Federal Budget 2007: More & Still More Government

[August1991]

I think Canadians like a lot of the things the Conservatives stand for, and if they thought about it, and it was explained to them, they'd like a lot more - provided it wasn't the CBC doing the explaining. But I also think a lot of Canadians have become seduced by the idea that the government is there to solve all problems, no matter the cost, to right all wrongs, and to make everyone happy.

By and large, I agree with Argus on this. Harper is not prepared to change people's attitude about government now.

Moreover, I think the problem will have to get much worse before any PM takes this on. We can expect larger government budgets and more government regulation. It will be increasingly ineffective.

---

As to the birth rate question, child care measures have to be credible for them to influence behaviour. At present, no one really believes that the current system will be in place for another 5 years let alone 20.

I think the drop in birth rates occurred in the 1960s because of the birth control pill and because of rising wages paid to women. If there is a rise in birth rates in the immediate future, it will occur because people start to fear that the State will not be able to keep its promise to take care of older people. Younger people, looking at the fate of childless boomers, are already thinking along these lines.

Finally, the world's problem is not a lack of children. The world's problem is to educate well the ones we have.

[Pat Coghlan]

I think the drop in birth rates occurred in the 1960s because of the birth control pill and because of rising wages paid to women. If there is a rise in birth rates in the immediate future, it will occur because people start to fear that the State will not be able to keep its promise to take care of older people. Younger people, looking at the fate of childless boomers, are already thinking along these lines.

Finally, the world's problem is not a lack of children. The world's problem is to educate well the ones we have.

Women entered the workforce in droves starting in the 70s, soon after Nixon stopped backing the US$ with gold. The inflation which followed forced families to have both spouses in the workforce.

You might find the following website interesting, especially the interview with the author of Financial Armageddon: http://www.netcastdaily.com/fsnewshour.htm

[geoffrey]

I disagree, that inflation is mostly societal really. Wages have increased at pace or higher than the pace of inflation generally over the last 30 odd years.

People now 'require' two cars (nice ones too), a 5 bedroom house with only 3 people living in it, they eat out everyday and go on vacation twice a year.

If they want that, they have to work for it. It's no inflationary pressure, it's the better than the Jones' pressure.

[August1991]

At the risk of encouraging thread drift (or, would you please start a new thread...)

Women entered the workforce in droves starting in the 70s, soon after Nixon stopped backing the US$ with gold. The inflation which followed forced families to have both spouses in the workforce.

In the 1950s or 1930s, women didn't think about working outside the home? The simple fact is that the value of their time was greater at home than in paid employment. In many third world countries, that's still the case - even for men.

Starting in the 1960s, wages in the labour market made it interesting for women in North America to work outside the home. They had a choice.

BTW, this is called "economic development" or providing people with more choices.

[blueblood]

I disagree, that inflation is mostly societal really. Wages have increased at pace or higher than the pace of inflation generally over the last 30 odd years.

People now 'require' two cars (nice ones too), a 5 bedroom house with only 3 people living in it, they eat out everyday and go on vacation twice a year.

If they want that, they have to work for it. It's no inflationary pressure, it's the better than the Jones' pressure.

Agreed, crop inputs/machinery reflect this as well. If you want a brand new sprayer with autosteer, GPS, self boom height levelling, CD player, Greenstar Field mapping, etc. get ready to cough up 500+ grand to do it. Funny thing is some people are that stupid.

[jbg]

In third world countries everyone thinks like this, yet they have the highest birthrates on the planet.

wrong, in undeveloped countries it is economically beneficial to have children to help out with the farming, fishing etc.

Ya, it would be if they didn't eat.

Clearly you have no idea what you are talking about.

It may be a pretty good budget. I do not believe that a budget in Canada is going to reduce the population implosion.

A better place to start would be to reduce the ridiculous amount of time it takes to get an undergraduate degree and most professional degrees. High school and college could each be three years, law school, one year, and medical school, I don't know from experience but maybe 2 or 3 years.

I know this may be a topic for another thread, but I graduated law school at age 25 in 1982. I was in no position, economically, to marry until I was around 30. If I graduated law school at age 21, I could have married early enough to have 3 or 4 children, rather than just 2. Also, the generations would roll by faster, increasing even further the population growth effect.

While tax credits for dependents may be a good idea, I didn't exactly look at my tax returns in deciding how many children to have. The calendar sort of made that decision for me.

[blueblood]

In third world countries everyone thinks like this, yet they have the highest birthrates on the planet.

wrong, in undeveloped countries it is economically beneficial to have children to help out with the farming, fishing etc.

Ya, it would be if they didn't eat.

Clearly you have no idea what you are talking about.

It may be a pretty good budget. I do not believe that a budget in Canada is going to reduce the population implosion.

A better place to start would be to reduce the ridiculous amount of time it takes to get an undergraduate degree and most professional degrees. High school and college could each be three years, law school, one year, and medical school, I don't know from experience but maybe 2 or 3 years.

I know this may be a topic for another thread, but I graduated law school at age 25 in 1982. I was in no position, economically, to marry until I was around 30. If I graduated law school at age 21, I could have married early enough to have 3 or 4 children, rather than just 2. Also, the generations would roll by faster, increasing even further the population growth effect.

While tax credits for dependents may be a good idea, I didn't exactly look at my tax returns in deciding how many children to have. The calendar sort of made that decision for me.

Bang on. This post secondary trap is in my opinion a big hindrance on growth. Most stuff learned in post-secondary is not practical. Having so many students chained to student loans is hindering them. Do you honestly need a 4 yr. degree to sit in a cubicle? Learning on the job is by far the best way to learn. I think our society should realize that university degrees are not the be all and end all of the world.

[August1991]

jbg and blueblood, please don't kill this thread by quoting quotes of quotes.

[blueblood]

whoops

[jbg]

jbg and blueblood, please don't kill this thread by quoting quotes of quotes.

I'm usually pretty good about trimming quotes. I was trying to build a post with substance on top of a stack of one-liners, some not all that well thought out.

[Pat Coghlan]

I disagree, that inflation is mostly societal really. Wages have increased at pace or higher than the pace of inflation generally over the last 30 odd years.

People now 'require' two cars (nice ones too), a 5 bedroom house with only 3 people living in it, they eat out everyday and go on vacation twice a year.

If they want that, they have to work for it. It's no inflationary pressure, it's the better than the Jones' pressure.

The government is causing inflation thanks to all the money it has been printing. The US government prints money like crazy. Paul Volker tried to keep this under control in the 80s by raising interest rates, but it's out of control now.

Not only do families require two incomes, they are also going deep into debt.

Do you really think this is all happening because families want 2 cars?

Checked the price of a loaf of bread lately?

[Pat Coghlan]

Starting in the 1960s, wages in the labour market made it interesting for women in North America to work outside the home. They had a choice.

BTW, this is called "economic development" or providing people with more choices.

If they really have a choice, why is it that the greatest number of at-home parents have an upper middle-class (or higher) income?

Choice is not why many women go to work at close to minimum wage jobs.

Out of curiosity, what would happen if many of those families suddenly had an extra $4K-$5K of after-tax income? Would the 2nd spouse still choose to work?

[blueblood]

Starting in the 1960s, wages in the labour market made it interesting for women in North America to work outside the home. They had a choice.

BTW, this is called "economic development" or providing people with more choices.

If they really have a choice, why is it that the greatest number of at-home parents have an upper middle-class (or higher) income?

Choice is not why many women go to work at close to minimum wage jobs.

Out of curiosity, what would happen if many of those families suddenly had an extra $4K-$5K of after-tax income? Would the 2nd spouse still choose to work?

Probably, they're going to want to buy things, nice cars and city houses cost a fortune.

[jdobbin]

If they really have a choice, why is it that the greatest number of at-home parents have an upper middle-class (or higher) income?

Choice is not why many women go to work at close to minimum wage jobs.

Out of curiosity, what would happen if many of those families suddenly had an extra $4K-$5K of after-tax income? Would the 2nd spouse still choose to work?

I haven't seen the figure that the greatest amount of stay at home parents are upper middle class.

And what minimum wage jobs are you talking about and what circumstances are you talking about?

As for your assumption that one of the spouses would stay at home for $4 or $5 thousand just to have more children, it is possible but for how long?

There is so much assumption going on and very little evidence to support that a huge spike of children beyond replacement value will be born if tax is dropped. Other factors like women being better educated, seeking careers outside the home and having children later in life often dictate fewer children.

[jdobbin]

Edmonton Sun column thinks the budget could end in a deficit.

http://www.edmontonsun.com/Comment/2007/03...796829-sun.html

On Monday, Flaherty predicted Canada's surplus in the coming fiscal year -- April 1 to March 31, 2008 -- will be a mere $300 million, after an obligatory payment of $3 billion on our existing $472.3-billion national debt. The year after that, there will be no surplus after the $3-billion debt payment.

In other words, in a time of what Flaherty describes as fiscal plenty, he is predicting that for the next two years the Conservatives will have almost no financial cushion to deal with something unexpected -- like a recession.

The likelihood of a recession is not to be taken lightly. American and Canadian belief that the housing market could not not go down is already showing repercussions. A downturn in consumer spending is a distinct possibility.

[Michael Bluth]

The likelihood of a recession is not to be taken lightly. American and Canadian belief that the housing market could not not go down is already showing repercussions. A downturn in consumer spending is a distinct possibility.

That $3 Billion debt payment will have to come from a surplus.

Nice try though...

[Curiouscanuck]

I don't like this budget because it spends far too much money and it spends the money in really dumb ways. The government now wants to make the choices for us.

I beg to differ. The decentralizing of government allows for more money in provincial hands, where matters are negotiated closer to home.

The majority of new spending was in this fiscal imbalance fix.

Provide $39 billion in new funding for health, education and infrastructure to improve the fiscal balance between the federal and provincial governments

http://en.wikipedia.org/wiki/2007_canadian_budget

This allows the provinces to have more money, and will allow for some very good provincial budgets if treated properly. In the future, my rational is that the federal government will lower taxes so the complications and inefficiency of only returning the money where it came from will be prevented.

I have been hearing that this is a short sighted budget. Because of this important measure however, I believe otherwise.

[jdobbin]

I beg to differ. The decentralizing of government allows for more money in provincial hands, where matters are negotiated closer to home.

The majority of new spending was in this fiscal imbalance fix.

Decentralized governments spend money just as stupidly as anyone does.

If the provinces really believe in decentralization, they will decentralize to the municipalities and cities. That's where the real fiscal imbalance is.

[August1991]

Decentralized governments spend money just as stupidly as anyone does.

I disagree.

One reason the US has been such a successful country is that it has 50 states that are sovereign in their fields. The federal government "tends" to stick to military and foreign affairs.

At the very least, smaller governments have less money to waste. For a country as a whole, I'd rather have a few provinces waste money rather than have a central government go for the big jackpot. Call it diversification theory applied to stupidity.

[jdobbin]

I disagree.

One reason the US has been such a successful country is that it has 50 states that are sovereign in their fields. The federal government "tends" to stick to military and foreign affairs.

At the very least, smaller governments have less money to waste. For a country as a whole, I'd rather have a few provinces waste money rather than have a central government go for the big jackpot. Call it diversification theory applied to stupidity.

I'd have to see some fairly strong evidence that smaller governments are better run and spend money more wisely.

Given what I've seen of cities and school boards, I'd think the evidence of better managed money from size small is a myth.

[August1991]

This allows the provinces to have more money, and will allow for some very good provincial budgets if treated properly. In the future, my rational is that the federal government will lower taxes so the complications and inefficiency of only returning the money where it came from will be prevented.

I have been hearing that this is a short sighted budget. Because of this important measure however, I believe otherwise.

Curiouscanuck, if this new formula for equalization works, and the new methods for calculating health and education grants stick, then you may be right. But I fear that this is just another round in these endless negotiations.

My main objection to the federal budget concerned all the niggling measures that were "tax cuts" for the anointed.

[Pat Coghlan]

If they really have a choice, why is it that the greatest number of at-home parents have an upper middle-class (or higher) income?

Choice is not why many women go to work at close to minimum wage jobs.

Out of curiosity, what would happen if many of those families suddenly had an extra $4K-$5K of after-tax income? Would the 2nd spouse still choose to work?

I haven't seen the figure that the greatest amount of stay at home parents are upper middle class.

And what minimum wage jobs are you talking about and what circumstances are you talking about?

As for your assumption that one of the spouses would stay at home for $4 or $5 thousand just to have more children, it is possible but for how long?

I found the following census data: http://www40.statcan.ca/l01/cst01/famil05a...di=one%20income

Note that the figure for average total income seems to be the highest in one-earner familes with children - higher than pretty much every other category other than non-elderly, two-income familes (with or without children).

I think it's safe to conclude that families with a stay-at-home spouse have one significantly above-average income. Perhaps someone else can refine this data.

I think the main point here is that things have changed significantly since the 1960s, when pretty much anyone earning a decent income could support children and a spouse in the home.

I maintain that inflation is the main reason why this is no longer possible (except for some) and that government monetary policy is to blame.

[jdobbin]

I found the following census data: http://www40.statcan.ca/l01/cst01/famil05a...di=one%20income

Note that the figure for average total income seems to be the highest in one-earner familes with children - higher than pretty much every other category other than non-elderly, two-income familes (with or without children).

I think it's safe to conclude that families with a stay-at-home spouse have one significantly above-average income. Perhaps someone else can refine this data.

I think the main point here is that things have changed significantly since the 1960s, when pretty much anyone earning a decent income could support children and a spouse in the home.

I maintain that inflation is the main reason why this is no longer possible (except for some) and that government monetary policy is to blame.

It doesn't say how many children these one income families have. If it is two, they have afford it with one income. If it is three or more then they are making ends meet.

I would have to see specific data that indicates that higher income families have more children. I've never seen that type of data.

Since the 1960s, there have been changes in gender roles and expectations in the home and workforce. The time frames to accomplish tasks in the home has dropped such as cleaning clothes and making meals. Subsequently, more women have entered the workforce because time factors no longer dictate the one must hunt while the other cooks.

Inflation most certainly has been a factor on reducing what a take home wage brings in. However, consumerism has run rampant as well. Shopping has become the lifeblood of the industrialized economy.

I often think that if people had $4 or $5 thousand more they might not have more children but spend it on more stuff.

[Renegade]

I maintain that inflation is the main reason why this is no longer possible (except for some) and that government monetary policy is to blame.

Actually in constant dollars income in two-parent families has gone up since the 60s. I think expectations is the biggest reason for the change. In the 60s houses were 1500sq ft, and people had a single car and a single TV. Today they expect more, and are willing to trade one spouse at home in order to get those things. So when people say they can't "afford" to have one spouse stay home, it is usually because of the other choices they make.

[Pat Coghlan]

I maintain that inflation is the main reason why this is no longer possible (except for some) and that government monetary policy is to blame.

Actually in constant dollars income in two-parent families has gone up since the 60s. I think expectations is the biggest reason for the change. In the 60s houses were 1500sq ft, and people had a single car and a single TV. Today they expect more, and are willing to trade one spouse at home in order to get those things. So when people say they can't "afford" to have one spouse stay home, it is usually because of the other choices they make.

Well, by trading the at-home spouse they also trade away any realistic possibility of having 3 or more children.

Also, you only get one chance to spend the pre-school years with your kids, so that is traded away as well.