Every $1 the government spends costs taxpayers (or the general economy in some form) $1 + all the government overhead associated with collecting taxes and running the various government programs that keep that entire process alive. Let’s suppose the government overhead is 10%. Spending $1B on Alberta and Saskatchewan would cost Alberta and Saskatchewan taxpayers – their respective economies – $1.1B, or an extra $100 million. So we give $1.1B to the government and get $1B in return. Gee, thanks.
Better option; reduce taxes in these provinces by $1.1B – particularly for those in the highest tax brackets – and let the taxpayers invest in the economy as they deem appropriate. And who would you trust to better know how and where to spend the money:
- People who have personally made a bunch of money on good investments over a many-year period (e.g. the dreaded “1%”) or…
- Government bureaucrats?
Thanks for the good intentions, Trudeau, but I’m far more likely to trust my fellow Albertans, especially the wealthy, when it comes to figuring out a way to solve our economic problems, than any politician from any party (even Conservative). As I demonstrated in For The Love Of Alberta, lower taxes are always better for an economy, and Canada has a long history of proving that point. When the economy is running well, government officials can afford a little harmless flirting with lousy economic theories involving higher taxes. It’s good PR, even if it’s actually counterproductive, so at least “they’ve got a good heart.” But when the economy is tanking like this, go with what works.
[By the way, I don’t intend to blog about politics all that often, recent evidence to the contrary. It’s just, with the folks in charge at both the provincial and federal level right now, there’s a whole lot of facepalming going on.]