Middle Class People are the Job Creators

[Captain Awesome]

But, I would rather have faced the challenges I faced than the ones my great grandparents faced.

True that.

[Homeownertoo]

The average wage in Canada has not increased in 35 years.

I just love these people who make up their facts as they go along. You clearly were not around 35 years ago to compare the standard of living then with today. Those of us who were know better.

At the same time user fees have been introduced, sales tax has increased, food and fuel prices have exploded. (I know you don’t eat much so food isn’t a big one for you, we don’t need to hear again how you spend 50 a month on food ) but for a father with two growing boys food is a big expense ... The average family is really struggling right now.

Food is a smaller part of the family budget today than it has been at just about any time in history, and today's dinner plate contains a wider variety of goods, year round, than it did when I was growing up in the '60s.

an average family house that cost a hundred grand fifteen years ago is a half million today etc. ... I know things were tough in the past also with high interest rates and so on but its worse now and not getting any better.

Houses? Let's compare apples to apples. The house I bought on Ziprick in 1990, for $108,000 (I guess I got ripped off) would today fetch $350,000, at best. More likely $325,000, if well kept. Inflation since 1990 (Bank of Canada) is 58%. So take my buying price, add 58%, and it is $170,000. My mortgage was 13.25% (it went higher the next year), and you get an monthly mortgage payment of $1,904 a month (RBC website). Compare that to a 3.6% five-year mortgage on today's $350,000 home (just to take the higher price). It requires a monthly mortgage payment of $1,758 (RBC wbsite). So even with today's higher house prices, it costs no more (actually less) to house yourself than it did 22 years ago.

What else. Cars? Cheaper and much better built today than when I bought my first new vehicle. Clothing? Cheaper today than when I was buying my first pair of jeans. Electronics? 'Nuff said about that.

Just my opinion, feel free to point out just how wrong my thinking is. Can’t wait to hear how kids now-a-days want everything handed to them. I like hearing that from the generation that paid low low taxes while our infrastructure rotted into the ground.

Expectations today are much higher than they were, and people abuse credit much more. But those are choices. They are things people can control. The things we don't really control -- salaries and actual costs -- show a different picture. And that picture is that today's society is richer than it has ever been, for the middle class, for seniors, and especially for the 1% (but that's a different issue altogether).

The golden age when life was a bowl of cherries and we all had our pick of easy, high-paying jobs on which we paid next to no taxes, and cheap, well-appointed homes, cars and clothes, is just a myth. But it's an enticing one for a generation that followed the luckiest generation in history. Yes, compared with our parents and their parents, we boomers have had it good, and will have it good right to the grave. Will following generations also have it good? Depends on the policies they let politicians follow? Do you support debt reduction and deficit elimination, or an ever-growing list of government programs that require funding that erodes the wealth-producing sector of the economy? Will you rein in entitlements that have never been properly funded, or continue toward the fiscal cliff edge? The lessons are all around us, in the US, Europe, Japan and some Canadian provinces. Will you learn from them or wish such lessons away? Your future depends on your choices, both personal and political.

[hobbyguy]

I think the question of governement style, and deficits, needs to be tuned to what is best for the middle class. Therein lies the question.

Deficits (which generate debt) need to be divided into (at least) two classes. Just as in personal debt, there is reasonably good debt taken on for constructive purposes and with future paybacks (e.g. the building the hydro-electric infrasture that this province enjoys - or an a personal level an affordable mortgage), and there is debt/deficit that is taken on to cover ongoing costs (e.g. policing, fire protection - or on a personal level buying gasoline, food etc.).

It is quite arguable that when the economy is sour, it makes sense for governments to stimulate the economy with projects that will have future paybacks (off the cuff - something like building the site 'C' dam). This simply plays into the economics that when businesses aren't spending, and consumers aren't spending, then government (which is us collectively) should spend to take up the slack.

What is arguably the worst kind of government deficit/debt is "structural" deficit where the cost of ongoing operations are funded through borrowing. Unfortunately this is often a result of us being told we can have something for nothing in the form of electioneering promises of lower taxes.

[sooperphreek]

why is there evens such a thing as debt in national or provincial terms? that should be illegal and go the way of the dodo bird. then we would see politicians actually doing their jobs and "budgeting". im tired of the merry go round of debt and deficits.

[hobbyguy]

Debt and deficits for governments should be a limited occurence. The problem is that we as voters allow politicians to buy us with promises of lower taxes.

But take heart, the noted conservative republican Dick Cheney has told us "deficits don't matter".

[Captain Awesome]

Debt and deficits for governments should be a limited occurence. The problem is that we as voters allow politicians to buy us with promises of lower taxes.

Well, when govt slashes jobs and budgets to close the deficit, they become the worst thing since Hitler, as we saw it with Harper...

[hobbyguy]

Paul Martin had us in a good position with what I feel was a good balance. Reasonable taxes, good social programs, and a budget surplus. Too bad he wasn't as good a politician as he was a finance minister.

The whole myth of "something for nothing" tax cuts has been a huge lie that we, as voters, have swallowed. It was essentially started by folks who wanted less government to suit their own agendas. Don't forget that when Ronald Reagan was pedalling this rubbish, George H.W. Bush called it "voodoo economics". Of course George H.W. went down in flames because lots of us want "something for nothing". So Regan put through his promised tax cuts, but was smart enough to start reversing them as fast as he could - a pretty strong indication that he knew it was, in fact, "voodoo economics".

This nonsense also sold well in Canada, and so now we have two choices: slash programs (which I maintain is ultimately destructive to the middle class) or raise taxes.

Slashing programs means lay offs. Those lay offs will be folks who make decent money. The supply of decent paying jobs is not growing very much, so the effect is to reduce the middle class. Plus those who depend on those programs will have less. The result is a reduced market for small business, and less economic activity. It's a slow motion thing, so unless you are one of the laid off, you may not feel it right away - but eventually it lands on your doorstep.

That may sound "leftist", but is not intended to be so. It is prompted from the position that neither "zero" government, nor "100%" government is correct, but that the level of government that is good for all is somewhere in between.

Part of this thought process is to "follow the money". Who benefits from fewer meat inspectors? Who benefits from reduced environmental oversight? It isn't the middle class - we will be fed some twaddle to justify it, but it won't be the middle class that benefits.

On the flip side, if were running for office, and chose to be honest (there's a novel concept!), I would be campaigning on raising income taxes for ALL, in order to keep government "right sized". So I guess the only vote I could count on would be my wife's (or at least she'd tell me she did).

Therein lies the problem, we are the architects of our own demise.

[Captain Awesome]

So, having deficit is no good, having high taxes is no good, and slashing programs is absolutely evil.

You can't have surplus, low taxes, and plenty of social programs at once. Pick 2 out of 3.

[hobbyguy]

That's sort of what I'm getting at. The taxation level needs to match the program costs that you wish to have in order to have the country you want to have. If you want a disaster like Greece, you don't pay taxes and expect good government programs. If you want a disaster like Somalia you don't pay taxes and don't expect government programs at all. If you want a disaster like the Soviet Union, you pay virtually all taxes and get nothing but government.

What I'm advocating for is that we face up to the reality that in order to have a strong middle class, with a good standard of living, we need good government. In a business, if your product cost 1,000, you want to sell it for more. If we accept that government should be nonprofit, then the product cost of 1,000 should be sold for 1,000 - plus perhaps a very small margin to pay off debt, build up "rainy day" funds etc. Unfortunately, the "salesmen" keep quoting us 900 because we would rather have the product for that price. The product that we can have for 900 is not what we want or need for ongoing prosperity. Rather like being sold a Ford Ranger when the job requires an F150 (in this analogy the F350 would be overkill). So the product keeps getting trimmed, and pretty soon doesn't resemble what we want.

When we face up to the fact that the government we are paying for isn't what we want, our reaction is generally to "kick the bums out" and try the other guys. But the other guys can't deliver the F150 for the Ranger price either. So our business needs the F150 to be successful, and we keep buying the Ranger and wondering why it won't carry the load.

BUT, if the new "salesman" says, "I can deliver the F150 you want and need, but you're going to have to pay more", we decide that he's a bum, and move on to the next one.

There is no doubt that Canadian governemental spending at its Trudeau peak was excessive - but we're miles from that now and slipping well below norms.

So I think it's time to "pony up" and pay a little more income tax so that we can maintain this great country.

[Homeownertoo]

Or not pony up and reduce our expectations of what government should deliver. I think it's clear, not just in Canada, that voters don't want to pay for the programs politicians have promised and delivered. So the course is clear -- cut programs.

[steven lloyd]

So the course is clear -- cut programs.

... and bureaucracy. I agree. The trick is making intelligent choices of where to cut (that are presumably a result of actually investigating the purpose and outcome of certain types of spending before just cutting for the sake of cutting), and not make reckless across the board decisions that are purely ideologically based and that can actually result in increased long term costs and even other more drastic negative repercussions.

[Smurf]

Exactly Steven. It only makes sense to cut programs and or employees if it saves money now and in the long run. Our current government has proven beyond a doubt that reckless cuts cost much more and will continue to cost much more than keeping the programs and running them properly. When the company I worked for and our union made a breakthrough to actually work together we saved jobs, recieved raises and benefit increases, improved production, improved accident stats, you name it. It was a win, win, for everyone. All changes were thought through thoroughly by both sides to look at all negatives and positives. Results were unbelieveable. In comparing it to similar business we moved light years ahead and they still are. Sometimes it takes a lot more than cuts to be successful and sometimes it means paying a bit more whether we like it or not. But even the paying end of it can be done smartly. The big thing is to get all parties on side and do it smartly. Just look at Ford during the last crisis. Bailout what bailout. They worked it out with their big bad union and didn't need government welfare. Good on them. Some other business's should give it a try instead of whinning like babies and waiting for government to bail them out.

[hobbyguy]

So homeowner, taking the position of "less government", what significant programs would you cut that wouldn't negatively affect the middle class?

Or are we just stuck in the old Ronald Reagan myths again? Bear in mind that Reagan INCREASED the size of the government despite his famous "government isn't the solution, government is the problem" speech. Reagan lowered taxes, then raised them, and put government spending above the 40 yr average (%GDP). By golly that guy was some heck of politician, probably the best in my lifetime at telling folks what they wanted to hear, doing something else, and not getting sussed out.

[Homeownertoo]

I guess we won't agree on Reagan's era, since you are wrong and I am right (you seem unaware that Reagan did not control Congress). But if it makes you feel good to believe in myths, fill yer boots.

Back in 2001, when Paul Martin was still finance minister, federal spending was a mere $130-billion a year. This year federal spending is expected to top $270-billion, on its way to $300-billion by 2015. But apparently we can't cut a dollar without devastating the middle class. OK, if you say so.

You want programs to cut? I don't think you really do. But assuming I'm wrong and you are serious, here's a start. Over at Maclean's magazine (can't recall the edition; I'll let you do the searching), Andrew Coyne crafted a plan to trim federal spending over the next few years. In "How to cut $20-billion from spending without really trying," Coyne proposed cuts that would bring the budget deficit to zero over five years. A useful but tougher companion document is the Canadian Taxpayers Federation's pre-budget call for about $20-billion in cuts over three years.

I would support either plan, but I favor the CTF plan, for the simple reason it is more robust. A perusal of its website will provide a list of numerous federal and provincial programs that deserve to be cut or eliminated.

Your position that nothing can ever be cut because someone will object ignores the reality that a nation cannot pile on debt endlessly. You cannot borrow your way out of debt, despite the claims of the Left's 'experts'. Several European nations have already reached Keynes' famous "in the long run", and we are not far behind. Even Bill Clinton recently said the US faces a fiscal cliff if it does not extend the Bush tax cuts at least temporarily, and that Europe has only 30-50 days to come up with a credible plan to deal with their debt crises. These issues are for real, and you can no longer wish them away, which seems to be the strategy of several contributors on this forum.

[Motoguy]

I just love these people who make up their facts as they go along. You clearly were not around 35 years ago to compare the standard of living then with today. Those of us who were know better. how would you know if I was around or not FAIL
Food is a smaller part of the family budget today than it has been at just about any time in history, and today's dinner plate contains a wider variety of goods, year round, than it did when I was growing up in the '60s.

how about fuel? Who cares if you can get more variety if you cant afford it how about fuel FAILHouses? Let's compare apples to apples. The house I bought on Ziprick in 1990, for $108,000 (I guess I got ripped off) would today fetch $350,000, at best. More likely $325,000, if well kept. Inflation since 1990 (Bank of Canada) is 58%. So take my buying price, add 58%, and it is $170,000. My mortgage was 13.25% (it went higher the next year), and you get an monthly mortgage payment of $1,904 a month (RBC website). Compare that to a 3.6% five-year mortgage on today's $350,000 home (just to take the higher price). It requires a monthly mortgage payment of $1,758 (RBC wbsite). So even with today's higher house prices, it costs no more (actually less) to house yourself than it did 22 years ago. So today is as bad as it was during the worst decade to afford a house. Intrest rates did go back down right? Its as bad now as it was. FAIL

What else. Cars? Cheaper and much better built today than when I bought my first new vehicle. Clothing? Cheaper today than when I was buying my first pair of jeans. Electronics? 'Nuff said about that. So cars are better today wow no wonder they cost too much to afford FAIL
Expectations today are much higher than they were, and people abuse credit much more. But those are choices. They are things people can control. The things we don't really control -- salaries and actual costs -- show a different picture. And that picture is that today's society is richer than it has ever been, for the middle class, for seniors, and especially for the 1% (but that's a different issue altogether).

The golden age when life was a bowl of cherries and we all had our pick of easy, high-paying jobs on which we paid next to no taxes, and cheap, well-appointed homes, cars and clothes, is just a myth. But it's an enticing one for a generation that followed the luckiest generation in history. Yes, compared with our parents and their parents, we boomers have had it good, and will have it good right to the grave. Will following generations also have it good? NOT EVEN CLOSEDepends on the policies they let politicians follow? Do you support debt reduction and deficit elimination, or an ever-growing list of government programs that require funding that erodes the wealth-producing sector of the economy? Will you rein in entitlements that have never been properly funded, or continue toward the fiscal cliff edge? The lessons are all around us, in the US, Europe, Japan and some Canadian provinces. Will you learn from them or wish such lessons away? Your future depends on your choices, both personal and political.

Thanks for proving my point Giant FAIL on your part.