Raise the Hammer

James >> If there were some way to get the money for the stadium and instead spend it on something that would be actually useful

Like giving it back to individuals and businesses to buy what they want.

To understand the power of less government spending for improving the economy, at the start of 1996, Ontario government spending was 22.2% of GDP, by 2000 it was 18.9%. In that 5 year period, Ontario's economy averaged 4.8% per year.

As of the end of 2009, government consumption as a percent of GDP was 22.9%. During that 9 years, when government has been busy spending on public health and education, GDP has averaged 1.39%.

From the beginning of 1996 to the end of 2000, the value of new residential construction averaged 8.2% every year. From 2001 to 2009, this number was only 1.9%. Curiously enough, home prices have spiked dramatically since 2000, forcing home buyers to take on record debt levels due to the lack of supply of new homes.

In the 1996-2000 time period, Ontario exports averaged 7.9% a year. From 2001-2009, exports have averaged -1.3%. Our ability to create goods and services that the world wants to buy has not improved for almost a decade.

From 1996-2000, Ontario business spending on machinery and equipment averaged 10.4% a year. In the 2001-2009 time period, this number was 0.3%.

As for government spending, in the 1996-2000 time period, real spending (2002 dollars) averaged only 1.2% a year. The 2001- 2009 time period saw government spending average 3.8%, almost three times as fast as the overall economy.

As for how this relates to Hamilton, if we want a better economy with more and higher paying jobs, the best thing the city can do is reduce it's level of spending. This means now stadium, no LRT, no new anything until we allow the private sector to gain regain it's strength.

As you can see from the numbers I presented, high levels of government spending does not create private sector economic activity, it crowds it out.