74 replies to this topic

[Moonlight Graham]

So let me get this straight. The Harper government implemented a economic stimulus plan equaling $47 billion (from 2009-2010, was there even more since then?). They obviously wanted to grow economic activity & stem unemployment etc. with this spending.

Fast-forward to 2012, where in recent months the Harper gov had ordered all government departments to find ways to cut a certain percentage of their budgets (originally between 5-10%) in order to decrease overall government spending (austerity, in short). Seems fiscally prudent at first glace.

But what is illogical is that numerous departments have laid off thousands of government workers in order to meet their budget cut obligations, & in the March 2012 budget the Harper gov "announced it would cut 19,200 public service jobs over three years in a bid to save $5.2 billion per year". How exactly do these layoffs help the Canadian economy? In a recession with high unemployment, they have raised unemployment #'s even more with this & added tens of thousands more people to an already large job-seeker pool in an already tough/competitive job market. Now unemployed, more people have to get on EI and other benefits & drain even more money from government coffers. Also, with these laid-off workers obviously not making the money they were, it decreases overall Canadian consumer spending which negatively impacts our economy.

This is clearly an anti-stimulus policy by the government, and I don't see how it helps our economy, but rather worsens it; increases unemployment, decreases consumer spending, and puts more strain on our welfare system. Are the government savings from this worth the cost? If anything, such a recession is the time when you should NOT be laying off tens of thousands of federal employees. Some austerity measures may certainly be prudent, but maybe there should be a policy of trying to find cuts without mass layoffs, and rather wait for stronger economic times to cut federal jobs for savings.

[jacee]

Well said.

And they're not paying taxes either. 67% of their salary in EI, 20% won't be paid in taxes = 87% of their salary in costs to government. The fact that they'll be consuming less, thus paying less in sales/gas and other consumption taxes and it's a clear loss to the economy.

Mass layoffs in the public sector have never made financial sense.
But they don't have to. They're just a political ploy to appeal to the hardline core supporters who like to see people in pain. Makes them feel powerful to make other people suffer.

[bleeding heart]

But what is illogical is that numerous departments have laid off thousands of government workers in order to meet their budget cut obligations, & in the March 2012 budget the Harper gov "announced it would cut 19,200 public service jobs over three years in a bid to save $5.2 billion per year". How exactly do these layoffs help the Canadian economy? In a recession with high unemployment, they have raised unemployment #'s even more with this & added tens of thousands more people to an already large job-seeker pool in an already tough/competitive job market. Now unemployed, more people have to get on EI and other benefits & drain even more money from government coffers. Also, with these laid-off workers obviously not making the money they were, it decreases overall Canadian consumer spending which negatively impacts our economy.

This is clearly an anti-stimulus policy by the government, and I don't see how it helps our economy, but rather worsens it; increases unemployment, decreases consumer spending, and puts more strain on our welfare system. Are the government savings from this worth the cost? If anything, such a recession is the time when you should NOT be laying off tens of thousands of federal employees. Some austerity measures may certainly be prudent, but maybe there should be a policy of trying to find cuts without mass layoffs, and rather wait for stronger economic times to cut federal jobs for savings.

What's fascinating to me is that, as we watch the pro-austerity rhetoric grow louder and more self-assured, we see a simultaneous disregard for the very well-understood fact that austerity is not a catch-all answer to economic woes.

The way people are talking now, you'd think it was a magic bullet...and perfectly obvious!

We only haven't done it to any great degree before because...we're all coddled, big-Government adolescents.

The arrogance, the sanctimony, and the sheer (and self-destructive!) stupidity boggles the mind.

And none of these pro-austerity voices would stand for a single deficit in their own standard of living! Gods, no!

Remember the Tea-Partier's cry: "keep your government hands off my medicare!"



That's the sort of logic we're dealing with now. Fun times.

Edited by bleeding heart, 21 June 2012 - 03:15 AM.

[bjre]

It is not about austerity, it is about unfair, no freedom, wasting, and robbery.
Ehealth scandal a $1B waste? Who did that? "the qualified professionals". They take money from everyone.
Whom else can do that? Too many people include lots of immigrants that can not find a professional jobs and had to rely on welfare or sell cafe in Tim Horton's.

So many people have come to Canada, they should create a large market demand and provide a large sum of tax to make Canada better.

However, Jobs are need certificates and licensed that controlled by monopoly.
When they need to see a doctors, they find not so many doctors are available; and no one among them are allowed to be a doctor.
When they need a house to live, they found they are not allowed to build their own house, they have to buy it with a high price and give mortgage provider same money as the house price.
When they need drive, they found, as an oil rich nation, gas price is 6 times high than Saudi Arabia and 10 times high than Iran, but they are not allowed to build their own refinery.
When they have a kid and apply for a birth certificate, they need to wait for a whole year, but they simply can not find a job to prepare birth certificate for others.

This is Canada, too many people held the job but just do a little work but ask for big money, so many blood suckers are waiting for feed too, in the meantime, so many others can not find a job that they are good at, so that they can only do low income jobs, or become a welfare sucker themselves. This certainly limit the potential of the ability for them to increase market demand and provide tax.

What's fascinating to me is that, as we watch the pro-austerity rhetoric grow louder and more self-assured, we see a simultaneous disregard for the very well-understood fact that austerity is not a catch-all answer to economic woes.

The way people are talking now, you'd think it was a magic bullet...and perfectly obvious!

We only haven't done it to any great degree before because...we're all coddled, big-Government adolescents.

The arrogance, the sanctimony, and the sheer (and self-destructive!) stupidity boggles the mind.

And none of these pro-austerity voices would stand for a single deficit in their own standard of living! Gods, no!

Remember the Tea-Partier's cry: "keep your government hands off my medicare!"



That's the sort of logic we're dealing with now. Fun times.

[Moonbox]

No disrespect intended really, but clearly none of you guys have studied any economics. The fact that you're asserting that more government jobs = more taxes and therefore a stronger economy is pretty indicative of this. The exact opposite is true, in fact. The taxes public sector workers pay NEVER EVER equals what they earn in salaries. If the math escapes you, picture an economy where EVERYONE in Canada worked for some public service. The tax rate would be 100% and the government would still go bankrupt. I mean...this is just funny:

And they're not paying taxes either. 67% of their salary in EI, 20% won't be paid in taxes = 87% of their salary in costs to government. The fact that they'll be consuming less, thus paying less in sales/gas and other consumption taxes and it's a clear loss to the economy.

Wow. Let's pretend we have an income of $60k.

67% of 60k = 40k So we have savings per year of 20k

As for tax revenues lost, you'd see around 6k less tax revenue from this person per year total. So we're looking at 14k of savings now. Lastly, we have consumption taxes that we're missing out on, so let's pretend HST all goes to the federal government at 13% of consumption AND let's assume that the 20k in lost salary would have ALL been spent. 20k x 13% = 2600 in revenue.

14k-2.6k = 11,400 in annual savings for the government in the FIRST year, disregarding the fact that EI is temporary and that the former employee will have to find a (hopefully) private sector job which will provide net benefit to the economy or end up on welfare, where he/she will be MUCH less of a drag on the economy than they previously were.

Edited by Moonbox, 21 June 2012 - 06:55 AM.

[Spiderfish]

How exactly do these layoffs help the Canadian economy? In a recession with high unemployment, they have raised unemployment #'s even more with this & added tens of thousands more people to an already large job-seeker pool in an already tough/competitive job market. Now unemployed, more people have to get on EI and other benefits & drain even more money from government coffers. Also, with these laid-off workers obviously not making the money they were, it decreases overall Canadian consumer spending which negatively impacts our economy.

This is clearly an anti-stimulus policy by the government, and I don't see how it helps our economy, but rather worsens it; increases unemployment, decreases consumer spending, and puts more strain on our welfare system. Are the government savings from this worth the cost? If anything, such a recession is the time when you should NOT be laying off tens of thousands of federal employees. Some austerity measures may certainly be prudent, but maybe there should be a policy of trying to find cuts without mass layoffs, and rather wait for stronger economic times to cut federal jobs for savings.

The recession in Canada ended in 2009. Since then, Canada's economy has been in growth, granted it has been a slow growth. There is a time for the government to prop up the economy and help it through the rough times, but once the engine starts to turn on it's own again, the government must then turn to the task of tending to it's own finances. This is what I see is happening now. Budget cuts are never fun, but sometimes they are necessary.

[bleeding heart]

No disrespect intended really, but clearly none of you guys have studied any economics. The fact that you're asserting that more government jobs = more taxes and therefore a stronger economy is pretty indicative of this. The exact opposite is true, in fact. The taxes public sector workers pay NEVER EVER equals what they earn in salaries. If the math escapes you, picture an economy where EVERYONE in Canada worked for some public service. The tax rate would be 100% and the government would still go bankrupt.

Sure, when these former government employees get laid off, they may go on EI temporarily and be just as much of a net drag on the economy, but eventually they'll either need to go on welfare (in which case they're much LESS of a drag) or they'll find a public sector job where their contributions provide net value to the economy.

Feel free to ask questions if you're still confused.

Ok, I'll bite:

Do you honestly believe--through your study of economics--that a complex national economy (or the public sector aspect of it) is a simple zero-sum game of wages earned versus taxes paid?

[Wild Bill]

Ok, I'll bite:

Do you honestly believe--through your study of economics--that a complex national economy (or the public sector aspect of it) is a simple zero-sum game of wages earned versus taxes paid?

Ok, I'll bite!

Do you honestly believe that we can have a robust economy by drafting everyone into the public service and employ them at shuffling papers for each other?

Work is work, right? All work is of equal value, right? Growing food and shuffling paper is of equal value, right?

[eyeball]

I'll bite too, does anyone honestly believe the government's management of the economy is honest enough to not result in a playing field that is heavily tilted towards the most powerful players on it?

Power is power, right? All political power is of equal value, right? The influence of the 99% is equal to that of the 1%?

[bleeding heart]

Ok, I'll bite!

Do you honestly believe that we can have a robust economy by drafting everyone into the public service and employ them at shuffling papers for each other?

Work is work, right? All work is of equal value, right? Growing food and shuffling paper is of equal value, right?

Moonbox asked if anyone had any questions for him.

I asked him one; and my guess is he'll strive to answer it honestly and intelligently.

So what's all this you're saying, then? Non sequiters, and an implied caricature of a view which I don't hold and have never expressed.

[PIK]

Heard today on the news that on any given day 19000 PS are on sick leave and why, because they can. And I hang out with some, I see it all the time.

[Moonbox]

Ok, I'll bite:
Do you honestly believe--through your study of economics--that a complex national economy (or the public sector aspect of it) is a simple zero-sum game of wages earned versus taxes paid?

It's not quite zero-sum, no, but the 'intangibles' that you and jacee etc would ask us to consider don't even come close to bridging the gap. This is not to say that we don't need a public sector, but the fact that it's already bloated and that it generally pays far better wages (for similar or even worse qualifications) means that would certainly be better off trimming the fat.

[bleeding heart]

It's not quite zero-sum, no, but the 'intangibles' that you and jacee etc would ask us to consider don't even come close to bridging the gap. This is not to say that we don't need a public sector, but the fact that it's already bloated and that it generally pays far better wages (for similar or even worse qualifications) means that would certainly be better off trimming the fat.

I think "trimming off the fat" sounds rational, necessary even. But in and of itself, it is a platitude, and it begs some serious questions, which I hope you'll indulge:

If we're to take all this at face value, then the Conservative Government has been seriously remiss for a long time...incontrovertibly so since winning a majority.

Why haven't they already done it?

They've been wasting our tax dollars on unneccessary fat?

And the anticipated response--better late than never--is true enough, but doesn't absolve them of the unwarranted waste which they have wilfully allowed...in fact, embraced...for years now.

Why aren't they being held to account for years of waste--years of waste which is plainly implied by the ability to cut ten-twenty thousand jobs?

It's not enough to say that other governments can and have been guilty of the same thing; that's true, under this paradigm, this austerity notion. But that doesn't absolve the conservatives. It indicts them.

But ok....that's given your assertion; that holds if I agree with you. In fact, it is your assertion that implies criminal wasting of money by ideological ©onservatives.

They've certainly admitted nothing of the kind; nor, to my knowledge, have the bulk of their intellectual defenders.

So it's a bit...dubious, let's say.

However....that's not the only issue. As I said, my critique there holds true only within the parameters laid out, by the Government itself.

Because the other question is this: what fat? Who decides? Some cuts, I suspect, will at least sound like no-brainers (to people like myself, I mean, who perhaps lack the deeper knowledge and understanding of what many of these employees actually do); but are we to assume, a priori, that they're all going to be correct?

Why should we assume any such thing? We're not poster Fletch, after all, who takes these things as an article of Faith.

And (related) what of Civil Servant Argus's position: that much of the waste is the result of the way things are done, not of the number of people involved...so that the cuts might actually increase inefficiences, and so cost us more money?

As for the wages...I get this, but the assumption that Private Sector wages are inherently just and rational, and so the "proper" measurement of how things should be done, is a fairly extremist ideological position, not something derived from "natural law," as some would have it; at any rate, it's a separate, philosophical argument as much as (more than, really) an economic one.

Edited by bleeding heart, 21 June 2012 - 07:34 AM.

[Moonbox]

If we're to take all this at face value, then the Conservative Government has been seriously remiss for a long time...incontrovertibly so since winning a majority.

Why haven't they already done it?

First, you have to understand that everything works at the government level at a snail's pace. Even with the government limiting debate in the House it's a huge, complex beast and is going to take way more time than most people wouldn't like.

And the anticipated response--better late than never--is true enough, but doesn't absolve them of the unwarranted waste which they have wilfully allowed...in fact, embraced...for years now.

That's irrelevant to the discussion. If you're interested in having an honest, non-partisan debate, you can't argue against the government's initiative in the first place and then also complain that they didn't do it sooner.

Why aren't they being held to account for years of waste--years of waste which is plainly implied by the ability to cut ten-twenty thousand jobs?

It's not enough to say that other governments can and have been guilty of the same thing; that's true, under this paradigm, this austerity notion. But that doesn't absolve the conservatives. It indicts them.

Sure! I'll not argue that at all. We are talking about politics, however, and it's a science of comparison. The government is held accountable at election time, and in the absence of a reasonable and superior alternative, it's going to get re-elected. The NDP was certainly not offering these cuts in their platform, so what are we going to do? Are we going to hold the present government accountable for NOT cutting spending earlier by electing a government that declared itself against these cuts???

Because the other question is this: what fat? Who decides? Some cuts, I suspect, will at least sound like no-brainers (to people like myself, I mean, who perhaps lack the deeper knowledge and understanding of what many of these employees actually do); but are we to assume, a priori, that they're all going to be correct?

We'd have to assume that the expensive consultants the government has hired over the last few years would be the ones finding inefficiencies and redundancies. It's more or less worthless for you and I to speculate, because there's no way for us to know.

And (related) what of Civil Servant Argus's position: that much of the waste is the result of the way things are done, not of the number of people involved...so that the cuts might actually increase inefficiences, and so cost us more money?

Like any organization, public or private, the cuts aren't likely to be made blind. Most managers would hopefully know enough about their operations to see what they can get by without and what isn't necessary. Again, however, it serves no purpose for you and I to speculate whether or not the cuts will all be done right. Indeed, probably not all of them will be. Cutting costs in general, however, is probably a good idea at this point.

As for the wages...I get this, but the assumption that Private Sector wages are inherently just and rational, and so the "proper" measurement of how things should be done, is a fairly extremist ideological position, not something derived from "natural law," as some would have it; at any rate, it's a separate, philosophical argument as much as (more than, really) an economic one.

The private sector, however, usually doesn't leave the taxpayer holding the bag. The inefficiencies there are, at least to some extend, sorted out by competition. Over-staffed, unproductive units eventually get shut/trimmed down by virtue of the market. It's not perfect, no, as we've seen with the Big Three automakers and the Telecom industry, but it's better than having to deal with the Public Sector Unions.

Edited by Moonbox, 21 June 2012 - 08:24 AM.

[Michael Hardner]

Thanks, Moonbox, for the great replies on this thread.

The only thing I'd like to add here is that the business of restructuring government in today's era needs more transparency and more information than in the past. Given the government's commitments to GOV 2.0, I would like to see a website where the costs/services/savings are shown in an easy and relevant app.

That would increase my faith that the government knows what it's doing this time.