ground.)

IOW, an election can have only one winner.

Second, my vote matters not a wit for the overall result. Hence, I don't bother to find out which candidates are good and I don't even bother to vote. People spend hours and hours figuring what car to buy or what house to buy. They negotiate, ask questions, look at their budget. Many of those same people pay as much or more in taxes yet never vote.

These people are not fools. They are not dupes. They know that an hour devoted to choosing a better RRSP has a much better return than an hour devoted to choosing the best candidate.

Governments are useful but they have a tendency to become tyrannical and make a mess of things. So, we hem our leaders in. One way to do this is to roll the die every few years to pick new leaders. (We call that an election - it causes problems of its own but it makes politicians at least appear to be polite.) We also create independent judges and police (but that only works sort of). In Canada, we have a federal state so that the potential tyrants squabble with each other.

It may be possible to make collective decisions based on individual votes but first, one would have to devise a way to let people express the strength of their feelings about an issue and second, one would have to devise a way to ensure that they tell the truth. No one has so far devised a voting mechanism to do that. Frankly, I think a solution must be sought elsewhere - well outside of the notion of voting.

The problem with democracy is obvious.

IMV, Arrow's Impossibility Theorem is unoriginal and even silly. Samuelson's social welfare function comes best to describing the problem.

If I would pay $1,000 to avoid a $100,000 loss, does that mean I would pay $1,000 for a similarly possible $100,000 gain? We compare absolute outcomes not relative changes.

Why Electoral College? The electoral collage is at its base a perversion of the democratic principle.

1 man, 1 vote.

If I may note, democracy seems to be the purest example of 'communism' (or socialism) extant.

Democracy loses in this good comparison.

But first, let me respond to BD:

Democracy requires citizens to be informed, vigilant and active. It is not simply casting a ballot once every four years in blind hope that things'll just work out for the best.

"Informed, vigilant and active"? What's that? A new drug? Magazine? People are what people are. Let's take them as they are - which is pretty complicated already.

Democracy requires, in my humble opinion, one thing: a civilized way to throw the buggers out. I don't know if you realize that in most countries in our 2004 world, ordinary people are impressed when this happens. Sadly, we Canadians almost take it for granted.

But I don't like democracy. Why? For several reasons, but I'll note the "one person, one vote" idea. That makes everybody the same, which we are obviously not. A few people like pizza alot while others sort of prefer Chinese but not really. When choosing where to eat, should it be one man, one vote? Is that how small groups really decide collective decisions? (BTW, markets don't work that way. If the cigarette market were decided by majority vote, the 75% non-smokers would win the referendum.)

Churchill said it best: Democracy is the least bad method when a single collective choice is required.

It sickens me that we are so f-ing privileged in this country that we can even for a moment suggest that bad weather is a legitimate reason to not vote...

Shame on anyone who has the nerve to complain about when we have to vote, and even more contempt for anyone who won't take the time to do so.

FTA

<{POST_SNAPBACK}>

A civilized society is not measured by voter turnout statistics, nor is a democracy. IMV, the best measure of a government's legitimacy is the willingness of citizens to pay taxes and the government's ability to collect them.

My single vote will change absolutely nothing in the final result of the next federal election. If I don't vote, the result will be the same. The same is not true of my tax payments.

The error here is to confuse the individual and the collective.

Once again I am totally heartbroken that none of the parties have even mentioned electoral reform in any meaningful way. What do I have to do to get people to notice that their votes don't count? Run down Bay Street wearing nothing but a banner that says "The people demand a revisitation of an archaic and outdated system of casting votes to choose representatives!"? Because I will! (The banner needs to be long, because it is very cold here in Toronto. I imagine I'd leave the "The people demand" showing, and then wait for the news crews to show up before I explain exactly what we demand).

Am I the only person left in Canada who is sick and tired of being effectively disenfrachised by single-member plurality voting?

When you do your grocery shopping, you decide not only how much of your total budget to spend on groceries, but you also decide what groceries to buy. If you are a vegetarian, you don't buy meat. You buy milk, orange juice or Coke, as you prefer.

Our tax dollars are not spent with anything near the same precision, and this is a great shame. So many political problems could be avoided if people honestly stated how much tax they were willing to pay, and how they wanted their tax dollars to be spent. (As an idealist, I believe that some smart individual some time in the future will devise a way to elicit people's honest opinion about this.)

As I have argued here many times, people don't vote the same way they buy a car. When you buy a car, it's worth spending alot of time researching and deciding what car to buy because the decision will have a direct effect on your life. Your solitary, single vote will change absolutely nothing in the results on Monday. Whether you go to vote or not, the result will be absolutely the same.

People aren't fools. They devote much more time deciding what car to buy than they would ever devote to deciding what candidate to vote for. (And yet, federal taxes will take more from their pocket this year than the car that they drive.)

Civics class teaches that democratic government is the expression of the people. That's not true. Representative democracy is a method to pick a leader. The 2000 and 2004 elections were so close that either candidate could have won, and flipping a coin would have been a suitable method to pick the winner. What's more important is that there is a method to pick one leader. I was happy to see the Supreme Court step in in 2000 and make a quick decision. Since the Court split on partisan lines, it was as if they'd flipped a coin.

I just voted in an election and I just bought a cup of coffee. There is a supreme difference bewteen these two acts.

Imagine if all our decisions were taken by democratic vote; that is, imagine if we always decided as the majority desires.

The reason that is bad is because the minority will be forced to do as the majority chooses. (If I am not in a country of coffee drinkers, I lose.)

It gets worse. One person, one vote does not reflect the strength of one's opinion. Some people feel very strongly about environmental protection and others could care less. An election offers no way of indicating those feelings. (I absolutely love coffee and the others don't like it but could live with coffee if they had to.)

Last but not least, consider how much time and energy most people devote to deciding what car to buy compared with what party to vote for. They get a direct benefit from their car research. They get no benefit from their political research because their one vote will change nothing. (I'll let you go to all the trouble of forming the pro-coffee party, doing the costing estimates and so on. Then when you succeed, I get the benefit of coffee.)

Democratic elections are an extremely poor way to make collective decisions.

As Melanie pointed out, this is a Canadian web site but since we are in north America, I'll take your question in the large sense.

America is reputed to be most democratic country at present. So I am asking Americans - What on earth is democracy? I am asking you this question from Byelorussia.

I have thought about this question too Alex, (and even in places like Belarus!). Here's my simple definition:

A democracy is a country where there is a civilized way to get rid of the buggers.

A democracy is when governments change peacefully. But more important, when a government is obviously atrocious, a democracy means it is possible to get rid of it.

That's a simple definition (criteria) that, IME, clarifies most situations.

[theloniusfleabag]

Dear August1991,

The word "democracy" is so misunderstood but the idea of "one person, one vote" is truly a travesty.

I am not sure how you think 'the best of terrible alternatives' should be applied. Even the Roman Senate was biased and elitist in it's own way. What mechanism best serves the 'common man's interest'?

I feel one of the best ways would be with me in charge, (I'm sure that this thought never ocurred to anyone else before) and have everyone vote on items of legislation (or bills, ala USA) that would or would not be passed. However, some form of direction would obviously be present.

[Mad_Michael]

First Point: The media decides what we think

Good gosh. The mass media decides what is news and tend to influence what people think about those same issues.

I can't wait to see the next 9 points...

[August1991]

Third Fallacy: Canada should have a Made-in-Canada Oil Price, and Quebec should have low electricity prices

This idea is wrong in two ways. First, the Canadian price should never differ from the world price. (Is that extreme? Could there be exceptions?) It is unfortunate our domestic electricity prices are so much lower than US prices. Second, even the possibility of a lower Canadian oil price is an invitation to compete for benefits.

Corollary Fallacy: Good Governments are Fair and Just

This one crops up often and from the perspective of the individual, it makes sense. From the perspective of the collective, it does not.

On the contrary, good governments don't waste. IOW, the measure of a government should be its ability to avoid wasting - not its ability to achieve justice (modern environmentalists would agree)

Sorry if this sounds confusing but these are points to myself. In time, maybe I will make them clear.

----

Links

I am heartened that the idea of price regulation has not ventured into the mainstream and seems to have stayed among the Left. Jean Charest rejected the idea prominently on a very popular Quebec TV talk show a week or so ago - evidence that people understand that governments cannot fix prices.

But in Alberta, it still costs exactly the same as it did last year to pump oil out of the ground, but now they can charge an extra fortune for it... great if you've got lots of stocks in oil... rather the converse if not... Why doesn't the government implement a highly "progressive" tax on oil company profits for the "gouge factor" and use that to drop taxes for the average Canadian....

<{POST_SNAPBACK}>

Americans discover the wit and wisdom of Err. New Yorkers are clamouring to hear Err live, LA wants Err in the movies, both send him 7 digit contract offers for mere appearances.

Instead, Err stays in Canada and posts to Internet forums because it is better to sell oneself cheap rather than go for the bucks.

Now, we are not even talking about human services - we are talking about mere oil.

Every barrel sold internally at a low price is a barrel we could have sold abroad at a high price. Countries, like people, don't get rich by underpricing what they have of value.

No, I am not joking. Show me a single. Cite one comparative study of international systems that supports the hypothesis that it is a disincentive to work. Cite one that shows tax policies are any deterrent to groth.There is none. There is only the unsupported bunk of the "Right Wingers." There are studies of the opposite wrt tax policies. Ayrton Sen's is the most notable.

<{POST_SNAPBACK}>

I wasn't addressing the disincentive to work, I was talking about YOU taking my money that I earned and giving it to other people. Instead of showing up at my door and doing it, you advocate the government coming and getting it with their police and guns. That pisses me off.

An accident? Seems to me that the rule is there because it was intended to be. I believe August has written that Upper Canada insisted on provincial control of resources because they didn't want to share revenues from their newly discovered kerosene deposits with the other provinces. If that's the case, Alberta is simply carrying on a Canadian tradition. Recall that for a long time, Canada's Oil Capital was Sarnia, not Calgary. The scene on the back of the old $10 bill was Sarnia, not anywhere in Alberta. The system, as it was set forth, worked well for Ontario for a long time. Why is it an accident when it works to somebody else's benefit?

-kimmy

{arrr. avast!}

<{POST_SNAPBACK}>

Here is the link to the post about Petrolia and a thread about who owns Alberta's oil.

In that thread, it seems that I was arguing that Albertans were "wrong" to believe that it is "unfair" if non-Albertans get to free-load on Alberta's oil. By chance, Alberta has oil, by chance the BNA Act gives the Albertan government the royalties and by chance oil is expensive now. Who can say what is fair in that?

As to the 1850s Petrolia story, I have no evidence of its effect on Section 92 of the BNA Act of 1867 but it makes sense to me that Upper Canada was not about to share this wealth with Lower Canada or the other colonies. I think it is fair to say that oil (kerosene in fact) was the Internet of the 1850s and 1860s. Oil had made Rockefeller rich before 1867.

Is it wrong for governments to subsidize a Rolling Stones concert?

Many people were humming familiar rock tunes at Halifax city hall Tuesday as council agreed to pony up $100,000 to help open the door for what Mayor Peter Kelly described as the biggest entertainment event in the city’s history.

....

There have been widespread rumours that Mick and Keith and the boys will headline the show. But the phrase Rolling Stones was not heard officially at city hall on Tuesday.

Halifax Chronicle-Herald Edited January 16, 2008 by August1991

[August1991]

First Fallacy: The media decides what we think

Corollary: Advertising doesn't matter

For example, in today's Winnipeg Free Press there is a full page story on the bombs in London, and another half page op-ed on the same topic. There is also a tiny 2 inch hidden story about Ethiopian bandits raiding a village in Kenya, resulting in a clash that killed 71 people, including 2 dozen children. Why are their deaths not given as much coverage?

The answer strikes me as rather obvious: bombs in London are alot more interesting than Ethiopian bandits.

People are usually well-informed about matters that will affect them. Why? The time spent obtaining such information is of direct benefit to people.

A majority of Americans believe that New Mexico is part of Mexico. Are Americans ignorant? No. Those same Americans can probably explain in great detail how their income is taxed, their chances of a promotion or the various mortgage rates on offer.

Consider "news" about bombs in London, Ethiopian bandits and brake failures on Pontiacs. Irrelevant to most of us unless you're travelling to London, Ethiopia or shopping for a new car.

The better question might be why is there any news at all about Ethiopia. Well, there are always some people going to Ethiopia next week. Or, you may believe you'll go there by chance in the next year and want to stay informed. For some people, there's the sheer fun of learning stuff about Ethiopia, like stamp collecting or star-gazing.

More critically though, the subject of Ethiopia may arise with acquaintances or work colleagues and then everyone will know about the bandits except you. Does this matter? It depends. I have had endless fun pretending not to know who Paris Hilton is.

I short the media does not decide what we think - it just tries to figure out what we alredy think and repeats that to us without challenging our sensibilities.

I just spent a week at a cottage where I had to endure conversations about the relative challenges of crossword puzzles in various English newspapers. Is that what you mean?

All media organizations are caught in a vicious circle were they are forced to choose stories and biases that will not offend their target audience.

Hmmm. My joke about Paris Hilton was no joke. The shibboleths to signal being well-informed are changing. When everyone can know easily that the WTC collapsed, people seek other ways to show their access to insider information.

----

I fear I have avoided the question of media bias in the sense of left, right, American, corporate, MSM, whatever. I frankly find this question sterile, and irrelevant.

People are informed about what matters to them, and they show what they know according to their judgment of a particular situation. The Soviet bloc, media bias at its most flagrant, provides perhaps the best evidence of this. At most, the cost of obtaining information is the issue. (IME, East Germans, probably because it was easier for them, knew more about the outside world than other eastern Europeans. Russians were notoriously ignorant. Yet, both East Germans and Russians were as savvy about bureaucratic rules.)

Only a few years ago, most Canadians had access to two TV networks, a few radio stations with short news broadcasts, perhaps two city newspapers, one local paper, a public library and a bookstore or two. There was also word of mouth.

Now, there is all that - more or less - plus satellite TV, the Internet and Amazon. IOW, it is less costly to get information.

I started this thread with the subtitle of "fallacies of intelligent people". Well, here's the fallacy: The media decides what your neighbour thinks about things that matter to your neighbour. That's a fallacy because the media doesn't. However the media may twist or distort the truth about Paris Hilton, Ethiopia, New Mexico or even Air-Miles, I'll bet your neighbour knows exactly how to collect Air-Miles.

----

I'm reminded of an issue of the Toronto Star from many years ago, during apartheid. The big, black, bold front page headline spoke of two black men killed in Soweto. Well inside, on page thirty nine or something, in a small square box, was the story of five thousand tutsis killed by Hutus in tribal warfare.

If protestors are shot down in the streets of Damascas, the Muslim world shrugs. if Muslims activists are killed by security police in Indonesia, nobody cares. But let one Palestinian protestor trip on his shoelaces while throwing a rock at an Israeli checkpoint and bloody his nose and the Arab world rocks with outrage.

<{POST_SNAPBACK}>

You have reinforced my point, that the media really decides what is worth our attention, and what is not. Aparthied was in the news more than Rwanda because that is what publishers believed would sell more newspapers - they catered to what they thought would interest us. Riots that result from Western injustices against Muslims are deemed to be of more interest to us than any action resulting from Muslim injustice against Muslim. I don't trust journalists motives, obviously; I think the most anti-Western news is often related for the sole purpose of giving us the opportunity to claim the moral high ground, shake our heads and murmer "tsk tsk, how backwards those goat herding Arabs are, we are so superior in so many ways".

On this specific point (or rather fallacy), I disagree (sort of) Melanie.

here is a very informative article on how news events are manipulated by the media using language:

http://zena.secureforum.com/Znet/zmag/zart...97herman.htm%20

Thanks cgarret, I found the site amusing!

But the article is entirely premised on the assumption that people who read about the Guatemalan civil war are ninnies, or decide how to vote based on what they read.

You give far too little credit to the intelligence of the people you espouse to defend. But more important, most people (Canada or US) don't know where Guatemala is and few (if any) will cast their vote based on what happens there.

Ordinary people have a tendency of deciding in their own way what they think is important. They decide on their own how to vote. To say they are manipulated is demeaning, and wrong.

IMO, Americans have a strong tendency to vote according to whether they think their own life is good or not. Canadians vote more traditionally.

Sometimes I wish it were as easy as you suggest to manipulate people.

In this thread I will post examples of the media's mistakes, censoring or just plain propaganda. I encourage everyone to add to this thread their own examples. What I'd like people to get from this thread is the power of the media on manipulating its viewers opinions.

The Left misunderstands the power of advertising, and misunderstands symbols and reality.

Advertising doesn't change ordinary people's minds; advertising simply shows ordinary people that someone has a lot of money to advertise.

[Guest eureka]

And 12% of Americans believe that Joan of Arc was Noah's wife, or so I read today. That is not a joke, either but a finding from some survey.

[Mad_Michael]

I started this thread with the subtitle of "fallacies of intelligent people".  Well, here's the fallacy: The media decides what your neighbour thinks about things that matter to your neighbour.  That's a fallacy because the media doesn't.  However the media may twist or distort the truth about Paris Hilton, Ethiopia, New Mexico or even Air-Miles, I'll bet your neighbour knows exactly how to collect Air-Miles.

<{POST_SNAPBACK}>

I'm definitely missing something here.

Thread seems more accurately named "fallacies of foolish people".

[August1991]

Fourth Point: Bad Governments borrow, Good Governments don't

I have had to argue this one on numerous occasions. In the past, it was the Right that accused the Left of being profligate (perhaps because the Left was Keynesian and Keynes argued in favour of a deficit during a recession.) Now, it seems the Left takes pride in being fiscally responsible (given Bush Jnr's policies). Both Richard Nixon and Tommy Douglas probably said at one point, as populists, "Politicians must balance the government budget so that ordinary people can balance the family budget." Whether seen from the Left or Right, the fallacy has a typically North American Calvinist tinge - governments must live within their means, just as good people live within their means.

Well, that advice might be wise for a family, but it is irrelevant for governments - and it has nothing to do with Keynes. The simple reason is that governments are unlike a family. Understanding the fallacy provides an insight into the nature of government, difficult to fathom otherwise. It also focuses attention on the true measure of a government's economic competence: what governments buy. Lastly, it inoculates one against politicians claiming economic competence because they balance budgets.

The insight? Unlike a family, a government always spends other people's money. (A government has no money of its own to spend.)

Families work to earn their money. Governments don't. (True, civil servants work but where do governments get the money to pay civil servants?) To pay expenses, governments simply take money or they borrow it. No family has the power to simpky take money. This is why government debt and family debt are so different.

Consider Bill Gates and the Seattle municipal government. The local council has access to both Gates' Amex credit card and his Bank of America debit card. If the council uses his debit card, that's like a tax. If it uses his credit card, that's like borrowing (in Gates' name). Does it matter which card the local council uses? Should the council claim financial competence because it uses Gates' debit card rather than his credit card?

"Canada the country" and the Canadian federal government are two different entities. Imagine "Canada" the country as one single, large, wealthy person: owner of oil, gas, trees, buried minerals, smart brains, good muscle, ability to figure things out. "Canada" is one person. Imagine too that this person can live forever. Now, imagine the Canadian government as an agent hired by this very wealthy Canada person to buy stuff: in Canada, abroad, wherever. Does it matter whether the agent uses Canada's debit card or credit card for the purchases? Does it even matter whether the agent buys in France or Russia?

The only question, as any agent should know, is whether "Canada" needs the purchase or not. The where and the how of the purchase is irrelevant.

If the agent uses the debit card rather than the credit card to pay, it makes no difference to "Canada" (Canada's rich like Gates) - and it's certainly not a reason to justify the purchase.

It also doesn't matter whether the money is borrowed from abroad or from Canadians. And it also doesn't matter whether the money is used for capital or current expenditure.

If government spending is good, it doesn't matter whether it's capital spending or current spending. It's good. And if it's good, it doesn't matter whether we borrow from Canadians or foreigners. It's almost frightening to think that the government has the right to treat Canadian lenders any less respectfully than foreign lenders. That's almost Soviet in its thinking.

Corollary: We are spending now and borrowing from the future. (If we are in debt to the future and the world completely disappeared tonight, does that mean we could rip off the universe?)

Second corollary: The world cannot have a trade deficit (or a trade surplus).

Third corollary: Government debt is bad.

Check the two graphs at the top

See this table from this Fraser Institute report.

Canadian Debt Stats (at the bottom)

Links

Sure, the opposition parties are screaming and wailing about the surpluses, but just imagine the ruckus they would make if it was in the other direction!

We can argue about expediture levels and priorities, but in terms of balancing revenues with expenditures, this is EXACTLY how the country is SUPPOSED to be run. To argue otherwise is very disingenuous.

A government's fiscal position (whether in deficit or surplus) is no measure of the fiscal responsibility of a government. The correct measure of a government's fiscal responsibility is how much it spends, and what it buys.

A government is not like a family. Living debt-free may be good advice for a family but it is utterly meaningless for a government.

Families must work to earn the money used to pay for purchases or to pay back debt. Governments can take money whenever they want it because they spend other people's money - and they never have to pay back tax money raised.

http://money.cnn.com/2005/09/24/news/inter....reut/index.htm

Federal Reserve Chairman Alan Greenspan told France's Finance Minister Thierry Breton the United States has "lost control" of its budget deficit, the French minister said Saturday.

"'We have lost control,' that was his expression," Breton told reporters after a bilateral meeting with Greenspan.

"The United States has lost control of their budget at a time when racking up deficits has been authorized without any control (from Congress)," Breton said.

I suppose we should not be surprised by this, but it is kind of scary if it is true.

Paul Martin stole this money from the pension funds as finance minister to fund his deficit reduction, and never paid it back. Now he's promising the old age pensioners funds as a tax-grab to buy votes in the upcoming election.... but he's not in a hurry to return the stolen funds.

This thread merely highlights the difficulty - if not impossibility - of determining the true debt position of the govedrnment. The government has a variety of commitments into the future. Should these commitments be actualized and calculated as a current liability? One can play around with these numbers as one wants - excluding or including future pension payments for example - and present almost any fiscal picture one desires.

We inherited the debt our predecessors foolishly incurred. So now that we have the debt, even if we only earn $20,000, we would be wise to continue to pay it down. What is the alternative, wait indefinately until we earn more and continue to pay interest on the debt?

Wait and second here, Renegade. Your predecessors got the benefit of borrowing. If your predecessors didn't leave anything to you, don't blame cybercoma for that. And by the way, the world as a whole is a heck of a lot richer now than it was even 30 years ago. So if you personally feel burdened by debt, then it must be that others of your generation have got even more than you. You should have picked your parents better.

The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's central bank.

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Daily Telegraph

But gc, if you don't want to have debt, just buy government bonds (about $20,000 worth) and then you can rest easy that you've paid back your portion of the debt. The coupons you clip will be payments to yourself. Whenever Harper announces that he's paid down the debt, you too can cash in the bonds. You could even use the proceeds of the sale to pay some of your tax bill. Of course, if Harper cut taxes and ran a deficit, you'd have to buy more bonds. But then you'd have lower taxes.

In a sense, if you did this, you'd mirror exactly Harper but in the opposite direction. You'd be no better or worse off.

I gave one simple example of how an individual will try to pay off a (mortgage) debt but society will always have (mortgage) debt. You are arguing that society doesn't need children's books because you don't read such books anymore.

[Toro]

August.

This is not a fallacy unto itself.

Fourth Point: Competent governments have budget surpluses

I think it must be understood in context before you can determine whether it is a fallacy or not. I think the proper terminology for a fallacy would have been "Competent governments always have budget surpluses." At times, a budget surplus is a sign of a competent government. At others, it is not.

Second corollary: The world cannot have a trade deficit.

Yah, that's a good one.

[August1991]

At times, a budget surplus is a sign of a competent government. At others, it is not.

Thanks. Change made.

[Guest eureka]

Might it not be more of a fallacy to suggest that governments can be competent without stating competence for what purpose? General competence given the constraints of democratic politics hardly seems likely.

Tolerable incompetence might be the best we can hope for.

[August1991]

Fifth Fallacy: Small Canada must trade cautiously with the Big US

Corollary: Wal-Mart is not a store, it is an intermediary - like a market.

Trade is not a sports match with winners and losers. In a functioning market, size doesn't matter. Countries don't trade, individuals do.

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Links

As funny as you may think it at first, they need us.... What will they do... They can't invade Canada.... They can hurt us economically for a short time, but not without further hurting themselves.... and God forbid, have us get into bed with China or another large power instead of relying on Uncle Sam as our major trading partner... And we actually have all of the resources to be self sufficient.... they don't...

Let's look at the 'hurting' involved. To draw a physical analogy they could punch us so hard as to put us into a coma, but they would break a few fingers in doing so. While lying in our hospital bed recovering we could take solace in the fact that at least those buggers were injured in the attack. What a tremendous moral victory.

Their economy is TEN TIMES the size of ours.The answer is shrewdness, not belligerence.

This whole thread is irrelevant. The Americans already control Canada in every way. We are like an ant colony on the presidents desk trying to assert ourselves.

Get real. The saying is true; If you can't beat 'em, join 'em.

[theloniusfleabag]

Dear August1991,

Wal-Mart is not a store, it is an intermediary - like a market.

..."Turning countries into labour camps, modern slavers in drag as champions of freedom..." (excerpt from Bruce Cockburn's song: "And They Call It Democracy") They do not, or will not, ever allow the 7 cent/hr (maker of most of their products) ever peddle their wares directly, under the Wal-mart roof (like another market) and share the profits. Further, they (not just Wally-World) have direct influence on the market conditions of the manufactuers, (choosing to have them mostly in the 'third world' where labour is cheap by force of arms) and skew things as far in their own favour as they can.

I think you have confused 'oligopoly' with 'farmer's market'.

[August1991]

Sixth Point: Job Creation is a measure of economic performance

Tens of thousands of Canadian Manufacturing jobs were lost because of NAFTA. We should use the opportunity to get them back.

Cite

What I'm really interested in is what the "living wage" advocates think of this. If people start using these on a regular basis, will businesses still need the same amount of cashiers they employed before? If not, what's going to happen to the cashiers who suddenly find themselves making $0/hour?

Another Cite

Ugh.

[Toro]

Turning countries into labour camps, modern slavers in drag as champions of freedom..." (excerpt from Bruce Cockburn's song: "And They Call It Democracy")

Why would we listen to Bruce Cockburn? What's his area of expertise? Folk singer?

They do not, or will not, ever allow the 7 cent/hr (maker of most of their products) ever peddle their wares directly, under the Wal-mart roof (like another market) and share the profits.

This is an odd statement. What do mean?

Further, they (not just Wally-World) have direct influence on the market conditions of the manufactuers, (choosing to have them mostly in the 'third world' where labour is cheap by force of arms) and skew things as far in their own favour as they can.

Labour is not cheap because "of force of arms." Labor is cheap because productivity is lower. Its simple economics. Name a single third world country on the planet that has wages as high as the western world? You can't. That's why they're third world. Companies such as Wal-Mart are improving labour conditions in those countries. For example, real wages have risen 440% in China from 1980 to 2000 (according to Martin Wolf of the Financial Times, using World Bank Data). Another way to look at it is to see the results of this World Bank study on the effects of trade, demonstrating that increased trade has increased the wealth for the poor in China. There are other studies like this looking at other poor countries. Globalization benefits the third world as it provides jobs and incomes, often to the poorest of the poor.

I think you have confused 'oligopoly' with 'farmer's market'.

I think you're confusing "oligopoly" and "farmer's market" in general.

[Toro]

Sixth Point: Job Creation is a measure of economic performance

Tens of thousands of Canadian Manufacturing jobs were lost because of NAFTA. We should use the opportunity to get them back.

Cite

Ugh.

<{POST_SNAPBACK}>

Double ugh!!

[Guest eureka]

Does "Ugh" mean that you agree that the United States should be held to account?

[Technocrat]

Ugh Ugh!

Is this cavemanspeak for "Me want more Mammoth?"

[Toro]

Does "Ugh" mean that you agree that the United States should be held to account?

No. "Ugh" means a failure to find any connection to the loss of jobs, NAFTA and fighting a trade war to get them back.

[August1991]

Seventh Fallacy: The GST is a bad tax

The GST is a regressive tax. Poorer and middle income people live cheque to cheque. They spend pretty much all their income. Thus, they pay value-added taxes on pretty much all their income. If August1991 had her way (at least I'm assuming August1991 is a she, sorry if I'm wrong) these poorer people pay value-added taxes on ALL their income. Whereas wealthier folk who do not spend all their income every week.... are taxed only on the portion they spend. Thus, the poor pay a higher percentage of their income on tax than the wealthy with GST/PST.

There are so many errors here (not disagreements of opinion) that I don't know how to begin. Suffice to say that no-one, wanting ordinary Canadians to have a better life, would ever make the arguments above.

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err, to disagree with you, I won't use Kimmy's excellent point that GST doesn't cover food and rent - major expenses for poor people. I won't even use Kimmy's other excellent point that GST replaced the MST (which taxed Canadian products but not imported foreign products).

err, I won't even use the argument about the administrative cost of collecting a tax - the number of people a government must deal with, and potential fraud.

Instead, I'll make the obvious point that income tax takes money from people before they spend it. The GST takes money from people when they spend it. If a poor person manages to save money, through a pension scheme or otherwise, should they be penalized and taxed? Should a government tax savings?

You claim that I have introduced a strawman argument. I haven't. If the government taxed as you suggest, it would tax all income. It would tax money spent and money saved. The GST only taxes money spent.

Taxing savings is dumb. It makes countries poor and it hurts poor people.

Now then, if you want to raise taxes on rich people and lower taxes on poor people, we can discuss it. But let's not tax savings.

The economic argument in favour of a consumption tax (such as GST) over an income tax largely depends on the idea that it is better to tax when you spend not when you earn. (This argument has been made by Andrew Coyne, for example.) Income tax discourages saving because people save with (smaller) after-tax income. This distortion of income tax is partly corrected with RRSPs.

All true. The GST also requires fewer collection points than the income tax. The GST is also made fairer by giving out refunds for low income families and by exempting food and rent.

What these economic arguments fail to consider though is that taxes exist in a political world. Tax policy is proof of the adage: the perfect is the enemy of the good.