Ontario debgt is twice that of California's

[HOWITZER]

Originally Posted by Azure

Gotta think you have to cut entitlements for the boomers. Focus more on these in actual need, and getting them into the working class. There should also be new ways to generate tax revenue. Marijuana for one should be legalized and taxed. We need a carbon tax, possibly a sugar tax as well. Cut off subsidies, fix out of control healthcare spending. There are lots of options to look at.

Of course we are talking about none of them.

One word of caution, generating tax revenue doesn't solve the problem. That's almost like saying, hey, I outspend my monthly budget, but that's okay cause I'll just call mom and dad and they'll give me more money! Sure, they aren't (always) going to come clawing it back like the bank, but if you do it enough, you're going weaken their ability to be financially independent and subsequently you're screwed too.

You need to stretch the value of the dollar. Instead of filling out 100 sheets of paper and talking to 20 clerks to get a new drivers license since you lost your old one, it should be one sheet and one clerk (extreme example for dramatic effect).

Originally Posted by CaptainCrunch

The Ontario public service is incredibly bloated, I think I read somewhere that about 20% of the jobs in Ontario is in public service.

Is there really anything wrong with a large public sector? I'm not a communist, and I love entrepreneurship, but so long as you're balancing the books at the end of the year, does it matter if someone works for a private company (where the boss takes home the dividends (or investors)) or the government (where the investors are everyone)?

[OMG!WTF!]

Originally Posted by HOWITZER

Is there really anything wrong with a large public sector? I'm not a communist, and I love entrepreneurship, but so long as you're balancing the books at the end of the year, does it matter if someone works for a private company (where the boss takes home the dividends (or investors)) or the government (where the investors are everyone)?

There's a huge difference between the two. Public sector jobs generally do not create wealth. Private sector jobs generally do. That brings money into the province and creates growth.

[HOWITZER]

Originally Posted by OMG!WTF!

There's a huge difference between the two. Public sector jobs generally do not create wealth. Private sector jobs generally do. That brings money into the province and creates growth.

Don't mean to derail thread, but how so? Sure, private enterprise is at the heart of industrialization and creating new technology. But government can still enrich a large populace. A government building a dam for example makes everyone slightly more rich (by virtue of shared wealth). Whereas a company making a new watch makes the company owner richer in dollars. I think they both create wealth and similar levels of it, it's just how it's distributed. In public sector, you see small gains for lots of people, and with private enterprise you see large gains for less people.

A healthy balance of both makes sense.

Or maybe I'm out to lunch?

[OMG!WTF!]

I'm not a all an expert, but generally the majority of investment and innovation comes from the private sector which generates the majority of tax money that pays for the public sector. Building roads and dams, shuffling tax returns around, sweeping snow, making sure people don't litter etc etc doesn't create any money. Digging a hole, filling a bucket with goo and selling it brings dollars into the province from somewhere else. That gives us the cash we need to sustain an economy...buy stuff, pay taxes, create more money through investing. I'm sure this is too simplistic but I think it's vaguely accurate by some accounts.

[Flash Walken]

H'wat?

Just by existing public sector employees have a net benefit on the Canadian economy.

Even as an emotionless accounting robot, they have a positive economic impact

Required savings in the form of pension plan contributions
result in BC public pension plan members
accumulating about $2.2 billion more in savings every
year than similarly situated RRSP savers in BC. This is
because they would have a higher likelihood of not saving
at all (i.e., a lower participation rate) and make lower
contributions when they did save (i.e., a lower savings
rate). Simply put, the BC public sector pension plans
are designed to encourage a high rate of retirement savings.
BC residents of similar income simply do not save
for retirement as well as British Columbia public sector
pension members.

What is the economic impact of this saving? There
are two—one that relates to the overall economy and
another that relates to the individual plan member. In
terms of the overall economy, the plans lead to a larger
savings pool for investment, which raises the capital
stock in the economy. An economy with more capital
has a greater potential because the economy depends
primarily on capital and labour to produce output
and income.

Based on data from bcIMC, we estimate about 70 per
cent of this additional savings (or around $1.6 billion in
2012 dollars) finds its way into Canada’s capital stock.
This is consistent with other pension plan asset allocations
that seek to manage risk through geographic
diversification. We then simulated our model to determine
the impact of adding $1.6 billion to the capital
stock. Initially the additions to capital stock are marginal,
resulting in greater Canadian GDP of just over
$200 million (in 2012 dollars). But over time, the impact
grows because the additional savings build up an
increasingly large capital stock.

So by 2035, we find Canadian GDP to be about $7 billion
($4.6 billion in 2012 dollars) higher than in the absence
of the plans. Cumulatively, we estimate that these higher
savings result in around $60 billion more in investment
($47.5 billion in 2012 dollars) and just over $85 billion
($65.6 billion in 2012 dollars) more in GDP over the
2012–35 period. These effects are for the overall Canadian
economy. We estimate that the impact specific to the
province of British Columbia is $10.6 billion ($8.1 billion
in 2012 dollars) as the province’s share of GDP is
12.4 per cent of Canada’s GDP.

[HOWITZER]

Originally Posted by OMG!WTF!

I'm not a all an expert, but generally the majority of investment and innovation comes from the private sector which generates the majority of tax money that pays for the public sector. Building roads and dams, shuffling tax returns around, sweeping snow, making sure people don't litter etc etc doesn't create any money. Digging a hole, filling a bucket with goo and selling it brings dollars into the province from somewhere else. That gives us the cash we need to sustain an economy...buy stuff, pay taxes, create more money through investing. I'm sure this is too simplistic but I think it's vaguely accurate by some accounts.

I think I'm picking up what you're laying down. Basically, that private enterprise is the reason for economic development, and the role of government is to maintain/encourage the free flow of commerce. That's fair, and on a high level I agree.

[stampsx2]

Originally Posted by Flash Walken

H'wat?

Just by existing public sector employees have a net benefit on the Canadian economy.

Even as an emotionless accounting robot, they have a positive economic impact

Ya sure. Ten unioned employee's to dig a ditch. Each with his own job. One to drive to the site, one to carry the shovel, one to inspect the grounds, one to dig, a couple safety and operational supervisors etc. all being paid a full wage. Each employee not motivated to excel cause promotions are based on seniority. Each guarenteed a pension nobody in the private secor could ever dream of.

What an effective system.

It certainly does benefit them but not the taxpayer. I know how unions work. I've been part of one before.

[OMG!WTF!]

Originally Posted by Flash Walken

H'wat?

Just by existing public sector employees have a net benefit on the Canadian economy.

Even as an emotionless accounting robot, they have a positive economic impact

I'm not at all saying public sector employees are useless or unimportant or don't have a positive impact on the economy. That goes without saying. Yes, just by existing they pay taxes, spend money, invest and save. But the point is the act of working for the government does not generally add money to the system.

The article you quoted is actually a perfect illustration of what I'm saying. Public sector investment in the private sector is what stimulates economic growth, not simply the act of working in the public sector which does not stimulate economic growth. The majority of the public pension contribution to the gdp over the next 25 years is in the form of higher stocks prices...ROI...aka, profit from private sector business.

If all we had was the public sector, we'd have the same amount of money every single year. We'd hand it out at the beginning of the year, exchange it for communal goods and services all year, then get it all back next year. We need people in profit generating businesses to bring new money in.