Tax and spend Campbell

I guess I am now a bonafide liberal. After being accused of being a right wing fanatic earlier in my career, I guess that’s par for the course.

I argue this morning in the TJ that we shouldn’t be cutting taxes – rather we should be spending the tax dollars we collect more effectively.

For those of you that read the T&T, you will know that Al Hogan is running almost daily stories pushing for tax cuts.

He also argues for spending increases – convention centres, cath labs, etc.

Must be nice to be a newspaper editor. You can push for it all with no accountability.

One wonders if Al was talking about his newspaper he would take the same approach.

Cut the price of the T&T and offer better journalism.

This entry was posted in Uncategorized. Bookmark the permalink.

0 Responses to Tax and spend Campbell

  1. Anonymous says:

    How can eliminating our dependency on equalization payments be the objective when no supporting figures, no economic analysis and no measurement benchmarks have been set in time?

    I challenge anyone to show that equalization is in fact, and most importantly in actions, the objective when it has NEVER been stated as an objective in ANY of the official government document.

    The only benchmarks that we have as of today relate to specific sector initiatives, not to equalization payments. A review of the public documents shows that:

    – During the press conference announcing the official plan the premier’s response to journalist when questioned on concrete criteria’s for the action plan was two folds; one key over all measurement is the creation of a feeling of “hope” and that “the next elections will be all about self-sufficiency”. Don’t take my word; listen to the conference and the premier (http://www.gnb.ca/2026/index-e.asp).

    – The four “new” objectives with numbers where unveiled in the state of the province; population growth, job growth, social development and a ceiling on power rates. Once again, don’t take my word on it, read the speech (
    http://www.gnb.ca/0089/speeches-discours/SOP2008/speech-e.asp)

    – The auditor general requested that the government put in place the financial projections for self-sufficiency in its last report. Again, you don’t have to take my word for it you can read the report (http://www.gnb.ca/oag-bvg/2007v1/chap1e.txt).

    These are the facts, and they demonstrate clearly that reducing dependency on equalization payments was never a goal and that there is as of today not even an inkling of a financial plan to achieve self-sufficiently.

    As a respected economic development commentator how can you honestly continue the discourse in a direction that you know is a complete fallacy?

    Lending your voice to the coming tax reform public relations spin in this way undermines your credibility in my view.

    Right or wrong, the axe that you’re grinding with Hogan seems to have put blinders on your capacity to reason I suggest you that you take a step back and think.

    I have been actively reading your deep thoughts since your started publishing them David and yes I am disappointed in your commentary this morning.

  2. David Campbell says:

    That’s quite a rant. I hope you feel better. Now, the truth is that self-sufficiency was indeed defined by the Liberals as eliminating the need for Equalization. That is a fact.

    You are correct that the term ‘self-sufficiency’ has morphed into a political slogan as I have said before (Premier Graham talked about how his fitness initiative would help us with self-sufficiency). As for the action plan, it would be unlikely they would have reduction of Equalization as a goal – when the federal government is already forecasting an increase in Equalization every year until 2010 or later.

    The Auditor general wants specifics about ‘self-sufficiency’ projections? Don’t we all. But, again, if you do read my blog you will know that I think ‘self-sufficiency’ is unattainable and the goal should be more about building stronger own source revenue and maybe holding Equalization constant over the next 10 years or so.

    So, your assertion that These are the facts, and they demonstrate clearly that reducing dependency on equalization payments was never a goal and that there is as of today not even an inkling of a financial plan to achieve self-sufficiently.

    From the Office of Self Sufficiency:

    Self-sufficiency is a tall order – it’s nothing less than a proposal to change the standing of New Brunswick in the federation from a ‘have-not’ to a ‘have’ province.

    Ooops. Sorry to have shown you this.

    As for tax ‘reform’, I am all for tax cuts but not if it means more dependence on Equalization or deeply cutting funding to stuff that is needed to keep us competitive.

  3. NB taxpayer says:

    Yes, you are right, but you could also argue that in order to be self-sufficient we must have economic growth, or better yet, when referring to government, a healthy increase in own source revenue.

    However, if you look back at the McKenna years, spending increased at a substantial pace while our net debt ballooned (same could be said with the latter part of the Hatfield yrs resulting in slower growth).

    If you look at the numbers, from 1987-99, our own source revenues increased, but at a modest pace (and on the backs of higher personal income taxes). However, if you look at a much shorter time period (six years) where spending was controlled, taxes reduced and the debt was paid down (2000-06), our economy grew considerably and at a much rapid pace. In other words, what I am also arguing is that own source revenues would have doubled the McKenna years at close to 5.3 billion if the policies that Lord had put in place had remained for the next six years. Now don’t get me wrong, this isn’t a defense of the Lord economic policies because Lord knows their were many flaws there.

    But it does offer a slight arguement for tax relief and controlled spending. The reason I say “slight” is that we have never had a true conservative government in NB that has tried it long enough (and at the pace required) to see its success through to the end. Hatfield was more of a socialist moderate and McKenna was a conservative handcuffed by Liberal party orthodoxy of the 70s (which was evident after his fairwell speech that showed his true colors on what must be done to spurn on economic growth).

    And if it were me, I’d take the tax cutting McKenna, the welfare reform McKenna, the slashing of government waste McKenna over the one we had in office during the 80s and 90s which furthered old ambitions.

  4. Anonymous says:

    Mr. Campbell, I must admit I have been baffled by your washed up ideas around economic development for a while. However your column today opposing tax cuts is patently absurd for somebody who should have a solid grounding in economic principals. Your belief in politicians ability to make better investment decisions than those who produce the wealth in the first place is unsupported by historical experience and economic theory. I am curious as to what you stand for, or what you credentials are to be commenting on development issues. What are you reading? Who are your intellectual mentors? What is your core philosophy? I think the substantive weakness of your columns is serious, given that NB needs to break away from economic ignorance if we hope to make any progress. I hope you reply, as I am very interested in this provinces future, and am concerned that if some take you seriously we are in trouble. News flash, government is the problem, full stop! I look forward to your reply.

  5. Anonymous says:

    Enjoyed today’s column. You keyed in on the critical thing; SPEND EFFECTIVELY.

    However, until a government can demonstrate the discipline for a better balance of effective spending versus spending solely for political gain, our money is safer in our pockets than in theirs.

  6. David Campbell says:

    Wow. I hit a nerve. Figured I might. To your questions.

    Your belief in politicians ability to make better investment decisions than those who produce the wealth in the first place is unsupported by historical experience and economic theory.

    I have never said, ever, that polticians have a better ability to make investment decisions than….

    It’s amazing to me that you would even say that. Using that logic, why even have a government at all? I believe there is a role for government. If you read my blog at all you will know this. The government is the only entity that acts on behalf of the community in total. Individual businesses don’t. Chambers of Commerce don’t. Social groups don’t. Churches don’t. Like it or not, government is the only entity that is supposed to look out for the community as a whole.

    With that as a premise, I then turn to best practice governments around the world and how they handle economic development. In Alberta, they used billions in tax breaks to stimulate oil sands investments. In Ontario, they have spent billions on industries such as auto, aerospace and life sciences. They pour billions in to R&D, hundreds of millions into training and hundreds of millions in direct incentives. Quebec, B.C., Nova Scotia, Ireland, etc. etc. etc. all have played a proactive role. Let’s go further. Massachusetts just announced a billion to stimulate more life sciences activity. We won’t talk about California. Nevada may be the least proactive – but at the same time they gave themselves the ultimate government-sanctioned economic development advantage – the liberal gaming laws.

    I am curious as to what you stand for, or what you credentials are to be commenting on development issues. What are you reading? Who are your intellectual mentors? What is your core philosophy?

    My education was in Hayek, Von Mises, Schumpeter, and the Austrian school of economics. As for credentials, 18 years of reading, working with over 30 communities and over 10 years of direct economic development work.

    I think the substantive weakness of your columns is serious, given that NB needs to break away from economic ignorance if we hope to make any progress.

    Are you that simple? Sorry, I don’t mean to be rude but you can’t see the difference between government bailing out bad firms, propping up communities with seasonal EI, make work projects to get people to their ‘weeks’ for EI and what I propose?

    I propose strategic investments in education, R&D, infrastructure and economic development activity to stimulate more private sector investment, reduce our dependency on all of the crap that has been built into the system.

    News flash, government is the problem, full stop! I look forward to your reply.

    That is so trite and so cliched. While Ontario puts billions into growth oriented investments, you want New Brunswick to cut taxes. How come you can’t get beyond rigid ideology? Why don’t you sketch out a path to economic independence, population growth, strong vibrant industries – without any government effort? Why? Because you can’t. You speak in vague generalities and cliches and never put forward workable solutions. And we sit here in the worst local economy in North America.

    Keep on spouting your generalities, I will continue to try and work through what it might look like if government became a serious partner in economic development. And as for your assertion that “government is the problem”, I pity you for that position. I really do.

  7. mikel says:

    David, to cut through it to the point, don’t ‘pity’ him for that view since you have the same view. No matter which side of the spectrum one is on, essentially, it comes down to this: the government IS the problem.

    Where are industry supports for anything but well heeled corporations? Where’s the supports for workers in dying resources? Where’s the investment in education?

    For the other side of the spectrum, where is the tax releif for low income earners, where’s the programs to help them get out of poverty and contribute, etc.

    You are right that government is SUPPOSED to look out for the community as a whole, the question is HOW. I’d say that the proof of ‘looking out for everybody’ by kowtowing to large multinationals is pretty much ‘in the pudding’. At least for those respective industries. It is painfully obvious whose interests those are looking out for.

    And again, it’s often ignored but building population and new industries is VERY difficult when everybody knows the control that a few private players have over government and legislation. That just scares the hell out of everybody.

  8. nbt says:

    To David’s defense, he is an economic developer, not an economist. The two are much different in scope wherein the former relies on a set of ideas which can be put into practice via a constant flow of revenues.

    Where and how that revenue flows is really up to the person or developer (well, in philosophy anyway!) And just so you know, from someone who has read this blog for years, David is definitely not an economic ideologue, he’s more of a centrist cherry picker.

    Much like Donald Savoie, he believes in a strong and caring government as an economic decision maker, not the market. Which is probably why both would argue for more government money targeted at ED funded institutions and regional agencies in New Brunswick so that individuals (in government or tied to government) can make more decisions when their guy is in power. A partisan economic teeter-totter so to speak.

    Call me a bit of a skeptic, but if this strategy hasn’t worked in the past, then why do they think it would work in the future with more money??? Maybe David can answer that one? (although I think I already know his answer)

    Btw, now that he has seen the light, I think their buddy McKenna would even tell them that government should be reduced so that it is not bloated and ineffective, taxes should be cut to the bone (especially corporate taxes), regional agencies like ACOA and BNB abolished or reformed (which would essentially starve out many other ED firms who rely on handouts) as well as much needed educational reform (and I’m not talking about more money or lip service changes like were just made).

  9. Anonymous says:

    ‘Hit a nerve’ replys..

    Well, I have just gotten around to reading your response to my posting and I must say it confirms my worst fears. Your positions are a hodge podge of ideas, ideologies, laughable generalities resulting in shallow and contradictory thinking.

    So here is my response to your response…

    D. Campbell: I have never said, ever, that polticians have a better ability to make investment decisions than….

    Response: Come on, I am not saying that was a direct quotation, it is painfully implied in your ideas and writing. If you believe that government should take a proactive role in economic development by luring investment into this province with lots of gimmicks like tax breaks, loans, subsidies, government funded R&D or whatever, you must think (or you’re really confused) that somebody, a politician, a bureaucrat or the head of ‘R&D NB Inc’ can make better decisions with tax dollars than the taxpayers themselves. Also, if you oppose tax cuts on the premise that those dollars would be better spent on your idea of economic development — you MUST by extension think that increasing taxes to put to that purpose would also be a reasonable idea.

    D. Campbell: government is the only entity that is supposed to look out for the community as a whole.

    Response: Wow, talk about ‘cliched’, and generalities, are you for real? The concept of government is force, any legislation beyond protecting individual rights is taking something from one group, and giving it to another, an exchange that would not otherwise take place without the threat of physical force. My favorite quote is from a brilliant man, Frederic Bastiat –
    “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.”

    D. Campbell: Quebec, B.C., Nova Scotia, Ireland, etc. etc. etc. We won’t talk about California. Nevada…

    Response: Boy, I stand corrected, check and mate! lol Your fetish of government directed ‘development’ knows no bounds. I mean Quebec, are you kidding! Here is an entity saddled with a MASSIVE public debt, kept afloat by extraordinarily disproportionate federal tax dollars, and still has an economy that just limps along. If Quebec was independent it would be a third world country inside of a decade! Nova Scotia?????? Ya there humming right along aren’t they??? In the case of Ireland, to overlook the transformation of its tax system, slashing it corporate rate, personal income taxes, and to credit the side-show of government proactivity begs the question, why aren’t France and Germany booming? They have a veritable smorgasbord of incentives, subsidies etc etc. As far as Alberta goes, any jurisdiction blessed with that amount of wealth in the ground is going to boom, tax breaks might have lured some investment, but you have to have the 170 billion barrels of black gold in the first place — an anomaly for sure. Having said that, can you imagine the Alberta economy if they used oil revenue wisely, to slash taxes to the bear bones? Nevada, I agree with you, any removal or reduction in arbitrary laws infringing on personal freedom will give that jurisdiction an advantage, but thats not proactive development, its just government getting the hell out of the way.

    D. Campbell: My education was in Hayek, Von Mises, Schumpeter, and the Austrian school of economics.

    Response: Ya, you say that, but honestly, have you read any works by these giants? If so you must of read them backwards, because your believe in government, and government directed economic development is the exact opposite of what the Austrian School is based on. Your claim to be an Austrian student through me off more than anything else due to it being so pathetic and utterly ridiculous. I challenge you to visit http://www.mises.org and just read for a while. You will soon realize the difference between what you are peddling and a true Austrian view.

    In essence Mr. Campbell, economic prosperity is not about investment, jobs, statistics etc. It is about economic freedom and individual rights. You can vainly claim that is being too ideologically rigid, but that accusation is not an argument, it is a smear, and ultimately a cop out. There are right ideologies, ones rooted in reality,fact and logic and wrong ones. (Assuming the same underlying values of human prosperity, peace and happiness) And then there are most people, like yourself, whose buffet of misconceptions, and ungrounded theories are held together by the inability to see the incoherent contradictions. Trouble with you is, most people aren’t writing columns as an authority on a subject. You are.

    I understand you will probably not bother with posting this, or making a comment, (other than a snide dismissing remark), but I ask that you take a close hard look at what you think you believe, know and understand. Economics, and by extension economic development is all about human nature. (ie. Austrian School)

    While you keep pushing for a “New Deal” for NB in pursuit of a ‘Bricklin’ economy, I will continue to advocate economic freedom, limited government and individual rights.

    As far as pitying me goes, the feeling is mutual.