Writing in the National Post, Macdonald-Laurier Institute Senior Fellow Philip Cross says the collectivists have it wrong.
Rather than spending excess tax dollars on big projects, governments should return surplus money to taxpayers to use as they see fit.
By Philip Cross, April 22, 2015
Commentary on the federal budget quickly evolved into two camps: those who urge the federal government to immediately spend more on public servant’s pay and benefits (unbelievably, headline news in Ottawa this morning), infrastructure, direct job creation and reducing income inequality, and those who want to return surplus government funds to taxpayers to spend or save as they see fit. The Harper government is clearly in the latter camp, as without a host of measures to reduce taxes last fall and in this week’s budget the federal surplus would have been $12.0 billion, not the actual forecast of $1.4 billion.
These two visions of who is best placed to spend Canadian’s money can trace their deep roots to the philosophies of collectivists versus libertarians. The differences were clearly on display in a debate I recently participated in at the annual meeting of the Broadbent Institute (I also spoke at this year’s Manning Networking Conference; the contrasting styles of the two organizations are revealing. Broadbent was precisely organized under central command, while Manning organizers basically said, here’s the broad idea, you figure out the details). Former Conservative cabinet minister Monte Solberg and I spoke of the importance of restraining the size of government and deficits in our society; author Linda McQuaig and Armine Yalnizyan of the Canadian Centre for Policy Alternatives argued for the collectivist vision of a larger state, deficits be damned.
Armine brought the assembled collectivist masses to their feet with an impassioned denunciation of the Harper government starving governments of resources just “so people could go shopping.” This reveals an elitism that is always just below the surface of self-styled progressives: We the ‘anointed’ (as Stanford’s Thomas Sowell called the collectivist elite in academia, government and media) best know how to spend your money. Left to their own devices, ordinary people show a disappointing tendency to buy things the anointed don’t approve of, like video games, fast food and car seats with 3-speed heating and cooling, instead of anointed-approved lifestyle choices such as mass transit, high density housing, and food sourced within a 100-mile limit.
Collectivists not only are dismissive of mass consumption, but pretend government spending is hyper-efficient, finely tuned and able to address every social problem and disadvantaged group. They ignore the large and growing share of government spending that is captured by the public service for its own benefit, both through ever higher levels of compensation per employee and ever more employees needed to administer government programs (what public administration expert Donald Savoie calls the “thickening” of civil service operations due to constant growth in oversight by central agencies and endless investment and training of its own employees, the results of which you undoubtedly appreciate every time you have contact with government services). This is why, for example, 80 per cent of the increased health care spending in response to the 2002 Romanow Report on the Future of Health Care ended up going to health care workers and not better services to Canadians.
It used to be that interest payments created a wedge between the taxes Canadians sent to Ottawa and the services they received in return. It was widely acknowledged that Canadians became disillusioned with governments when this wedge grew to 33 cents on the dollar in 1994, rightly sensing they were not getting full value for the government services they were paying for. Now that interest payments have fallen, the wedge between what Canadians pay and the services they receive has been partly replaced by growing public sector compensation.
Given the disconnect between what Canadians pay in taxes and the government services they receive, it is not surprising most people would rather spend the money themselves. Nor is this money wasted on the baubles that collectivists contemptuously dismiss. People spend mostly on their homes, on vehicles to get from home to work (80 per cent of Canadians still commute by car or truck) and on devices like smartphones that help them organize their busy daily lives. They support their children’s education, since over three-quarters of students go on to some form of post-secondary education. A growing number provide care to their elderly parents or send money to family living in other countries. The vast majority are saving responsibly for their retirement, with over 80 per cent contributing to various retirement saving vehicles once they settle into middle age. Faced with all these demands, it is not surprising that most Canadians would rather have the government return any surplus money to them, rather than having government spend it on programs of diminishing benefit to the average person. Collectivists claim to be the friend of the middle class, but only if they can substitute their own judgement on how to use the money of ordinary Canadians.
If you can still afford to go shopping after paying all your taxes and expenses, be my guest. You earned it. It’s your right, and don’t let any of the anointed tell you otherwise.
Philip Cross is a Senior Fellow at the Macdonald-Laurier Institute.