Monday, August 25, 2014


OK, I feel partly responsible.  I've been saying for over a year that Brian Gallant won't tell us what he will do if he wins.  So now that he has brought forward an idea, I have to admit that I pushed him.

But, oh, the humanity.

Here's the announcement. I know, I'm not supposed to link to another party's announcement. But by the time we are done here, you won't believe me if you don't see it yourself. So here it is. Brace yourself.

As you can see, the basic numbers are these: the Liberals will create a $900MILLION infrastructure fund and will, over six years, spend that $900MILLION to create jobs. How many jobs, you may ask?

1,700 jobs.

Here's the math.  It basically speaks for itself. 

If you spend $900,000,000 to create 1,700 jobs, that means you are spending $ 529,411.76 per job. Or, if you like, $ 88,235.29 per year, per job.

So yes, if you give Brian Gallant a little more than half a million bucks, he can create a job. You could also put that money in a bucket, blindfold my 4 year old nephew and have him stumble through town, and he might well be able to employ at least two people, but let's move on.  Math is inconvenient.

You can't make this stuff up.

You may be saying,  "Well, fine, Kelly, but that will put a huge dent in that unemployment rate, won't it?"  If you're saying that, it's a good question and I'm happy to answer it.

No. It won't. 

The workforce, according to Statscan, is 349,000 people.  So adding 1,700 people to that workforce will move the employment rate by 0.49%.  This means that, using Mr. Gallant's approach as a means of employing all able bodied New Brunswickers would take $18BILLION in expenses, or a little more than the entire provincial budget for two years. 

Now, the Liberals do mention that if government spends $88,000 to give you a job, you pay more taxes back, which is true. And they helpfully point out that $13Million more will come back In revenue to the provincial government. 

What they did not think of (and really, should have) is that even at very generous borrowing rates, the interest on $900 million would also have to come out of the yearly budget, to be taken from health and education. If interest were 3% a year, that's actually $27million per year, for a net loss of $14million every year that has to be cut or borrowed. 
                              NO, he didn't borrow that much, Brian.

Further, the Liberals' own commissioned economic analysis suggest that this will only increase the GDP by 0.3%, a highly inefficient return on stimulus packages (by contrast, the Obama stimulus package was held by economists to have had a GDP impact of between 2.5% and 4.5% with its emphasis on getting money in the hands of working families and more defined infrastructure. And even with that much better return on investment, no one ever suggested that the borrowing could be responsibly sustained for six years).  In fact, the Liberals' own analysis states that their expenditure will increase GDP by less than the actual expenditure. 

Not sure we were supposed to actually read that.  Perhaps they figured that we would nod reverentially and move on.

It's also important to note that when government borrows money, they increase demand for capital and drive up interest rates. So if you run a small business (the sector that actually creates jobs that last), then that's a lot of the oxygen the Liberals are taking up.  This could actually hurt access to capital for local businesses.

So, what does this mean for you personally? Well, right now there are 349,000 workers in the provincial economy. That means that, before interest charges, the Gallant Liberals will borrow $2,578.80 that each one of the has to pay back personally, with interest. They will then pool this money and give it to 1,700 lucky people who work on infrastructure projects. 

Um, how are people hired by Liberals to work on construction projects?  . 

Now, you might think that with all that infrastructure money, at least there will be a project that you'll like there, right?

Actually, um, no. They won't release the list until after the election. These are needs so pressing that they can't name any right now. 

So, to sum up.  We will borrow an amount equal to nearly the entire Department of Education, but none of it will go to education.  We will add $2,500 per worker to the debt, add $14Million in cuts to health and education, add $900Million to the debt to move the employment rate less than half a percentage point and build some things no one can name right now.

I challenged Brian Gallant to stop being silent. Shakespeare said something about silence and fools. The question is, will we be fooled?

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