Obscure To-Do List

The following is the forgotten to-do list for the government. Easily implemented and empirically proven.

1) Digital Telecommunications

The e-commerce growth in Canada has been extremely slow. Lagging behind in this new market sector would be incredibly damaging for the future of Canada.

The government should invest resources into developing the fibre optic backbone (for areas which do not already possess dark fibre) and implement this under a new government-owned crown corporation (let's call it Not-Crackpot Bell). The infrastructure is leased out to ISPs at cost-plus (a little extra for expansion of the network).

This results in an internet service marketplace which has almost no market entry barrier, giving consumers a better price and better service. With the increase in bandwidth, e-commerce is given an environment in which it can thrive.

Cost? Possibly 10s of billions.
Gain? Probably 100s of billions.

2) Space Programme

Throw an extra 100 million into the space programme, effectively doubling its budget. Then commit to every single robotics portion of space programs across the entire world. NASA, ESA, Russian Space program, Chinese, Indian, Japanese and so on will use Canadian robotics from Canadarm to Rovers.

Cost? 100 million
Gain? Depends on how much we sell the robotics for, but we also get ties with every single country's space program which should lead to a brain gain.

3) Medical Nuclear Reactor / Nuclear Medicine

Build a new medical reactor asap. Replace the one at Chalk River, or upgrade existing reactors to this capability, or build a totally new reactor. It's not hard.

With a new set of reactors we can easily edge up control of the radioisotope market to 90%+. This allows us to fund the entire world's anti-cancer programs.

Cost? A few billion.
Gain? Aside from saving millions from cancer, the increase in worker productivity and thus income taxes, we'd also be selling the isotopes to cover most of the costs anyway.

4) Safe Injection Sites

The Lancet journal backed the safe injection site because statistical evidence has shown a 30%+ drop in deaths. There was an accompanying drop in crime rate.

Cost? Put one in every city, probably a million dollars per year per city. So what 100-150 million?
Gain? It's likely to be a decrease in policing and healthcare costs of 1-2 billion dollars.

5) Mental Hospitals

Bring back mental hospitals. Safe, comforting mental hospitals for the mentally ill and take them off the streets.

Cost? Probably 100-150 million across the country.
Gain? Likely 1-2 billion per year due to decreased policing costs.

Shutting Down Government

The US Budget passed, luckily, avoiding a government shut down. Over 800 000 Federal employees keep on working and 1.4 million soldiers continue to receive their pay cheques. This is of course, very good.

So really we're left with a question in the aftermath of what makes sense to cut and what does not. Certainly at this point, with the size of American deficit, an austerity package makes sense.

But, really, the Tea Party has grown on the concept of "starve the beast" and presuming a positive correlation between government spending and oppression. I'd like to point out something written by someone else on the subject before I throw my own view out:

http://ordinary-gentlemen.com/blog/2011/02/17/government-spending-and-liberty/

The issue is that protecting the rights of the people, upholding the US constitution, is a task that is far more expensive than letting the mighty rule over the weak. Freedom is about choice of action and defence against others who would take away your choices. As far as the United States is concerned, the government does both but it is not the only entity in play.

Many different factors affect one's freedom and combined make out your total ability to succeed in society. We cannot disregard the government as the primary instrument for defending one's freedom simply because it has a capability of also suppressing it. Afterall, most would agree that a world run solely by corporations is likely to be extremely piss poor with such rampant poverty that any amount of legal freedom amounts to naught when you don't even have food to eat.

Starving the government and eliminate essential services is more likely to do such heavy long-term damage to the economy that any temporary relief on the deficit from the cuts are far outweighed by the losses. For instance, one of the obstacles in passing the budget was Planned Parenthood, costly a measly 323 million dollars a year. In a budget that is 3.2 trillion dollars, one would imagine such an item would not even come under scrutiny before larger ones (such as the F-35 purchase which will amount to tens of billions in total). But the prevailing idea is that cutting it would "save" the money when in reality, the preventative measures put into place by Planned Parenthood saves the government tens of billions per year in healthcare costs. A condom costs pennies. Managing a teenage mother who then has decrease employment opportunities costs you a lifetime of social services.

So when we think of an austerity package, what comes into question is what is essential and what is not. Courts, infrastructure and economic multipliers are essential. Preventative measures that save money in the long-term, those are revenue positive measures. Those should stay. Things that are revenue negative in the long run are the services that you tackle. This primarily means the military but there are also non-defence spending measures that can be eliminated as well.

As well, tax revenue collection is another way to tackle the issue. Reducing spending is one prong, but how about increasing tax revenues? Recently, it has been revealed that General Electric paid zero dollars in tax on 12 billion in profit. That means the average American, earning 40k a year, paid more tax than a hundred billion dollar revenue corporation. That is tax money lost and the loss has to be picked up by the middle class in America. Efforts should be made to capture this money to reduce the deficit.

On top of this, congress can work to reduce corporate loopholes in taxation (and thereby make the system more fair to small business who cannot afford the high class accountants necessary to make use of such unfair loopholes), shift more of the tax burden to the rich (and also reduce the loopholes they use) and increase tax revenue.

CBO recently published a long list of items that could be cut in the budget that amounted to six hundred billion a year. Depending on your political ideology, not all of those are cuts that "make sense" but certainly, one can cut more than the forty billion in spending that the current congress has done.

Cut spending, increase tax revenue, and commit to long-term economic goals. That should be what everyone in congress strives for. Shutting down government is an extremist view that does nothing more than damage the very fabric of the United States.

Fighter Jets

So an election is on and one of the big topics is fighter jet purchase to replace the aging CF-18s. Before we begin I want to express my personal view on "how many" planes that the Canadian Air Force should receive.

The CF-18 purchase under Trudeau was 138 planes. This was in addition another 100+ planes of another type. In the 1970s we had over 200 combat aircraft of various roles (interceptor, heavy fighter etc). Flash forward to today, and we've 80 CF-18s left. The current purchase on the table is from Harper who suggests that we should buy 65 F-35s (which by PBO estimate will be around 130 million a piece and including maintenance costs will total around 30 billion over the lifetime of the aircraft). So, basically the suggestion from Harper is that we should have even less planes than before. Does he also believe we should have one rifle for every two soldiers? Don't worry the rifle is really awesome.

I believe that Canada should at least maintain and airforce of 140 planes or more. Any less and we won't even have pilots for the next generation of soldiers.

Before we begin, these are the key easy points for what I believe should be done in order to secure the purchase of aircraft to replace our existing force.

• The Canadian Forces military analysts should be the ones who decide which planes are purchased. This includes the type and number of each. Certainly they should be allowed to choose more than one plane. I believe that we should not allow politicians to make this type of decision for the military.
• The government should be clear on how much money should be spent on new plane purchase and allow the military to decide the best way to spend this money. Alternatively, the military can suggest the optimum plane purchase for expected missions in the future (which is likely to be primarily peacekeeping)

So the choice is really down to how many planes we want and how much will it cost. Obviously, the more we can get per dollar the better. It is ridiculous to believe the F-35 is the only plane on the market. For someone like me, who is not a military analyst, I can mention this many planes offhand:

1. Boeing F-18 super hornet (at a cost of 55 million USD each)
2. Lockheed Martin F-35 Lightning II (at a cost of at least 130 million USD each, estimate)
3. Dassault Rafale (at a cost of 80-90 million USD each)
4. Saab JAS 39 (40-61 million USD each)
5. Eurofighter Typhoon (90-125 million Euros each)
6. Mikoyan MiG-35 (???)
7. Sukhoi Su-33 (55 million USD each)

We probably won't buy the MiG or Su since they aren't from NATO countries but they're still planes that could be considered. I leave it up to military analysts to judge the risk/reward factors. (Or hey, we could buy the F-22, I hear we can get them second hand and they've never been in combat missions before!)

Let's not put ourselves into the same problem as the United States, stuck into spending billions into the black hole that is the JSF program that produced the F-35. We don't need to throw tens of billions down the drain needlessly. Let's get the best our military can get.

The Economic Focus

Economics is the primary focus on any government in a stable society. Within that realm, many countries speak on different topics but in general what is the ultimate goal of the government? Make everyone rich? Eliminate poverty? Get everyone two cars? The best focus for a government is on two fronts: with respect to financial decisions it should focus on long-term growth, with respect to social economic decisions it should focus on eliminate poverty.

When we look at different countries in the world, the presence of affluence is not indicative of a well functioning society. In terms of the United Nations Human Index rating, those with the least poverty almost invariably score higher than those who focus heavily on increasing affluence versus targeting poverty. If we look at countries such as USA or South Africa, we see many of the richest in the world living there and yet, in terms of living conditions, some of the worst for the Western world (and in some cases, just worst in the world in general). In contrast, if we look at a country such as Sweden, with extremely low poverty, it scores very high and always ranks near the top for living conditions.

The reasons are typically simple and somewhat utilitarian. Every additional dollar above what is needed for the average comfortable life style adds very little to happiness. However, simply transferring money from the rich to the poor is an abuse of metrics. The problem is not that the rich hold too much money, hoarding it from the poor, it is that the poor were never given any opportunity to earn that money. Furthermore, opportunity is insufficient. Social mobility is an excellent trait for a society but unless the income divide is actually small, it is relatively meaningless.

So, countries and government should focus on tackling poverty. What are things that may be done?

• Income tax versus corporate income tax
• Rethinking welfare

Let's talk taxes. There's actually an extremely large variety of taxes today and in history; income tax, harvest tax, land tax, property tax, wealth tax, inheritance tax, tithes, inflation tax, sales tax, tariffs, export taxes, duties, debt interest. But by far, today in the modern age, in the big picture, the largest two are income taxes and corporate taxes.

Corporations pay tax only on profits. Individuals pay tax on everything.

The idea is to encourage corporations to reinvest the money they earn into creating more jobs, capital and generally investing in the economy rather than taking the profits home. On the other hand, individuals are taxed in a manner historically similar to completely broken systems such as the "peasant land tax" or "salt tax". It does not take into account the cost of living which is an important measure in determining poverty.

So, let's rethink welfare and rethink income taxes. We want people who are poor to move up into the middle class. We want the middle class to live comfortably and invest in our country's future (possibly moving up into the rich category by doing so). We want the rich to competently run corporations in an efficient market manner.

Structuring income tax to take into consideration the cost of living requires a measure for determining cost of living. Canada has the LICO (low income cut off) which indicates when you are poor. It would not be difficult to add another measure for "Oh my God, I don't have food", which sits even lower than the LICO. Now we convert income tax into a "individual profit tax" so that if you are having trouble earning enough to put food on the table, the government doesn't come to make your life even harder.

• Below the strict panic line, you should receive government money.
• Below the LICO line, you should not pay taxes.
• Above the LICO, you should pay graduated income taxes.
• We provide a variety of tax-free investment opportunities to encourage long-term growth (RRSP, RESP, TFSA etc)

We entirely eliminate provincial welfare systems and replace them with the negative income tax rates in this model. All of the administrative costs of welfare is to be turned over to tax auditing, which one hopes would not cost substantially different under this model.

If one is worried of welfare abuse then think of this; when you are using a spam filter for your email account, would you want it to eliminate all your spam but also blow away several of your good important emails per day or would you rather it let through a little bit of spam and allow all your important emails through to you? The answer is of course the latter (unless you wish to be facetious). I would rather ten poor people be given the chance at a better life than blocking a single welfare abuser from cheating the system.

So what about the other part of the government responsibility on long-term growth? I believe the key is for government to focus on being globally competitive. Ideology is exceptionally damaging to the Canadian economy and the best example is telecommunications. Mobile devices and internet prices are one of the highest in the Western world, with the lowest bandwidth caps and the slowest speeds. This is due entirely to private monopolies owning the market.

Forget neoliberal, supply-side or Chicago school of economics. Do what is best for the country! It is worth little to note that your ideology brings you to call something efficient when it lacks in comparison to the world. We could build our internet infrastructure through private monopolies and allow these companies to act without regulation, gouging customers and hampering the development of our digital economy, all in the name of free market, but at the end of the day, countries such as Japan or Finland forge ahead while we are left in the dust. What comfort is to cling to artificial principles when you live in relative poverty?

• Natural monopolies such as energy and infrastructure (including internet) should be socialised. In the case of infrastructure, this can be rented at slightly above cost to private corporations to provide service. For instance, the government laid fibre optic lines which they can then rent out to private ISPs at near cost who then resell to consumers in a highly competitive environment with nearly no bar to entry (afterall, an entrepreneur merely needs to fork out a small amount of capital to serve a small set of customers)
• Essential services need to be socialised. Healthcare, basic mail, licensing, regulatory bodies, inspections and so on, should be run by the government to reduce costs and corruption.
• Luxuries should be market run. In elastic demand environments, the government should not waste administrative overhead in trying to manage prices.
• Research and development. Universities product new technologies, corporations typically produce slight enhancements. The government should focus grants primarily to universities in order to encourage the growth of new industries and markets, which give our country a distinct time advantage versus others.

Growth and opportunity, that is the mandate of any government.