50 Billion Dollars Isn't Spent In A Day

Andrew Coyne is railing against the evils of government spending again. Mr. Coyne blames the eye-popping deficit on spending and spending alone. That is of course not true in the least. The reason this deficit is so troubling is not the stimulus and EI bills that have made it balloon but the irresponsible raiding of the federal coffers by this Conservative government. Let's go back to the first Harper deficit, the relatively modest 1.1 billion dollar deficit posted for the fiscal year 2008-2009. To be clear most of the money for this budget came in before the economic crisis exploded last fall, so this isn't really about a bad economy. When governments put out their annual budget they do forecasts for budgets going forward. Of course, these are reallly rough estimates but they do provide an interesting contrast. The last Martin budget, the spending laden, so-called NDP budget in 2005, had projections for the fiscal year 2008-2009. Here's what Ralph Goodale saw happening with a Liberal government at the helm:

Budgetary Revenues: $228.4 Billion
Program Expenses: $185.8 Billion
Debt Servicing: $36.1 Billion

Net Result: $6.5 Billion Surplus

Here's what actually happened after Tory irresponsibility:

Budgetary Revenues: $236.4 Billion
Program Expenses: $206.8 Billion
Debt Servicing: $30.7 Billion

Net Result: $1.1. Billion Deficit

Yes, spending is up to the tune of about $20 Billion, but that would have been affordable before the Tory tax cuts. But government revenues went up you say? Sure in terms of dollars but it shrank considerably when you look at it as a percentage of GDP. Here are government revenues as a percentage of GDP projected in 2005 for 2008-2009:

Personal Income Tax: 7.3%
Corporate Income Tax: 1.8%
GST: 2.4%
Other Taxes: 1.1%

Total: 12.5% (obviously some rounding here)

Here's what the Tories produced:

Personal Income Tax: 7.3%
Corporate Income Tax: 2.0%
GST: 1.6%
Other Taxes: 1.3%

Total: 12.2%

That 0.8% of GDP lost to the economically dubious GST cuts translates to a $10.5 billion loss in revenue. In other words, without the GST cuts, the government would have been in surplus even with the increased largesse in 2008-2009. The structural deficit, the one that is going to require either higher taxes or lower spending to get out of, is a direct result of irresponsible Conservative tax cuts. Short term investments in infrastructure do not create structural deficits, especially when you have ridiculously low interest rates to pay for them. A lack of sufficient government revenue does.

Side Note: I usually like Paul Wells, but the "they'll replace him with someone equally bad or worse" argument doesn't hold water. The idea of ministerial responsibility is that when you screw up, you resign or get fired. It doesn't matter who they get to replace you. Flaherty screwed up, he should resign or if he refuses, Harper should fire him. It's simple.

How Was I Supposed to Know There Would Be A Train on the Train Tracks?

Apparently, having a Masters in economics didn't allow our Prime Minister to foresee that employment insurance claims would go up in a recession. Yes, Stephen Harper is clearly the only one with the requisite knowledge to guide us through this crisis.

Bryant Gets Out

Michael Bryant has had enough of being a second tier minister in Dalton McGuinty's cabinet. While Bryant has had important portfolios in Aboriginal Affairs and Economic development, they never seemed big enough for Michael Bryant's britches. I expect with it all the more obvious that McGuinty intends to seek a third term in 2011, Bryant was looking for an exit strategy. The move to Invest Toronto provides a decent lateral exit strategy. The move into an organization run by Mayor Miller is an interesting move in terms of municipal politics. Miller needs to keep the Liberal voters who put him in office in 2003 if he gets a serious challenger in 2010. Appointing Bryant to an economic portfolio may be a way for Miller to keep the increasingly disenchanted right wing of his coalition happy. For Bryant it gives him distance from any of McGuinty's mistakes, if and when McGuinty retires and Bryant seeks the Liberal leadership.

However, the long term future political implications may not be as interesting as the short-term: namely, the by-election in St. Paul's. Why is a by-election in a safe Liberal seat interesting? Well, first the Liberal nomination fight. I expect there would be more than one person interested in the Liberal nomination for such a safe riding. The provincial party doesn't have the deep divisions that have plagued its federal counterparts and Bryant seemed to be one of the few people working behind the scenes for the race to replace McGuinty. This hopefully will mean a nomination fight based on the merits of the various candidates and not based on which future or past leadership hopeful they support. In other words, a wide open free-for-all. However, the race might not be as easy as the Liberal aspirants may think. The Tories (both provincially and federally) have always thought they should do better in St. Paul's. It contains some of the richer neighbourhoods in the city and seems to be prototypical of the old Toronto small-c conservative attitude. A by-election, with its low turnout and general wackiness, should be an ideal circumstance to try to steal the seat. The circumstances get better when you consider that the Tories should be riding relatively high after picking a new leader (even if Dalton waits until the fall to call the by-election). After the Tories lost a safe seat in Haliburton-Kawartha Lakes-Brock, I am loathe to rule anything out. I expect the Liberals to hold it, but I can't guarantee it, especially if the Tories find a strong candidate.

There's A Reason We Have A Representative Democracy

A great piece in The Economist about the fiscal disaster in California. I have always had a fundamental objection to direct democracy and any time I need to find courage in my convictions, I look at California. The state is a mess because special interests have exploited direct democracy to make it impossible for legislators to unseat them. The budget arrives in the legislature pre-cut up. This has been a problem for years but now facing declining revenues, the crisis has reached a new peak. We pay our politicians and bureaucrats good money to run our government. We do so not because politicians tricked us but because running a government is hard work and is actually a full time job. Direct democracy is a way for politicians to avoid making tough decisions.

Obama Sends Potential Rival to China

In a move that can be seen as both bipartisan and highly political, President Obama has named Utah Governor Jon Huntsman (R) as the United States' new ambassador to China. Gov. Huntsman is seen as one of the most capable Republican governors in the country. He would have been a formidable dark horse candidate in a Republican Presidential primary come 2012. Now, he'll be working for Obama thousands of miles away from the snows of Iowa and New Hampshire. The governor has experience in the foreign service and is fluent in Mandarin.

Attack Ads

While the media probably doth protest too much about the new Tory attack ads, I'm much more interested in the message the Tories are trying to send. In English, the message is fairly simple and simplistic: Michael Ignatieff is a jet setting academic with no attachment to Canada. While Tony Clement and others may have to answer to the what's wrong with Algonquin Park question, there isn't much substance in the English ads. They really seem to be straight out of the John McCain playbook; they characterize the opponent as a foreign celebrity. While the polling seems to indicate that the tactic worked for McCain, I wonder if it will work for the Conservatives. Canadians lack of fervent nationalism (outside the hockey rink) generally means that they take a fairly positive view of other countries, particularly the UK. While that might not extend to the US, there are many Canadians who have worked in the states for part of their career. Moreover, many Canadian voters spent a large portion of their life abroad. The largest group is obviously new Canadians. I don't know how the "foreigner" attack plays on someone who personally comes from elsewhere, but I can't believe it's a winner. With ridings like Brampton-Springdale, Richmond and Mississauga-Erindale as possible battlegrounds next election, I can't say I understand the tactic. I wonder how much say Jason Kenney had in the ad choice.

In French, the ads are much more substantive and frankly better. The tag line "Qui Suis-Je?" is much more ominous than the lighthearted "Just Visiting." The French ads also attack Ignatieff on policy: everything from his early support for a carbon tax to his "French North Americans" comment. The bad news for the Tories is that even if these ads work, they may only give votes to the Bloc as the Tory ship appears to be sunk in Quebec.

Post-Referendum Analysis

The slightly longer version this time. I still posit that the principle difference between 2005 and 2009 in terms of the referendum results is the distance from the strange 1996 and 2001 elections. If we call that reason 1, some other reasons out there for the shift against STV.

The Question: When CalgaryGrit isn't sure why the question matters, I am loathe to hazard a guess. I will say that I thought in 2007 that a FPTP v. Reform question would favour reform more than a simple yes/no. Back then, I thought that the a FPTP v. Reform referendum would allow the reform side to frame it as a referendum on FPTP, thus hiding their own warts. However, my thinking has evolved after watching the last two referenda. Here's a thought experiment. Say somebody asks you a yes/no question that you don't know and you have to give them an answer. Are you more likely to say yes? There's got to be a psych study on this somewhere. I have to believe the answer is yes. Particularly when your being asked whether or not you agree with something called "the Citizens' Assembly." On the other hand when given two equally strange sounding acronyms (FPTP v. STV) there is no natural tendancy to choose one over the other. It's not that I think the people of British Columbia or Ontario did not have the opportunity to become informed (the internet is a wonderful resource), I just don't think most people don't particularly rank electoral reform as a must know issue. So, long story short, the question might have helped.

STV Has A Bad Aftertaste: There are some arguing that the more you know about STV, the less likely you are to like it. I tend to agree in principle. The warts of any system (our own included) are more visible the more you know about it. There's no such thing as a perfect electoral system. That's one of the reasons that Western democracies can't agree on one.

Can't See The Trees For the Election: I've never bought the "we shouldn't hold this concurrent to a provincial election" argument. Presumably you would like people to vote in a referendum if it is going to be legally binding. Canadians don't particularly like to vote. I can't imagine you'd get much turnout in a separate referendum on electoral reform. Separation it ain't. Then again, this might be the only way electoral reform would pass. As the blogosphere demonstrates there are a lot more passionate supporters of electoral reform then there are detractors. Oh yeah, what's the cost estimate?

Don't Ask the Same Question Twice: The idea is that Canadians aren't going to vote for something that's already been rejected. I don't know how you explain the 1995 Referendum results when compared to 1980 in that context.

Misinformation: I really can't believe the majority of voters knew enough about the question to be so misinformed as to reject it against there own philosophical tendancies.

The Silent Majority: Ah yes, non-voters are so overwhelmingly in favour of electoral reform, they stayed home and didn't vote for it. I get it now!

Also of interest are the arguments not being used this time around. They include such gems as:

• Canadians are racists.
• The threshold is an affront to democracy!
• It did as well as the winning party, shouldn't that be good enough?
• Just wait until next time!
  

Thank You British Columbia

For sparing us any electoral reform conversations for a bit. The margin that STV was defeated was sizable but frankly, predictable. It is increasingly clear that the 2005 referendum was the anomaly. With the freak elections of 1996 and 2001 further in the rear view mirror, the margin last night was comparable to the results seen in Ontario and PEI. STV is dead, and it deserves its fate. Strange that the histrionics that we saw after the MMP debate didn't re-emerge today. I guess there's some resignation from the Fair Vote crew today.

Please BC, Say No to STV

Election day is fast approaching in British Columbia. The advocates for STV are making their final pushes. Here's Andrew Coyne's epic. The question for British Columbians is simple, what is more important: accountability or proportionality. The system that was proposed by the Citizens' Assembly is designed to try to appease the ivory tower concern of proportionality. Proportionality is something that is only useful to political parties, not voters. You are asked on election day, under both First-Past-The-Post and STV, to choose representative(s) for your part of the province to represent you in Victoria. You are not asked which political party most closely resembles your political phillosophy. You are asked to elect someone from your community (hopefully) to be your voice in government. One of the measures that you may choose to use in making your decision is partisan affiliation. Certainly the performance of a given candidate's party in the legislature is important. However, there are other variables in your decisions. Do you think the candidate is qualified to do the job? Do you think the candidate has your best interests at heart? These variables among thousands of others, may distort the statistical calculations of academics, they may confound the pundits paid to predict and pontificate. This doesn't make these considerations less valid. British Columbians vote on more than partisan identification. They should have an electoral system that seeks to do more than provide "justice" to political parties.

Representative democracy can only function if the representatives are held accountable by their members. British Columbians know that a "safe seat" is never safe in BC. The history of BC politics is littered with politicians who thought they could coast to re-election. Social Credit rose and fell in British Columbia. A government was reduced to almost nothing in British Columbia. A Prime Minister lost her seat in British Columbia. British Columbians hold their elected officials to account. It is a proud tradition that speaks to the basic ideals of representative democracy. STV promises that everyone will win. It lives up to that promise. It would only take 12.5% of the population of Victoria to keep an MLA in the legislature. How easy will it be for an established politician to find 12.5% on name recognition alone? Only a single member plurality system like the current First Past the Post system can provide true accountability. Only under FPTP can the people of BC truly strike the necessary fear into the hearts of their politicians. Only under FPTP will politicians pause before acting against the interests of their constituents.

Do not be distracted by the utopians promises of STV proponents. Politics aren't perfect anywhere. It cannot be as it is fundamentally a construct of imperfect people. No electoral system will make our politics more civilized. No electoral system will make politicians keep campaign promises. Utopia comes from the Greek for "No Place". Don't vote for an electoral system as a road to something that doesn't exist. On election day, vote for the electoral system that will allow you to keep politicians accountable when they screw up instead of voting for a system in the hopes that politicians will never screw up again.

British Columbians Becoming Increasingly Forgetful

That's the only conclusion for the Fair Vote crowd to draw if this polling proves accurate. There was a myth during the MMP referendum in Ontario that lack of information was the reason MMP failed. Fair Vote folks often say that if people had the facts they'd win in a landslide. I debunked the MMP myth here if you are interested. This time around, with now two efforts to educate the good people of British Columbia (this one extraordinarily well-financed), the evidence seems to be that the more people know about STV the less they like it. Lots of reasons for this. (It's just not that likeable in my humble opinion.) I'll save any analysis of this for after the ballots are in and we shall see if the pollsters are even in the ballpark (no guarantee, especially in BC). One question. If this fails miserably, do we get to put the electoral reform issue to bed for awhile? I know if it passes the cries from Fair Vote Canada will become insufferable.

Political Deaths

Jack Kemp is dead. The former Buffalo Bills quarterback and Republican Vice-Presidential nominee (Dole-Kemp '96), HUD Secretary and Congressman died Saturday. I think his death may have a little more metaphorical meaning this week in the wake of the defection by Sen. Specter. Kemp is the last Republican nominee for either top job from east of the Mississippi and perhaps more importantly he was the last in a long line of northeastern Republicans to get a nomination. The Republican fortunes in the Northeast are getting bleaker by the day. They now hold 3 senate seats from Pennsylvania to Maine. With former Obama Commerce Secretary designate Sen. Judd Gregg (R-NH) retiring, there is a strong chance that number will dwindle to just the two senators from Maine after 2010. There are no Republicans in the house from New England. There was a time that the Republican party was synonymous with small-c conservatives in the Northeast. No more.

A Bad Session For the YLC

With elections for incoming positions just finished, the Young Liberals of Canada has to be licking its wounds tonight. The constitutional plenary went from bad to worse this afternoon. With the magic of CPAC, I was able to watch a lot of the plenary (while flipping between that and Crosby-Ovechkin) from here in Toronto. The first defeat for the YLC was, in my mind at least, expected. The YLC amendment to the Weighted One Member One Vote amendment failed and failed miserably. It may have been insult to injury to have Justin Trudeau be one of the speakers against on the convention floor. Perhaps, the real damage though, was done after the hall had half emptied. After Don Boudria et al. killed amendment 10 which would have limited the number of ex-officio delegates by removing ex-officio status from non-privy council former MP's, the convention moved on to amendment 11.

The debate on Amendment 11 was perhaps the most interesting of the afternoon. It shouldn't have been, but it was. In spite of the efforts of the current and former Policy Directors of the OYL, the hall seemed confused by the wording of the amendment. This led to an extraordinary few minutes where the constitutional experts provided the most unclarifying clarification in history. They lambasted the amendment as poorly worded at best and self-contradictory at worst. In both official languages they concluded by saying they didn't know what the Amendment meant and that it wasn't "ready for prime time". Former blogger Jason Cherniak quite correctly criticized the constitutional experts for seeming to do the opposite of their job by failing to provide an interpretation and thus advocating for the defeat of the amendment. The amendment failed miserably and the YLC was left being called "not ready for prime time" from the convention stage.

To finish off a terrible session, the YLC saw their amendment for a National Outreach Secretary (that's Amendment 12 in your programs) fail as well. I honestly can't remember what happened to the first YLC amendment (9) but three defeats plus the failed sub-amendment makes for one bad day. The last thing the YLC wants is to be seen as "not ready for prime time". I don't think I was the only young liberal cringing watching that today. The job for the incoming YLC executive got a little harder today.