PBO Strikes Again
I wanted to tip my hat to the hard working folks at the PBO for a particularly revealing Economic and Fiscal Outlook that was published today. Â While the PBO has more than once eaten my lunch on various issue they’ve done a superb job of looking at Canada’s economic and fiscal position.
I’d point readers of this blog particularly to page 2 where the impact of budget cutbacks, both federally and provincially, are aggregated, not only in their real GDP impact, but also in their employment impact. Â That is to say that when governments cut spending, jobs are lost as a result and those jobs are not only government workers, but also private sector workers. Â The PBO estimates that the aggregate employment impacts of federal and provincial cutbacks will be over 100,000 jobs by 2014 and 2015.
The outlook also points out the historic lows in both program spending and Â budgetary revenues. Â Program spending will hit 5.5% by 2016, we have never seen such a small federal government footprint on Canada’s economy in the post-war period. Â Budgetary revenues are no better off sitting at or below 15%, again an historically low tax rate severely limiting the federal government’s ability to create positive change.
Last but not least, on page 27, the PBO now appears to be including three measures of inequality in its boiler plate reporting. Â You won’t find that in the federal budget even if the PBO places it on the second last page. Â Putting inequality on the same plane as GDP projections continues to highlight its importance as a central part of any Canada’s economic state.
And on a day where Cameron’s austerity is being blamed for double dipping the UK into recession.
(So how is that austerity action plan working now Mr. Harper. As one of the cuts and now an out of work federal economist I wanted to update the pef site- I have a new volunteer job, saving the ash trees in Ottawa from the Emerald Ash Borer. 75,000 trees of the urban canopy will die in 2-3 years as this bug expands at an exponential rate and ravages our trees (TO and much of Southern Ontario ash trees will be on the menu as well).
(Oddly enough they are blaming this on globalized trade bringing the beetle across the ocean in one of those billions of containers. 100 million dollars to cut all the ash trees down or inject a bunch and save them- I am working on the second option.)
Letter in Vancouver Sun, April 17
Government spending needed in slow economy
Re: What would a truly liberal, Liberal party look like?, Column, April 10
Michael Den Tandt wants the Liberals to support balanced-budget legislation, but that is a prescription with no merit whatsoever.
If the private domestic sector wants to save part of its earnings and if we are importing more than we are exporting, then there will be a shortage of demand in the economy that the government must fill, or there will not be enough jobs.
The recent Conservative budget forecasts an average unemployment rate of seven per cent over the next four years, an admission of failure.
Reducing government expenditures in a slow economy is the equivalent of treating a weak patient with bloodletting.
Larry Kazdan Vancouver
Flaherty gloated in a scrum today that he welcomes the new, converted PBO who he characterized as having a Paul on the Road to Damascus moment, having complained in 2010 that the gov’t would be running a structural deficit but now complaining it too quickly wasn’t.
But surely that’s not all attributable to the gov’t cuts & downsizing. Does anybody know how many extra billions of revenue the feds are enjoying thanks to we consumers paying extra taxes on the rising costs of gas that the PBO did not project / take account of in earlier reports?
Wonder how long those guys are going to be around, eh?