Tag Archives: Debt

If the shoe fits…

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Parasites are a part of living in our world whether we like it or not.

There are many kinds of parasites out there from the literal such as the blood sucking mosquito above to the figurative such as the tax dollar consuming civil servants below.

Civil servants unsurprisingly chafe at being labelled as parasites but they fit pretty much every definition of the term. Civil servants are 100% reliant on the resources provided to them by their host (taxpayers) who have to give without consent.

At best, the relationship can be considered something of a symbiotic one as civil servants can provide tangible benefits to taxpayers at times. There is no doubt that civil servants provide some rather essential public services particularly in emergency service provision. One rarely feels that their tax dollars were poorly invested when they have received emergency services from an ambulance or had their property and well being protected by a police officer. Most people agree that a degree of regulation is required in society and that regulation will come with some degree of bureaucracy and enforcement in its administration. That still doesn’t change the parasitic nature of the relationship however.

What is critical in a parasitic, symbiotic relationship is balance.

If parasites overpopulate, the host can become irreparably damaged as more resources are drawn than commensurate services are provided.

The Notley government has caused a terrible imbalance between the parasites and hosts in our provincial society. In order to try to mask the effects of our recession, the NDP has been borrowing at an astounding rate in order to pad up the number of civil servants in Alberta. This helps for a short term at least in keeping the unemployment figures from truly reflecting how depressed our economy really is right now. This approach is totally unsustainable and we will be paying a very heavy price for it soon.

While the trend of mass civil servant hiring did indeed begin before the NDP took office, they expanded on it and continued the trend. The parasite sectors is growing swiftly while the host sector has dropped and remains flat lined.

The accidental Notley government will be replaced in the next general election. Unfortunately, the hard work to recover from the terrible economic management of the NDP will only be beginning at that point.

The spike in civil servant numbers and compensation will rise even more dramatically once the NDP accept that they will not be forming government again any time soon. The NDP will greatly expand the civil service and will bind the hosts to contracts that will be terribly difficult to get out of as they vacate their temporary home in government.

With out mounting public debt and our flat lined employment numbers among producers (private sector), the cuts that will come to the tax dollar consumers (civil servants) post-Notley will have to be deep and will have to come soon.

Parasites will always struggle with vigor when being removed even if it means further damaging their host and themselves. Just as a wood tick will dig in and possibly cause its own head to be torn off rather than be removed from its feeding spot on its host, civil servants will do anything in their desperate attempts to continue feeding on the taxpayers indefinitely.

The parasites will begin lashing out with threats. I already saw that last night as a union member annoyed by my parasite characterization actually implied that civil servants may purposely meddle with my health care if I keep up with my critique as can be seen below.

Strikes will be threatened and possibly held as essential spending restraint looms.

This is not unprecedented at all as we went through all of this in the 1990s when Ralph Klein made the tough decisions that had to be made to bring the province back into balance. Those choices led to a period of unprecedented Albertan prosperity for over a decade until we slipped back into the trap of excess government spending yet again.

The looming cuts are inevitable. The clashes are inevitable too unfortunately as those with a sense of entitlement to the earnings of others never let go easily.

It will take courage to stand down the protests when the time comes. Understanding the parasitic and symbiotic relationship that we have with civil servants will help us remain strong when pressure to back down on cuts comes. We can’t be afraid to call the relationship what it is and act on that basis.

The relationship between taxpayers and civil servants is way out of balance and we will all suffer until that is rectified.

 

Health care “premiums” are a tax. Say it like it is.

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To say that the Redford government is up the fiscal creek is an incredible understatement. The Redford led Progressive Conservative Party of Alberta won the 2012 election on a platform of false revenue projections and completely unsustainable spending promises that can only be called outright lies. Fiscal reality has come home to roost and Alberta is now facing a catastrophically large budgetary deficit.

Like rats from a sinking ship, Alison Redford’s communications staff are bailing out as they know that participating in the festival of lies demanded to try and polish Redford’s turd of a budget will only destroy any future hopes of work within the field of communications. The lack of communications strength was quite clear and visible in Alison Redford’s bizarre address to Albertans where she spit out blame and excuses for the disaster of her own making while really saying nothing else of merit. Even the Alison Redford’s twitter account appears to have been assigned to somebody with the communications skills of a six year old as petulant tweets attacking radio hosts are sent out.

Now that is has been pretty clearly established that Redford has reduced her communications staff to one of the most expensive yet simplistic groups in the nation, we can speculate on where they plan to go to try and dig their administration out of this embarrassing hole.

Redford has now claimed that she will not raise taxes despite the gargantuan deficit that she created. This leaves her in something of a quandary. A simplistic way to get around this of course is to label a tax something else. That is exactly what happens when we hear speech on health care “premiums” and predictably we are hearing rumblings that the health care tax may be reinstated.

The general health care tax that was mislabelled as a “premium” was one of Alberta’s most regressive and inefficient taxes ever. While the tax provided little burden to high income earners, it was quite onerous for people and families on fixed incomes. The health care tax was very difficult to administer and a very large portion of the generated revenue was lost through collections and administration.

The funds from the health care tax were never kept in a separate dedicated fund for health expenditures. The health care tax was indiscriminate of the payer’s own health or lifestyle. Healthy people and sick people paid the same “premium” and all revenues went into general revenues. That is why no matter how some try to say it, the health care tax is a tax and not a “premium” by any measure. Redford’s communication army should try something new through telling the truth for a change. Admit a tax increase for crying out loud. It’s not as if Albertans have not already concluded that Redford is full of bullshit. We won’t be fooled now.

Some claim that a health care tax helps teach Albertans the true cost of health care. Unless the health care tax is at least a few thousand dollars a year, that simply is not true. A few years ago, I encountered a somewhat informed lefty who was convinced that the monthly “premium” that he paid for health care accounted for his entire costs in health care.  The monthly payment actually added to confusion about the real cost of care in our socialised monopolistic health care system.

Perhaps bringing in a health care tax is a good idea or perhaps it is not. Let’s not cloak this in bullshit though and call it what it is; a tax increase and another broken Redford promise if it comes about.

Government debt is nothing like a personal mortgage!

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As the inept and increasingly corrupt Redford government marches Alberta back into debt, apologists are trying to say that government debt it a good thing and is like a mortgage. That statement is utter hogwash and it is tiring.

To begin with a mortgage is taken out by individuals (or families), to purchase what will likely be an appreciating asset. Equity (most likely) will build in the purchase that can be used to borrow against in the future in possible hard times or the home may simply be sold outright later. Barring either of the above, the home and it’s value will eventually be handed down to heirs.

Government capital projects while providing value are not typically transferable and only lead to future maintenance costs as opposed to appreciating in future value. Can we use a hospital as collateral in a future loan? Can we sell an overpass if we need extra cash? Increasing long-term value makes incurring debt for a home purchase a good idea. That growing value simply does not exist in government capital projects.

A mortgage is usually a once in a lifetime debt. People may move from home to home while building equity and transferring the mortgage but a person will generally only have one mortgage at any one time and the goal will be to pay it off. When government begins borrowing in good times as Redford plans to do now, it is akin to taking out a new mortgage every year. No appreciating asset is being purchased and debt simply keeps growing and growing. There is no equity offsetting the loan.

While a personal mortgage will eventually end, capital expenditures never will. There will always be more roads needed and hospitals demanded. Will future generations not need such expenditures too? They will have to pay for that infrastructure while paying debt off along with interest. Is this principled or fair?

We hear the dwindling Progressive Conservative supporters trying to paint things as if it is some sort of zero-sum game with idiotic questions such as: “Don’t you want schools, hospitals and roads?”. Of course we do and we will still have all of those damned things without borrowing to get them.

People keep speaking of an infrastructure deficit. By who’s measure is there a deficit? Is there ever enough hospitals? Will roads ever be wide enough? Will kids have enough schools close to home? Will there be enough libraries? The demand for spending is truly infinite. The capacity to spend is finite though and we have to draw a line somewhere.

If we need to borrow while the government is receiving record revenues as it is now, it is clear that there is no way that this administration will stop borrowing down the road no matter what energy prices do. We will borrow and borrow and borrow until an inevitable fiscal collapse that our children and grandchildren will have to endure.

All around the developed world we are seeing governments collapsing under their own debt. Most of Europe is in fiscal shambles and the USA is soon to either hit the wall or have some terribly heavy austerity measures come into place as their government debt overwhelms them. Why on earth do we want to continue to keep digging ourselves into that unsustainable hole when such clear examples of the futility of that path are in front of us?

We are lucky in Alberta to have the means for some of the best infrastructure and development in the entire world. For us to threaten this with such a gross addiction to spending and lazy government is almost obscene.

The excuses and rationalizations will be coming hard and heavy as the 2013 budget looms and Redford presents Albertans with a massive budgetary deficit. To be sure, the mortgage comparison with government borrowing is simply bunk. Be sure to remind Redford’s small social media army of that as they ramp up their unprincipled rhetoric in the next few months.

A Record Month for Calgary City Council.

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It has been some time since I have seen our intrusive city council get on such a roll of covering so many self-important, expensive and intrusive initiatives that we really don’t need and that really don’t fall within what I see as their mandate as a city council.

Below is a clip from the Alberta Municipal Government Act mandating what the role of a municipality should be:

Municipal purposes
3 The purposes of a municipality are:

(a) to provide good government,

(b) to provide services, facilities or other things that, in the
opinion of council, are necessary or desirable for all or a
part of the municipality, and

(c) to develop and maintain safe and viable communities.

Now the above statement is pretty broad and yes leaves a great deal open to interpretation. It greatly empowers council in that it allows things to be done “in the opinion” of council which pretty much lets them judge themselves empowered to do damn near anything (and it shows in their actions).

What is outstanding in the document is also that the mandate is simple. The complexities in city governance are grown and created by busybody city councils that feel that they should be mandating, regulating and banning whatever practices among Calgarians they please.

Personal special interest mandates are showing clearly as city councilors waste their tax funded time on petty issues while major issues languish by the sidelines.

Council extremist Brian Pincott is a specialist in pushing these foolish, narrow initiatives. Pincott wants the law to tell you how many lights you can have turned on and at what time. Pincott wants to ban your right to use fire pits on your own property and perhaps even ban your wood burning fireplace. Brian Pincott wants ban cutting of trees on your own property and now Pincott feels it is his right and obligation to tell you what you are legally allowed to eat! 

Yes, I do understand that the practice of shark finning is repellent and inhumane. That being said, is it the role of a municipal council to ban the consumption of a legal product? Where do we stop? Veal? Foie Gras? Meat altogether? Non-organic foods? Non free range eggs? The list is endless and the precedent has been set. Sorry, I am grown to the point where I no longer will even let my mother tell me what I can or can’t eat, I sure as hell will not let a gang of busybody clowns in city hall tell me what to eat.

Despite a lack of need or demand, city hall will be spending a fortune closing even more lanes downtown for bikes and has set a timeline to pursue the expensive and proven loser called “bike sharing” that has proven to be a catastrophe around the world. 

Now in a stroke of genius despite the City of Calgary’s $3 billion debt and constant tax increases, Nenshi and city council have happily decided to pour tax dollars into golf courses to subsidize green fees. Hey, I like golfing but I don’t expect taxpayers to keep the cost of my game down. Is golf a need? How many Calgarians are served in this move? Is there a giant hidden surplus out there?

What can we look forward to in the next month as these nuts work to control more aspects of our personal lives on private property?

It is past time to clean house on Calgary city council. The next election is a year away. I do hope that a good fresh slate of people come forward as we really can’t afford these fools much longer.

What part of broke do they not understand?

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It is happening all around the world including Canada, the only difference is in degree. Governments on all levels are spending more than they are bringing in and the inevitable financial collapses are beginning to occur.

Cowardly politicians and shallow electorates have repeatedly brought in policies and programs that are totally unsustainable and have done so through debt. Nowhere is this more acute right now than in Europe where they have reduced retirement ages, shortened work weeks and grossly increased social entitlements such as pensions and welfare to the point of complete fiscal unsustainability.

The productive have been taxed out of the nations and investment is avoiding the EU like the plague.

One by one we are watching these nations collapse as they pass reasonable debt thresholds.

The economic collapse of these nations is not all that shocking. Right or left, the concept is very simple and immutable: IF YOU SPEND MORE THAN YOU TAKE IN EVENTUALLY YOU WILL GO TOTALLY BROKE!

Despite what should be a stark and self-evident reality, entitlement has blinded the citizens of these countries. As the inevitable austerity budgets come down, union-led riots erupt as people flood into the streets to demand funds that simply no longer exist. We saw this last winter in Greece and now are seeing it in Spain as pictured below.

Hipsters Gone Wild! Spain edition!

 

 

People can scream, shout, riot, assault police, attack businesses and throw whatever tantrums they like, it will not change the hard reality that the cupboard is bare.

Do these rioters think that their government is hiding a big pile of resources from them? Do they think their local legislative building has a mountain of gold hidden within it? Whatever their delusion may be, rioting is futile and they would be better served seeking employment and pinching their pennies.

As I said earlier though, we are only better in degree. Our governments at the federal, provincial and municipal levels are all spending more than they are taking in and it has to end. Will we let it end in bankruptcy like our European neighbors or will we begin to cut spending responsibly now while it can still be on our terms? I fear the answer for that.

We need to cut spending people. This is not a matter of opinion, it is simple reality. Otherwise we will inevitably end up in Europe’s shoes. It will be even worse for us pride wise as we have no excuse in not seeing this coming.