Category: Political Economy

Canada, Ethics, Political Economy, Politics1 Comment

Guaranteed Basic Poverty

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From time to time, some “social planner” will float another trial balloon for the “guaranteed basic income” (GBI). Most recently, it is Canada’s Parliamentary Budget Officer (PBO), also known as the Parliamentary “fiscal watchdog.” I don’t know what master this “watchdog” is really serving but if it’s the individual or Canadian taxpayers, then this “watchdog” is either soundly asleep or barking at the moon. This “social planner” clothed in “fiscal responsibility” offers up another emotionally appealing (to many) scenario that betrays everyone, including the proposed beneficiaries. The PBO betrays the Canadian taxpayer to the tune of $43 Billion per year … Continue reading Guaranteed Basic Poverty

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“Spending” Fundamentals

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Canada’s Finance Minister, Bill Morneau, donned his new pair of designer shoes last Tuesday and delivered the government’s budget. For clarity it ought to be called the government’s spending plans, larded with lots of “feel good” spending initiatives that have nothing to do with practical finance or economics. To many of us the hoopla that surrounds the government’s budgeting process and the endless commentary that follows release of the budget itself is mind-boggling. Lawyers, accountants, journalists and various pundits on television are engaged in analyzing the government’s budget. It is easier to understand what’s going on if you identify and … Continue reading “Spending” Fundamentals

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Out Damned Euro!

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I would go a bit further than Canadian Finance Minister Jim Flaherty in commenting that “maybe Europe should give up on the eurozone”. Europe should definitely give up on the eurozone, that collectivist-inspired effort at central control of disparate nations and disparate lives. The attempt to have a common currency—the Euro—among 17 different economies was always doomed to failure. It is just another essentially useless fiat currency. It is legal tender because central authorities say it is. The conduct of trade between 17 competitors using the same currency cannot work because no adjustment can be made in a member country … Continue reading Out Damned Euro!

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The Turmoil of Being Turmel

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  Nycole Turmel is the acting leader of the Canadian New Democratic Party (NDP), relieving Jack Layton who recently stepped down to deal with personal health priorities. It did not take long for the neophyte leader of the official opposition in the House of Commons to get into trouble. Nycole From “The Bloc” Nycole Turmel has come under widespread criticism in light of the revelation that she was once a card-carrying member of the Bloc Québécois, a Quebec nationalist federal party on the left wing of the commonly-used political spectrum. “The Bloc”, as it is referred to in most of … Continue reading The Turmoil of Being Turmel

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AAA Tax Rating

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Moody’s credit rating agency has maintained the U.S. government’s credit rating at “AAA”. Its review, which began on July 13, was coincidentally completed today with the following public statement: “We have confirmed the AAA government bond rating now that the statutory debt limit has been raised.” (Emphasis added.) The agency need not have bothered with the charade of an independent review during the eleventh hour political bickering in Washington if all it was going to do was sanction an increase in borrowing capacity once it was passed by Congress. Bond investors look for safety in the “full faith and credit” … Continue reading AAA Tax Rating

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The Spending Crisis

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Most media coverage of the main political fight in Washington these days refers to the “debt crisis” or “debt ceiling crisis”. Debt is the result of overspending. More spending, in the absence of sufficient revenue, leads to escalating debt. With the US economy already taxed at levels that can negatively impact investment, further spending can only exacerbate the debt problem. A more precise and fundamental headline would be “The Spending Crisis”. Obama Reveals Spending Crisis Unwittingly, President Obama made some remarks on Friday that really drew attention to the spending crisis. He wanted to emphasize that the reason for the … Continue reading The Spending Crisis

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Smoking Hot

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Canadians are trapped in an immoral system in which an economic good—medical care—is supplied exclusively by government. Canadians are not permitted to participate in any domestic market for medical care, even as they are constrained by the economically predictable shortages and rationing of care that result from bureaucratic supply. It should not be surprising that under such a system there are elevated levels of stress and conflict. The politicians and bureaucrats charged with “managing” the system are constantly and futilely attempting to get their annually escalating budgets under control. They have their own ways of dealing with conflict. It usually … Continue reading Smoking Hot

Ethics, Political Economy2 Comments

Appoint a Receiver

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Five months ago I encouraged you to keep an eye on the Statutory Debt Limit in the United States. My premise is that the “debt ceiling” indicates how seriously members of the US Congress and Obama Administration take fiscal responsibility. Since then the partisan bickering has escalated while a general consensus is not whether the limit will be raised but by how much and under what conditions. It is clear that the majority of political participants cannot be entrusted further with finding a resolution. It is time to appoint a Receiver. Debt Caused By Excessive Spending First, consider why law-makers want the … Continue reading Appoint a Receiver

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Sustainability

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The vague concept of “sustainability” is spreading as a cancer around the globe. The term has entered the social lexicon and permeates politics and economics. On some level it sounds positive, but where did it come from and what does it really mean? Sustainability Equals Environmentalism Those who have marched under the banner of “environmentalism” have not given up after several decades of failure to force entire populations to “get back to nature”. The weak intellectual support for a worldwide “green” dictatorship is now taking a new tack. The environmentalists and other Statists have found a more appealing banner in … Continue reading Sustainability

Economics, Political Economy1 Comment

Economic Alchemy: Spinning Death and Destruction into Gold

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Economist Paul Krugman, who writes a progressive political column for the New York Times sees some gold in the death and destruction in Japan. The rebuilding, he suggests, will be an economic boost. He admits it sounds like a “crazy” notion but points out that “…liquidity-trap economics is like that”. The observation is stupid on its face. Taken to its logical extension, if death and destruction have hidden economic benefits why not keep on destroying and rebuilding things? Only government elites and their advocates could come up with such cynically stupid ideas. The hidden costs, the things that could have … Continue reading Economic Alchemy: Spinning Death and Destruction into Gold