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The Progressive Economics Forum

So you think you can budget!

With the Alternative Federal Budget (AFB) officially released, you’d think the budget gnomes at the CCPA would have some much deserved time off.  Unfortunately with the snow still falling in Ottawa, we figured we’d put them back to work.

Every year, the AFB puts together ideas from all of the partners involved.  Once everything is said and done, those ideas are aggregated into the final 150 page document.  Just like the federal budget its all or nothing.

So this year, we decided to also make the AFB into an interactive tool.  It uses all the same multipliers and calculations as the full AFB.  But this time you get to pick what’s in and what’s out.

If you were finance minister for a day, which programs would you pick?  How would you manage the deficit and unemployment?  Sometimes its not as easy as it looks.

Give it a try yourself at   http://www.policyalternatives.ca/newsroom/updates/so-you-think-you-can-budget When you’re done, post the results to facebook, twitter or email them.

Enjoy and share:

Comments

Comment from Purple Library Guy
Time: March 21, 2011, 1:56 pm

That’s pretty cool.
I notice that if you do basically everything nice that might be wanted, but shrink the military and implement all the tax-the-rich measures listed, you end up with $5 billion more in deficits over the 3 years (but front-loaded, so if the trend continues the deficits will be lower in the long run) but noticeably lower unemployment and presumably much less poverty, better access to education and so on. Well worth the tradeoff I’d say.

It’s a pretty cut-and-dried exercise, though. It’d be even cooler if you could have, say, sliders for where you want to put your tax levels, things like that.

. . . I notice the model shows the effects on unemployment damping down over the three years. I wonder why that is? I’d have thought that, to the contrary, you might see at the beginning, just the direct effects of increased employment in the various programs, but a couple of years on there’d be a stimulative effect from the increased demand (both from the people working in those direct jobs and from people with more money from the enhanced social programs either giving them money directly or reducing their expenses) leading to more employment in the private sector as well. Or maybe the model does have that happen but it’s masked because this unemployment measure is the normal misleading kind, and the lack of improvement is meant to reflect many people ceasing to be “discouraged” and returning to the workforce? Maybe something which showed a broader, less meaningless unemployment measure would be more useful–give us the budget’s impact on % of potential workforce actually employed, or something.

Comment from David Macdonald
Time: March 21, 2011, 2:14 pm

Glad you liked it. The slider idea would definitely be cool and it certainly something I considered, but it was hard enough to get to V1.0 Sliders are in V2.0

The multipliers that we are using are calculated by Informetrica. The main reason that the Unemployment Rate goes down over time is that the AFB is based on governments’ own projections that themselves go down over time (based on the October 2010 update). Also, many of the AFB programs ramp up in spending over time meaning the largest effects are in year 3, again a bigger effect on unemployment later on. The model does incorporate a changing participation rate that increases as the UR decreases.

Unfortunately for public appeal, many of these interesting facts are simply aggregated under “Deficits” and Unemployment”.

Comment from Purple Library Guy
Time: March 21, 2011, 10:06 pm

No, I meant that in year 1, my lots-o-social-services’n’infrastructure-spending budget had unemployment 1.1% lower than the government budget, in year 2 it was 0.9% lower, and in year 3 only 0.5% lower. I was expecting the difference to widen rather than shrink.
In fact, while the government-budget unemployment rate started high and reduced, my alternative one started low but stayed nearly flat.

Comment from Travis Fast
Time: March 22, 2011, 7:38 am

Interesting. I would have liked to be able to choose the PIT rates and brackets. 250,000 is way too high in my opinion. Also I would have liked to be able to play around with the GST and carbon tax levels. Maybe next year you could put in sliders for the tax elements?

Comment from Paul Tulloch
Time: March 22, 2011, 10:58 am

To all those out there thinking they have a hugely busy day analyzing the budget, put your pens and keyboards down.

The budget will not pass. So don’t waist too much effort on analysis.

Spend a little time on why the budget stinks and move onto the election.

Nice job though by the CCPA on the AFB. I recall the early-mid 90’s and being involved in the AFB and the deficit terror that totally enveloped the whole budget process.

I guess given the minority government of the tories and the constant threat of an election it has helped temper the austerity so far. Which makes budget time a little easier. I am so glad the AFB was implemented as a yearly focal point of many in the progressive community. We need to organize more such initiatives.

pt

Comment from duncan cameron
Time: March 22, 2011, 12:49 pm

David this is great stuff. I remember the first AFB, it was done by Andrew Jackson who believed in the idea. I can still see the cover, it was a pink, a piggy bank motif I think. Not long after, the CCPA partnered with Cho!ces in Winnipeg, and the project moved to another level. With this initiative, making the AFB interactive, it just moved up a level again. It takes a philosopher to bring the dialectic to budgeting it would seem.

Comment from Paul Tulloch
Time: March 22, 2011, 1:48 pm

I did not know it was Andrew, that started this off. I guess he does do more than watching birds. lol.

It was a great AFB this year and growing more in depth and strengthened more and more every year.

Comment from Numeru
Time: July 6, 2011, 1:05 pm

Financial & Learning Portal
http://www.numeru.com

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