Wednesday, September 16, 2015

Something Doesn't Compute


Stephen Harper began the week by crowing about his surplus. He fancies himself a magician; and so, nothing he says or does is ever what it seems. And such is the case with the "surplus." Jim Stanford writes:

The Conservative government has been criticized (including by the Parliamentary Budget Office) for its routine practice of underspending Parliament-approved budgets in many departments, and approved but unspent allocations were a significant factor in this week's announced surplus. Lapsed funds totaled $8.7 billion in fiscal 2014-15, higher than expected in the budget, and continuing a trend of higher-than-normal lapses. The short financial summary from Finance Canada does not provide details on which departments accounted for the biggest amounts of lapsed funds. In the past, substantial lapsed funds were booked in departments such as including veterans' affairs, youth job-creation, and security. We won't know until the release of detailed public accounts how much was underspent in each area.
Another factor which can affect a small balance (up or down) is the timing of various revenues and expenses, and the treatment of accounting issues like depreciation of public capital. Here, too, we do not have enough information from this summary report to know if timing decisions affected the balance one way or the other. We should note that the government's net debt rose by $4.7 billion during the year, and it had a net financial requirement (to fund operations) of $2.7 billion. In other words, the government was still borrowing money, even though it declared a (paper) surplus. This difference can arise because of accounting treatment of fixed assets, etc., which reduce the apparent deficit even though the government still needs to borrow. The directional gap between a positive surplus and continued cash borrowing, suggests that these timing issues were likely important to the achievement of the "official" surplus -- but again we won't be able to tell for sure until the full public accounts are released.

What is particularly interesting is how surplus EI funds have been used to plug holes:

We can be sure, however, that surplus funds siphoned from the Employment Insurance system account for more than the entire $1.9-billion surplus for the federal budget as a whole. EI revenues exceeded EI expenses by $4.5 billion for 2014-15, according to the Finance Canada summary. That means that for every $1 in bottom-line surplus declared by the government, $2.38 was reallocated away from the EI system. The EI surplus arises because benefit eligibility has been tightened so aggressively, and most unemployed Canadians can no longer qualify for benefits. (At present, under 40 per cent of officially unemployed Canadians qualify for regular EI benefits.) Yet Canadian workers (and their employers) still pay into the system. The resulting surplus becomes a convenient slush fund for subsidizing other government fiscal priorities -- in this case, declaring victory over the deficit in the middle of an election. Without this transfer from the EI program, the federal government (excluding EI) would have recorded a $2.6-billion deficit (approximately equal to what the government originally predicted for the year).

Strange, isn't it? We are officially in recession, yet the government declares a surplus. Which raises the question, "Who does the economy work for?" Something doesn't compute.


Rural said...

Creative accounting is not a new skill but the Harper regime has taken it to new heights, Owen. Add to that the fact that you cannot believe a word that issues from Harpers mouth and you may depend that things are not as rosy as he would have us believe. Its all smoke and mirrors!

Owen Gray said...

Exactly, Rural. Honesty from the Harper regime is as rare as a two dollar bill.

Pamela Mac Neil said...

Owen, with Harper, it's simply GIGO, Garbage in Garbage out.

Owen Gray said...

When you're not interested in gathering accurate information, Pam, what you get is swill.

Lorne said...

But how will this play in the public's mind, Owen? There are some of us who take the time to scratch beneath the surface of this 'surplus,' but there are far too many others who will take it at face value and regard it as a testament to Harper's economic acumen and stewardship.

Owen Gray said...

Ignorance put Harper in office, Lorne. And he's counting on ignorance to keep him there.

Scotian said...

I've said it before, I'll say it again. Anyone, regardless of party or partisanship that trusts the numbers from this government is an idiot and a moron, because all the evidence shows that the information that comes out from this government is inherently unreliable, which is why as many objective information tools were attacked, not least of which the long form census. I couldn't believe my ears when Mulcair called this good news and showed that the NDP could have a balanced budget in their first full year instead of denouncing this obvious flimflam, but then what else should one expect from Mulcair? At least Trudeau, the supposed sock-puppet without a brain seemed to understand that this was a bullshit surplus from the outset and said so. So which is it with Mulcair, is he a liar or is he too stupid to understand that this government routinely lies, ESPECIALLY about fiscal numbers!

We here all know Harper is counting on ignorance in the wider electorate to let him get away with it, and the media to not challenge him on it, and when the LOO decides to continue to allow Harper to get away with such bullshit by accepting it instead of denouncing it it only ENABLES the Harper deception machine to work! THIS is part of why I say Mulcair is untrustworthy and is too much like the reflection of Harper in how he plays politics these days! This is something SERIOUS! This is even more important than aiding Harper to only do debates he wants to instead of what is best for the country and the voters, and that was no small issue either, but this is something truly core to the concept of good government, and Mulcair is failing it, and worse is continuing to aid the worst Destroyer and Salter of the Scorched Earth where good government has been concerned in Canadian history!!!

THIS is who partisan Dippers are so proud to follow and to denounce his critics for, well way to go A-holes, you all learned the wrong lessons from Harper in what it takes to gain power at any cost. Sure there might be a NDP government in name only after this election following this approach, but the NDP that for decades and generations stood for and fought for real progressive policies and values, that NDP is clearly dead! In case it isn't obvious enough, I am REALLY pissed about this, even beyond my usual anger with NDP-CPC alignment/cooperation, and this has NOTHING to do with supporting Trudeau or the Liberals, this is to do with something far more basic than that, and if you cannot grasp what that is, then there is no hope in trying to explain it anymore! I am who and what I am because process has always mattered most to me, even more usually than who runs the machinery, but Harper changed that for me, and any that aid Harper in my books deserve to be held in the same contempt with him, as I have Layton and Ignatief and now

Sorry Owen, I know this is a bit spicier and more anger laden than most, but this is really serious! This "surplus" is clearly a mirage created by the Harper regime for electioneering purposes, and ANYONE that claims to oppose this government and its practices that does not call this out for what it is enables it instead, and that is simply too seriou to not treat with this degree of vehemence in my view!

Owen Gray said...

I note that Naomi Klein, Avi Lewis and other long time Dippers have sent Mulcair a letter, telling him they are displeased, Scotian. I wonder if he'll listen?

The Mound of Sound said...

The fable of the 'balanced budget' began with Joe Oliver going back to before world oil prices sank. Joe assured everyone we would have a balanced budget. When oil prices collapsed, Joe presented a balanced budget forecast - based on the optimistic projection that world oil prices would recover in short order.

It was around that time that the Cons sent the word to various ministries to slash spending. Even the RCMP withheld money allocated to investigating child pornography offenders. Those withholdings were necessary to keep the ship from sinking to the bottom. Then, to conjure up a notional surplus they raided EI where the surplus is supposed to be invested to support a fund for future claims.

It's the standard sort of bullshit Harper's gullabillies swallow without a second thought.

Mogs Moglio said...

Budget surplus? Smoke and mirrors, ever seen the shell game played with extremely detrimental consequences? Harper has closed the purse strings on funds taxpayers and well as contributors to EI have paid in good faith the government is supposed to manage not use as a 'slush fund.'

Stephen will stoop lower than people who have no moral standards and lack any personal qualities, Steve redefines both. He lies about most everything and does it with no compunction. The Harper years will go down in history as Canada's worst nightmare.

Brace yourselves this budget surplus is a well orchestrated plot to fool his unthinking base but he needs more votes than that. I predict the cheating in the coming election will surpass anything North Korea has ever seen.

"While it’s unclear employing illegal methods to win elections is tipping the balance in their favour, the Conservatives do have a long history of dirty-tricks and unethical behavior." [During elections]

"In response to these scandals, the Harper government overhauled Canada’s election laws last year with the Fair Elections Act. This act makes it easier for the Tories to commit election fraud because it weakened the power of Elections Canada, effectively muzzling the chief electoral officer from communicating with the public and MPs about investigations, and cut off the agency’s investigations arm."

Harper-cons have consistently cheated during every past election this time around they have managed to rig the election prior to the election with the 'Unfair Elections Act'.

The End Run Government if Steve does not like a law he does an 'end-run' around it.

Owen Gray said...

And he insists, Mogs, that he firmly believes in Law and Order.

Owen Gray said...

I wonder how many Harperites are regularly taken to the cleaners by The Harold Hills of the world, Mound.

Scotian said...

Owen Gray:

About as much as Andrea Horwath did in the last Ontario election with the "gang of 34" I would suspect, and seeing the way the Dipper partisans have been acting, with similar consequences (or lack thereof) too if the same result happens nationally for Mulcair as happened for Horwath. To this day I don't understand why she is still their leader, that was her second bite at the apple as leader, and at the beginning of the year was positioned for becoming the second NDP Premier, yet in the end (half a year later) gained no more seats (and lost one afterwards), and gained a single percentage point in the overall vote totals. This despite running against the repeatedly stumbling Hudak campaign and a long time Lib government with its own issues and scandals weighing it down to end up with a Lib majority result? Going from holding the balance of power to third place in a majority in your SECOND election as leader despite such favourable conditions, and this is NOT a sign of poor leadership? I mean really, she didn't even have the basic infrastructure tools ready for an election writ call despite being in a minority government, something basic for all leaders in such situations to have to have prepped! Then the way she ran that campaign after she finally got little things like buses settled, and that result, and she is still their leader?!?!

I really found the ONDP beyond understanding after all that, and I am finding the NDP also more than a little problematic in this manner as well. I'm also wondering if the Mulcair team that went to work for Notley during her campaign caught victory disease and failed to understand that they won that majority not so much because of how well liked the NDP and the leader/policies were, but because in many ridings the ANDP were the only other party to vote for aside from the Alberta Libs (who have no cred in that Prov) and the discredited Wildrose, and that in ridings where they HAD candidates, which was not anywhere near as many as they should have, leaving the NDP the only place for the anti-PC vote to go in that election. On one level watching the NDP act this way makes it more likely in the end we see the anti-Harper vote coalesce around Trudeau, which would be my preference, yet on the other hand watching this level of either incompetence or corruption (as in lust for power corruption, something far too many forget is that corruption in politics takes many forms, and theft of money is actually one of the lesser ones, power corruption is one of the greater/more dangerous and has several variants) is hard to take, and sad too, for what it say about the true health of our political culture these days compared to only even a couple of decades ago now.

Somehow I suspect Mulcair will ignore any criticism, and the loyal trained seals within the Dippers will cheer him on and denounce all that stand in their way, even when they are denouncing others for doing what they are cheering on in their own leader. I really do not recongize this NDP as anything that deserves the name, but in many ways what I find more puzzling are all those long term NDP supporters that stayed in the dark ages because their principles so mattered to them suddenly no longer caring so much about them and instead care more about the win and power. It feels like the taste of increased power and resources they got as Official Opposition increased their lust for power to the point where it is the sole true driver of their actions, and the way they disappeared their policy book despite the NDP traditionally/historically being a policy driven first party strikes me as a major piece of evidence to support that premise. Not to mention it looks a lot like what Harper did with his own writings and statements after the CPC loss in 2004 in the run-up to the 2005 election, yet again the NDP learning the wrong lessons from the Harper machine, and they are supposed to be the party bringing real change?!?!?!


I say again...HA!!!

Owen Gray said...

I suspect, Scotian, that is exactly what Tommy Douglas and David Lewis would say.