Reynolds on a “Shameful Spending Spree”
Neil Reynolds has issued yet another diatribe in the Globe, “A Shameful Spending Spree”Â He argues thatÂ inflation adjusted government spending per person hasÂ grown by about 50% over the past 30 years. He uses 1982 as the base year.
Was all this inflation-plus spending really necessary? Yes, it includes health costs and education costs but does every man, every woman and every child in this country really require $15,000 a year in government support? A few years from now, will every Canadian require $30,000 a year in government support? Was life so intolerable in the 1980s (and since) that federal and provincial governments were compelled, year after year, to ramp spending by inflation-plus margins? It is preposterous and fiscally perilous to think so.
I’m not clear on where Reynolds gets his per capita spending numbers from, but there is no evidence of government spending growth in excess of income (GDP) growth per person over the past 30 years or so
If we look at the period from Reynolds base year of 1982 to 2009, real per capita GDP grew by 52%. So if Reynolds numbers are correct, government spending growth lagged growth in GDP per capita.
Moreover, Statistics Canada data show that, between 1982 and 2009, total current spending by all levels of government in Canada fell from 47.7% to 42.1% of nominal GDP. (Calculated from data in Tables 1 and Table 3 of the Historical Statistical Supplement to the Canadian Economic Observer.)
Government spending has been falling rather than rising relative to income over the period chosen by Reynolds, and this would show up in even more dramatic form if we took the early 1990s (when government spending topped 50% of GDP) as the base.
The fact of the matter is that Canadian governments spend a lower share ofÂ national income on public services and social programs than they did 30 yearsago.
Some “shameful spending spree”