I am increasingly of the opinion it’s going to take some radical medicine to ensure the long-term economic survival of Nova Scotia.
This isn’t a prediction of apocalypse. On our current course, government spending is unsustainable. Our elected officials fight to eliminate deficit spending but that effort will look like a cakewalk compared to the stress of an aging population and attendant medical costs. What will happen? Well, the world won’t end. The average Nova Scotian’s standard of living will drop significantly, however, and government services will, by necessity, deteriorate.
In other words, we’ll do too little too late, but we’ll muddle through. There will be a cost, though, and it will likely be higher than many people believe.
So, is this a done deal? Not necessarily.
First of all, predicting the future is a risky thing. Any number of unforeseen circumstances could come to pass that would change this course of events. Some zillionaire could take a holiday in Nova Scotia, decide she loves the place, and invest billions in our economy. Not likely, not something you bank on, but randomness is out there and impossible to predict.
More likely is a rise in rural land prices and decentralization generally as telecommuting becomes more viable. In essence, Cumberland County and Nova Scotia generally becomes more attractive as Torontonians and New Yorkers realize they can do their jobs away from the headaches of big city life, and can sell their cramped condo in the sky for a big house and a hundred acres in Cumberland County.
I don’t think this is a far-fetched prediction and the overall effect would be positive, even for those of us already here.
What about shipbuilding? I dunno. The money will be a boon for the local economy but my guess is it won’t have as big an impact as we’ve been told. Huge amounts of the $25 billion won’t be spent locally, and whether the $25 billion survives the era of austerity remains to be seen. I think we should anticipate a much smaller boost from this deal than we’ve been told to expect.
Where does this leave us? Well, let’s talk about the aforementioned radical medicine.
Some people are talking about eliminating corporate taxes. I think we need to consider it. This isn’t an ethical argument – whether or not corporations “owe” us money – but one based on pragmatism: making Nova Scotia as attractive as possible to investment will bring work here. The money we get from that isn’t in the form of corporate taxes but higher local incomes.
What about radically reducing the province’s income taxes? As someone was saying on the radio yesterday, income tax is one of the things professionals like doctors may consider when choosing where to live. Reduced income taxes would make Nova Scotia attractive to talented workers.
I am not claiming these measures would ultimately lead to higher government revenues due to an increased influx of money, nor am I saying government services would be flush with cash. Frankly, neither of those goals are my priority. Cuts to services are inevitable. Services will not be sustained on our current course. If my suggestion doesn’t sustain services, at least it provides a better opportunity for private citizens to provide for themselves. Radical tax cuts would create a more dynamic economy where young Nova Scotians with ambition could forge their futures without leaving the region, and where the private household could have the security of knowing prosperity is always there for the taking.
The government and our society generally have a moral duty to aid those who cannot help themselves, and to protect those who are too old or too young to be held fully accountable for their own welfare. Those duties should remain priorities. But discretionary spending should be radically curtailed (I’m not categorically opposed to maintaining higher taxes in the short-term were government spending radically reduced and taxes used to pay down debt).
You may be thinking: Yeah, but damned if we do, damned if we don’t; in both scenarios, Eric says the kinder gentler social welfare state will be dismantled.
The short answer to that is yes. The long answer is yes, unless we take radical action soon – action so radical it will be dismissed as fanciful.
Our American neighbours just across the border are considering legalizing marijuana: http://www.seacoastonline.com/articles/20130328-NEWS-130329728
It’s by no means a done deal, but it’s clearly a serious push. The question is, do we want to follow history or forge it?
Now, this idea may be too absurd to be taken seriously – I’m not sure I take it seriously – but here goes: If you want strong social services, well-funded schools, great environmental protection and state-of-the-art medicine, you need money. Why not take money from more socially repressive societies and siphon it here?
Create an adult sin city. Situate it in isolation, with an airstrip accessible from foreign airports only (sin taxes don’t work if you’re just robbing your own population). The easiest way to do that is putting it on an island (McNab’s?). Then create the facilities to enable almost any activity consenting adults wish to engage in – safely-administered IV drug use, gambling, prostitution, even euthanasia. Put in top-notch safety checks to ease our consciences. Then charge exorbitant fees for a unique tourism experience: debauchery made sanitary and legal. All the cash the resort generates is siphoned into provincial coffers.
I know, I know, it’s ludicrous, right? For starters, criminal law in Canada is federal and only federal. The province would run afoul of the RCMP.
Maybe. Federal law in the U.S. says marijuana is illegal, but Obama has resisted clamping down on state liberalization of drug laws. Perhaps local law enforcement could be brought onside.
The moral considerations matter, of course, even for an agnostic-atheist such as myself. For example, if someone comes for euthanasia, are they doing it willingly? Are they of sound mind? What about the billionaire who wants to try smoking crack, then goes home addicted and ruins his life and the lives of his family? Prostitution, gambling, drug use…all bear serious moral consequences.
But I did say it was radical medicine. And we can draw a line at some practices (one could imagine a poverty-stricken person agreeing to be tortured for money, as an example – not something we’d allow). I’m of the opinion government sticks its nose into too many “moral” issues as it is; again, consenting adults should be allowed to do what they wish, and facilitating that for a profit is morally neutral, not evil (…I think…that part needs serious pondering…). If we could engage in a morally neutral enterprise that generates vast quantities of wealth to the benefit of the entire province, that would be a net good, right?
OK, so that’s my whacky idea for the week. Feel free to disparage it. But on a more sober note, the slide into long-term decline has begun and no amount of government spending will change that. We take action soon or we risk a sizeable decrease in the quality of life for most citizens in our region. Services need to be cut and will be cut. The question is whether we’ll have private industry and entrepreneurship to compensate or lose that, too.
UPDATE: Just found this article focused on legalizing pot as a tax-grab for states facing hard times: http://www.politico.com/story/2013/03/buzzkill-cash-strapped-states-eye-pot-tax-89412.html
Maybe my sin city idea is only far-fetched, not wildly absurd…