3rd Party Spending in Action: Canada’s Economic Action Plan Advertisements

Posted: May 8, 2013 in Economics
Tags: , , , , , , , , , ,

Have you been watching playoff hockey lately? If you’re Canadian, the chances are you have. You would then have seen those commercials about Canada’s Economic Action Plan. It’s VERY hard to get under my skin, but every so often something comes along that just gets to me. Did you know you’re spending around $95 000 each time that advertisement plays; to be told that you’re spending money on improving the economy?

A while back I wrote a piece on the different ways money is spent, and I encourage you to go through it if you haven’t already. It explains how when you’re not spending your own money for yourself, it tends to get wasted. This is especially true when it’s not your money and it’s not for you, which is called third party spending.

If given that $95 000 to spend, even assuming you can’t spend it directly on yourself, how many people do you think would have chosen to spend it on that advertisement? I’ll bet anything that even the people who spent it on the ads would have spent it elsewhere if given the choice; if it wasn’t set for that campaigns budget by the government.

I recently read an article that showed the government has spent $113 million on these type of advertisements since 2009, that tell us they are doing a good job improving the economy. I’m not even going to go into whether the economy has actually improved, and what effect the rest of the plan has had. Let’s just look at these ads.

How much value was added to the economy from these ads? Since value is only added through production and services, there is very little. The prime minister has defended his actions by saying it boosts the confidence of Canadians; and this is true. When you consider the power of advertising, and how it brainwashes us to believe or act certain ways when viewing them repeatedly, there can be no doubt of this.

So confidence is boosted, but how does that boost the economy? Some would have you think that the more money is spent, the better the economy is doing; and this is also why many people believe the government can boost the economy by spending your money for you. The problem is that everyone is already spending too much money, as everyone is in debt; both the government and the general public.

As I go through in ‘Introduction to Economics’, wealth is created by producing something of value. The confidence is supposed to get people to spend money, but if nothing is actually produced then no wealth is created and thus the economy is not boosted. When the government spends money, it does so by taking it from taxpayers, believing it can spend it better; but 1st party spending vs 3rd party spending proves this to be false. So in the end, when the government spends money, it is not actually increasing the nations spending or output since that money has to come from taxpayers who can no longer spend it.

There are uses for the government, but we need to keep the 3rd party spending to a minimum. The only way we can do that is to limit the ability of the government to tax its citizens. As Orrin Woodward and Oliver DeMille proposes in LeaderShift, we need to limit the government to only be allowed to tax enough to cover essential services, and the only way to do that is have a set amount; without allowing them to go over it, and without allowing them to borrow money from our future or future generations.

Does anyone else cringe a little inside when you are shown that your money is being used to show you that your money is being misused?

Comments
  1. Brandon says:

    Yes, the ads are a terrible waste of taxpayer (including my) money, but you’re really undercutting the seriousness of your argument when you make simple grammar mistakes, like using “your” instead of “you’re”, which you do twice in the first paragraph alone (and several times more across the whole article).

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