Don’t count on oil rebound to solve Alberta’s fiscal problems. (Appeared in the Edmonton Sun) by Steve Lafleur and Ben Eisen. Alberta ran deficits even before oil prices fell.
“…The province is running large deficits today primarily because successive provincial governments have spent imprudently. For more than a decade, spending growth consistently outstripped the combined rate of inflation plus population, increasing pressure on the budget….”
Commentary On Alberta’s/Alaska’s Fiscal Crisis — and Root Causes
Photo Reference: http://tinyurl.com/h8x575p
Our essay begins with a couple of fiscal crises: Alberta and Alaska.
We then demonstrate to readers that the real culprit of unsustainable city/state/provincial/national budgets lays in the laps of politicians who are willing to sacrifice North American freedoms for popularity and reelection. Popularity and reelection, in turn, increasingly depend on imprudent spending and suicidal, weak and characterless national and immigration policies. The threatening policies benefit only a socialist agenda which seeks not merit but power and money: the real challenge. We hope but do not bet much money on the ability of today’s ‘politically correct’ politicians to successfully confront and reverse the growing threat of a North American socialist takeover.
“And why”, do you ask, “does an energy webpage address the challenge of a socialist takeover?” For the answer, we point to Venezuela, et.al.
Citizens of the US and Canada demand more “freebies”. Elected officials bring home the bacon as they are expected to. Entitlements and operational spending become permanent. Annual increased commitments are protected by elected officials and their constituents.
When a major and volatile source of natural resource commodity income declines, imprudent, historical spending policy is exposed…like a hapless starfish stranded on the beach at low tide.
Alberta’s population hovers a little higher than 4 million while Alaska’s is less than 1 million — less than a quarter of Alberta’s. Yet Alaska’s population has created — via massive overspending — an annual deficit of more than $4 billion, approaching half of Alberta’s deficit of $10 billion.
Human nature would suggest that neither Alberta or Alaska will learn the lesson of prudence. Nor will their nationally elected political leaders.
No elected official wants to displease constituents. One “liberal” politician wants public radio funding and a Davis-Bacon bridge. A “conservative” politician wants a Davis-Bacon airport and rail station. They trade … and make no provision for maintaining or operating or replacing the three pork-infrastructure projects. They both remain silent on the new federal employees required to administer the handouts. Now multiply that imprudence by all federal, state and local lawmakers and their budgets.
Predictably, higher business and industry taxes are usually the ‘funding’ solution providing least resistance. How is ‘fair’ taxation, a ‘fair share‘ defined? You have the money and I need the money and that is fair.
But when politicians are caught in fiscal crisis they created, they resort to increasing the cost of wealth production via taxation. In essence, politicians are wired to keep government operations ‘whole’ at the expense of the private sector. They also, in essence, keep themselves ‘whole’ at the expense of the kids, for they are transferring fruits of their malfeasance to their constituents’ children in a process known as ‘intergenerational inequity’, which we have so long detested. (i.e. Note the U.S. debt burden of $20 trillion which this generation will not pay.)
Intergenerational inequity is the ultimate tool that self-serving politicians employ to maintain popularity and stay in office even when their land is sinking in debt and applying ever more parasitic taxes and regulatory requirements on the wealth producers. This is easy to do because their adult friends want the ‘stuff’ and the next generation can’t vote.
In Alaska’s case, liberal politicians wishing to maintain power and position employ other techniques whose impacts will hit their children like a freight train — until the kids finally give up, abandon the distasteful legacy given them by their parents and leave the state for the freer, green pastures of North Dakota and Texas, for example.
Those other ‘revenue generating’ techniques, include trying, in next week’s election, to pass Ballot Measure One, promoted by those who would benefit from an increase in the ratio of liberal voters. Liberal community organizers favoring bigger government also try to mandate minimum wages for various segments of society so that those segments will forever be dependably supportive of them. Never mind the apprentices and kids they price out of the market. Today you can’t have a ‘summer job’ for a kid because she’s not being paid the ‘living wage’ due an adult family member. Never mind the kids are prevented from that first job that teaches punctuality, a work ethic, service to others, respect for authority. Never mind the decreased competitiveness with foreign manufacturers and service providers. The socialist element also works with politicians like Alaska Governor Bill Walker to expand unsustainable programs like Medicaid. Those programs produce more compensated liberal voters at the expense of wealth producers. The socialist element would provide public housing, free food, free healthcare, free phones, translation services and cash to impoverished new immigrants at the expense of lifelong taxpayers with more modest domiciles. More tax using voters at taxpayer expense.
Such deceitful political action pretends to support constituent desires and ‘diversity’ but it handicaps the next generation in several ways. Because of less investment, opportunities for our kids are fewer though the loss is impossible to calculate since, ‘we’ll never know how it would have been the other way.’ Our children will inherit a higher tax load. Entry costs of entrepreneurialism will be more daunting. They will live with fewer freedoms. Their society will be poorer, sapped as it has been by the earlier generation’s greed for power, taxes and burdensome regulations. Perhaps their greatest job opportunities will be with government agencies, at least while there is still ‘funding’–which assures our children will support the growth and grandeur of their communal employment.
Ultimately, unsustainable budgeting leads to bankruptcy.
Bankruptcy might be avoided if strong, charismatic leaders emerge and began to reverse the dangerous trends toward socialism and debilitating debt.
But it won’t be easy. Pathways to sustainable, prudent budgeting could require a whole range of unpopular and constituent-opposed initiatives; some examples include:
- enact balanced budget constitutional amendment.
- creating term limits for elected officials.
- abolish minimum wages, converting employment to a merit system from an entitlement system.
- competition in public education and elimination of teacher/professor ‘tenure’.
- constitutional spending limits at all levels of government with a ceiling calculated strictly on a population/CPI formula (i.e. even money for crises would have to be budgeted ahead of time).
- elimination of most government public relations offices.
- restrict government document printing to ‘pulp’ newspaper stock.
- selling unused or underused government property at auction.
- transferring federal lands with surface and subsurface title and resources (i.e. other than those required for military, American Native and other special needs) to the states for their more proper ownership supervision and use.
- disallowing any political contribution from any individual or entity to $250 or less (i.e. or, name another amount).
- no immigrants shall be extended any state or federal subsidies or educational benefits (i.e. or other benefits of citizenship) whatsoever until such time as that person is declared a legal immigrant and has been granted citizenship.
- absolute denial of U.S. access to any foreign citizens from countries regarded as hostile to the United States absent verification of loyalty to the United States, rejection of other authority, and documented evidence of eminent threat of death by the country of origin.
- immigration access to the United States based on merit and qualifications, not “need”, which is infinite. An overall annual quota must be adopted by Congress. Within that quota, quotas by nationality shall be determined. Within national quotas, a selection process shall be based upon meritorious factors including: educational level, professional/trade expertise, having been accepted for U.S. employment, financial capability, country of origin documentation affirming no criminal record.
- an immigrant’s public allegiance to the Constitution of the United States and total commitment to abide by the laws of the United States and to no other entity.
- an immigrant’s duty to prove proficiency in the English language within one year of obtaining a resident visa and denial of citizenship without English proficiency.
- competent enforcement of all immigration laws.
- repeal of ‘motor-voter’ voter laws and similar automatic voter registration processes.
- removal to country of origin and confiscation of property of all illegal law violations including those committing both felonies and misdemeanors.
- outlaw sanctuary city behavior.
- expedited death penalty for all capital crimes, including terrorism threats and actions that produce death, or the threat of death.
- expedited death penalty for all murders involving use of firearms coupled with a strengthening of ‘stand your ground’ laws to protect legal use of firearms for self defense in residential or public places.
- make prison life less desirable:
- all head and facial hair cleanly shaved
- no head dress or costumes of any kind; convict clothing only
- tatoos identified upon prison admittance; any new tattoos acquired in prison to be removed forcibly
- bland food
- rejection of ineffective ‘prison rehabilitation concepts’: no access outside of cell (including exercise/library/work programs) except for medical emergencies, visitation, weekly showers, etc. Food to be provided in cell. Cell to be cleaned by inmate.
- one person per cell.
- eliminate all federal grants to non-profit organizations by bureaucratic agencies. Federal grants can only, sparingly, be designated by Congress.
- eliminate all discrimination, including reverse discrimination, in all federal employment, education, military and other activities.
- massive tort reform which applies categorical limits on liability except as approved by a higher court.
- eliminate judicially applied subsidies for “public interest” litigants. Place limits on ‘sue and settle’ environmental, faux ‘public interest’ industry.
- all environmental, DOJ, OSHA, etc. fines to be deposited into the Treasury for the purpose of reducing debt above and beyond existing, scheduled payment requirements (i.e. eliminate agency ‘slush funds’).
- eliminate all federal employee bonuses completely and in all forms.
- establish mandatory punishment, including denial of pensions and terminiation, resulting from malfeasance in office (i.e. Call it the “Lois Lerner” law).
- minimize government travel and entertainment budgets.
- health savings account creation…approval of cross state border insurance competition. Abolish Obamacare.
- abolish DOE and redistribute critical duties to other departments with Congressional approval.
- abolish DOC and redistribute critical duties to other departments with Congressional approval.
- adopt legislation forbidding the Administration for using budgeted funds for one Agency’s use to other Administration activity (i.e. Waters of the United States, War on Coal, Ocean Policy, etc.)
- massive elimination of regulations and enforcement staff. Require all new regulations to be approved by Congress — along with financial analysis — as part of the agency’s budget process.
- abolish EPA and redistribute critical duties as approved by Congress.
- recognize “climate change” as a multi-millenium cycle that cannot be influenced by U.S. reduction in economic sustainability. Withdraw from and oppose United Nations cabal of climate change believers. Provide incentives to producers and manufacturers for environmental improvements that do not injure the nation’s economic strength or consumer behavior.
- reduce and redirect foreign aid only to areas with whom a direct beneficial relationship to the US can be established and approved by Congress via the budget process.
- automatically cut Congressional and staff salaries by 50% any year in which a proper budget hearing and adoption process is not successfully completed with presentation of a budget to the President.
- either eliminate the U.S. Senate cloture rule or adopt it as an inviolate Constitutional amendment. While one majority party respects cloture the other should not be able to violate it upon attaining a majority.
- and, so much more….
We think it unlikely that America’s leadership will be able or courageous enough to take such action. This is because of America’s huge influx of third-world country immigrants that, unlike previous waves of immigrants find U.S. financial benefits for indolence more attractive than the rewards of work. Current immigration policy seems to favor uneducated new citizens with cultural values that more easily acquiesce to lawless behavior. Instead, America should be attracting lawful immigrants with a work ethic, education and commitment to reject foreign laws — and who are inclined to vote for politicians offering fewer benefits that tax the productive work force. Furthermore, the perverse incentive for non productive new immigrants to produce many children is currently encouraged by increased financial and other benefits. This, as socialist schemers in the U.S. hope, works just as anticipated in producing a predictable cadre of new voters every year.
Without such focus on immigration and adequate cost cutting reforms, the future for America’s taxpayer, for defense of our Constitutional protections, for a robust natural resource industry, for entrepreneurialism and a free enterprise system is dim.
Such are the issues facing the current leaders of Alaska and Alberta and, particularly, the new president of the United States of America.
In view of the foregoing, one suspects that citizens now focused on Alberta/Alaska energy policies might regard next week’s election differently than the, ‘business as usual’ elections of previous decades.