The accounted make-the-world-a-better-place budget summaries are:
#1) Green Party: $181.1B (corrected from $172B)
#2) Liberal Party: $44.8B
#3) NDP: $44.5B
#4) Bloc Quebecois: $15.0B
#5) Conservative Party: $7.9B
Of note, the environmental externalities were (pre-debt payment adjustment) $150B, $31B, $23B, $12B, $1B, for the above 5 parties. Take away this and the approximate pre-debt payment adjustment rankings are:
#1) Green Party: $22B
#2) NDP: $21B
#3) Liberals: $13B
#4) Conservatives: $7B
#5) Bloc: $3B
The Green Party's foreign aid expenditure was $7B higher than nearest competitor.
The Bloc had the highest mental health and affordable housing (anti-homelessness) expenditures at $5.5B, with Greens at $4.1B and NDP a respectable $2.6B.
Greens the only party for THC legalization.
Liberals R+D budget $4.2B, Conservatives $2.4B, and Bloc $1.4B.
Greens and NDP keep corporate taxes high; good while sindustries rule.
Greens would spend $6.6B on childcare, NDP close with $5.8B, and Liberals at $3.7B.
Tuesday, September 30, 2008
problems with this methodology
Externality Accounting accounts the % of federal debt repayment over a 3 year budget, and assigns twice this as a multiplier (or divider where increasing debt) to expenditures estimated to return at least 15% or so annually.
These expenditures are limited by my knowledge base and time available to track down research that estimates ROIs. For instance, freeing up hospital beds is likely high ROI but I just don't have the time to account nursing home and homecare platform strategies.
One way to "game" this methodology is to transfer costs to provincial, municipal, and personal budgets. High ROI expenditures like public transit are municipal expenditures; I should be accounting a fraction of cash given to cities as an externality.
My only discount formula here rests upon the debt interest rate. This is a rather arbitrary way to measure societal capital depreciation/appreciation and time preference discounting, but is a problem in all of economics and finance.
Haven't considered marginal gains of investment. Canada needs $76B more of transit funding, but for instance, the Green Party's extensive environmental costing might be coming close to approaching the limit of where environmental capital is undercosted.
It is evident some of these budgets were hurried. A little more detail to Liberal and NDP infrastructure expenditures would raise their externaility totals. The Conservatives haven't forwarded a budget. The Bloc would presumably export daycare to all of Canada. There are many other law changes that I don't know how to cost in terms of money.
These expenditures are limited by my knowledge base and time available to track down research that estimates ROIs. For instance, freeing up hospital beds is likely high ROI but I just don't have the time to account nursing home and homecare platform strategies.
One way to "game" this methodology is to transfer costs to provincial, municipal, and personal budgets. High ROI expenditures like public transit are municipal expenditures; I should be accounting a fraction of cash given to cities as an externality.
My only discount formula here rests upon the debt interest rate. This is a rather arbitrary way to measure societal capital depreciation/appreciation and time preference discounting, but is a problem in all of economics and finance.
Haven't considered marginal gains of investment. Canada needs $76B more of transit funding, but for instance, the Green Party's extensive environmental costing might be coming close to approaching the limit of where environmental capital is undercosted.
It is evident some of these budgets were hurried. A little more detail to Liberal and NDP infrastructure expenditures would raise their externaility totals. The Conservatives haven't forwarded a budget. The Bloc would presumably export daycare to all of Canada. There are many other law changes that I don't know how to cost in terms of money.
NDP 2008 platform externalities
NDP financial calender starts Apr/2009, so I'll push back their 3 yr budget 5 months to encompass Nov/08-Oct/11. http://www.ndp.ca/page/6984 source. NDP project a $12.21B surplus in their easy-to-read budget tables. But $6.9B of this is listed as "adjustment for programme overspending"; I'll ignore. In their budget tables, they claim 1/2 the surplus for infrastructure and 1/2 for paying down debt. This is a little less vague than the Liberal infrastructure spending commitment, but doesn't list specific infrastructure priorities, only some of qwhich I consider high ROI, so I'll ignore this. $2.655B in debt repayment is 0.58199% of $456.191B federal debt, yielding an externality bonus multiplier of 1.16398%.
NDP will raise additional corporate tax revenue of $26.9B. As described in Green Party externality account, good industry profits minus sindustries equal 21.8615% of Canadian 2007 profits were sin. So $26.9 x 21.8615% is $5.8807435B in NDP corporate tax externalities.
THC decriminalization, $1.2B.
1/3 of childtax benefit is high ROI (0-6 yrs old): so $1.166666B of $3.5B increased child tax credit is 1x externality. $4.65B daycare.
$2.5B homelessness fighting affordable housing. 1/2 of $150M for mental illness and drug initiatives; fighting mental illnesses fights homelessness so $75M.
$1.2B public transit at 2x, 1/2 tallied under transit. $30M producer co-ops; I've listed a similiar programme in Conservative budget under healthcare, it could even belong under agriculture. $10.9B cap-and-trade auction proceeds. Another $1.55B transit at 2x, 1/2 tallied under transit. Industry innovation and enviro-sector strategies, $2.88B. Green jobs, $2.25B. $30M sustainable agriculture: I like banning terminators at 2x, hate going organic at -2x, and like sustainable practises at 1x. So count $10M at 1x under environment (there is another budget table listed as $750M for manfacturing and agriculture, but I can't find these in the budget description, maybe listed erroneously as forestry and fisheries; I'll assume agriculture spending listed under the 3 bullets on page 14 is only $10M annually). Alternative energy and retrofits, $1.6B. Assuming $800M is for 2x retrofits that pay for themselves rapidly, and $800M for 1x alternative energy. Water, Parks and conservation, $470M. I don't consider municipal water to be an environmental externality unless noticably deficient, but these programmes are accompanied by a water audit. Described "individual and small business incentives", $1.5B at 1x. Ignoring vague "other measures" $650M.
$1.2B transit at 2x, 1/2 tallied under environment. Another $1.55B transit, 1/2 tallied under environment.
$150M for national literacy strategy arbitrarily at 1x. The only education externality I've listed.
$300M for R+D: research grants.
$3B Kelowna Accord, 14% of which I've accounted from INAC budget funds externalities: $420M.
$1.5B foreign aid increase.
$240M children nutrition programme seems like a high ROI healthcare externality, 1x. $150M Healthy living strategy is nice but too vague. Homecare transfers might reduce load on expensive hospital beds, but this isn't specified. Like the idea of buying generic drugs and bulk drugs, but nothing mentioned how to ensure excess stocks won't be overprescribed/wasted.
corporate tax externalities: $5.8807435B
Childcare: $5.816666B
Anti-homelessness: $2.575B
Environment: $23.19B
Foreign Aid: $1.5B
Kelowna Accord externalities: $420M
R+D: $300M
Education: $150M
Transit: $2.75B
Healthcare: 240M
THC: $1.2B
$44.022409B in positive NDP externalities mulitplied by 101.16398% debt paydown bonus is: $44 534 821 000 in externalities.
NDP will raise additional corporate tax revenue of $26.9B. As described in Green Party externality account, good industry profits minus sindustries equal 21.8615% of Canadian 2007 profits were sin. So $26.9 x 21.8615% is $5.8807435B in NDP corporate tax externalities.
THC decriminalization, $1.2B.
1/3 of childtax benefit is high ROI (0-6 yrs old): so $1.166666B of $3.5B increased child tax credit is 1x externality. $4.65B daycare.
$2.5B homelessness fighting affordable housing. 1/2 of $150M for mental illness and drug initiatives; fighting mental illnesses fights homelessness so $75M.
$1.2B public transit at 2x, 1/2 tallied under transit. $30M producer co-ops; I've listed a similiar programme in Conservative budget under healthcare, it could even belong under agriculture. $10.9B cap-and-trade auction proceeds. Another $1.55B transit at 2x, 1/2 tallied under transit. Industry innovation and enviro-sector strategies, $2.88B. Green jobs, $2.25B. $30M sustainable agriculture: I like banning terminators at 2x, hate going organic at -2x, and like sustainable practises at 1x. So count $10M at 1x under environment (there is another budget table listed as $750M for manfacturing and agriculture, but I can't find these in the budget description, maybe listed erroneously as forestry and fisheries; I'll assume agriculture spending listed under the 3 bullets on page 14 is only $10M annually). Alternative energy and retrofits, $1.6B. Assuming $800M is for 2x retrofits that pay for themselves rapidly, and $800M for 1x alternative energy. Water, Parks and conservation, $470M. I don't consider municipal water to be an environmental externality unless noticably deficient, but these programmes are accompanied by a water audit. Described "individual and small business incentives", $1.5B at 1x. Ignoring vague "other measures" $650M.
$1.2B transit at 2x, 1/2 tallied under environment. Another $1.55B transit, 1/2 tallied under environment.
$150M for national literacy strategy arbitrarily at 1x. The only education externality I've listed.
$300M for R+D: research grants.
$3B Kelowna Accord, 14% of which I've accounted from INAC budget funds externalities: $420M.
$1.5B foreign aid increase.
$240M children nutrition programme seems like a high ROI healthcare externality, 1x. $150M Healthy living strategy is nice but too vague. Homecare transfers might reduce load on expensive hospital beds, but this isn't specified. Like the idea of buying generic drugs and bulk drugs, but nothing mentioned how to ensure excess stocks won't be overprescribed/wasted.
corporate tax externalities: $5.8807435B
Childcare: $5.816666B
Anti-homelessness: $2.575B
Environment: $23.19B
Foreign Aid: $1.5B
Kelowna Accord externalities: $420M
R+D: $300M
Education: $150M
Transit: $2.75B
Healthcare: 240M
THC: $1.2B
$44.022409B in positive NDP externalities mulitplied by 101.16398% debt paydown bonus is: $44 534 821 000 in externalities.
Sunday, September 28, 2008
2008 Liberal budget externalities
The Liberal platform: www.liberal.ca/platform_e.aspx, is based on four years and I'm assuming three years for the next minority government, so I'll trim all cuts and spending 1/4 unless platform explicitly states year-to-year differences. Also shifting the 2009-10 financial calendar year backwards 5 months to assume Nov-2008 to Oct-2011 time period. Liberals assume a $1.305B surplus over 4 years along with a $12B contingency fund. But this counts $2.24B in additional revenue not recognized by the BofC budget; I'll stick with BofC estimates. Over 3 years this is a $8.29875B surplus, but $1.7B to nebulous infrastructure spending for the last year assuming BofC $4.7B surplus estimate, so $6.59875B to pay down debt. Divided into the $456.191B federal debt baseline is 1.44648%. The 1x externality multiplier debt repayment bonus will be 2.89296%. Liberals have committed any surpluses over $3B to infrastructure, but since they haven't listed the $1.7B portion of the BofC projected 2011-12 for infrastructure on their budget's financial table, and haven't prioritized infrastructure spending (only some of which I consider high ROI), I'll ignore this.
Liberals claim to reduce corporate tax rate 1% below Conservative projections without detailing when. So I'll assume this happens halfway into their 4 yr budget. 2007 corporate taxes at a 22.12% rate and -$22.899B sum of "good" companies minus sindustries yields $1.0352169B in negative externalities per % corporate tax cut per year.
Ending oil sands tax subsidies, 3/4 of $1.2B is $900M. Green Shift carbon tax revenues of $39.975B with 3/5 of revenues in first three years: $23.985B at 1x. 1/2 of $100M budgeted for pollution control and food safety here, 1/2 in healthcare: 3/4 of $50M is $37.5M. 3/4 of $250M to fight Mountain Pine Beetle is huge; the Conservative plan just focused upon post-beetle economic diversification but this plan has elements like creating buffer-zones around cities to protect high-value trees, like what AB is attempting to protect high-value National Parks trees. Conservatively account this $187.5M at 2x. 3/4 of $575M for green mortgage retrofits at 2x: $431.25M. 3/4 of $370M for clean energy is $277.5M. I don't know enough about freshwater supplies to consider it a high ROI; it is lacking on IRs and in NFLD to my knowledge. Of $400M for a freshwater fund, only 1/6 is for freshwater (farm freshwater), the rest is environmental. And this falls under $690M budgeted for clean water, oceans and natural environment. So 3/4 of $290M and 3/4 of 5/6 of $400M is $467.5M. A $1B AMP fund on pg 16 is only budgeted for $875M on pg 69 under "Manufacturing and Transportation", if they are the same thing. I'll go with the latter total. These investments are stated as green and R+D or manufacturing. So a 1.5x multiplier with 3/4 (1x of 1.5x) tallied here and the 0.5x R+D doublecount tallied 3/4 under R+D. $656.25M. 3/4 of $300M to retrofit boats/trucks with green equipment, $225M.
Liberals have suggested in the past decriminalization/legalization and have agriculture funding that alludes to environmental or productivity advances, but nothing specific mentioned. Also ignoring the 10yr $70B Infrastructure funding as I'm not sure if it is to be funded from bond sales or surpluses.
Increased foreign aid, 3/4 of $500M is $375M. Haitian Lymphatic Filariasis elimination; 3/4 of $15M is $11.25M.
3/4 of 1/2 of $100M for pollution control and food safety under healthcare: $37.5M.
3/4 of $9.9B for increased child-tax benefit, 1/3 of which I'll assume is for the 0-6 age bracket. So $2.475B at 1x. 3/4 of $1.5B for daycare, $1.125B.
3/4 $2.1B for Kelowna Accord at previously accounted 14% INAC externality rate: $220.5M.
3/4 of $620M in social housing to fight homelessness is $465M.
R+D from AMP, 1/2 of $656.25M is $328.125M. Other R+D spending (increased granting agency budgets, etc): 3/4 of $1.945B is $1.45875B.
In addition to the above, the Liberals will match all budget 2008 programmes, so capture all Conservative externalities that aren't post-budget 2008 announcements! These in brackets:
THC decriminalization, $1.2B
Corporate tax externalities: -$1.0352169B
Kelowna Accord externalities: $220.5M
R+D: $1.786875B (+$2.425B)
Anti-homelessness: $465M (+410M)
Foreign Aid: $386.25M (+$631M)
Childcare: $3.6B (+$116M)
Healthcare: $37.5M (+$774.219M)
Environment: $27.78625B (+2.9228B)
THC: $1.2B
(Anti-pandemic: 3x $13M)
(Transit: $1.75B)
$43.515178B of Liberal externalities multiplied by a 102.89296% surplus bonus is $44 774 054 000 in Liberal budget positive externalities. Kind of a cheap shot to match the Conservative budget's externalities, but there weren't many of them anyway.
Liberals claim to reduce corporate tax rate 1% below Conservative projections without detailing when. So I'll assume this happens halfway into their 4 yr budget. 2007 corporate taxes at a 22.12% rate and -$22.899B sum of "good" companies minus sindustries yields $1.0352169B in negative externalities per % corporate tax cut per year.
Ending oil sands tax subsidies, 3/4 of $1.2B is $900M. Green Shift carbon tax revenues of $39.975B with 3/5 of revenues in first three years: $23.985B at 1x. 1/2 of $100M budgeted for pollution control and food safety here, 1/2 in healthcare: 3/4 of $50M is $37.5M. 3/4 of $250M to fight Mountain Pine Beetle is huge; the Conservative plan just focused upon post-beetle economic diversification but this plan has elements like creating buffer-zones around cities to protect high-value trees, like what AB is attempting to protect high-value National Parks trees. Conservatively account this $187.5M at 2x. 3/4 of $575M for green mortgage retrofits at 2x: $431.25M. 3/4 of $370M for clean energy is $277.5M. I don't know enough about freshwater supplies to consider it a high ROI; it is lacking on IRs and in NFLD to my knowledge. Of $400M for a freshwater fund, only 1/6 is for freshwater (farm freshwater), the rest is environmental. And this falls under $690M budgeted for clean water, oceans and natural environment. So 3/4 of $290M and 3/4 of 5/6 of $400M is $467.5M. A $1B AMP fund on pg 16 is only budgeted for $875M on pg 69 under "Manufacturing and Transportation", if they are the same thing. I'll go with the latter total. These investments are stated as green and R+D or manufacturing. So a 1.5x multiplier with 3/4 (1x of 1.5x) tallied here and the 0.5x R+D doublecount tallied 3/4 under R+D. $656.25M. 3/4 of $300M to retrofit boats/trucks with green equipment, $225M.
Liberals have suggested in the past decriminalization/legalization and have agriculture funding that alludes to environmental or productivity advances, but nothing specific mentioned. Also ignoring the 10yr $70B Infrastructure funding as I'm not sure if it is to be funded from bond sales or surpluses.
Increased foreign aid, 3/4 of $500M is $375M. Haitian Lymphatic Filariasis elimination; 3/4 of $15M is $11.25M.
3/4 of 1/2 of $100M for pollution control and food safety under healthcare: $37.5M.
3/4 of $9.9B for increased child-tax benefit, 1/3 of which I'll assume is for the 0-6 age bracket. So $2.475B at 1x. 3/4 of $1.5B for daycare, $1.125B.
3/4 $2.1B for Kelowna Accord at previously accounted 14% INAC externality rate: $220.5M.
3/4 of $620M in social housing to fight homelessness is $465M.
R+D from AMP, 1/2 of $656.25M is $328.125M. Other R+D spending (increased granting agency budgets, etc): 3/4 of $1.945B is $1.45875B.
In addition to the above, the Liberals will match all budget 2008 programmes, so capture all Conservative externalities that aren't post-budget 2008 announcements! These in brackets:
THC decriminalization, $1.2B
Corporate tax externalities: -$1.0352169B
Kelowna Accord externalities: $220.5M
R+D: $1.786875B (+$2.425B)
Anti-homelessness: $465M (+410M)
Foreign Aid: $386.25M (+$631M)
Childcare: $3.6B (+$116M)
Healthcare: $37.5M (+$774.219M)
Environment: $27.78625B (+2.9228B)
THC: $1.2B
(Anti-pandemic: 3x $13M)
(Transit: $1.75B)
$43.515178B of Liberal externalities multiplied by a 102.89296% surplus bonus is $44 774 054 000 in Liberal budget positive externalities. Kind of a cheap shot to match the Conservative budget's externalities, but there weren't many of them anyway.
Saturday, September 27, 2008
Daycare externality formula
A Quebec study says taxpayers get back 40% the cost of daycare in the first year as it frees up a mother to work. Presumably this would pay for the full cost of the programme when factoring private earnings. However, I've seen some papers suggest children in daycare might be more irritable. I have my reservations about the papers, but don't have time to study this issue in detail so am conservatively only giving daycare a 1x externality multiplier, when it may in fact be as high as 4x.
I'm also squeezing in Indian Reserve education here too. Children on Reserves graduate high school at 1/2 the rate of other children. My dumb and coarse method of handling this is to consider IR primary education (grades 1-6) to be a 1x externality. So off IR education I don't consider to be a really high ROI, but on Reserve, 1/2 is.
I'm also squeezing in Indian Reserve education here too. Children on Reserves graduate high school at 1/2 the rate of other children. My dumb and coarse method of handling this is to consider IR primary education (grades 1-6) to be a 1x externality. So off IR education I don't consider to be a really high ROI, but on Reserve, 1/2 is.
Thursday, September 25, 2008
THC externality formula
The direct police, court, prison costs of THC criminalization have been estimated conservatively at $400M/yr. Estimated tax revenue foregone with illegalization is $1B/yr. I'll assume decriminalization kills half the former costs and saves society $600M in resources over 3 years that can be freed up to fight rapes and murders. Legalization, $4.2B over 3 years.
Criminalizing the substance makes all other laws a little less just.
Criminalizing the substance makes all other laws a little less just.
Kelowna Accord and other INAC externality formula
http://www.ainc-inac.gc.ca/pr/est/rpp08-09/08-09_INAC_planned_e.html
From this budget's 2007-08 forecast spending, tacking on the 2008-09 $138M water/wastewater expenditure, an INAC annual budget of $7.3746B is attained. The externalities in this budget can be used as a guide to estimating the externailities of expenditures such as Kelowna Accord.
I've previously costed these externaltiies line-by-line, but have lost the record. The total positive externalities of the INAC budget came to just under 14%. So I'll use 14% as my externality multiplier baseline for INAC spending increases such as Kelowna Accord, and reaccount the INAC budget if I have time.
From this budget's 2007-08 forecast spending, tacking on the 2008-09 $138M water/wastewater expenditure, an INAC annual budget of $7.3746B is attained. The externalities in this budget can be used as a guide to estimating the externailities of expenditures such as Kelowna Accord.
I've previously costed these externaltiies line-by-line, but have lost the record. The total positive externalities of the INAC budget came to just under 14%. So I'll use 14% as my externality multiplier baseline for INAC spending increases such as Kelowna Accord, and reaccount the INAC budget if I have time.
Wednesday, September 24, 2008
2008 Bloc Quebecois budget externalities
Chapter 6 of Plateforme08 is my source for these figures. I don't speak French so I may have made obviously mistakes or missed entire programmes. The English 2008 budget summary on the Bloc website also mentions restoring ecoAUTO rebates. The budgets for Apr/09-Mar/12 I'm shifting back 5 months to encompass a 3 year minority government (could happen with Que. sweep and even split elsewhere).
The Bloc project an existing BofC budget surplus of $20.1B over next 3 years. This differs from BofC's $9.1B. The Bloc include a chart detailing their correct historic surplus predictions over the past decade. I don't know the details of the prediction methodology, if these are made at the same time as are the BofC's. I've only translated a few pages of their platform into English...so I'm sticking with the BofC's guess and if it is wrong all parties would get the surplus boost anyway. The Bloc includes $9B contingency fund. that leaves their 3 yr budget $2B in deficit. $2B/$(existing debt circa 2008)456.191B = 0.0043841%. This makes the new debt interest rate baseline 7.4023108%, and externalities must ROI 14.804621%, or be penalized where externality ROIs unestimated (most), by 0.87682%.
Bloc Quebecois plans to increase taxes on the oil industry to raise an additional $9.588B, included in this figure is $997M gained by eliminating accelerated capital depreciation for the oil industry. Renewable energy production, $315M. Boat fleet fuel efficiency upgrades, $560M. Buildings energy efficiency, $210M at 2x. Heating oil reductions, $515M. 50% excise tax reduction for inland flights (why not subsidize a more efficient fleet?), -$60M. $570M tax credit refund for transit at 2x, 1/2 listed under transit category for tallying. Restore ecoAUTO $460M.
Transit tax credit refund, $570M.
R+D tax credit: $1.32B. PARI (industrial research, I think) commercialization, $120M.
Affordable housing to end homelessness, $5B! Housing on Indian Reserves, $500M.
Foreign aid towards meeting 0.7% of GDP 2015 benchmark (I assume this is what this budget expenditure is for listed under "other ministries"), $1.4B.
$1.2B towards Indian Reserve funding. I've previously costed that about 14% of INAC's budget qualifies as an externality, would be listed as such under other categories. So for now I'll call this $168M IR externalities.
The Bloc have mentioned they are for marijuana decriminalization. So $1.2B.
IR externalities: $168M.
Foreign aid: $1.4B
Anti-homelessness: $5.5B
R+D: $1.44B
Transit: $570M
Environment: $12.368B
THC: $1.2B
So $22.646B divided by the debt penalty (2x % increase debt) of 0.87682% leaves a Bloc Quebecois 2008 budget with $22 449 161 000 in positive high ROI externalities. But there is a need to consider the currency depreciation (among many other) effects of Quebec separation; institutional investors would flee the CAD. I'll arbitrarily assign a 1/3 penalty to Canada's exchange rate and assume this arbitrarily devalues Canada's Bloc externaility budget, the same (for a lack of any better idea how to cost seperation).
So $21 854 376 000 without sovereignty, $14 966 105 000 with. To bad Bloc won't export some of their high ROI programmes like daycare to the rest of Canada
The Bloc project an existing BofC budget surplus of $20.1B over next 3 years. This differs from BofC's $9.1B. The Bloc include a chart detailing their correct historic surplus predictions over the past decade. I don't know the details of the prediction methodology, if these are made at the same time as are the BofC's. I've only translated a few pages of their platform into English...so I'm sticking with the BofC's guess and if it is wrong all parties would get the surplus boost anyway. The Bloc includes $9B contingency fund. that leaves their 3 yr budget $2B in deficit. $2B/$(existing debt circa 2008)456.191B = 0.0043841%. This makes the new debt interest rate baseline 7.4023108%, and externalities must ROI 14.804621%, or be penalized where externality ROIs unestimated (most), by 0.87682%.
Bloc Quebecois plans to increase taxes on the oil industry to raise an additional $9.588B, included in this figure is $997M gained by eliminating accelerated capital depreciation for the oil industry. Renewable energy production, $315M. Boat fleet fuel efficiency upgrades, $560M. Buildings energy efficiency, $210M at 2x. Heating oil reductions, $515M. 50% excise tax reduction for inland flights (why not subsidize a more efficient fleet?), -$60M. $570M tax credit refund for transit at 2x, 1/2 listed under transit category for tallying. Restore ecoAUTO $460M.
Transit tax credit refund, $570M.
R+D tax credit: $1.32B. PARI (industrial research, I think) commercialization, $120M.
Affordable housing to end homelessness, $5B! Housing on Indian Reserves, $500M.
Foreign aid towards meeting 0.7% of GDP 2015 benchmark (I assume this is what this budget expenditure is for listed under "other ministries"), $1.4B.
$1.2B towards Indian Reserve funding. I've previously costed that about 14% of INAC's budget qualifies as an externality, would be listed as such under other categories. So for now I'll call this $168M IR externalities.
The Bloc have mentioned they are for marijuana decriminalization. So $1.2B.
IR externalities: $168M.
Foreign aid: $1.4B
Anti-homelessness: $5.5B
R+D: $1.44B
Transit: $570M
Environment: $12.368B
THC: $1.2B
So $22.646B divided by the debt penalty (2x % increase debt) of 0.87682% leaves a Bloc Quebecois 2008 budget with $22 449 161 000 in positive high ROI externalities. But there is a need to consider the currency depreciation (among many other) effects of Quebec separation; institutional investors would flee the CAD. I'll arbitrarily assign a 1/3 penalty to Canada's exchange rate and assume this arbitrarily devalues Canada's Bloc externaility budget, the same (for a lack of any better idea how to cost seperation).
So $21 854 376 000 without sovereignty, $14 966 105 000 with. To bad Bloc won't export some of their high ROI programmes like daycare to the rest of Canada
Saturday, September 20, 2008
2008 Green Party externalities
http://www.partivert.ca/files/GP_Budget_Full_DL.pdf
http://www.partivert.ca/files/GP_Budget_DL.pdf
Source for Green Party figures. Their budget schedule for 2009-2010, I'm arbitraily moving back 5 months to encompass our elections to make Nov/08-Oct/11 correspond with GP budgets 2009-2012.
The Green Party budget claims to rack up no federal deficits or surpluses (presumably spending gross surpluses on tax cuts or some other expenditure).
RoB magazine July/Aug 2008 issue says there were $104.7B in profits by Canada's 1000 largest publicly listed companies. http://externalityaccounting.blogspot.com/2008/09/corporate-tax-methodology.html explains how I've subtracted sin profits from "good" ones and arrived at the figure of -$22.899B. -$22.899/$104.7 is 21.8615%, the amount of Green Party corporate tax increases that are positive externalities IMO. The Green Party intends to reverse Corporate tax cuts to amass $28.7B in new revenue between 2009-2012 BoC financial calendar years. $28.7B x 21.8615% is $6.2742505 in positive corporate tax externalities.
Marijuana is a harmless substance whose criminalization supports organized crime and stresses scarce and expensive legal/police/judicial/prison resources; in the USA this lobby has in part led to a prison economy where prisons are funded better than universities. Those in the THC business should pay taxes. GP estimates $3B in tax revenue from THC and I've seen a conservative estimate as to the direct police/legal/prison taxpayers costs of arresting THC users/dealers as $400M annually. So $4.2B in totally GP green externalities.
http://www.partivert.ca/files/GP_Budget_DL.pdf
Source for Green Party figures. Their budget schedule for 2009-2010, I'm arbitraily moving back 5 months to encompass our elections to make Nov/08-Oct/11 correspond with GP budgets 2009-2012.
The Green Party budget claims to rack up no federal deficits or surpluses (presumably spending gross surpluses on tax cuts or some other expenditure).
RoB magazine July/Aug 2008 issue says there were $104.7B in profits by Canada's 1000 largest publicly listed companies. http://externalityaccounting.blogspot.com/2008/09/corporate-tax-methodology.html explains how I've subtracted sin profits from "good" ones and arrived at the figure of -$22.899B. -$22.899/$104.7 is 21.8615%, the amount of Green Party corporate tax increases that are positive externalities IMO. The Green Party intends to reverse Corporate tax cuts to amass $28.7B in new revenue between 2009-2012 BoC financial calendar years. $28.7B x 21.8615% is $6.2742505 in positive corporate tax externalities.
Marijuana is a harmless substance whose criminalization supports organized crime and stresses scarce and expensive legal/police/judicial/prison resources; in the USA this lobby has in part led to a prison economy where prisons are funded better than universities. Those in the THC business should pay taxes. GP estimates $3B in tax revenue from THC and I've seen a conservative estimate as to the direct police/legal/prison taxpayers costs of arresting THC users/dealers as $400M annually. So $4.2B in totally GP green externalities.
Introducing a "toxic tax" gains the environmental externality 1x multiplier. $881M. Bumping corporate oil/gas tax rate to 28% nets $5.25B (more in reality as I think this estimate is based on 2005-07 oil prices). Eliminating subsidies on fossil fuels that were typically enacted when oil was $8-40/barrel is a no brainer: $4.217B at 1x. Accelerated capital cost for renewable energy, $210M. Green energy (I assume energy conservation practises) corporate tax cuts, $6.518B. Carbon tax pulls in $108.285B, probably surpassing positive externalities of any other party's entire budget. GHG offset purchases, $13.287B. Rail systems investment, $3B!! National Park completion budget: $1.5B. $550M for energy efficiency programmes in residential and commerical buildings. Small EE projects typically repay themselves in 3.5 years and larger ones in 7.5 years. So I'll cut it $275M at 1x and $275M at 2x. $1.5B from superfund for transit at 2x, 1/2 in Transit category when tallied. Brownfield remediation from superfund $1.5B; don't see why polluters shouldn't pay for this. Cycling and pedestrian "promotion" from superfund, $1.5B. Arbitrarily consider wastewater treatment to be an environmental expense, not water treatment (unless deficient like on Reserve or in NFLD, AFAIK). So 1/2 of superfunding destined for water/wastewater treatment makes this cut, $750M at 1x.
Chemical fertilizers and pesticides are often necessary to amximize agri-yields. Sometimes chemical pesticides are less poisonous than organic ones. So -$3M removing the GST exemption for chemical farm imputs. Once again, the GP policy of ending federal funding for GMO research seems wrong. Many chemical giant bullying tactics are inefficient and patenting genes is dubious, but a broken system is still better for agri-yields and medical research than none. Arbitrarily set a -2x multiplier to ending GMO supports, so -$294M.
Low-income housing programme that fights homelessness, $2.6B. $1.5B from superfund for low income housing.
Foreign aid to 0.7% of GNI, $8.61B.
Increased federal "scientific capacity" $45M.
Universal daycare by 2010, $6.6B.
Transit, 1/2 of $1.5B at 2x superfund tallied here, so $1.5B.
Looking at the 2007 INAC budget, tacking on 2008 expenditures for drinking water treatment and assuming $138M in annual housing funding comes out of a INAC infrastructure budget line about 10x larger, about 14% of INAC's $7.237B budget can be considered an externality. I've doone this line by line INAC summary before, lost the record, don't want to do it again for the moment. GP budget allocates $1.772B in Kelowna Accord funding, so $248.08M is a positive externality, I'll filter to individual categories later.
Anti-Homelessness: $4.1B
Transit: $1.5B
Corporate tax externalities: $6.2742505B
THC: $4.2B
Agriculture: -$297M
R+D: $45M
Childcare: $6.6B
Environment: $149.773B!!
Kelowna Accord externalities: $248.08M
Foreign Aid: $8.61B
Total Green Party 2008 budget externalities: $181 053 330 000.
Tuesday, September 16, 2008
2008 Conservative (GovofCan) externalities
I'm accounting this Conservative budget (2007, 2006 and other Party's projected budgets to follow) based on differences from J.Flaherty's Oct/2007 Economic and Fiscal Update. Two post Budget 08 initiatives are the diesel excise tax reduction and tobacco phase out. This is the externalities account for differences from Oct/2007 EFU:
The BoC's financial calendar is Apr-Mar, many budget programmes use Julian calendar year, and I'm considering Nov08-Oct11 as my timeframe for when the next government will be in office. I'll arbitrarily shift Conservatives 2008-09 accounting forward 7 months, and assume two year programmes are extended one more year, for a 3 yr timeframe.
Conservatives plan to pay down debt $1.3B 09-10, $3.1B 10-11, and $4.7B 11-12. I'm ignoring new election spending announcements post-budgets for debt purposes as well as revenue from larger than expected bandwidth auctions. Using $456.191B as a baseline federal debt estimate, the Conservatives will reduce debt by 1.99163%. This is divided by existing federal debt interest rate of 7.37% and doubled to yield an externality baseline of 15.033566%, a 1.5x baseline of 22.550349%, etc. For the most part I've yet to estimate broad ROIs so externalities will be multiplied by twice 1.99163%, 1.5x externalities by 3x 1.99163%; paying down debt is a bonus.
Private R+D returns about 17% annually, is a 1x multiplier. $55M SR+ED tax credits "enhancement". $945M research infrastructure. $73.5M grants and research chairs. $20M Gairdner Endowment. $240M research grants. $140M Genome Canada. $150M for Auto Innovation Fund (5yr programme but only considering 3 yrs here). $250M CCS is R+D and enviro. So 2x but I'll account 1/2 in environment when tallying. $300M for CANDU demo and Chalk River not broken down so I'll assume 1/2 is for R+D (nuclear reactors not demonstrated low footprint lifecycles so no enviro doublecount). Counting IT infrastructure as R+D so $64.5M Communications Security Establishment. $45M research streamlining. $15M synchrotron. R+D new wood products, $127.5M. $4.5M ESS pilot (forget what this is). $45M GST-free medical ergonomic stuff at 1x. Work with me, boomers need better ergonomic products so I'm viewing this programme as R+D pilot. $10M CCS for NS and UofC at 2x, 1/2 tallied in enviroment.
Environmental capital is undercosted, is arbitrarily a 1x multiplier. $15M to cleanup and repair harbours to be privatized; 1/2 of this is environmental so 7.5M at 1x. $22M Streamline aquaculture regulations. $99M regulate industrial GHG emissions. $18M Parks police. $31.5M Environment Canada regulators. $50M to cull swine is 2x; hogs are high footprint and arbitrarily assuming this is health 1x benefit too, when tallying. $25M forestry management in towns. -1.8B diesel tax credit (why not subsidize clean trailers or parts instead?!). *NextGen* biofuels fund $500M (not corn!!). $15M biofuel R+D is 2x, 1/2 in R+D. $7.5M accelerated CCA clean energy. $3M biosphere preserves. 1/4 of Gas Tax cash suggested for wastewater so $1.25B at 1x. $36M ocean environmental patrols. $30M ocean shelf mapping, presumably be cleaner under Canadian jurisdiction. $113M over five years to punish chemical spill polluters is $67.8M.
Addressing homelessness is a conservative argument. Contrarily to popular belief homeless people usually utilize higher cost services like prisons, hospitals, emergency shelters; arbitrary 1x multiplier for mental health and housing infrastructure. $110M Mental health commission. $300M Northern Housing Trust.
I learned when honey was branded as a health food in 1980s in USA, consumption increased 3.5x. There is latent potential in branding healthy foods so arbitrarily 1x. $49.5M natural health products safety. $169.5M food and consumer safety action plan. $219k BC farmers markets. $45M enabling accessible fund seems a good way to reduce healthcare costs, 1x. $300M tobacco phase out. $15M combat smoking, a bewildering set discounting formulas accompanies social rates of return here so 1x for now. Safe drinking water on IR $495M (NFLD deficient too).
0-6yr child care returns are off the charts (daycare ROI in 2.5 years publicly and in one year adding private earnings), but I've seen studies claiming daycare raised toddlers have aggression issues. Until I learn toddler development and daycare selection biases I'll arbitrarily assume 1x. Indian Reserve adults have 1/2 the high school graduation rate of off reserve Canadian adults. I'll very dumbly assume 1x for IR primary school as well. $70M over 2 yrs for IR education (0-18 yr old I assume) = $70M over 3 years at 1x. $43M IR prevention models. $3M medic alert bracelets.
UK foot and mouth biolab "leak" was devastating. I'll arbitrarily assume 3x for biolab safety on decreased nightmares alone. $13.5M biolab safety.
Transit is needed infrastructure at high oil prices and environment. So 2x for $500M Transit but add 1/2 to enviro when tallying. Gas Tax cash to cities schedule is 1B, 2B, 2B. 1/4 suggested to transit so $1.25B at 2x, 1/2 in enviro for tally.
I'm arbitrarily using new immigrant remissions to home country as my experts for optimal foreign aid levels. That puts us up to $15B or 16B as an upper limit (nowhere near it) at 1x. $450M Global Fund fight diseases. $100M more for Afghan aid (not like it'd do better in Zimbabwe). $75M for development innovation fund is 2x, 1/2 tallied as R+D. $6M combat child trafficking (if this is for Canada move to childcare).
Foreign Aid: $631M
R+D: $2.425B
Transit: $1.75B
Environment: $1.1228B
Anti-pandemic: 3x $13.5M
Childcare: $116M
Healthcare: $1.074.219B
Anti-Homelessness: $410M
So $7.569519B, multiplied by 1.0398326% equals a positive externality account of $7 871 032 600.
The BoC's financial calendar is Apr-Mar, many budget programmes use Julian calendar year, and I'm considering Nov08-Oct11 as my timeframe for when the next government will be in office. I'll arbitrarily shift Conservatives 2008-09 accounting forward 7 months, and assume two year programmes are extended one more year, for a 3 yr timeframe.
Conservatives plan to pay down debt $1.3B 09-10, $3.1B 10-11, and $4.7B 11-12. I'm ignoring new election spending announcements post-budgets for debt purposes as well as revenue from larger than expected bandwidth auctions. Using $456.191B as a baseline federal debt estimate, the Conservatives will reduce debt by 1.99163%. This is divided by existing federal debt interest rate of 7.37% and doubled to yield an externality baseline of 15.033566%, a 1.5x baseline of 22.550349%, etc. For the most part I've yet to estimate broad ROIs so externalities will be multiplied by twice 1.99163%, 1.5x externalities by 3x 1.99163%; paying down debt is a bonus.
Private R+D returns about 17% annually, is a 1x multiplier. $55M SR+ED tax credits "enhancement". $945M research infrastructure. $73.5M grants and research chairs. $20M Gairdner Endowment. $240M research grants. $140M Genome Canada. $150M for Auto Innovation Fund (5yr programme but only considering 3 yrs here). $250M CCS is R+D and enviro. So 2x but I'll account 1/2 in environment when tallying. $300M for CANDU demo and Chalk River not broken down so I'll assume 1/2 is for R+D (nuclear reactors not demonstrated low footprint lifecycles so no enviro doublecount). Counting IT infrastructure as R+D so $64.5M Communications Security Establishment. $45M research streamlining. $15M synchrotron. R+D new wood products, $127.5M. $4.5M ESS pilot (forget what this is). $45M GST-free medical ergonomic stuff at 1x. Work with me, boomers need better ergonomic products so I'm viewing this programme as R+D pilot. $10M CCS for NS and UofC at 2x, 1/2 tallied in enviroment.
Environmental capital is undercosted, is arbitrarily a 1x multiplier. $15M to cleanup and repair harbours to be privatized; 1/2 of this is environmental so 7.5M at 1x. $22M Streamline aquaculture regulations. $99M regulate industrial GHG emissions. $18M Parks police. $31.5M Environment Canada regulators. $50M to cull swine is 2x; hogs are high footprint and arbitrarily assuming this is health 1x benefit too, when tallying. $25M forestry management in towns. -1.8B diesel tax credit (why not subsidize clean trailers or parts instead?!). *NextGen* biofuels fund $500M (not corn!!). $15M biofuel R+D is 2x, 1/2 in R+D. $7.5M accelerated CCA clean energy. $3M biosphere preserves. 1/4 of Gas Tax cash suggested for wastewater so $1.25B at 1x. $36M ocean environmental patrols. $30M ocean shelf mapping, presumably be cleaner under Canadian jurisdiction. $113M over five years to punish chemical spill polluters is $67.8M.
Addressing homelessness is a conservative argument. Contrarily to popular belief homeless people usually utilize higher cost services like prisons, hospitals, emergency shelters; arbitrary 1x multiplier for mental health and housing infrastructure. $110M Mental health commission. $300M Northern Housing Trust.
I learned when honey was branded as a health food in 1980s in USA, consumption increased 3.5x. There is latent potential in branding healthy foods so arbitrarily 1x. $49.5M natural health products safety. $169.5M food and consumer safety action plan. $219k BC farmers markets. $45M enabling accessible fund seems a good way to reduce healthcare costs, 1x. $300M tobacco phase out. $15M combat smoking, a bewildering set discounting formulas accompanies social rates of return here so 1x for now. Safe drinking water on IR $495M (NFLD deficient too).
0-6yr child care returns are off the charts (daycare ROI in 2.5 years publicly and in one year adding private earnings), but I've seen studies claiming daycare raised toddlers have aggression issues. Until I learn toddler development and daycare selection biases I'll arbitrarily assume 1x. Indian Reserve adults have 1/2 the high school graduation rate of off reserve Canadian adults. I'll very dumbly assume 1x for IR primary school as well. $70M over 2 yrs for IR education (0-18 yr old I assume) = $70M over 3 years at 1x. $43M IR prevention models. $3M medic alert bracelets.
UK foot and mouth biolab "leak" was devastating. I'll arbitrarily assume 3x for biolab safety on decreased nightmares alone. $13.5M biolab safety.
Transit is needed infrastructure at high oil prices and environment. So 2x for $500M Transit but add 1/2 to enviro when tallying. Gas Tax cash to cities schedule is 1B, 2B, 2B. 1/4 suggested to transit so $1.25B at 2x, 1/2 in enviro for tally.
I'm arbitrarily using new immigrant remissions to home country as my experts for optimal foreign aid levels. That puts us up to $15B or 16B as an upper limit (nowhere near it) at 1x. $450M Global Fund fight diseases. $100M more for Afghan aid (not like it'd do better in Zimbabwe). $75M for development innovation fund is 2x, 1/2 tallied as R+D. $6M combat child trafficking (if this is for Canada move to childcare).
Foreign Aid: $631M
R+D: $2.425B
Transit: $1.75B
Environment: $1.1228B
Anti-pandemic: 3x $13.5M
Childcare: $116M
Healthcare: $1.074.219B
Anti-Homelessness: $410M
So $7.569519B, multiplied by 1.0398326% equals a positive externality account of $7 871 032 600.
corporate tax methodology
Canada's corporate tax policy is very friendly. Universal healthcare and oil policies (lack of windfall tax) dating from back when oil was $8/barrel and no sunset clauses. Oil companies can even be structured as an income trust for the next little while, a vehicle designed as a tax-shelter for cyclical industries and income seeking investors. Unfortunately, as of 2008 big oil has successfully surpressed scientific research and successfully brainwashed policymakers and voters into believing climate change is not a major preventable negative externality. There are a number of environmental negative externalities and geopolitical ones, big oil can afford to pay for (most profitable industry on Earth) but isn't. These include ensuring non-competition for freshwater aquifers with cities, tailing pond cleanup, funding the inflation infrastructure costs of surrounding region....I look at healthcare policy and see how advanced it is because the tobacco and alcohol lobbies are now minor in the developed world. I look at environmental policy; big oil presently runs these policies in Canadian and American federal governments.
Until these issues are addressed I'm treating big oil as a sindustry. Same for tobacco and alcohol. Wouldn't mind paying healthcare costs when I buy beer. High R+D industries are good industries. A UK BERR report titled "The 2007 R+D Scoreboard" says the R+D intensity of biotech and technology companies are high (translating their industries calassifications into RoB's). Private R+D returns around 17% annually, I read somewhere. I'm also assuming railroad/bus companies, food (not feed/ethanol) grain companies, farm machinery manufacturers, greenhouse manufacturers, and fertilizer manufacturers, are good industries. I'm tacking on soon to be in demand environmental services as a good industry. Probably some R+D intensive telecoms and service industry companies I've missed.
The Jul/Aug 2008 RoB magazine lists 574 Canadian companies publicly traded and in the black for 2007. Oil producers, servicers, integrateds and pipelines, made $30 200 000 000. Good industries made $7 301 000 000. That is -$22 899 000 000 added together at a 2007 corporate tax rate of 22.12%. Assuming no deductions and losses, each % drop in the corporate tax rate is $1.0352169B in corporate sindustry profits lost to public coffers. Not condemning oil, is praise of nationalization, just accounting the need for dirty industries to pay extra to cover societal externailities. RoB doesn't distinguish between coal and hydro utilities...
that profit lost goes in the red of an externality budget. ex) raising the corporate tax rate from 19% to 20% is accounted as $1.0352169B in the black, to be modified by deficit/surplus multiplier. If I were an oil CEO earning record profits in a non-nationalized jurisdiction I'd go out of my way not to subvert science or public policy. If I were a policymaker I'd ensure oil pays the costs for a sustainable infrastructure and economy after the bust. But I'm neither.
Until these issues are addressed I'm treating big oil as a sindustry. Same for tobacco and alcohol. Wouldn't mind paying healthcare costs when I buy beer. High R+D industries are good industries. A UK BERR report titled "The 2007 R+D Scoreboard" says the R+D intensity of biotech and technology companies are high (translating their industries calassifications into RoB's). Private R+D returns around 17% annually, I read somewhere. I'm also assuming railroad/bus companies, food (not feed/ethanol) grain companies, farm machinery manufacturers, greenhouse manufacturers, and fertilizer manufacturers, are good industries. I'm tacking on soon to be in demand environmental services as a good industry. Probably some R+D intensive telecoms and service industry companies I've missed.
The Jul/Aug 2008 RoB magazine lists 574 Canadian companies publicly traded and in the black for 2007. Oil producers, servicers, integrateds and pipelines, made $30 200 000 000. Good industries made $7 301 000 000. That is -$22 899 000 000 added together at a 2007 corporate tax rate of 22.12%. Assuming no deductions and losses, each % drop in the corporate tax rate is $1.0352169B in corporate sindustry profits lost to public coffers. Not condemning oil, is praise of nationalization, just accounting the need for dirty industries to pay extra to cover societal externailities. RoB doesn't distinguish between coal and hydro utilities...
that profit lost goes in the red of an externality budget. ex) raising the corporate tax rate from 19% to 20% is accounted as $1.0352169B in the black, to be modified by deficit/surplus multiplier. If I were an oil CEO earning record profits in a non-nationalized jurisdiction I'd go out of my way not to subvert science or public policy. If I were a policymaker I'd ensure oil pays the costs for a sustainable infrastructure and economy after the bust. But I'm neither.
debt penalty and externality tally methodologies
A government can pay down debt if it can't think of any other bright way to spend cash, the corporate equivalent of buying back stock. Canada's debt interest rate is 7.37% or so. Paying down Canadian debt will double government revenues in just under a decade. To separate the wheat from the chaff, I'm interested in expenditures that return at a minimum, twice the debt interest rate. So 14.74% or bust. I'm also penalizing governments racking up debt.
The net debt interest rate can be artifically lowered by selling more or buying back less T-Bills, bonds, etc., in a low interest rate environment. I'm reminded of a teacher that flunked out his worst student to increase the class GPA. Too much debt is poisonous to financial markets in this derivative era long-run, even worse assuming social progress. So any deficits I'm treating as if they raise the debt interest rate by a ratio equal to the deficit/debt and likewise for surpluses.
ex) the Dominion of Phil has a debt of $456 and owes Tony the shovel 7.37%/week. If Phil takes out a new loan of $45.60, regardless if at an interest rate of 1% or 20%, I'm going to increase my multiplier baseline of 7.37%/week by 10% to 8.107%/week.
This still doesn't stop downloading of debt to municipalities, Provinces, individuals....working on that. A social rate of return between 2-3x debt interest rate, I'm going to call a positive externality. Between 3-4x, a 1.5x externality, between 4-5x, a 2x externality...
This illustrates for a South American country that has been jacked by neoconservatism, with a debt interest rate at 15%, the best use of their money may be to pay down debt. This seems fascist. But looking at the big picture, the best use of cash for the world at large, if the SA country has otherwise intact infrastructures, may be to forgive the debt.
I'll tally externalities as my 2008 Canada Election "report cards". The debt multiplier baseline will be applied to twice an externality, 3x a 1.5x externality, 4x a 2x externaility. In the example, by racking up 10% more debt I now need a ROI of 16.214%/week to qualify for an externality, instead of 14.74%/wk. So if I pay $15 for a hard hat that gets me one 1/2 day of work for $17.25, this doesn't quite qualify as an externality under 16.214% ROI, but would under 14.74%.
It is tough to account accurate ROIs. No agreed annual discount formula. No agreed weight of value of Canadians vs non-Canadians. So where I can't find good research I'll arbitrarily assign certain expenditures an externality value (1x, 1.5x, 2x) and divide by (debt+deficit)/debt.
The net debt interest rate can be artifically lowered by selling more or buying back less T-Bills, bonds, etc., in a low interest rate environment. I'm reminded of a teacher that flunked out his worst student to increase the class GPA. Too much debt is poisonous to financial markets in this derivative era long-run, even worse assuming social progress. So any deficits I'm treating as if they raise the debt interest rate by a ratio equal to the deficit/debt and likewise for surpluses.
ex) the Dominion of Phil has a debt of $456 and owes Tony the shovel 7.37%/week. If Phil takes out a new loan of $45.60, regardless if at an interest rate of 1% or 20%, I'm going to increase my multiplier baseline of 7.37%/week by 10% to 8.107%/week.
This still doesn't stop downloading of debt to municipalities, Provinces, individuals....working on that. A social rate of return between 2-3x debt interest rate, I'm going to call a positive externality. Between 3-4x, a 1.5x externality, between 4-5x, a 2x externality...
This illustrates for a South American country that has been jacked by neoconservatism, with a debt interest rate at 15%, the best use of their money may be to pay down debt. This seems fascist. But looking at the big picture, the best use of cash for the world at large, if the SA country has otherwise intact infrastructures, may be to forgive the debt.
I'll tally externalities as my 2008 Canada Election "report cards". The debt multiplier baseline will be applied to twice an externality, 3x a 1.5x externality, 4x a 2x externaility. In the example, by racking up 10% more debt I now need a ROI of 16.214%/week to qualify for an externality, instead of 14.74%/wk. So if I pay $15 for a hard hat that gets me one 1/2 day of work for $17.25, this doesn't quite qualify as an externality under 16.214% ROI, but would under 14.74%.
It is tough to account accurate ROIs. No agreed annual discount formula. No agreed weight of value of Canadians vs non-Canadians. So where I can't find good research I'll arbitrarily assign certain expenditures an externality value (1x, 1.5x, 2x) and divide by (debt+deficit)/debt.
intro
One way to rank the efficiency of government in promoting quality-of-living is to account how many high return on investment expenditures are captured. Governments can spend taxpayer money now in a way that saves the future tax-base money. Often the public and/or politicians aren't educated or don't care to make quality-of-living supreme. This blog is meant to act as a gentle tase in the right direction.
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