INFLATION in Haliburton-Kawartha Lakes -Brock

Part 2: Inflation caused by Government Fiscal Policy

What is Fiscal Policy?

“The use of government spending and tax policies to influence economic conditions, especially macroeconomic conditions, including aggregate demand for goods and services, employment, inflation, and economic growth.Fiscal policy is often contrasted with monetary policy, which is enacted by central bankers and not elected government officials.” https://www.investopedia.com/terms/f/fiscalpolicy.asp

Fiscal policies are formulated and decided by politicians who have successfully won a seat in Canada’s Parliament  or a province’s equivalent law-making body such as the Legislative Assembly of Ontario.

The dynamics of law-making is complicated by ‘party politics’. The political party that has won the most seats is the one that has the greatest influence on the type of policies that are introduced into the law-making process as a Bill and that is ultimately passed by ‘majority-vote’ into law as an Act of Parliament.

Legislation enforcement

The enforcement of all Acts falls on the government bureaucracy. It is comprised of hundreds of thousands of civil servants employed in a labyrinth of Ministries, Agencies, Boards, Commissions and Crown Corporations. Libertarian scholars say that “governments hold a monopoly on force” because the Acts of Parliament authorizes their powers to decide, enforce and dole out punishments to people and business owners who disobey their rules on purpose or by oversight.

While not always directly employed by governments, accountants and lawyers also play a vital part in the enforcement of laws and regulations. These professionals are licensed by government authorities to assist and/or enforce business owners and individuals to comply with state mandates. There are so many rules to enforce that it is impossible for an average citizen to navigate them without the specialized knowledge and skills of these experts. As such, those professions are essentially an indispensable monopoly of access to our financial and social institutions of Justice without which we would be helpless.

If you consider the above, it would not surprise me that 50+ percent of all working citizens hold jobs directly within our governments or dependent on the governments’ operations, legislation and regulations.

Autocratic Socialist political parties.

In Canada, three political parties are predictably autocratic in their policy proposals. They aspire to use legislation to control our citizenry into compliance with their ideas concerning Social Justice and government dependance.

The Liberals, NDP and Green Party politicians in every election always display the greatest ambitions to spent more, tax more, and regulate more than Less Government advocates like me.

The Conservative parties are a “hit or miss” variation on the same theme: sometimes their leadership behaves as one might expect of a Liberal, and sometimes they shows signs of sympathy for more Libertarian goals.

The “fringe” parties

In every election, there are as many as two dozen political parties registered to run (23 are register for the current Ontario election on June 2, 2022). Nearly 90% of these parties are generally viewed to be inconsequential to the election by mainstream media journalists and, consequently, by the uninformed general population. Each of these “fringe” parties offers valid ideas for change which often legitimately highlight the flaws of current government operations. Of course, the major “establishment” parties conveniently ignore these shortcomings and focus solely on messaging about the “wonderful things their party can do for the greater good”.

Taxation and spending priorities are addressed by all political parties - major and “fringe”. All politicians, and their supporters, are citizens and taxpayers who are ostensibly “equal” under our laws, our political systems and our Charter of Rights and Freedoms. This, however, is not the reality. All elections are rigged. The 4 major Ontario parties, for example, receive hundreds of $millions in taxpayer subsidizies. The rules laid out and enforced by Elections Ontario heavily favour the well-funded major parties. The tax-subsidized corporate media organizations provide election coverage only for the majors. The public, unfortunately, are only exposed to the Autocratic Socialist politicians and their policies: the Liberals, NDP, Green and the unpredictable Conservatives. This Oligopoly of Political Power is well-establish and deeply entrenched into the fabric of our political culture. This explains why we have rarely witnessed a breakthrough of new parties into the primary sphere of political influence and certainly never one that offers Less Government and serious opposition to Autocratic Socialism.

Socialism via Bigger Government

The Socialist element within the Oligopoly of Political Power becomes crystal clear when you understand the spending priorities of its member parties. Each Autocratic Socialist party has aligned itself with a different set of “needy” special interest groups/communities and they intentionally pander to those social collectives to win as many votes as possible. John Merrifield, a former datacenter Director with the Ontario Government once told me: “The currency of politics is votes; money is simply a means to buy votes with taxpayers’ own money”.

The growth of government since I was first able to vote in 1969 has always been fuelled by the John Merrifield ‘law of the political jungle’. I have often wished that every voter would develop a skeptical eye for every election promise and ask two simple questions: “Who pays? Who benefits?”. I recently heard as estimate that 88% of tax revenues goes to pay for the cost of government operations of which the lion’s share is wages and employment benefits. In addition, over 75% of government employees are required to belong to a public sector labour union as a condition of employment. These factors are worth considering when asking these two questions.

After-tax consideration of the rising cost of living.

Fiscal Policy has a dimension to it that is rarely discussed - the after-tax purchasing power of the average citizen. Consider this. In 1961, the average Canadian bread-winner (usually the husband; the wife was home caring for children) remitted 38% of annual earnings to tax payments paid to all levels of government. Today, it’s 53%. Is it any wonder why two-income households are the norm today compared to the single-income, family-focused households of the past?

The dramatic rise in the cost of government IS the primary cause of todays rising cost of living for everyone. This rise has also changed Canadian culture and values enormously, and not necessarily for the better.

Can the Inflation beast be tamed?

I have been a Less Government advocate since the late 1970s after spending 3 years on the Ontario Government account team as a sales and support specialist with IBM Canada. Over the years since, I have become increasing aware of the dangers of Too Much Government as I learned more about government operations throughout my career.

I have also witnessed first hand how our governments have muscled their way into our lives to the extent that it is no longer healthy for national unity, economic prosperity or public trust in our political leaders and public institutions. I blame this on the millions of naive and disinterested citizens who have been gullible enough to believe the promises of Autocratic Socialist politicians and vote them into power.

If Big and Bigger Government policies have been responsible for much of what ails us today, then the only reasonable remedy is to begin the long process of repealing all of the most harmful legislation that feeds this voracious beast.

Government gluttony and obesity is the problem. Belt-tightening “tough love” is the appropriate treatment.

Less Government should be an app on every Fitbit as a daily reminder to exercise Freedom On Choice in every election - Freedom from Excessive Government Controls.