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The liberals are the real conservatives. Or is it the conservatives who are the real liberals…

Partisan or ideological labels are meaningless


 

Coyne’s article on the budget perpetuates the myth that it is the “right” that wisely manages your money and the “left” that squanders it. It is conservative governments over the past 2 1/2 decades that have overspent and undertaxed, leaving high deficits to mop up. It was a Liberal government in the 90s that practised restrained conservative fiscal management and took flak from a Conservative opposition for it. Perhaps it is time to abandon cozy, outdated and deceptive labels.

– Letter writer in the current issue

You see this sort of thing a lot these days: the meme has escaped the lab, as it were. And it’s certainly true that big-C Conservative governments have often been anything but small-c conservative. But as to the broader thesis, that it is characteristic of conservative governments, owing to their reckless tax cuts, to run deficits that liberals have to clean up, well, it just ain’t so.

It was indeed the Liberals who cleaned up the mess in the 1990s (with large assists from the Reform opposition and Alan Greenspan). But, if you remember, they also created the mess: when the Mulroney Conservatives came to power in 1984, they inherited a deficit in excess of 8% of GDP from a party I’ll call the Liberals. True, they then spent nine years not doing much about it, but not because they cut taxes: they raised taxes (16.2% of GDP in 1985, 17.8% in 1993). So it can’t have been, in the writer’s fetching idiom, that we were “undertaxed.”

As for the Harris Conservatives in Ontario, another example that often pops up, it’s true they cut tax rates. But tax revenues didn’t fall after the Harris tax cuts: they went up. Own-source revenues (that is, not counting federal transfers) averaged just over 12% of provincial GDP in the early 1990s under the NDP, but averaged more than 13% through the Harris years. That’s how they were able to whittle a $10-billion deficit (again, inherited from the previous, left-leaning government) to zero, even as federal transfers were being cut in half. Well, that, and the spending cuts they imposed in their first term.

The reason the Ernie Eves (Harris’s successor) government ran deficits wasn’t because they cut taxes, but because they raised spending: having been held to roughly $5500 per citizen (in 2008 dollars) through the Harris years, program spending suddenly ballooned to nearly $6000 under Eves (in nominal dollars, it jumped from $56-billion to $64-billion in two years). Had they kept spending under control, there would have been no deficit.

If, further, the Liberals under Dalton McGuinty were then able to balance the budget, it wasn’t because of their conservative fiscal management: McGuinty spent money even faster than Eves did. By fiscal 2008, real spending had jumped all the way to $6800 per capita. The only reason he was able to balance the books was because of the massive increase in federal transfers in that period: just $6-billion in 2001, by 2008 they were $16.6-billion. Well, that, and the tax increases he imposed.

As for the Harper government, while they did cut taxes — the wrong ones — they also increased spending, rapidly. As did the Liberals before them.  As I noted in a recent column,

It was in the 2000 budget, the deficit vanquished but memories of it still fresh, that Paul Martin promised to hold future increases in spending to no more than the rate of inflation plus population growth—“the benchmark used by most economic commentators”—or about three per cent per year. Yet hardly had he issued the pledge before he broke it. Program spending that fiscal year jumped by nearly $12 billion, or 10 per cent, twice as much as forecast. This was followed by increases of 5 per cent, 8 per cent, 6 per cent, and an astonishing 15 per cent in 2005. The Conservatives followed with increases of 7 per cent, 6 per cent, and 4 per cent—again, well in excess of the inflation-plus-population growth standard.

It is worth considering where we would be today, had governments of either party stuck to the not-terribly-exacting standard of fiscal discipline Martin promised in 2000. Had program spending been held to 2000 levels in real per capita terms—that is, allowed to increase by no more than inflation plus population growth—it would today be just $165 billion, or some $43 billion less than currently projected.

The moral of the story: partisan or ideological labels are meaningless.  Right or left, Conservative or Liberal, if they have the revenue, they spend it. Except for those occasions when they spend it even if they don’t have it.


 
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The liberals are the real conservatives. Or is it the conservatives who are the real liberals…

  1. “Raised taxes by X of GDP?”

    Should I use current currency exchange rate or purchasing power parity GDP the next time I file my taxes? I’ve never had a GDP before come April.

    I guess what I’m getting at is that our tax footprint – with its federal-provincial division – is complicated enough without expressing it in terms of its relationship with (one of) our GDP figures. I’d also say it’s pretty charitable to say the Mulroney Tories didn’t do anything much about the state of Canada’s finances; they did a lost worse than nothing.

    And what of the Harper conservatives, who have cut taxes while spending has ballooned? Not that you’ve been kind to them, Andrew, but they were included in the authors’ allegation you were rebutting.

    • I guess what I’m getting at is that our tax footprint – with its federal-provincial division – is complicated enough without expressing it in terms of its relationship with (one of) our GDP figures.

      If you don’t understand why it’s useful to measure tax revenues as a percentage of GDP, then you probably don’t understand a thing about economics.

      • Civil.

        If I wasn’t explicit enough what I objected to was the argument being -exclusively- in terms of GDP. The size of the national economy – which is expressed in two different ways, for what it’s worth, is not set by policy; taxes are not levies on the basis of this size.

        Percentage of GDP is, while useful and relevant, inadequate to the discussion. Federal and provincial income taxes footprints? Relevant. Corporate tax rates? Relevant. Recessions, such as the one Canada was in during Andrew’s second taxes vs. GDP snapspot? One would think.

        • Civil.

          Sorry if I was blunt.

          If I wasn’t explicit enough what I objected to was the argument being -exclusively- in terms of GDP.

          As opposed to what? Just comparing the raw revenue and spending numbers? That doesn’t seem very useful when you’re comparing different time periods.

          The size of the national economy – which is expressed in two different ways, for what it’s worth.

          Yes, and welcome to Econ 101. For purposes of this discussion, it doesn’t really matter whether you use PPP or nominal GDP – as long as you use it consistently.

          is not set by policy; taxes are not levies on the basis of this size. Percentage of GDP is, while useful and relevant, inadequate to the discussion.

          Sigh. Back to my original point about you not understanding ratios. If GDP declines, tax revenue will also decline unless you raise tax rates. If GDP rises, tax revenues will also rise, and (this is Coyne’s main point) both Con and Lib governments tend to increase program spending to match the increase in revenues.

          Federal and provincial income taxes footprints? Relevant.

          Are you making some kind of point about transfer payments? For his Ontario examples, Coyne made it clear that he was using same-source revenues (i.e. revenues generated by the province without the distorting effects of transfer payments).

          Corporate tax rates? Relevant.

          Coyne is comparing tax revenue from all sources, including corporate and income taxes.

          Recessions, such as the one Canada was in during Andrew’s second taxes vs. GDP snapsht? One would think.

          During the mild recession (1990-1993), GDP declined in 1990 and 1991, and there was very slight growth in 1992 and 1993.

          Coyne’s point is that between 1985 and 1993, Mulroney raised taxes, so the % increase in tax revenues was higher than the % growth of the overall economy during that time frame. In other words, you can’t blame tax cuts for the deficits during those 8 years.

          It would be impossible to make this type of comparison if you didn’t take GDP into account (by using those ratios you seem to find so inadequate).

          • Governments set tax rates. Not tax revenues, not the size of the economy, not the relationship between the two figures. When we say “raise or lower taxes,” we aren’t talking about raising or lowering revenue, or the ratio of that revenue to GDP. We’re talking about income tax rates, corporate tax rates, and other levies, as rates.

            Evaluating whether a government is “a tax cutting government” by looking purely at tax revenues vs. GDP has the benefit of simplicity but is too abstracted from the actual interplay of economy and tax policy to be the support for Andrew’s point, which was that the Mulroney Tories were tax cutters.

            Welcome to “getting my obvious and salient point 101.”

          • Somewhat undermined by my writing “cutter” for “raiser.”

          • Somewhat undermined by my writing “cutter” for “raiser.”

            Indeed.

            Governments set tax rates. Not tax revenues, not the size of the economy, not the relationship between the two figures. When we say “raise or lower taxes,” we aren’t talking about raising or lowering revenue, or the ratio of that revenue to GDP.

            Of course government sets tax rates. And when the government lowers tax rates, government revenue decreases. Could there be a connection here? Do you see the relationship between tax rates and the tax revenue that is produced by those rates?

            Evaluating whether a government is “a tax cutting government” by looking purely at tax revenues vs. GDP has the benefit of simplicity but is too abstracted from the actual interplay of economy and tax policy

            Here’s a tip: If government revenues in Year 2 are lower than in Year 1, but the size of the economy (GDP) hasn’t changed, then guess what – they probably cut taxes. It could have been an income tax cut, it could have been a sales tax cut. For the purposes of Coyne’s illustration, it doesn’t matter, because we’re talking about aggregate (total) government revenues.

          • Also add some further complications.

            GDP includes many types of income, not all of which are taxed evenly. Corporate property revenue is taxed considerably higher than income from resource extraction & processing. Canadian-controlled public corporations (CCPC’s) under a certain income level are taxed at lower rates than retail giants. Proprietorships and partnerships are taxed differently than corporations.

            GDP and tax don’t calculate things the same way. GDP includes all goods manufactured in a year. Tax is based on goods sold. These are very different numbers sometimes. Think auto industry in 2008.

            Short version of this is: Imagine two consecutive years with zero inflation. Both years have identical GDP & identical tax rates. Will tax revenues be the same? Answer: Impossible to tell. Probably not.

            Basic implication: Mega-chains generate more tax revenue than small corporations doing the same work and earning the same profit, but less tax revenue than small, unincorporated businesses, also doing the same work & earning the same profit. Value-added businesses generate less tax revenue per profit than import sales.

            Really short version: Controlling for tax rates, GDP & tax revenue have a weak correlation in the long term. Government Finance 365.

          • CR: When you’re discussing policy it makes sense to talk about the concrete policies of the government: if you want to say Government X cut or introduced a tax, or changed who it applied to, say so.

            Government revenues are affected by whether economic activity happens to grow or shift in ways which are taxed; growth in wages has a different affect on revenues than a growth in resource exports. And government policy changes may not result in the revenue vs. GDP outcome they envisioned, assuming they envisioned one explicitly at all: a change in tax rates may accidentally raise or lower taxes. M. Dion’s carbon tax was intended to be revenue neutral; his critics suggested the results would be otherwise. The GST, which probably had a signficant impact on the revenue-GDP changes Andrew mentions, was -explicitly- intended to be a revenue neutral replacement for the MST and telecommunications tax.

            To my mind this is like saying “The Smith government was successful at encouraging immigration: here are the populations at the start and beginning of their government, and here are the annual birth rates.” I mean, sure, you might actually be able to eyeball the results that way, if there’s nothing significant in all the detail that’s lost, and if the government had any real choice in the matter. But it’s a wierdly abstracted way to go about things.

            If I want to argue that Kennedy and Reagan cut taxes, I say, look, historically significant changes to income taxes; if I include the relationship of government revenue to GDP it’s as a demonstration of the -consequence- of the policy change which I explain with more direct evidence.

  2. Coyne’s column is brilliant as usual, but also a bit depressing. As he skilfully illustrates, the differences between the Conservatives and the Liberals, which are so exaggerated and distorted by partisan spin, are really quite small. It’s quite revealing that if you look at the revenues and expenditures of previous Liberal and Conservative governments, the numbers are so similar it’s almost impossible to tell them apart.

    • The good news: there’s still room for a party to proclaim itself the true party of fiscal responsibility.

      • That won’t happen. The right would be split and the Libs would win easy majorities for a decade (1993 all over again).

      • Almost right, J@ck. There’s PLENTY of room for a party to proclaim itself fiscally responsible, as that turf has been completely abandoned by the current lot.

        • The NDP should get a new leader, burn its Starbucks frequent buyer card, and take this tack. There’s nothing incompatible as between a left-wing agenda and fiscal responsibility — look at the provincial NDP governments — and their fiscal recklessness is by far the biggest, whitest albatross they’ve got. (The phrase “Finance Minister Jack Layton” did more damage to the Coalition than any other slogan.) They could still pull their fat out of the fire and become a government in waiting, if they just took opportunities like this. Ah well . . .

  3. Your selective reference to the underlying conditions (the federal liberals get a boost from Greenspan and the provincial Liberals from fed. transfers, but no mention of the boost Harris gets from Greenspan or the tough economic conditions that affected Trudeau and Rae) shows your underlying bias here.

    You also failed to mention the U.S. experience.

    Also, given the fungibilty of money, it is not really honest to say that the Eves deficit was caused by the spending increase and not by the tax cuts.

    Still, by noting the assist the Liberals got from Reform in cutting the deficits you outline one of the reasons why right wing governments do poorly with fiscal management – there is no right wing noise machine to keep them in line (yourself an honourable exception, of course).

    The recent experience seems to be that Liberals/NDP run deficits during recessions, and Conservatives run deficits always.

    • AC’s argument works fine for those who don’t factor GDP into how they’re going to put food on the table or where they are going to find work. As Declan hints at, conservativism has certainly delivered some fine silver linings for those richest of the rich; the rest of the population who can say they’ve lived under the Reaganomics and Bushian travesties will likely not care about the label. Liberalism may not exist in its true form, but those who have carried the banner of late, specifically Clinton, Chretien and Martin, may qualify for sainthood by the time this current mess is deconstructed.

      • AC’s argument works fine for those who don’t factor GDP into how they’re going to put food on the table or where they are going to find work.

        You don’t seem to understand what “GDP” means. It’s a measure of the total size of the economy. If GDP is growing, the economy is expanding and that helps you put food on your table and find work.

        As Declan hints at, conservativism has certainly delivered some fine silver linings for those richest of the rich; the rest of the population who can say they’ve lived under the Reaganomics and Bushian travesties will likely not care about the label.

        You can’t just cut and paste some generic left-wing US critique of Reaganomics and expect it apply to Canada as well. Guess what – we never tried Reaganomics in Canada. There were no massive tax cuts here. In fact, as Coyne points out, taxes weren’t cut at all during the 1980s.

        Chretien and Martin may qualify for sainthood by the time this current mess is deconstructed.

        Why? Because they were lucky enough to govern during a period of global economic growth?

        • GDP is, as you say, a measure of the total size of the economy. There are several basic ways to calculate it. Themost commonly used is Current consumption + new Investment + Government spending + (eXports – iMports). C + I + G + (X – M).

          GDP says nothing about how wealth is distributed. Remember the term “jobless recovery” back in the tail end of HW?

          • GDP says nothing about how wealth is distributed. Remember the term “jobless recovery” back in the tail end of HW?

            I do indeed remember the jobless recovery. However, if I may simplify somewhat, a rising tide raises all ships. Inequity in wealth distribution may exacerbate the effects of a recession for certain groups, as you point out. In general, however, a rising GDP is good news for everyone, and a falling GDP is bad news for everyone. That’s the (extremely simple) point I was trying to communicate to burlives.

    • The recent experience seems to be that Liberals/NDP run deficits during recessions, and Conservatives run deficits always.

      Seriously? What experience would that be? Harper didn’t run a deficit until the recession, right? I’m not sure how you draw this conclusion.

      Plus, look at Alberta. The Honourable Ralph Klein? Holding up a big “Debt Free” sign? Ring a bell? Surpluses, surpluses, SURPLUSES! Stellar PC fiscal management all around! (And yes, that last part was hard to say with a straight face.)

      • I kept looking over to your avatar as I read your words, Olaf. Rest assured, your straight face stayed straight throughout.

  4. The moral of the story is: if the Conservatives had left so-called ‘God-given rights” out of the equation we’d all be alright now.

    But no, they had to call upon divine right to try to push their agenda through and inevitably ran up against the non-divine.

    Hence our troubles.

    Many people contribute to GDP; the pity is that Conservatives tend to discount the GDP of those who they think is beneath them.

    GDP isn’t about morals or shallow thinking but about what a person can do for him/her self and the country. At this stage of the game it looks like it isn’t the poor or liberal who are tanking, falling far and falling fast.

    • if the Conservatives had left so-called ‘God-given rights” out of the equation we’d all be alright now.
      But no, they had to call upon divine right to try to push their agenda through and inevitably ran up against the non-divine.

      Ummm… that’s the moral?

      Many people contribute to GDP; the pity is that Conservatives tend to discount the GDP of those who they think is beneath them.

      Do you even know what “GDP” means?

      • CR, you were replied out on the post I wanted to comment on, so I do so here. I think we have had it proved beyond the shadow of a doubt that, while a rising tide raises all ships, monetary policy has no similarities with tides. Perhaps go back an issue or two and read the Maclean’s article about how the middle class is dying out–and how the rich have increased their riches.

  5. I wonder how the Harper Conservatives would fare should Canada and other industrialized countries were to experience double-digit unemployment, double-digit interest rates and double-digit inflation.

  6. There are few ‘real’ cons in Canada and none of them are appear to be in Cabinet at the moment, that’s for sure. Harris is the only Con I can think of who tried con-type policies in the past 40 years. Canada has had an ideology imposed on it – liberal/progressive/socialist – and it is rare for any major party to break free from that.

    I find that the three major parties agree broadly on the issues and any debate that occurs is about details. None of the major parties are agitating for flat tax, significantly reduced spending, nationalization of the oil and auto industry … etc. And somehow, our pols have also decided that there are some topics that just aren’t discussed. Like abortion or private health care or eliminating Indian Affairs and treating natives like any other Canadian … the list goes on.

    And Mulroney did balance the operating budget, which is not that great, but it’s not nothing either.

    • Canada has had an ideology imposed on it – liberal/progressive/socialist

      Yeah, those damn voters, imposin’ their ideologies on real Canadians!

      None of the major parties are agitating for flat tax, significantly reduced spending, nationalization of the oil and auto industry … abortion or private health care or eliminating Indian Affairs and treating natives like any other Canadian

      Check the polls, jwl. These things aren’t being discussed because Canadians aren’t interested.

      That’s the conservative paradox : lots of people buy the sales pitch – lower taxes! small government! freedom! – but when they find out what it will cost them, they tend to discover they like a government that provides services, offers some sort of safety net and stays the hell out of their doctors’ offices.

      • I think you will find Canadians are interested in many topics, they just aren’t being discussed in msm. Since when are Canadians not interested in health care system or abortion or treatment of natives, I find people can get quite passionate about all sorts of topics when they come up at dinner parties or family get-togethers.

        There is a major disconnect between regular Canadians and what msm reports on, which leads to the imposed ideology, because msm is deciding what is acceptable and what isn’t. I think the Canadian msm is slowly circling the toilet bowl because they only appeal to a small sliver of public opinion.

        And I am curious to know how you think the government is staying out of the doctor’s office when government pays for most medical services , Health Canada posters are all over the place imploring us to do this, that or the other and bureaucrats decide what treatments/medicines we can, or can’t, have. I find it curious that so many liberal people love government deciding just about everything for them but when it comes to killing babies, they become rather libertarian.

        • Well of course Canadians are interested in and passionate about those *topics*. My point is that there’s very little support for the *policies* you outlined.

          Flat tax? Banning abortion? Introducing private health care? These aren’t opposed by a small sliver of the public – check the polling data. The silent majority whose support you (and most conservatives) claim *simply doesn’t exist,* and it’s not due to some failing of the msm.

          If there was widespread support for such hard-right policies, there would be a successful political party including them in their platform. Heck, if there was widespread demand for three-wheeled cars, you’d see one on every lot. But nobody wants such things. Instead we have four-wheeled cars and Harper’s crazy grab bag of right-wing sales pitches, sweater-vests, tax cuts, out-of-control spending, conciliatory gestures and political attacks. God bless the poor bastard, he has spent the last three years running smack into Canadian reality.

          Of course my reference to keeping gov’t out of the doctor’s office was a reference to abortion, not Health Canada posters or user-pay medical services. And of course, killing babies is illegal.

          You know perfectly well that abortion is not a typical policy debate. You don’t score any points by trying to paint liberal support for a woman’s right to choose as some sort of ideological inconsistency.

        • jwl,

          If most people are smart enough to discuss and be concerned about issues beyond what the “msm” is reporting (as I believe is true) then an ideology isn’t really been “imposed” is it?

          Conversely, if the ideology is being imposed by the “msm”, most people must be stupid enough to be imposed upon (which I don’t think is true.) and which you don’t seem to think is true either.

          Do you really believe a relatively tiny coterie of journalists (relative to total population) has imposed an ideology on unsuspecting and unthinking Canadians for 40 years? It is difficult to argue that an ideology has been imposed on people by the media without also arguing that most people are stupid enough to be duped.

          • I would argue that msm has imposed their beliefs because they get their knickers in a twist when any pol or high profile person says/does something they don’t approve of. There is no tolerance of dissent or disagreement which leads to a huge disconnect between msm and the majority of Canadians.

            As far as regular people go, I am libertarian/conservative, like to say things that are contrarian to politically correct orthodoxy and I am astonished by the reaction I get. Many people have said they wish they were ‘brave’ enough to say things I have but they are scared to or others talk about how they don’t like pc thought but lower their voices when expressing that opinion. Most of the people who say things like that to me are not Cons/cons but they are clearly scared/agitated by something. Why are people lowering their voices, or looking around to see who’s listening, when expressing the most milquetoast of opinions that don’t conform to the ‘consensus’.

          • I have to stand about 75% behind JWL here. I think his definition of “conservative” is the Hayek-school, small government anti-Keynesian conservatism of the Reform movement, which is supported by something like 2.5 to 3.5 million people across western Canada. (Just guessing at the number of supporters.) I don’t think he means southern Ontario & Quebec PC Toryism, which is a lot like Victorian conservatism with a lot of Keynesian elements thrown in, or neoconservativism, (Reagonomics, Thatcher-nomics, Pinochet/Sukharto-nomics), which blends Friedman’s anti-Keynesianism with Machiavelli’s Discourses, which probably had its biggest moment in Canada under the Paul Martin Liberals, and is PMSH’s field in academics.

            I think JWL also points out that Canada doesn’t have a lot of the type of American mainstream conservatism, which mixes the Hayek school with the extreme social conservatism of the religious right, or the type of American Libertarianism that mixes the Hayek school with Ann Raynd politics. (I refuse to call anything she wrote philosophy.)

            I have to agree with JWL that the MSM in Canada doesn’t really understand the different types of conservatives in Canada. If they did, more of you would know the difference between Reform, Canadian Toryism and neoconservatism, and not group them together under the single banner of Conservative when the three ideologies have very little in common.

          • Shenping: I don’t agree. I understand what you’re saying, but the reason there isn’t a lot of interest in a taxonomy of conservatism – I did one when I blogged – is because it’s of interest only to wonks.

            If it’s in plain, public debate between politicians on the news, than Canadians will have an opinion about whether Keynesian or Hayekian economic policy ought to be followed: but they’d probably be more interested if we skipped the part where we tell them about John Maynard and Friedrich and just talked economic stimulus, deficit spending, employment and inflation, and there being two schools of thought on the matter.

            Similarly, it is pretty much -adequate- for the 60+ percent of Canadians who fairly robustly reject the sub-ideologies within the CPC to -do so.- You’re right; there are people who are mostly Hayekians, there’s the more moderate “PJ O’Rourke” beast starvers who just think conservatives do better by doing less, there are people mostly exercised about social conservative issues, there’s a Harris tradition and there are eastern Tory traditions. And there are people who simply dislike the Liberals and wouldn’t consider voting for the NDP.

            The question isn’t “why isn’t this covered,” it’s “why would we expect anyone to care?” Without necessarily naming or knowing all the details, I think post-Trudeauvian Canadian progressive opinion pretty much repudiates the A-Z of Tory opinion. That works fine for me. Most of it isn’t very good.

            We, chatterers, need to do a lot better with involving fellow citizens in basic policy questions before we can start thinking about getting them interested in the origins and bases of Parties’ policies, in terms of factions, history and personalities. Those are all meta- questions when the policies themselves are little talked about.

  7. I think the letter writer probably had in mind: George Bush. Of course Reform/Alliance/Harper/Manning/Harris types in Canada are Republicans.

  8. Just to point out the most obvious straw man here: in response to an entirely correct statement that right-wing governments “overspent and undertaxed”, Coyne spends the bulk of his post refuting the nonexistent contention that the deficits are “owing to their reckless tax cuts” alone.

    • Did you even read Coyne’s post?

  9. Coyne is biting off more than he can chew here.

    • Coyne is turning into jwl.

      Shorter Coyne/jwl: “Harrumph!”

      • I just think it’s likely impossible to make a convincing economic argument for revisiting and re-interpreting the last 40 years of fiscal management, since the information/evidence for it was likely far from perfect at the time and has only degraded since.

        And that’s not even touching the pseudo-science known as “economics” to begin with.

        • I just think it’s likely impossible to make a convincing economic argument for revisiting and re-interpreting the last 40 years of fiscal management, since the information/evidence for it was likely far from perfect at the time and has only degraded since.

          Numbers don’t degrade. You must be thinking of DNA evidence or something.

          • Numbers don’t degrade. You must be thinking of DNA evidence or something.

            What are you talking about? First of all, the all the figures cited by Coyne are all unsourced (although I assume they’re credible) and second of all, I was referring to information (not ‘numbers’), which does degrade with the passage of time as the relationship between information and whatever evidence it was derived from becomes less clear or disappears entirely…and that’s if there was ever any evidence for it to begin with. A big “if” when it comes to economics and financial reporting.

          • If a government spent $x billion dollars in 1980, it’s not like that information will somehow change or degrade as the years pass. When you are comparing it to other years, you have to express it in real dollars (to take inflation into account). The numbers and ratios Andrew used to make his calculations are easy to find (hint: Statscan) and completely uncontroversial.

          • If a government spent $x billion dollars in 1980, it’s not like that information will somehow change.

            Is this discussion focused around that one factoid?

            The numbers and ratios Andrew used to make his calculations are easy to find (hint: Statscan) and completely uncontroversial.

            You must think I’m an idiot.

          • I don’t think you’re an idiot, Ti-Guy.

            I’m just making the point that you can disagree with Andrews’ conclusions about the numbers he used. You can accuse him of oversimplifying his assessment of government spending policy over the years. You can say that he’s looking at the aggregate numbers without taking into account nuance and complexity.

            But you shouldn’t dispute the actual numbers he used in his calculations. These numbers (yearly totals for gov’t revenues, gov’t spending and GDP), would be accepted by all economists.

        • Today is the first day of the rest of your life.

        • But you shouldn’t dispute the actual numbers he used in his calculations. These numbers (yearly totals for gov’t revenues, gov’t spending and GDP), would be accepted by all economists.

          Well, I don’t know that exactly, since I don’t know where his figures are coming from. And I wouldn’t think of searching StatsCan before having that information first.

          The problem I have with this post is Coyne’s insistence that we should think of the Liberals as fiscally irresponsible or at best, no better than the Conservatives when recent history doesn’t support that and when his exposition of ancient history is unconvincing. Of course, what I wanted to do was argue the use of taxation as a percentage of GDP as opposed to a percentage of median disposable household income, but I got here too late for that.

    • How would you know?

  10. There is a real difference between Canadian Liberals and Conservatives. Liberals truly believe the social programs they advocate will lead to a stronger and fairer Canada but if necessary they will cut taxes to get votes. Conservatives truly believe that enough tax cuts will lead to utopia but will spend money to get votes. The Conservatives will always complain that any Liberal tax cut is too small making it easier for Liberals to make deep tax cuts. The Liberals will always complain that any social program brought in by Conservatives does not go far enough making it easier for Conservatives to spend like drunken sailors. By careful consideration of the above, plus the fact that Liberals were red ties and Conservatives blue ties it is easy to spot the difference.

    • While I’m not sure that Liberal/Conservative is actually the dividing line, that’s not a bad summary of left vs. right.

      But it’s worth noting where responsible budgeting fits into the picture. Right-wing parties tend to talk about it more as their basis to justify cuts to social spending – either by a left-wing party when they’re in opposition, or when they see enough of an opening while in power themselves. But left-wing parties do better in practice, since they actually have reason to care whether or not their social spending is sustainable.

  11. I can’t help but think the Conservative obsession with taxation is a symptom of the infantilisation of our culture; kind of like when you get your first real job and are shocked and livid by how much is deducted. You complain loudly and older people kind of look at you as if you’re quaint.

    That’s really not supposed to persist much beyond one’s mid-20’s, but since the voodoo economics of the Reagan years, it’s become an conventional wisdom, to the point where saying things like “all taxation is theft!” is not considered that all that loony anymore.

    • Cons are vexed by taxes for a number of reasons but I think the main one is that they think of taxes as a way to reduce liberties/freedoms.

      And I am interested in your idea of people not supposing to care how much money our governments take from us after our mid-20s, right when people start to actually need money for student loan repayments, mortgages, starting families … etc.

      • And I am interested in your idea of people not supposing to care how much money our governments take from us after our mid-20s, right when people start to actually need money for student loan repayments, mortgages, starting families … etc.

        There’s nothing they can do. The high-living civil servants, teachers, nurses, not to mention all the welfare recipients are gobbling it all up and they’re powerless to do anything about that. Bwahahaha….

  12. “The moral of the story: partisan or ideological labels are meaningless. Right or left, Conservative or Liberal, if they have the revenue, they spend it. Except for those occasions when they spend it even if they don’t have it.”

    I think that is a fair assessment based on the facts. What never ceases to amaze me is that conservatives are conned into voting for Conservatives based on ideology. They really do want to believe that Conservatives represent and will base their policies on conservative ideology – despite overwhelming evidence that Conservatives never behave like conservatives once in office.

  13. Well Andrew I certainly can not argue with the moral of the story. Ti-Guy presented a point that us conservatives have a fixation with taxation = Absolut freaking ly right we do and we are in good company! after all more than one of the greatest revolutions in democracy and freedom essentially boil down to that very point! Taxation without Representation (you know that tea party thing) and if you think that is infantile well goo goo ga ga. I think there are still some differences between the so called Liberal mind set and the so called Conservative mindset. The Liberal or left wing philosophy is still playing itself out by honestly believing that societal problems can be resolved by government creating programs that solve or at least manage a specific issue and that this is good! The Conservative mind set finds problems with this approach as more often than not these gov’t programs can become part of the problem itself and once implemented are impossible to manage let alone actually get rid of them. Take the Arts and Culture issue awhile back a classic Liberal Conservative dichotomy is in play here and one in which the Liberal mind set won the day. Consider the fact that the CPC was only slowing down the growth which was based upon previously good economic numbers and that this for one reason and another became almost impossible. If we carry this principle to it’s logical conclusion what happens when we are dealing with a gov’t program that is critical to our lives .. indeed it becomes even more apparent that maybe it’s a good thing that the LPC party isn’t really Liberal (as they have been known to deal with this issue in the past) and the CPC party isn’t really Conservative (as is plainly self evident) – in the final instance here I guess that maybe all along as usual the canadian voter has displayed immense wisdom on choosing their representation forcing the partys into each modifying their hard line approach to either side of the issue – you know that old say democracy bla bla bla messy etc.

    • I’ve always found that tea party thing to be a howler. A bunch of Boston hooligans dressed up as “red” Indians dumping tea into the harbour to protest a tax designed to pay for their defense against red Indians largely financed by the French.

      Then 1789 …..

  14. The best example of right-left deficit policy is early Alberta/Sask. The right wing province went bankrupt – 3 times! The left wing one was allergic to deficits.

    • The right wing province went bankrupt – 3 times!

      What is your source for this assertion?

      • I’m assuming he’s talking about the provincial default under the Socreds in the Depression, although I’ve never heard of “three” bankruptcies.

        And at any rate, there are sounder grounds to demonstrate that Hayek/Grover Norquist economics usually lead to catastrophes other than the unpleasant utopia they aim for. (eg recent North American history.)

        Saying a province went “bankrupt” in the depression under a bunch of newly elected zanies in a constitutional struggle with the feds and the crown isn’t really saying much at all.

    • Complete BS! Get a life!

  15. Conservative policies leave big holes in the safety net. Then when they have to patch them they move to red. The meme is that all of this has to do with consistent policy. The truth is that a ‘change of guard’ in government is the most expensive, deficit creating thing of all.

  16. I am a fiscal conservative, but after suffering thru Brian Mulroney and now Stephen Harper I really can’t see the point of voting Conservative in order to get a fiscally conservative government. It seems to me that it’s a better proposition to have the Liberals in power with the Conservatives trying to keep them in check, than have the apparently spineless Conservatives in power with the Liberals and NDP and Bloc egging them on to spend more and more.

    • I’ve made a similar case with regard to federalists in Quebec: much better to have a PQ government — which can be safely ignored — than have the Liberals trying to out-nationalist them to stay in power, and the feds desperate to give the Liberals something to prove that federalism really is profitable…

      • PQ safely ignored? Ignore the flight of the economically productive, ignore the flight of capital, ignore the head-office exodus, ignore the capital-D deficits, ignore the laughing-stock-of-the-free-world language legislation, ignore the first referendum, ignore the second referendum, ignore the perennial loser have-not status resulting from all the above…

        This is most certainly NOT to be taken as an endorsement of the Quebec Liberals, but, sorry, “safely ignored” could not be left alone.

      • The way to weaken separatism in Quebec (or in Alberta, for that matter) is to build the Canada brand, not by means of over-paying crooks to exhibit flags at hockey games, but by building a shared foundation of explicitly Canadian experiences, values, and narratives. A key aspect has to be frequently repeated ceremonial commitments to the nation’s symbols (flag and anthem).

        None of that will be done by a provincial government of any stripe. It has to be done by the Canadian government. (And if it is NOT done, our country will drift apart, ending up as a sovereign Québec and several new US States.) A few ideas:

        – A programme of national service. Not military — instead, a peace corps, something like a much-improved and expanded Katimavik — that brings young people together from all over the country, and shows them its breadth and depth. A context in which they would learn discipline, teamwork, service, and love of country. And yes, our anthem would be sung at roll call, and our banner would fly high.

        – A very well-funded national network of excellent charter schools for talented kids, with a strong emphasis on experiential learning and mentoring, associated practicums and life-experience semesters in every part of our country, and much intermingling of kids from across the nation. And, yes, our anthem would be sung, and our banner would fly high. (Yeah, I know education is a “provincial responsibility”. I couldn’t care less. I’m in favour of ignoring arbitrary, counterproductive constraints in favour of taking useful measures that will engender pragmatic progress.)

        – Electoral reform, so that Alberta gets a (Liberal) seat at the table when there’s a Liberal government in Ottawa, and so that 40% of the popular vote in Québec gets the BQ 40% of Québec’s seats in Parliament, rather than 65% or 70% as at present.

        – A national push to build a green-energy future as fast as can be done, a push to be the first country in the world to get to a near-zero-carbon economy, designed so that we build great new industries and get rich in the process.

        – Reform of the banking system, particularly the Business Development Bank of Canada, to make entrepreneurial capital more easily available to people who have energy and ideas but no collateral, supplemented by a national business mentoring programme (retired businesspeople advising young entrepreneurs, etc.), and a complete removal of internal barriers to trade — a movement towards building truly national businesses.

        – This one’s impossible, but I’ll mention it anyway: A change of the Constitution to enable the federal government to enact national laws on any topic it deems appropriate, i.e. no more exclusive “provincial responsibility” domains, so that Canada can do things like decarbonize the economy without running into the brick wall of provincial governments ferociously defending their turf. We seem to have forgotten that the provincial governments were created out of whole cloth just 120 years ago. Canada started as Deux Nations, and provincialism is turning us into Douze Nations. Not good.

  17. so in summary, governments need to bribe current voters with their grand children’s money in order to stay in power today.

    “We the people” believe we are due more than we are actually worth. What our actions are saying is that we are just hoping this inter-generational ponzi scheme stays afloat until we have used up all the benefits and we are gone.

  18. Andrew, I agree with your thesis, but I don’t think you have hit on the cause. Understanding that cause is important. Political parties in Canada are not ideological, and largely strive to maintain power, as opposed to advancing a particular agenda. They spend or save all in order to woo the swing voters that are critical to winning elections.

    So you need to ask – who are the most fiscally conservative voters? What kind of cleavages would make them key swing voters? What kind of party system would draw out those cleavages?

    The answer is probably some combination of wealthy 905’ers (Oakville but not Oshawa; Burlington, not Cambridge), Albertans and the non-NDP parts of British Columbia. While the first and third of that group are swing voters they have to contend with other key swing voter groups.

  19. Fear not Andrew, there is a party proposing a business tax cut. The obvious answer? The NDP in Nova Scotia.

  20. Mr. Coyne, if you ever vote for office, I will vote for you.

    And then when you come to power I’ll write bitter blog comments about how you’ve betrayed everything you’ve once stood for in the desperate urge to seek continuing power by “moderating”, which is a nice way of saying abandoning the concept of governing by logic.

    And the cycle will begin anew!

  21. “The moral of the story: partisan or ideological labels are meaningless. Right or left, Conservative or Liberal, if they have the revenue, they spend it.”

    What you are saying Andrew is that they are both socialist. One band of brigands is said to be selling the “right” brand of socialism, the other gang of pirates is claimed to be selling the “left” brand of socialism. But in any case their policies are 99% the same. They both support the core socialist policies which are laughably called “centrism” in Canada – massive coerced wealth distribution from productive regions to unproductive regions, communist style health care, fascist style control of corporations and investment, ponzi style generational welfare programs, and various squishy “rights” based policies whose purpose is essentially to find and new types of aggrieved swing voters so that they can be ensnared and chained to the political vote-buying machine.

    Most observers and pundits of this political scene are nearsighted fools who obsess over minor and insignificant details in party policies. It puzzles them mightily, to see how these policies are invented out of nothing, traded between parties and leaders, and then hypocritically dropped from moment to moment according to flavor-of-the-month trends and the findings of polls and focus groups. They are so befuddled that they fail to grasp the essential purpose of electoral politics which is common to all parties – the will to dominate, control and steal, but to disguise their rackets as “the will of the people”.

    • Spoken like a true democrat.

      • Canadians didn’t get the govts they wanted? What the hell! I needn’t have bothered voting at all.

        • Neither you nor 99% of the rest of us, apparently.

          I’m trying to figure out what Al Heck Brakes must see when he envisions “the centre.” Curtis LeMay?

  22. massive coerced wealth distribution from productive regions to unproductive regions, communist style health care, fascist style control of corporations and investment, ponzi style generational welfare programs, and various squishy “rights” based policies whose purpose is essentially to find and new types of aggrieved swing voters so that they can be ensnared and chained to the political vote-buying machine.

    Oh Lord, it’s Friday “Meth at Half Price” night in Fort McMurray.

    • He’s just mad because Ralph never ran for PM. Canada dodged a bullet there!

  23. Probably you’re facts are true. Liberals caused deficits, Conservatives did nothing about them other than simply increase them, and then Liberals with good fiscal management turned the deficits around and created surpluses.

    Seems to me that Liberals have the advantage here don’t you? Tell me, would you prefer Paul Martin leading the efforts to curb the current economic crises? Or would you prefer the status quo? Or someone else perhaps….who is he or she?

  24. A summary of facts about the federal budgets:
    – during the decade+ prior to 1975, budgets were mostly in operating surplus, but in net deficit owing to debt charges
    – from ’75 to ’86, budgets were in operating deficit; debt climbed from about $35 billion to $258 billion
    – from ’87 onward budgets have been in operating surplus
    – from ’87 to ’96 there was a net deficit (debt) charges; debt climbed to $563 billion
    – from ’97 to ’08 there have been net surpluses; debt down to $458 billion
    – from ’83 to ’96 debt charges were 30% to 37% of federal revenue
    – the turning point from net deficit to surplus was made when the spending cut amounted to about 8% of revenue, not one-third or more
    – the reduced size of the necessary cut to achieve a net surplus (remember how reasonable people were – imagine the response to a 1/3 cut) was chiefly due to increased revenue growth and falling interest rates

    (For those who may be unfamiliar, which I think is only a small minority here: “operating balance” is analogous to your monthly paycheque versus your monthly costs; you are in operating surplus if paycheque > costs. “net” is analogous to adding in whatever interest payments you might have to make on your credit cards/line of credit. When you “overspend” you draw on your credit. When paycheque – costs < monthly interest, you have a problem – a net deficit.)

    There was no “overspending” in the strict sense during the period 1987-2008: operating balances were in surplus. The problem was the cost of the debt. The debt we have now – the $458 billion or so – is due to overspending prior to 1987 and the cost of servicing it. In the looser sense of “overspending” meaning also “imprudent spending growth”, the record is mostly one of overspending excepting chiefly the period 1993-1999 when growth was held under 3% year-over-year.

    What about overtaxation? How much additional taxation was possible from ’83 to ’96 without having the effect of driving actual revenues downward? People don’t simply pay taxes as levied; they respond to changes in the regime. It is pure fantasy to imagine that federal revenues could have been raised by one-third – or federal spending cut by a like amount – to achieve a net balance.

    Here is the main point: our problem now is that not enough debt was paid off from 1997 onward. Blame it on undertaxation or imprudent spending growth. We still have to pay for spending that was done prior to 1987, and we are about to add on a bunch more. When will we pay for it? Debt charges are running at about $33 billion per year. Too bad our restrained fiscally conservative managers didn’t hold to the ’93-’99 spending growth restraint; our current “spend, spend, spend” philosophy would barely register a deficit.

  25. Coyne has made a career out of defending inept governments. He never lets facts get in the way of a good dig at the centre or centre-left.

  26. Mr. Coyne, I’ve read a good many of your columns — you are a masterful writer — and I will attest that this particular column is perhaps your most intellectually dishonest piece of spinmeistering I’ve yet seen. And that’s saying rather a lot.

    You’re a smart man. Were it not for your blind ideological commitment to Austrian School dogmas, you would even have a crack at becoming a wise man. Please — for your own sake — go back and reread your own column, with a critical eye, and see if you can pick out the glaring (and deliberate) errors of logic. I’m not certain whether you are even aware that you are egregiously abusing logic and language, here; ideology does weird things to people’s powers of ratiocination. Confabulation and rationalization are most artfully deployed by intelligent ideologues, often, I suspect, without self-awareness.

    Here’s a hint: Deficit spending is not created by “raising spending”, any more than clapping is created by moving one hand back and forth. Deficit spending is created by spending more than one takes in in revenue. Ergo, the solution to deficit spending is to ensure that revenues are always as high as, or higher than, outlays.

    Here’s another hint: Low per capita government spending is not a “good” in and of itself. **Nor (and this is important, please pay careful attention and then go do several weeks of background reading without your ideological blinkers on, if that is even possible given the depth of your commitment to unshakeable certainties) is taxation a zero-sum game, in which every dollar taxed “away from” a citizen is a corresponding reduction in the wealth of that citizen.**

    There is such a thing as shared wealth; and there also is such a thing as increasing the aggregate wealth-generating capacity of an economy, by building the common-wealth infrastructure and services that in turn enable the generation and accumulation of greater private wealth, over time, in a virtuous circle.

    This is the truth that you, and most of the folks who post comments to your columns, apparently just do not understand. Moreover, this truth is not an ideological belief: it is an empirical reality.

    Try to recognize that “taxes” are not the violent, gun-point theft of private property by marauding gangs called “governments”, at least, not outside failing states in Africa. This is a bizarre misapprehension perpetrated on impressionable teenage minds by the likes of Ayn Rand, von Mises, and various Republican spinmeisters. This narrative is a classic Big Lie. Taxes, in a reasonably functional country, are better understood as the membership dues paid by members of a privileged, geographically defined group of people, who are together providing investment capital to an elected governance council whose task it is to spend these membership dues on common infrastructure and common security programmes, in order to increase the common wealth – and consequently, to improve the conditions for generation and accumulation of private wealth.

    And it works, as you will note by the fact that ALL of the OECD nations (i.e. the club of wealthy nations) have much higher “tax rates” measured as a percentage of GDP than the corrupt hell-holes in which governments collect and spend only a small share of GDP. It is the case that in ALL of the wealthiest countries in the world, spending by governments (aggregating spending by all levels of government, not just national) ranges from about 40% to 60% of GDP — not 10% or whatever the Austrian School wants us to allocate so that government is reduced to courts for settling private-property disputes plus a military to defend terrain.

    OECD countries not only have less-poor poor people and far more, and more prosperous, middle-class people than the Nigerias or Paraguays or even the Mexicos of the world. OECD nations also have far more rich people than you’ll find in any country in which government collects and pays a small, lower-than-OECD share of GDP. This is extremely strong evidence for the hypothesis that the allocation of spending power between government and the private sector is not a zero-sum game, at least, not over time. At any given instant in time, it may seem zero-sum, but this ignores time as a factor. Over time, pooling a portion of our wealth to build well-functioning roads, bridges, hospitals, schools, universities, technical colleges, judiciaries, and other institutions of cooperative security, leads to a situation in which our aggregate wealth is much greater, and our ability as individuals to build personal wealth is also much greater, than it ever will be in a minimal-state Hayek/Grover Nordquist polity. Together, by sharing some of our wealth, we build a launching-pad for even greater wealth. (And no, this does NOT happen all by itself in a free-market, all-private Hayekian Utopia. It just doesn’t – for the same reason that voluntary pollution standards do not work, and mandatory pollution control regulations do work.)

    This is a reality which is shown by abundant empirical evidence. Your commitment to minimal State involvement in the economy and low tax rates is entirely ideological, and it crumples miserably when it runs into a concrete blast wall composed of hard facts, should one bother to actually examine the numbers.

    Or in much, much simpler terms: Assuming you were an ordinary citizen of ordinary means, would you rather live in Sweden or Nigeria? Switzerland or Uruguay? Germany or Paraguay? Canada or Mexico?

    Think about it, Mr. Coyne. Set aside ideology, and look at the empirical evidence. You will find that mixed economies in which government spending and private-sector spending are in roughly equal balance, turn out to be (in every case) the economies that are wealthiest, both in depth and breadth. But don’t take my word for it. Go and dig around the OECD website, among other places, and see for yourself.

    My basic question to you is: Will evidence ever trump ideology in your mind? Are you ever going to grow out of ideological puberty, recognize that Ayn Rand was not the Messiah, and become an intellectual adult?

    If you do, your career and your lasting contribution to Canada could flower like never before.

    But I’m not holding my breath. I don’t think you’re capable of doubting your certainties or laying aside childish things. I think you will go to your grave smugly certain that pure minimal-taxation Ludwig von Mises/Ayn Rand/Fraser Institute anti-government free-market-god-worshipping undiluted economic liberalism is the Sacred Truth, and writing cleverly written, intellectually dishonest and deeply mistaken tracts defending your obsession.

    • Wow…….impressive to say the least. I am not sure if I can reach up to your level of the written word, or comprehend everything you are saying……but make no mistake, I would for sure want you on my team. Good stuff!

      • Thank you.

  27. It could be because a growing percentage of those of us who are politically active have no memories of the trudopian years. All I have to measure is mulruney and later—and in *those* terms, it is exactly true that what a conservative government gives you is large amounts of pointless deficit spending, often on military matters(that never actually increase the fighting efficiency of the canadian armed forces), alongside graft and corruption that would make even liberals blush.

    IMHO, more people should be giving a chance to the NDP on the federal level, if they truly want a fiscally responsible government. Either that or the Libertarian party needs to get its act together, and fast.

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