Let me pick up on one point. The Fraser Institute authors claim the following.
In addition to the multitude of private organizations supplying economic forecasts and fiscal projections, others still go to great lengths to scrutinize the accuracy of government budget numbers and assess its fiscal policies and programs. These include think tank institutions (including our own), lobbyist groups, and professional and academic economists. In a sense, the government already has multiple “watchdogs” keeping it honest and disciplined.
Where are these watchdogs? Have you seen them? Where are the detailed, credible, timely, and transparent costings of government and opposition tax policy initiatives? I don't see them. Not at the Fraser Institute, not elsewhere. I don't mean opinion pieces. I mean solid, objective, transparent policy work.
Speaking for myself, I am one of those academics who has a great interest in matters of public finance. But, with the other demands on my time (teaching, publishing, committee work, and once in a long while some leisure) I seem barely capable of writing one blog post a week, let alone doing fully costed pricing analysis of policy initiatives. The incentives are simply not there for me to spend my time on being a fulltime watchdog.
I am not convinced that the PBO guys are going to be better macro forecasters than anyone else. On that point, I have some sympathy for the Fraser Institute argument. But that's not what we're paying the PBO to do. We're paying them to a) translate those macro forecasts into fiscal projections and b) price policy initiatives coming out of Parliament.
I just don't see anywhere else in Canada that you have 5 or 6 economists devoted full time to these tasks, with access to the data necessary to do it. Yes, banks and thinktanks do produce the occasional report. But this is far short of what can be done by even a small fulltime staff dedicated to this task.
The three million dollars that the PBO costs is a rounding error on a budget of $260 billion. In fact, let me do the math. It's 0.00154% of 260 billion. In terms of time, the federal government spends 3 million every 6 minutes. I think it is worth spending 0.00154% of our federal budget to monitor and study how the other 99.99846% is spent.
Let me leave with one more quote from the National Post piece:
Speaking for myself, I am one of those academics who has a great interest in matters of public finance. But, with the other demands on my time (teaching, publishing, committee work, and once in a long while some leisure) I seem barely capable of writing one blog post a week, let alone doing fully costed pricing analysis of policy initiatives. The incentives are simply not there for me to spend my time on being a fulltime watchdog.
I am not convinced that the PBO guys are going to be better macro forecasters than anyone else. On that point, I have some sympathy for the Fraser Institute argument. But that's not what we're paying the PBO to do. We're paying them to a) translate those macro forecasts into fiscal projections and b) price policy initiatives coming out of Parliament.
I just don't see anywhere else in Canada that you have 5 or 6 economists devoted full time to these tasks, with access to the data necessary to do it. Yes, banks and thinktanks do produce the occasional report. But this is far short of what can be done by even a small fulltime staff dedicated to this task.
The three million dollars that the PBO costs is a rounding error on a budget of $260 billion. In fact, let me do the math. It's 0.00154% of 260 billion. In terms of time, the federal government spends 3 million every 6 minutes. I think it is worth spending 0.00154% of our federal budget to monitor and study how the other 99.99846% is spent.
Let me leave with one more quote from the National Post piece:
Indeed, this switch has minimized the government’s ability to fudge budget numbers for political advantage.
Were these Fraser Institute guys even around in the Fall of 2008?
