Thursday, October 5, 2006

Socialism and the oppressive modern state

Canada is an example of 'statism' gone wild

by StFerdIII

Statist government is not benign, moral, or effective, but feckless. Seeking sanctuary in statist protection might satisfy some emotional yearning to be a part of ‘the pack’, but it does nothing to promote the ideals that create civilization, high standards and a moral, better functioning society. Few politicians actually proffer that government is the problem and if they do, once in power they are constrained by electioneering, the civil service, the media, and other vested interests in rolling back the state. But the benefits of limiting government and confining it to certain roles with-in the political-economy is obvious. Canada for example, is an over-governed and over-taxed jurisdiction. The harmful effects of big government are everywhere to be seen in Canada. Reform is necesssary, but few inside the Canadian state have the courage to implement change. Much the same can be said for Europe and the US.

Governments should never accede to a greater share than 30% of the GDP and they should focus on the 4 core duties of government; security and border defense; infrastructure; immigration control, and accessible social services. Outside of immigration these government mandates should of course involve the private sector as well. Government by itself is never the answer and a market without competition, private capital and initiative ultimately fails. This includes health care. Once government controls more than 30% of GDP there is a regressive impact on the economy and society. If government becomes too large there is a negative correlation with GDP, job growth, productivity and a positive connection with corruption, fraud, waste and union power. Marxists, do-gooder socialists and eco-cult fascists might scream that reality is unimportant; price-points are to be disdained; supply and demand pressures must be ignored; and innovation should be magically created by a committee; but the affairs of men and the real world indicate the opposite.

Sadly however, the Marxists, anti-reality groups, and academics hold sway over most of government, associated unions and the media. In Canada for instance regarded in Europe as an appendix of the ‘capitalist’ United States, government takes 43% of GDP directly and indirectly whilst employing somewhere between 30-35 % of the total workforce through its own payroll or by supporting innumerable programs and industries reliant on government contracts. Union rates while falling are still 2.5 times the US level [or 30%] indicating that protectionist and anti-capitalist practices are alive and well in the 51rst state. Government and its power brokers, supporters and dependents are now the most powerful force in the Canadian state. This is hardly conducive to creating a better society, or for the eco-fascists, even a cleaner society. Market forces, innovation, technology advancement and productivity are surer guides to future wealth and a cleaner world, than government diktats and bureaucratic nonsense.

Witness the almost illimitable size of the Canadian state which sits on top of the unsuspecting citizen. In Toronto there are 57.000 government employees working for a population of 2.5 million. [Keep in mind this is the same total as the entire province of Ontario.] This means there is 1 government union worker for every 45 citizens or 3 times what the average US city requires. The Toronto government union worker earns more than the average citizen in the private sector and has 10 weeks off a year and a fat pension – none of which the average worker has. In Toronto the annual budget is $7.6 Billion or $3004 per citizen. It escalates by 10% per annum. Taxes rise in Toronto and never fall. A real subway system and infrastructure does not exist. The city is dirty, its politics corrupt and large program spending out of control with waste, graft and fraud common. The city has a debt that is 1/3 the size of its annual budget consuming 11 % of the total budget in interest fees, and has had in recent years a negative job growth in the private sector. Yet no reforms will be enacted, and government in Toronto will continue to grow.

But that is only one level. In Ontario there are 55.000 government union workers with jobs for life in a population of 9 million or 1 worker for 180 citizens. The budget revenues increase by 10-15% per annum with a current budget of $85 billion or $9400 per citizen. Debt levels are at $130 billion or about 2 times the annual budget. Interest on the debt consumes 11% of the total budget. Program spending on tearful issues like health or education escalate by 15% per annum and health care within 30 years without reform will devour the entire budget. Yet like most governments Ontario cries that it is poor and needs more money. It is hard to understand this argument when revenues and spend have increased by 35% in the past 6 years and the number of union workers grows apace by 10-12% per annum. What do all these people do?

But that is only the second level. At the top of the pyramid lies the Canadian Federal state which employs 179.000 union workers for life, out of a population 30 million or 1 worker for every 168 citizens. The Federal budget is $200 billion per annum or $6700 per citizen. It is hard to understand why there needs to be close to 200.000 federal workers to manage federal programs. The collective debt and unfunded federal liabilities now approach 2 times Canada’s GDP with the federal debt at $530 billion and federal unfunded future liabilities approaching $1.3 trillion [for future pensions, health and social service payments]. The unfunded liabilities are of course kept off the official accounting statements – something that would send a private sector capitalist to jail.

In Canada there are close to 1 million government workers – all unionized; all paid well; all with nice pensions, good teeth, well groomed hair and 10 week holidays. But is this logical? In a workforce of 13 million does it make sense to have one million government workers who indirectly employ millions of more contractors, and personnel in firms reliant upon government contracts and subsidies? The economic impact is enormous and the replacement of private capital by public money, means a direct reduction in competitiveness, productivity, wages, and living standards.

The concept of transparent democratic governance is to put the decisions and the money to manage programs as close to the people as possible. This means a few things. Clearly we need to severely limit the role of the various levels of government. For instance the federal government has no business in taxing and redistributing money. It should focus on defense, security and national infrastructure. It is a travesty that the tax office for example has 3 times more employees than the military [19.000] or that ‘Indian Affairs’ has a budget almost as large as the military [$12 billion vs. $15 billion]. Toronto does not need 60.000 government sniveling servants. It needs maybe 15.000 and to focus on infrastructure, housing, building a real subway and lowering tax and spend to stimulate its economy. But it will do the opposite. Ontario is heading towards bankruptcy piling up debt and expanding health spending until it will consume most of the budget. But there will be no reforms, just higher future taxes and ‘I feel your pain’ political posturing.

All of this is obvious. But what gets lost in the Marxian analysis and media crying is the impact on the average Joe and Jane. Living in Toronto - a supposedly world class city with a third world infrastructure – means that if Joe earns $55.000 gross income per annum he will pay out about $30.000 in taxes – or over half his wage. You can add it up yourself. Per capita costs for a working man will cost him $5.000 for the Toronto government, $15.000 for Ontario’s and $10.000 for Canada’s. For this he gets ‘free’ health care; a public library he never uses and a school system that is sub-standard with no intra-school competition or vouchers [no competition is necessary in the world of the socialists]. Joe must be scratching his head and wondering how he will be able to afford his 10 day vacation or send his son to hockey camp. Government union workers and their friends never have such concerns of course.

One of the greatest threats to civilization is the sheer lunacy of big government, academics, Marxists, socialists and eco-cultists. These groups are opposed to reality and freedom. The onward march of government is not a friendly, charitable event. It is an abysmal development that curtails the development of a well functioning, cultured, and truly responsible society. Maybe some cataclysmic event is necessary in which whole states go bankrupt and almost disappear before change is enacted. But in fighting a war with fascist Islam we can’t chance this. It is a puzzle however, to find a way inside our current political process to elect politicians who will roll-back government, reduce tax and spend and create a real society.

This is one of the great conundrums of the modern age and one of civilisation’s great battles.