How screwed is your Government?
Annual budgets are the way to tell, but not the headline numbers.
Here's an analysis of what the Canadian government is up to with its budget
https://nationalpost.com/news/politics/ ... ng-deficit
Here's my summary.
Freeland has just promised around C$15 bn in new direct spending, and C$16 bn in new indirect spending,
but also promised the expected deficit won't exceed the previously forecast $40 bn, and won't increase middle class taxes.
Firstly, it ignores the basic problem of deficit spending, especially in an era of high interest rates, and that the government (just like the UK, US, etc) is further in time from the promised break-even year than when they took office.
Secondly, why bother promising the deficit won't increase? The government doesn't care about broken promises, but all the new money floating around is now directly affecting inflation.
So how does C$31 bn not get added to the existing C$40 bn deficit?
Last year, Freeland asked government departments to find C$15 bn in savings...they found C$2.25 bn.
We won't even go into the shenanigans of how those savings "appeared", nor why so little was found (or why so much was asked for).
So, the C$15 bn in new spending actually turns out to be under C$ 3 bn in spending
this financial year. The money is being spent over 5 years, with much of it delayed.
The schedule of delays isn't known. It won't be revealed until the actual budget is presented in Parliament, which is why Freeland has broken with tradition and started telling the media what the budget will contain (well, all the 'good' bits) before she tells Parliament. You can guess how much reporting there will be on a
boring thing like spending schedules. Especially from a mainstream media where the government is now paying
one third of reporters' wages.
And doubtless the schedules won't have much more spending next year, as that's an election year. In short, Jam Tomorrow.
And the C$16 bn for housing and childcare is to be in the form of loans, for which the government is ultimately responsible, but thanks to the wonders of accounting do not count towards the deficit.
UK readers will know how Gordon Brown's similar PFI schemes to keep stuff off the deficit books worked out.
..and furthermore, much of the housing spending is not actually going to be putting a single house up. All of the housing money recently announced near me is to speed up the process of Permitting only.
Yes, the major costs and delays are due to government which is spending more taxpayer money rather than fixing the problems within itself.
..and the childcare loans are a complete failure in several Provinces already. Nobody wants the money. Private daycares, often a mom or two using their own property or a small building, can't wade through all the paperwork and regulations required to access the loans. Indeed, some are even shutting down after the attempts, thus increasing the waiting lists rather than reducing them. Childcare is now cheap...and unavailable.
..and inflation continues at higher rates than wage increases, which reduces everyone's wealth but doesn't count as taxes.
And the poor can't be taxed any more. Indeed, the government is now throwing (new) money at them in the form of rebates and allowances just to keep them afloat.
So the only way the government can increase taxes is to tax the rich and corporations.
Well, the rich can move their money, and the corporations will continue their current practices of increasing costs to the consumer to mitigate the taxes.
In short, the government
will increase taxes on the middle class, in two different ways, neither of which counts as 'taxes'.