Chris Nelson, in his CALGARY HERALD, piece explains why the energy industry is so essential to North American prosperity. We are only amazed that these principles are not taught in the schools of both countries. -dh
ECONOMIC FREEDOM ON THE WANE IN THE LAST FRONTIER? (Alaska Headlamp)
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We always appreciate Headlamp's take on energy issues and this is another worthy opinion piece. See our 12-17-15 commentary on the same subject. -dh Headlamp's Alaska Gasline response to Governor Walker's policy: "Walker said that where 2015 was Alaska’s 'year of the budget,' 2016 will be the 'year of the gasline.' Headlamp questions the basis of this statement by Gov. Walker given the tenuous history of 2015, and the fact that Alaska faces another $3.5 billion deficit in the face of continued low oil prices. Here is the Governor's fiscal plan presentation. ("The minimum tax on the oil industry will increase by $100 million.") The oft disproved concept of "killing the goose that lays golden eggs," is alive and well in the Alaska governor's office. -dh Effectively Confronting Alaska's Fiscal Crisis In 2016
We agree that the main reason for establishing the Permanent Fund was to fund government operations during times of revenue shortage. But, citizens should beware of the way Permanent Fund revenue sources are tapped. Why? Because of the nature of government. What is the nature of government? Government's nature is to establish a "new source of revenue", then keep the new sources and create big new government programs even when old sources of revenue return to normal. Government's nature is never to cut, even as taxpayers suffer and job losses grow…and, even when revenues return to normal or increase. Accordingly, we would counsel applying an annual "sunset provision" to use of Permanent Fund and ALL NEW REVENUE SOURCES, that may be employed in this and future fiscal crises. If continuation of increases from year to year are essential, sunset extensions should be easily if not unanimously achieved via legislation and a governor's signature. In fact, thoughtful citizens might be well advised to create a voters initiative putting a constitutional requirement for annual sunsets of all new revenue sources forevermore. For true reform, the use of any new revenue sources should be accompanied by decisive spending cuts. Reform should also mean that all remaining government expenses should be effectively spent. Effective expenditure of public monies should imply:
Absent these major policy reforms, such as the other Governor Walker executed in Wisconsin, we have little optimism that Alaska's citizens will find economic prosperity again in this generation and perhaps many to come–unless those citizens are unionized employees of government agencies and politicians they support. -dh |
Alaska: the land of mountainous expanses, tremendous natural resources, phenomenal wildlife, rugged and independent people, and lack of economic freedom. Wait, what? You thought Alaska was a land of opportunity, overflowing with economic freedom? Think again. The Fraser Institute recently released their 11th annual Economic Freedom of North America report and the findings concerning Alaska are grim. The report measures how economically free North America is at a national and sub-national level. According to the report, in terms of economic freedom, Alaska ranks 48th out of 50 U.S. states – just ahead of New York and California. Supporters of free markets and limited government should be exceptionally concerned that Alaska ranks anywhere near those two bastions of big government and tax and spend policies.
The Fraser Institute defines economic freedom simply as the ability of individuals to act in the economic sphere free of undue government restrictions. The report measures a jurisdiction’s level of economic freedom by analyzing numerous variables from different policy areas such as government spending, taxation, and regulation of markets. Unfortunately, data from the report shows Alaska severely lacks a robust level of economic freedom needed to spur strong job growth, raise living standards, and create greater opportunity for all. According to the report Alaska is losing its competitive edge due to high levels of state spending, generous subsidies, government employee pensions, a sizeable state government workforce, and several other factors.
The only policy area where Alaska shines is taxes,thanks to our lack of a state income and sales tax (though Gov. Walker and others are trying to reinstate the state income tax). It is worth noting that since the passage of oil tax reform under SB 21, our economic freedom measure concerning taxes has substantially increased!
In 2016 the Legislature and Gov. Walker should have one major goal: increase Alaska’s economic freedom in order to facilitate a healthier economy, lift people out of poverty, fix our fiscal crisis, and increase general well-being. Right sizing government, by cutting spending to the sustainable level of $4.5 billion as developed by Dr. Scott Goldsmith, is one of the most important ways to achieve this goal. Not imposing new taxes, not raising taxes on industry, advancing the AKLNG project, and increasing oil production will all help boost Alaska’s level of economic freedom. Headlamp hopes policy makers take notice of our dismal standing presented by the Fraser Institute, and will resolve to change it for the benefit of Alaska’s next generation.
As Calgarians embark upon a worryingly unstable new year, here’s an inconvenient truth our head-in-the-sand energy industry haters ignore.
Canadian annual exports — things we produce that others are willing to buy — are topped by oil and gas at almost $130 billion in real, U.S. dollars. The next best product nations give us money for is vehicles — about $60 billion. After that, it’s relative chicken feed.
Now for those content to see this country slide into an agrarian backwater necessitating massive cuts to health, education, pensions and other tax-funded initiatives, then fair enough. That’s odd, but honest. But for the other 95 per cent of whiners, activists, pity-poor-me and bandwagon-jumpers who blow hot air while living off the fat of this land, their parents’ largesse or transfer payments from Alberta, well, perhaps they can come up with a credible industrial strategy to replace the billions we’ll forgo in returning to rubbing sticks together for warmth.
No doubt they’ll blather on about some green energy revolution — as though Alberta will rival China or Germany in designing and building giant windmills, solar panels or such projects. (Read the Calgary Herald Op-ed by Chris Nelson here.)
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