Wage increases to a bloated bureaucracy, stimulate the economy
Let’s bail out ordinary people
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The early 1980s, a time of high and growing unemployment was also the heyday of the Rhinoceros Party of Canada. The party was named after its leader; a rhinoceros at the Granby Zoo just outside of Montreal. The rhino was the consummate politician; thick-skinned, not too bright, and slow moving except when it was in its interest to move quickly. And it spent all of its time wallowing in mud.
The major issue in the 1980 general election was the high rate of unemployment in the country. A candidate for the self-described Marxist Lennonist Party (that’s Groucho Marx and John Lennon) gave his party’s solution to the unemployment problem. If unemployment was eliminated, then we wouldn’t need federal public servants to work in unemployment offices. Those people would end up getting laid off and therefore become unemployed but there would be no one left to process their claims. This scenario was clearly unacceptable to the Rhinoceros Party. The party’s platform called for unemployment rates to be increased and people put back to work by working in government unemployment offices.
What passed for parody and satire thirty years ago has now become reality. Earlier this week, Ontario Premier Dalton McGuinty justified the 3 per cent plus wage increase for some civil servants as well as keeping the bloated bureaucracy in a time of economic turmoil. By keeping all of these people employed, and at higher wages, they will have more money to spend. And, in the parlance of the day, this will “stimulate” the economy.
If McGuinty and his ilk really believe in this then why don’t they go all out? All governments, if they wished, could reduce their unemployment rates to zero. All they have to do is to hire every person who is willing and able to work. The government could then pay them high salaries that include yearly increases and performance bonuses. Half of these new hires could be put to work digging holes in the ground while the other half could be employed filling the holes up again. This of course would serve no productive purpose but it would give all those currently unemployed more money to spend and the economy would be stimulated. The recession/depression would be ended. If only it was that simple.
McGuinty’s rationalization for his high spending is typical of how a lot of governments are dealing with the current economic conditions. They are bailing out special interest groups such as government workers, auto workers, bankers and those who work in the financial system while ignoring the plight of the ordinary citizen. There is a solution to all this but governments are too busy throwing money at their friends and then justifying any spending on the grounds that someone, somewhere will have more money and the economy will therefore be stimulated to even think about it.
A caller to a radio talk show had the following idea of how to stimulate the auto sector. Every family would be given a voucher in the amount of $10,000 to use towards the purchase of a new GM or Chrysler vehicle. The voucher would have a time limit of three months so it has to be used quickly if it is to be used. Although a lot of people would still not be able to purchase a new car or would be reluctant to do so, many others would go out and buy a new car. If no one used the vouchers, the government wouldn’t be out any money. But if enough people did use the vouchers, the auto sector would be stimulated. And ordinary people, not special interest groups would be able to reap the benefits. The cost of the vouchers that would be used would be far less than the unimaginable sums that are being thrown at the problem these days.
The idea of improving the economy by increasing government workers or increasing their salaries was funny back in 1980 when it was championed by Rhinoceros Party of Canada. It’s not so funny anymore.