A better perspective on government fiscal stupidity

The fuse is burning

Like most sensible people I often worry where the continuous overspending by all levels of government will eventually lead. Ongoing spending by Municipal, Provincial, or Federal governments seems to indicate a total lack of common sense or any fiscal responsibility on the part of our elected officials. It's almost like they live on a different world where money literally grows on trees and they function using a system of math where two plus two does not equal four. The alternative would be that they are simply stupid or incredibly naive about managing money.

Now while our Canadian Federal or Provincial governments are not by any stretch of the imagination "fiscally responsible" they do not even come close to displaying the free spending mindset and the reckless fiscal abandonment that our American neighbors to the south are engaging in, particularly at the Federal level in Washington. Watching their antics as they battle over adjusting personal tax rates higher, debt ceiling increases, and implementing spending cuts, would be comical if it was not so serious that the outcome has the ability to negatively impact the entire global economy. Even a simpleton knows that you can not continuously spend more than you take in, unfortunately this basic fact seems to be lost on America's elected officials especially the guy currently serving as President.

So if a simpleton can understand the concept, why can't supposedly bright elected officials?
Here's what I think........

So, Where do I sign up?

A day in the life of a Federal civil servant

When I was growing up, when you heard of someone who worked for the Federal government, you knew a few things right off the bat. One, they were probably not an ambitious individual, two, they didn't make a lot of money, and last but not least they would most certainly be serving a life sentence with the feds. It was a given that while a federal job didn't provide the big bucks that private industry did, it was a very secure position that in the end would provide a comfortable pension for ones golden years. Federal positions tended to attract those that wanted to take little risk on the career path and generally weren't overly eager to expend too much effort in earning a living.

Now fast forward to today's world......Lordy, Lordy, how things have changed and the pendulum has swung! Today's federal civil servant has rocketed ahead of us poor schmoes in the private sector to the point where one has to ask if the inmates are running the asylum in Ottawa. If by this time your beginning to believe that old Frustrated Joe is simply exaggerating the situation, just keep reading.

One can only wonder where it will all lead....

Over the years as I have watched the world go by it has become more apparent on a daily basis that the manner in which our democracy works is at times it's own worse enemy. Although from an early age we are taught that the different levels of government exist to serve the people, unfortunately in practice it seldom works as originally intended. In reality, many basic human traits make the practical application of good government far more difficult to implement than it appears on paper. Greed, lust for power, ignorance, prejudices, and people's general inability to understand that every action has a consequence, all play a role in making perfect government only a dream that will never be achieved.

Those that "serve us" in government rely solely on the electorate process to maintain their seats of power. So our politicians have learnt well that the people's loyalty can be bought with a few baubles and trinkets. Every election brings more promises of what the electorate can expect "in payment" from each of the political candidates if they are elected. What we generally see is a bidding war for votes with every party pulling out the cheque book and removing all stops in their zeal to promise the voter more than their opponent can. The problem is compounded as the demands of the electorate and the promises of those running for office increase with each election and every generation of voters. Now on first glance, one may wonder if this is such a bad thing, after all it is taxpayers money intended to be spent for the common good and the betterment of society as a whole.

Government and Debt. How did we ever go down this road?

Just the other day I was watching television in my bed prior to drifting off for the evening. As I recall I was watching the news, and I got to thinking about how nice it would be to get rid of my 21" CRT boob tube and replace it with a brand new 32" Plasma, LED, or LCD HD television. You know the ones, fully loaded with all the bells and whistles.

Now I will admit that there is really nothing wrong with the TV I have, but lets face it the new ones are just a lot nicer. As I lay in my bed musing about this I thought that if I were to buy a new TV I might as well get one of those PVR satellite receivers, that way I could record programs and watch them at night. After all, in for a penny in for a pound. In fact since I am upgrading.... why not a couple of sets of wireless headphones for the wife and I, that way one could watch TV into the wee hours while the other slept. Ooops, almost forgot a DVD player, a Bluray, probably 3D with some wireless features (don't want to miss out on NetFlix).

Just as I was planning my run to BestBuy the next day, reality set in (it's a bitch at times). I needed all of this equipment like a "starving dog needs a second arsehole", more to the point where was the money coming from? After all it's not like I had a couple of grand set aside for tech upgrades, or that my employer would just cut me a cheque out of the goodness of their heart (and their understanding of my hi-tech needs). The bottom line was that the money would have to be reallocated from something else ( food, education, retirement, mortgage, emergency funds, saving, etc.) or borrowed, thus incurring some debt.

So, now that I have laid out my hi-tech bedroom fantasy (almost sounds risque doesn't it?) you are probably asking yourself what this has to do with Government debt.

Well its no big secret that governments at every level (civic, provincial, and federal) are and have been overspending for years, taking on ever increasing debt loads with no end in sight or any formal plan for repayment. So what is the answer?

Enough with the regulations and redtape!

As most Canadians go through their day to day life the last thing on their minds is the ever existing, non relenting government creep into our daily lives. Unfortunately, it creeps along taking our freedom a small bit at a time, not enough to raise a red flag, but there none the less. Like rats, one is just the first and before you know it your home is infested. Now the really insidious part of it is that it comes from all directions, from all levels of government, and seldom shows any indication of where it will lead say a decade down the road.

The underlying cause of all of this is that by default one of a governments main functions is to regulate. Think about it, at the end of the day once you set aside the most obvious top of the pile government duties like defense and such, what's left but regulation. Every level of government, civic, provincial, and federal all are at work continuously to rewrite, enhance, and create new regulations. Add to that the fact that with every change of government the "new guys" have to prove they can do better than the "old guard" by making changes to existing, trashing the old, writing new, or just being creative and making a crisis out of something that was never regulated before.

Think about it, what restrictions and regulations have been brought into place in just the last ten years? What regulations affect your daily life?

Government has gone from serving the people, to supervising the people. Canadians are now wards of the state, for the most part viewed as irresponsible individuals who have to be taken care of from cradle to grave, and told how to behave in society. Government regulation takes from our pockets as surely as taxes do, but regulations typically do it under the radar. Every product or service that you purchase almost certainly has regulations attached to it, regulations that incur costs for the provider, manufacturer, wholesaler, retailer, and in many cases all of them at differ points in the path to the end user, which are in turn passed onto you as the consumer. So, just how bad is it?

Now this is truly a case of the pot calling the kettle black......

"Sydney, what happened to you? You've become obese!"

Recently, Jim Flaherty Canada's Finance Minister has taken to publicly criticizing the spending habits of the provincial government of Ontario.

Now while I can't argue with the criticism nor would I in my wildest dreams ever consider defending Premier Dalton McGuinty and his merry band of free spending caucus members, I do have a problem with this.
Where do I start, well it seems Jimmy has suggested that the McGuinty Liberals should "look in the mirror" to see who is responsible for Ontario's current economic woes. A fine suggestion, but tell me Jimmy-Boy, do you own a mirror?

Rather than having me take off on a rant (something I tend to do occasionally), let's keep this short and use a couple of old but well proven adages that accurately describe this soap opera.......
"cast the first stone" or  "Those that live in glass houses....."

I am personally amazed that Jimmy feels he can tell anyone how to be fiscally responsible. It certainly is not based on his setting such a fine example to follow,  another old adage says it best  "Don't do as I do, do as I say"

On the other hand, maybe there is a simpler motivation at play here, like the fact that Jimmy's wife Christine Elliot is the deputy leader of Ontario's Conservative party. You know, the same Conservative party that would like to form the next government of Ontario and currently sits in opposition to McGuinty's Liberals.

So Jimmy, how about doing us taxpayers a couple of favors?
First, balance your own governments budget and address it's debt before you worry about the other guys, and secondly when your working on our nickel let your wife do her own campaigning.

Getting closer each day to the edge of the cliff in Ontario...

Ontario Premier McGuinty and his ministers

Is it just me or does it appear that having a complete lack of common sense or any level of financial savvy is one of the prerequisites to holding an elected office in Provincial or Federal politics?

Now a lot of us non elected types who manage businesses and our own households understand the most basic of financial concepts, that you can not continuously spend more than you take in. Sure on occasion, all of us have gotten a little loose with the purse strings in the short term, but generally we rein them in pretty quickly to avoid financial ruin.

So why is it that governments with their army of accountants and advisers can't seem to balance a budget? To be fair I understand that on occasion revenues will be lower that anticipated and might result in a short fall, but the theory is that you adjust spending accordingly. Our governments in general have gotten to the point, particularly in the last number of years where a balanced or surplus budget is the exception, not the rule. Where they celebrate the introduction of a budget that shows a slight reduction (not elimination) in its projected deficit from the previous years deficit. Case in point, the Province of Ontario.

A taxpayers prescription to doctors and government, take on a daily basis.....

Image Courtesy of Acclaim Clipart

Doctors for Fair Taxation, a group of Canadian doctors is "prescribing" increased taxes on Canadians in higher income brackets. Promoting the slogan "Tax us. Canada's worth it!", the group is suggesting that both the Federal and Provincial levels of government raise taxes on the top 10% of wage earners in Canada.

"We are pleased that so far most of the health care system has been spared the cuts made to other sectors. But we see the impact of these cuts in our patients who lack the community services, housing, and income to be full participants in Canadian society," the group states in an online petition addressed to the federal and Ontario governments. "When a family faces a loss of income it doesn't resolve the crisis by denying food to one its members. A functional loving family makes the existing food go further. Our country should similarly find ways to best use our existing resources so no Canadian will be deprived of their health and security," said the group.
(Hold your horses Docs, since when did an individual citizen's earning become a national "existing resource"?)

In a nutshell, they suggest the following tax formula,
Canada's top 10% of wage earners, those who make more than $100,000 a year would see a 1% tax increase. But it doesn't stop there, they also suggest a 2% tax hike for the 1% of Canadians who earn more than $170,000, a 3% tax hike for the 0.1% who make more than $640,000 and a 6% hike for the top 0.01% who earn more than $1,85 million.

Now, some Canadians may look at the above proposal as being fair and just, after all why not take more from the "rich" (they can afford it, right?). Personally, I have some serious issues with the way that our progressive taxation system penalizes (via higher tax rates) individuals for taking risks and achieving success. But that's only part of the reason this proposal stinks......

What's all the fuss about Old Age Security?

Like most people I see a day when retirement will be upon me. So while I am doing my best to build a nest egg for those years I also realize that I will be counting on the government for some of my retirement income.

This means that anytime our federal government discusses changes that may effect the retired segment of our population I listen up. Naturally when I recently heard Prime Minister Harper speak on the need for raising the age of eligibility for Old Age Security (OAS) to 67  from it's current 65 my ears perked up and I immediately assumed the worse. However like so much of what the mainstream media serves to us there is far more to it than meets the eye.

When it comes to taxes , we all need a little perspective.

With the United States currently in the midst of the Republican primaries and the Presidential election coming this fall one topic that is being hotly debated and makes headlines virtually every day is taxation. More to the point, the rates of taxation.

The spark that ignited this fire is ever increasing government debt and no foreseeable end to budget deficits. Obviously the wisest solution would be to curtail reckless spending and live within budget, unfortunately that would entail making some hard choices, something that most politicians try to avoid at all costs. Apparently those in power have another route in mind, one that they view as having a lot less potential to cost them votes, simply increase revenues. From their perspective high atop the mountain they feel they have discovered an untapped "national resource" in the form of increasing taxation rates to higher income earners.

Nowhere was this message more clear than in President Obama's recent state of the union speech. Never one to miss an opportunity Obama used the State of the Union address to kick off his campaign for re-election. Here's a quote from his speech (the bolded text was highlighted by myself)

Once again the pigs are at the trough....

If you keep abreast of current news you have probably noticed that the topic of MP Pensions has been rearing its head again lately. Although these pensions have been in place for many years they seem to become the focus of attentions every once in a while. What amazes me personally as a taxpayer is that this issue is ever allowed to creep back into the shadows.This is probably one of the most blatant example of how our elected officials ensure their own pockets are lined at the expense of those that elected them. Don't believe me, well read on and you will....

How our Government is destroying everyday charity

With the Christmas season upon us it generally means that most individuals feel a greater compassion towards their fellow man. The most noticeable result of this is the increased donations to charity, everything from the "Sally Ann " kettle at the mall to the local food bank. Most charities count on the Christmas season to help fill their coffers so that they in turn can provide help to those that need it in society. Along with cash donations comes an army of volunteers that help collect donations, feed people, deliver toys, you name it. What we see at Christmas is the best of our society, people helping people, not because they have to but on their own accord and out of the goodness of their heart.

Unfortunately this whole idea does not sit well with big government, who in general tends to dislike the concept that individuals might just be able to accomplish what needs to get done on their own with the government having no say or control over it.

Let's discuss our governments role in charity and how they approach it using the concept of  "wealth redistribution".

Federal Debt. and what 's never discussed ...Unfunded Liabilities

As of the writing of this post Canada's Federal debt sat around  $572 Billion  based on the debt counter to the right, unfortunately that is but part of the story.

In addition to the national debt, Canadian governments have committed themselves to providing programs that are not fully funded. In simple terms, as a country we have promised to provide a host of programs which current tax rates leave unfunded. Which means, the money to pay for them needs to be found in years to come.

But Frustrated Joe, whats the big deal? All we need is more immigration and to increase taxes a bit to cover all of this. Right?

Unfortunately  a bit won't cover it, here are some numbers to ponder.....

Taxation, sometime blatant, sometimes subtle, but always there.

I read with interest a news article by CBC News detailing a recent poll they have had conducted regarding the willingness of Canadians to pay road tolls. Apparently half of Canadians surveyed said they would be willing to pay road tolls if it would ease gridlock and shorten their commute. The concept of road tolls is simple enough, they allow a government to recoup the cost of a project (the entire cost or a portion) and thus not require it to be paid out of general revenue. This allows the government to complete a project and take credit for it without paying directly for it.

I won't bore you with all the details of the poll as I am more of a "big picture" guy, and in this case it's the big picture that caught my attention. One of the findings of the poll was that on average city commuters appear willing to pay up to $3 a day for road tolls. The simple math on this is that based on 5 work days a week, 50 weeks a year this adds up to $750.00 per year!

Robin Hood, Alive and Well in Todays World?

Being a weekend I am feeling a bit lazy, so I will take the opportunity to ramble on about one of my pet peeves, taxation/wealth redistribution. No stats quoted, no hard numbers, no video clips, just some of my thoughts on the issue

All of us from an early age are taught that as good citizens we must pay our fair share of taxes to maintain and improve our society. It is explained to us in detail how our taxes are used by different levels of government to ensure that we all have the opportunity to live in a safe society where all are treated fairly. The concept is great and anyone would be hard pressed to argue against the notion of  "all pulling together and everyone contributing a bit to make for a better society".

Unfortunately somewhere along the line the concept has gone astray, like many concepts that got off to a simple start this one has grown wildly beyond anyone's dreams, if fact in some cases to the point where it consumes a large portion of an individuals efforts.

Not sure if this is Robin Hood or one of our
current government leaders, either way he'll do.

In today's world taxation has evolved into a government run system of  "wealth redistribution", maybe we could jokingly compare the government to Robin Hood, taking from the rich by force and giving to the poor. But as I recall Robin Hood was considered a thief and a bandit and along with throwing a few pounds to the pheasants, he always made sure his own band of merry men were well stocked with food, ale, and wenches (no doubt one of the reasons they were "merry"). On second thought......maybe the comparison is a good one after all.
 So lets explore this analogy a bit more. One of the issues Robin Hood certainly faced is that he needed the support of the common man, and as long as kept throwing them a few pounds they had his back when the Sheriff of Nottingham came calling looking for Robin. Now in order to do this Robin had to keep going back to his only source of revenue "the rich", unfortunately he didn't have too much time to sort out who was actually taking advantage of the poor, and who was doing their best to use their wealth to help out the underprivileged. It was far simpler to just take from anyone who appeared to have anything, distribute it to the poor (or at least the ones that appeared poor or claimed to be), and garner their support and undying devotion. No doubt Robin's intentions when he started were noble, help out the underprivileged, but unfortunately it got away on him and soon everyone demanded more, resulting in Robin having to take more. Wow, it seems the comparison between Robin Hood and our own government is more appropriate than even I imagined.

Ouch, I think I have rambled on enough for one day, my head is starting to hurt, probably yours as well. So until next time, Adieu

Welcome to Dwindling Empire

To those of you who have stumbled over this page, Welcome to my perspective of the world, take it or leave it, I stand behind it. The opinions I express here tend to be very "black or white" as I firmly believe that the grey areas are what tend to get us into trouble. However please feel free to post your opinion and debate mine, after all this is still a free county.....isn't it?