I am talking about the Fraser Institute quoted in the T&T today led by the big bold black headline “Lower taxes create jobs”. Glad that Al Hogan is joining the discussion. Wish the piece was a little more nuanced.
Our GDP per worker is second worst among the 60 states/provinces. This is Fraser’s measurement of productivity. This is one measure of productivity but certainly not a comprehensive understanding of productivity. For example, public services tend to have very low GDP per worker ratios and NB has among the highest percentages of public workers in the workforce. Now, I am not a defender of a swelled civil service but I am just saying that you can’t assume that public sector workers are not productive because they don’t have a high GDP per worker ratio. We don’t measure the success of public service on its GDP.
And as for the boilerplate about cutting taxes, Fraser economists get paid a commission for every time they can work the term “cut taxes” into their vocabulary. As I (and many others) have pointed out, taxes are only one factor in determining business investment and if tax cuts erode further education quality, infrastructure, economic development activities, etc. they would likely lead to worse business investment outcomes.
But I am beginning to appreciate the value of mantra. Give Fraser and AIMS their due – they do stay on message – decades of staying on message.