Friday, September 15, 2006

Compassionate Canadian Conservatism

Is there any difference between tearful conservatives and the statists?

by StFerdIII

Income and money is not the only important measurement in life – other factors ranging from the intellectual to the emotional, to the cultural, to the inspirational are important as well. But if you want to discuss the power of the state, and the subordination of the individual to whims and powers that are beyond his control, than looking at taxation is appropriate. Here we have in Canada the creation of the all powerful, European style welfare state. Taxes in Canada since 1965 have gone up 1400 percent. Average income in 1965, normalizing for inflation, would have been in 2005 money, about $15.000. It is now $50.000 – an increase therefore of about 300 %. Disposable incomes have remained flat in Canada for the past 10 years. Standard of living levels are 30 % below that of the hated Americans. Socialism is the cultural force prima inter pares in Canada.

Witness this – in the past 5 years while fighting 2 wars and dealing with the catastrophes of 9-11 and Hurricanes -- the Americans have seen their economy produce over 3 million jobs, grow by 3.5 % per annum, with government revenues rising by 20 % as taxes are cut. Yet the media is full of doom and gloom and announce weekly and daily the inevitable and pending US economic crash. We are still awaiting the economic meltdown of the US. In Canada the big government model has produced on average 2.3 % economic growth and ½ of the per capita job creation that has been created in the US. However no media coverage or clamor on a coming Canadian recession, economic downturn, or economic calamity exists. Granted Canada is now a commodity driven economic but with oil declining, gold soft, and copper declining [which portends softer future commodity pricing], you would think at least the Cassandra's would be beating the drum about 'Canadian decline'. In any event the economic difference in real GDP growth in the past 5 years between the US [20 %] and Canada [10%] should indicate that the Americans are continuing to become richer and more powerful, while the Canadians become smaller and more marginalized.

This difference has been ongoing for 40 years. Since 1965 public per capita debt in Canada has skyrocketed to $174.000 per man, woman and child. At every level of government since 1965 spending has increased to keep pace with or even outpace [as in the case of Toronto and Ontario], government taxation revenues. Now 44 % of Canada’s GDP is state controlled. If this is not socialism what is it ? When will the appropriation of wealth and economic privilege stop ? When 55 %, or 60 % or 48 % or 65 % of GDP is controlled by governments ?

So now some media are asking in Canada – can Conservatism actually win elections? This is laughable. How about the real question – was Conservatism ever alive in Canada ?

The tree huggers, Gay activists, Islamic apologists, US-haters, and Che t-shirt buyers, will object that taxation levels have nothing to do with the greatness of the country. They can reference of course the arrogance of the Chinese who believe that their country is the center of the world, or the fashionably obnoxious French who believe that a second rate state is actually the leading cultural force in the world even as it is mired in obscene national and international corruption. Good for them. Back in the real world taxation powers granted to government determines its power. The greater the money flow to a centralized bureaucracy the faster is the imposition of government agencies whose sole purpose is to extract more money, and power.

Most economists state unequivocally that government transfers above 30 % of GDP hamper economic growth and wealth creation and actually on a marginal basis destroy more wealth then they create. This is especially relevant when you compare Canada – a country with no military [19000 soldiers commanding $12 per hour], little border controls and a woeful immigration system, free riding off the US. Canada has 10 % more of GDP under government control than the US which has 35 % of GDP under government control. Normalise for Canada’s free riding off the US military and we would, with normal military spend, border controls and security spend, have well over 46 % of our GDP under government control.

When your major trading partner and competitor has only about 35 % of its GDP under Government control the difference is staggering leading to wealth destruction in Canada and more perniciously a whole philosophy of self justification for WHY government must control so much of our economic and social affairs. This philosophy with no basis in historical empiricism or intelligent assessment of reality is called Post Modernism. It is elitist, judicially biased and prone to historical revisionism. It is also morally and economically bankrupt. Yet this absurd anti-reality philosophy is now the state religion of Canada.

Leaving aside the philosophical problems and cultural issues facing Canada, the most pressing problems for Conservatives to resolve are the size of government, the lack of democracy, and the staggering taxation load. Once these are addressed then Conservatives can start to dismantle the Post Modern Orwellian state that has produced 2 generations of ninny’s and wimps. But that assumes that Conservative elements still exist in Canada and can assume power. This is dubious even under the supposed rabid, raving, GW Bush loving Stephen Harper. Harper is a 'centralist' as much as Premier Klein in supposedly right wing Alberta is an out of control big spender. The question is whether any politician will ever fight for a limitation and roll back on the state.

Some economic figures in over-governed Canuckistan:
-Governments take $475 billion out of taxpayers each year or $15000 per capita. In 1981 governments took only $10.000 per capita.
-In 1981 Ottawa took $4.900 per capita and this has risen to $6.300 by 2005.
-Provincial and municipal spending has increased by more than 65 % from $5.400 in 1981, to $8.900 in 2002 [inflation adjusted].
-High personal tax rates falling on middle class and lower income earners approach a marginal rate of 70 %.
-A person whose salary is in the 30 % tax bracket, who earns 4 % on a GIC, with inflation at 2 % faces an effective tax rate of 60 %.
-RRSP limits have not kept up with inflation and the limits are quite low. [only up to 18 % of earned income, forcing people to spend].
-Dividend tax rate is higher than the capital gains rate, meaning that firms do not pay dividends and instead buy back their own shares.
-Corporate income taxes are the 2nd highest in the world and force firms to locate offshore.

So has Conservatism ever really existed in Canada since 1965 ?

Post 1965 Canada has failed to capitalize on its latent potential. Canada has some strength’s that a lower tax base, a reduction in regulation and government downsizing would do much to enhance. NAFTA, a well educated labor force, good primary education, excellence in some areas of post-secondary education, and some good economic fundamentals including; low inflation, moderate money supply growth, a more respectable currency, trade surpluses [which also means the country is exporting capital], a reasonable [though declining] standard of living, and a commitment to international affairs and for, are some positive aspects of Canadiana. These strengths are significant but are juxtaposed against some fundamental flaws.

It is these flaws that Conservatives must address. If you want to have a Conservative movement in Canada that is different than the Post Modern status quo, then agreed to do the following:

-Prioritize less government, lower taxes, more competitive economics
-Stop all subsidies to businesses and regions
-Simplify the tax structure and introduce a flat tax
-Enshrine family and Western Enlightenment values
-Triple the military budget
-Democratic reform including an elected Senate
-Engage the world through the backing of Western ideals
-Be fair, firm, friendly, mature and supportive of the US
-Stop the immigration rot and corruption and refocus immigration to Europe and like minded Judeo-Christian nations
-Force through internal free trade
-Reject our Cuban Health Care system and allow local jurisdictions to introduce private care. In fact turn health care into a profit making industry where we can export technologies, people and pharma across the world and turn our Cuban system into a job creating and consumer responsive market.
-Support Conservative institutions and magazines and webzines
-Get the Conservative party organized on the grass roots level and professionalise the organization through paid activists willing to do the hard work to build up a real Conservative party from the ground up.
-and debate, rage, argue, harangue and take on the socialists face to face, man to man

In essence we need to reject the EU model and fight hard to convince the majority that we are right. Conservative ideals are correct, but if you don’t engage in the fight you lose the war.

But perhaps most people don’t care. Apparently they want their hands held, their noses cleaned and their hair combed, all the while being told how wonderful they are.

Or do they ? Maybe it is not too late to build a real society.