Saturday, March 25, 2006

"The compulsory deficit"

Terence Corcoran on the Ontario Liberal government's budget:

Ontario's Finance Minister, Dwight Duncan, yesterday invented a new fiscal concept: the compulsory deficit. Come hell or high water, no matter how many billions in new revenues roll in, the government of Ontario will not under any circumstances abandon its unwavering commitment to operate in the red. Premier Dalton McGuinty has finally found a promise he can keep.
In a budget that mangled fiscal concepts and invented new ones to suit the McGuinty Liberals' spending agenda -- up 8.8% this year on top of 8.9% last year, a record for a province allegedly suffering from a fiscal imbalance -- Mr. Duncan declared Ontario to be a bedrock of "fiscal prudence." Highlights of the prudence: program spending is now back up to 15.7% of provincial GDP, the highest since 1998, tax revenue is rising and tax cuts nowhere in sight.
Read the rest here. Gerry Nicholls notes the creation of a Move Ontario fund in the budget — unintended consequences, as they do, increasing proportionally with increased government intervention, the moniker may prove appropriate as people and investment move out of Ontario. Speaking of unintended consequences, Lawrence Solomon describes a few anticipated results from the Liberals' heroically massive planned-economy investment of tax dollars in transportation:
A Toronto megalopolis, 150 kilometres in girth, will be born of the Ontario provincial budget announced this week. The budget's big-ticket transportation projects will drive this outcome through measures that will undermine public transit in the city while accelerating suburban sprawl in the Greater Toronto Area and beyond.
Read the rest here. Should anyone get the impression that the London Fog is selectively citing only negative commentary on the budget, we present reaction from the city of London as reported in the London Free Press:
In yesterday's harsh morning light, the Ontario budget looked a lot better to Londoners than it might have when tabled a day earlier.

London MPPs yesterday detailed to interest groups the Liberal government's spending blueprint, initially criticized Thursday as too focused on Toronto, but which also included $14.3 million for London roads and bridges.

"There's probably more in it at second glance than first glance," said London Chamber of Commerce president Gerry Macartney, who met with London Liberal MPPs Khalil Ramal, Deb Matthews and Chris Bentley yesterday. "We're getting a fairly good chunk of change ourselves. That number was not articulated (on Thursday)."
Oh, well, as long as we're getting some! The Liberal MPPs may have captured the appreciation of their special interest group audiences, but the pitch to the ordinary taxpayer should not be so successful. Whatever the political merits of politically-motivated redistribution schemes to particular political interests, all London and Ontario residents will pay for the unnecessary deficits and high taxes in the budget. $14.3 million for London road and bridges does pique the attention, however, given the current state of those structures, but…
That $14 million, which can be spent at the city's discretion
Despite the soundings of Dave Leckie, London's director of roads, does anyone really believe that a discretionary fund handed to city hall will be spent entirely on such politically drab projects?

2 comments:

Anonymous said...

I think you'll find that the creation of megalopolises is a hallmark of the socialist state. In a free market, competing companies will tend to disperse as widely as possible, as they seek cheaper labor, cheaper land, cheaper and less congested transportation, etc.

But in an unfree market, of which Ontario is a prime example, the government and government-subsidized and government-regulated industries are dominant. To organizations such as these, expenses are not really the major concern, because government can always raise more taxes in order to meet its own payroll and subsidize the crony capitalists who depend on government handouts. What really matters in a socialist economy is to wield power, and to be close to power. Also, because of the legal and accounting entanglements that accompany Big Government, there are a smaller and smaller number of accounting and legal firms who have the expertise (and the connections) required to help companies survive and flourish.

Up to a point, all roads do indeed lead to Rome. The point at which they stop leading to Rome and the megalopolis dies is the point at which the megalopolis has sucked so much blood out of the region it controls, that the economy collapses and there is no longer enough thriving, non-centralized - and obedient - industry left in the hinterland which can pay for all of Rome's fiddling.

MapMaster said...

With succint and pointed commentary as this, anonymous shouldn't be anonymous. But the comments are greatly appreciated even if credit can't be extended to a name.