Business
The Dangers of a Central Bank Digital Currency (CBDC) – John Stossel with Florida Gov. Ron DeSantis
On the same day that this add about Digital Currency from the Bank of Canada popped up on my facebook feed..
I see that 19 time Emmy Award winning journalist John Stossel has posted a short discussion with Florida Gov. Ron DeSantis on the implementation of Central Bank Digital Currency in the United States.
Should you be concerned? Depends how much you like living under the thumb of whatever the government dictates.
From Stossel TV
The federal government and the media are excited about something new: a Central Bank Digital Currency (CBDC). “I think it would be a total disaster,” Gov. Ron DeSantis tells me.
A CBDC would be a cryptocurrency, one controlled by the federal government. The Biden administration says a CBDC would “protect consumers, investors…and the environment.”
DeSantis tells me, “Sometimes government does things that may appear to be benevolent but really are kind of like a wolf in sheep’s clothing. This is a wolf coming as a wolf.” DeSantis says the government will use digital money to spy on us and control our behavior. “’You’re filling up too much [with gas]. Wait a minute–Climate change… You can’t be doing that! …You bought another firearm? No, no, no.'”
He’s is so upset about this new plan, he just persuaded Florida’s legislature to ban the CBDC’s use in Florida.
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After 40+ years of reporting, I now understand the importance of limited government and personal freedom.
——————————————
Libertarian journalist John Stossel created Stossel TV to explain liberty and free markets to young people.
Prior to Stossel TV he hosted a show on Fox Business and co-anchored ABC’s primetime newsmagazine show, 20/20.
Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.” High school teachers in American public schools now use the videos to help educate their students on economics and economic freedom. They are seen by more than 12 million students every year.
Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Other honors include the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award
From the Frontier Centre for Public Policy
Rail advocates admit that trains can’t compete with airliners over long distances or with cars over short distances but claim there is a middle distance – supposedly around 150 to 800 kilometers – in which rail has an advantage over its competitors. That would be true only if the trains were almost 100 percent subsidized.
The Canadian government is considering spending $6 billion to $12 billion to introduce what it calls “high-frequency trains” between Toronto and Quebec City. Though some media reports have described these as high-speed trains (which generally means trains capable of going 250 kilometers per hour), they won’t be. Building such a rail line would easily cost $60 billion and probably much more.
Passenger-train advocates argue that Canada needs to join the international race to have the fastest trains in the world. But this is a race Canada can afford to lose because the country has something that is faster and far less costly: jet airliners.
High-speed trains were already obsolete in 1964, when Japan started operating its first bullet trains. Six years before that, Boeing had introduced the 707 and Douglas the DC-8, both of which cruised four times faster than the early bullet trains and twice as fast as the fastest trains in the world today.
Aside from speed, airliners also have a huge cost advantage because they don’t require a lot of expensive infrastructure between cities. While airports are infrastructure, the only infrastructure airliners really need are paved runways and perhaps a Quonset hut for ticket agents, baggage handling, and a waiting room—which is all that some of Canada’s more remote airports have.
Today’s big-city airports with huge concourses, shops, and jetways were built up over time and mostly paid for out of ticket fees. In contrast, rail advocates want taxpayers to put up tens of billions of dollars before a single wheel turns in the hope that trains that are slower than flying, less convenient than driving, and more expensive than both will somehow attract a significant number of travelers.
Rail advocates admit that trains can’t compete with airliners over long distances or with cars over short distances but claim there is a middle distance – supposedly around 150 to 800 kilometers – in which rail has an advantage over its competitors. That would be true only if the trains were almost 100 percent subsidized.
Air Canada and its competitors currently offer more than three dozen flights a day between Toronto and Montreal with fares starting at $118, less than 25 cents per passenger-kilometer. Fares on VIA Rail Canada averaged 68 cents per passenger-kilometer in 2022, and more than half of its costs are subsidized. People are simply not going to ride high-speed trains in large numbers if those trains cost far more than airlines, buses, or driving.
Amtrak’s only high-speed train, the Acela, collected fares of CN$1.80 per passenger-kilometer in 2022, and while Amtrak claims it covers its operating costs, all of its infrastructure costs are paid for by taxpayers. Amtrak brags that it carries more passengers in the Washington-New York corridor than the airlines, but cars and buses in this corridor carry well over 10 times as many intercity passengers as Amtrak.
The other argument rail advocates make is that high-speed trains will offer shorter downtown-to-downtown times than airlines in some markets. But most people neither work nor live downtown. Toronto and Montreal each have three commercial airports and residents are more likely to be near one of those airports than downtown.
Finally, rail proponents claim that high-speed trains will emit fewer greenhouse gases than cars or planes. But as usual they ignore the construction costs—that is, the billions of kilograms of greenhouse gases that would be emitted to build a high-speed rail line. It is likely that operational savings would never recover this cost, especially since it would be far less expensive to power jets and automobiles with biofuels.
One thing is certain: building high-speed or even high-frequency rail will require lots of workers. Far from being a benefit, Canada is currently suffering a labour shortage that is not expected to end soon. If the government decides to spend billions on a rail line, it will only make the costs of housing, cars, and just about everything else rise even faster.
China, Japan, and Spain have practically wrecked their economies by spending too much on high-speed trains. Just because other countries are foolishly building high-speed rail lines doesn’t mean Canada should do so any more than the country should spend billions on other obsolete technologies such as telegraphs, electric typewriters, or slide rules. Taxpayers should tell the government not to waste money on such boondoggles.
Randal O’Toole is a transportation policy analyst and author of Building 21st Century Transit Systems for Canadian Cities. (20 pages) March 12,2024.
From the Fraser Institute
By Niels Veldhuis and Jake Fuss
Labour productivity isn’t growing, it’s declining. And stretching the analysis over the Trudeau government’s time in office (2015 to 2023, omitting 2020 due to COVID), labour productivity has declined by an average of 0.8 per cent. How can the Trudeau government, then, base the entirety of its budget plan on strong labour productivity growth?
As the federal budget swells to a staggering half a trillion dollars in annual spending—yes, you read that correctly, a whopping $538 billion this year or roughly $13,233 per Canadian—and stretches over 430 pages, it’s become a formidable task for the media to dissect and evaluate. While it’s easy to spot individual initiatives (e.g. the economically damaging capital gains tax increase) and offer commentary, the sheer scale and complexity of the budget make it hard to properly evaluate. Not surprisingly, most post-budget analysts missed a critically important assumption that underlies every number in the budget—the Liberals’ assumption of productivity growth.
Indeed, Canada is suffering a productivity growth crisis. “Canada has seen no productivity growth in recent years,” said Carolyn Rogers, senior deputy governor at the Bank of Canada, in a recent speech. “You’ve seen those signs that say, ‘In emergency, break glass.’ Well, it’s time to break the glass.”
The media widely covered this stark warning, which should have served as a wake-up call, urging the Trudeau government to take immediate action. At the very least, this budget’s ability—or more accurately, inability—to increase productivity growth should have been a core focus of every budget analysis.
Of course, the word “productivity” puts most people, except die-hard economists, to sleep. Or worse, prompts the “You just want us to work harder?” questions. As Rogers noted though, “Increasing productivity means finding ways for people to create more value during the time they’re at work. This is a goal to aim for, not something to fear. When a company increases productivity, that means more revenue, which allows the company to pay higher wages to its workers.”
Clearly, labour productivity growth remains critical to our standard of living and, for governments, ultimately determines the economic growth levels on which they base their revenue assumptions. With $538 billion in spending planned for this year, the Trudeau government better hope it gets its forecasts right. Otherwise, the $39.8 billion deficit they expect this year could be significantly higher.
And here’s the rub. Buried deep in its 430-page budget is the Trudeau government’s assumption about labour productivity growth (page 385, to be exact). You see, the Liberals assume the economy will grow at an average of 1.8 per cent over the next five years (2024-2028) and predict that half that growth will come from the increase in the supply of labour (i.e. population growth) and half will come from labour productivity growth.
However, as the Bank of Canada has noted, labour productivity growth has been non-existent in Canada. The Bank uses data from Statistics Canada to highlight the country’s productivity, and as StatsCan puts it, “On average, over 2023, labour productivity of Canadian businesses fell 1.8 per cent, a third consecutive annual decline.”
In other words, labour productivity isn’t growing, it’s declining. And stretching the analysis over the Trudeau government’s time in office (2015 to 2023, omitting 2020 due to COVID), labour productivity has declined by an average of 0.8 per cent. How can the Trudeau government, then, base the entirety of its budget plan on strong labour productivity growth? It’s what we call a “fudget budget”—make up the numbers to make it work.
The Trudeau fudget budget notwithstanding, how can we increase productivity growth in Canada?
According to the Bank of Canada, “When you compare Canada’s recent productivity record with that of other countries, what really sticks out is how much we lag on investment in machinery, equipment and, importantly, intellectual property.”
Put simply, to increase productivity we need businesses to increase investment. From 2014 to 2022, Canada’s inflation-adjusted business investment per worker (excluding residential construction) declined 18.5 per cent from $20,264 to $16,515. This is a concerning trend considering the vital role investment plays in improving economic output and living standards for Canadians.
But the budget actually hurts—not helps—Canada’s investment climate. By increasing taxes on capital gains, the government will deter investment in the country and encourage a greater outflow of capital. Moreover, the budget forecasts deficits for at least five years, which increases the likelihood of future tax hikes and creates more uncertainty for entrepreneurs, investors and businesses. Such an unpredictable business environment will make it harder to attract investment to Canada.
This year’s federal budget rests on fanciful assumptions about productivity growth while actively deterring the very investment Canada needs to increase living standards for Canadians. That’s a far cry from what any reasonable person would call a successful strategy.
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