Clemens vs. Clemens

Jason Clemens, who hangs his hat at several right-wing think-tanks (the Fraser, Pacific Research and Macdonald-Laurier Institutes), lauds Canadian fiscal conservatism in today’s Wall Street Journal:

Canada’s government, for example, has grown smaller over the last 15 years. Total government spending as a share of the economy peaked at a little over 53% in 1993. Through a combination of spending cuts in the 1990s and spending restraint during the 2000s, it declined to a little under 40% of GDP by 2008. (It’s currently about 44% due to the recession.)

Reductions in government spending allowed for balanced budgets and the retiring of debt. Federal debt as a share of the Canadian economy was almost halved from nearly 80% to a little over 40% over the same period.

Here’s how he presented the same facts earlier this year to The Financial Post’s Canadian readership:

All told, the federal government expects to rack up nearly $110-billion in debt due to deficits from the current fiscal year through to 2015-16, when the federal government finally expects to record a small surplus. As a result of these annual deficits, the federal debt will swell to $626-billion in 2014-15 from $464-billion in 2008-09, a nominal increase of 35%.

The culprit behind these continued deficits is the government’s unwillingness to address spending. . . . By 2015-16, spending will be $25.5-billion (9%) higher than it is this year (2010-11) and 45% higher than it was when the Conservative took office in 2006.

So, is Canada an example of successful spending restraint or out-of-control spending? It depends whether Clemens is advocating spending cuts in the US or in Canada.

18 comments

  • It’s curious that these types never address the revenue side of the equation, merely debt and spending. How can outlays ever be relevant without regard to earnings? Tax policy is surely a fundamental aspect of debt retirement and deficit reduction.

  • He uses debt-to GDP ratios when he wants to say one thing and specific dollar figures and percentage growth of spending when he wants to say something else.

    Typical bullshit artist. A hack.

  • I really don’t want to be fair to this guy, but . . .
    He appears to be talking about the record of the past, 1990s to today, when he lauds spending reductions. And he appears to be talking about Con projections for the future, up to around 2015, when he trashes spending increases. So there’s no direct contradiction there.
    Essentially, if you put those two articles together they seem to represent a claim that Liberals are far more fiscally conservative than Conservatives, which seems valid although probably not something this guy would want to be seen saying. Although they also seem to involve a claim that it’s mostly about the spending side, when in fact it’s mostly about the Conservative mania to achieve insolvency by jettisoning revenue.
    Not that I want to be governed by either party.

  • In the FP, Clemens explicitly argues that the Liberals were more austere than the Conservatives, which is true. However, his portrayals of the Conservative record are contradictory.

    The WSJ piece approvingly cites “spending restraint during the 2000s” while the FP piece complains about higher spending since 2006. The former parenthetically acknowledges recent spending increases as an acceptable result of the recession, but the latter blasts those same spending increases.

  • It’s not complicated. Are Canada’s finances where they ought to be? Clemens says no. Are Canada’s finances in better shape than those of the U.S.? Clemens says yes. These are not contradictory statements.

  • rcp,

    It’s not complicated. Is spending in Canada out of control? Clemens says yes. Is fiscal policy in Canada prudent and restrained? To a different audience, Clemens says yes.

    It all depends on what you’re trying to sell.

  • thwap, I think you’re assuming bad faith where none necessarily exists. I would rework your most recent comment as follows:

    Is spending in Canada out of control, relative to what a fiscal conservative would like to see? Clemens says yes. Is fiscal policy in Canada prudent and restrained, relative to that of the United States? Clemens says yes.

    These are not contradictory statements.

  • @RCP
    “…I think you’re assuming bad faith where none necessarily exists.”

    I think you are assuming good faith were none sufficiently exists.

  • rcp,

    “Through a combination of spending cuts in the 1990s and spending restraint during the 2000s, it declined to a little under 40% of GDP by 2008. (It’s currently about 44% due to the recession.)”

    You know what? I was going to edit the two quotes down even more to show you the glaring inconsistency in tone and use of data, but they’re already crisp enough.

    In the first one, the tone is that everything is fine. In the second quote, the tone is hysterical and condemnatory.

    I second what Travis Fast said.

  • @ Travis and thwap:

    It is quite possible for Clemens to simultaneously a) be happy that government spending declined from 53% to 44% of GDP and b) to wish it was lower, say 40% as it was before the recession.

    I can’t stop you condemning Clemens from the outset and not trying to determine what he might reasonably be getting at, but then the detailed content of the quotes is kind of beside the point, isn’t it?

  • rcp,

    A hack standing up for a hack. Nothing surprising here. If you want to engage in a typing contest, I’m not interested.

    For the last time: When this Clemens hack describes Canada’s fiscal situation to one crowd, to sell one concept, he uses different facts and a tone of pride and contentment.

    When he’s writing for another audience, he hypocritically uses different facts and a hysterical tone to sell a different concept.

    Respectable commentary usually responds to one state of affairs in a consistent fashion. Hacks adjust their facts and rhetoric to suit their sales pitches.

    It’s right there in front of all of us, but do keep spinning. That’s basically what Fraser-institute types and their ilk do.

  • thwap,

    I’ve described a couple of ways in which Clemens could hold beliefs consistent with both quotes. Your response is “We know he doesn’t because he’s a Bad Guy!”. Ad hominem much?

  • @ RCP,

    Good faith does not sufficiently exist because Clemens provides no guide to what he believes the actual levels of public debts/deficits ought to be and as such is free to move the goal posts and avoid a conversation about his view of where the goal posts ought to be. That is the definition of a bad faith argument.

  • @ Travis,

    At the end of the second article Erin linked to you will find the following sentence:

    “To that end, Mr. Flaherty should put forth a true austerity budget that actually cuts spending to balance the budget over the next two years.”

    You might disagree with the position (I think it’s far too extreme) but it’s pretty clear.

  • Yah I saw that but that is the subsidiary goal to:

    “The sooner the government gets its fiscal house in order, the sooner it can take action to reduce taxes and improve the country’s competitiveness.”

    Which outside of being open ended and woefully under defined is also the formula that made it so that the conservatives partly have the revenue problem they do. It ought to go without saying that if the government cuts taxes in good times but not spending then it will necessarily fall into deficit in bad times or have to engage in more severe austerity. We all know where the Fraser sits ideologically so the 2 year thing is just part of the larger project of reducing the capacity of government quicker via more tax cuts the theoretical limit which is 0. Competitiveness is just hand-waving in order to distract from the nakedness of his juvenile anti-state position.

    The whole concluding statement is ludicrous when you stop and think about the idiocy of the implied causal links.

    But I will concede he is not necessarily being self contradictory between the two articles when you take into account that no conservative government, that hopes to win elections, can possibly achieve Year 0.

  • @ Travis,

    I agree that a zero tax rate is not going to happen. People want government services, even if rational people can disagree on exactly how much. The services have to be paid for.

    I doubt that anyone can gin up enthusiasm for further GST or corporate tax cuts (neither rate is exorbitant compared with our major trading partners).

    So, faute de mieux… I predict a sudden enthusiasm for personal tax cuts as a lead-in to the next federal election.

  • @ RCP

    Google Year Zero and Cambodia.

  • @ Travis,

    I know what Pol Pot did. I was assuming you were not making a gratuitous genocide reference. My bad.

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