STATISTICS ARE USELESS WITHOUT COMMON SENSE

Statistics are pretty meaningless, or misleading – unless you apply common sense. In Canada they have a federal program called Equalization. The federal government collects taxes, and then redistributes the money to top up the budgets of the poorer provinces, purportedly so all Canadians can have access to a roughly equal lifestyle. What in fact happens is that receiving provinces often use the money to provide better services than the contributing provinces.

In Quebec you can take your kids to daycare for $7. Not per hour; per day. Quebec gets the largest share of Equalization,  and is over $200 billion in debt. Alberta contributes the most, and has no debt. For American readers, soon to go to the polls; that that is how it works when politicians and bureaucrats get into the redistribution business. Caveat emptor!

What these hare brained equalization /  redistribution schemes fail to consider is that the average cost of living in a poorer province or state is usually less than that in a wealthier province or state. (I misspoke. It’s not the schemes that are hare brained, its the people who throw them together to buy our votes. And if it works, it’s us.)

For example:  in the United States in 2008 – 2009,  Mississippi had the lowest median household income – $35,693. The Northeast had 4 of the wealthiest states and the South had 9 of the poorest ones. However, when differences in local cost of living were factored in, a Mississippian earning $38,000 could live as well as a New Yorker in Manhattan earning $93,000.

Common sense would suggest that unless all the costs of living can be accurately and fairly factored in, and all the advantages and disadvantages – very subjective here – of living in one place over another, (hard to go fishing on Manhattan; limited live theater in Mississippi, can’t climb mountains in Saskatchewan), that governments would be well advised to keep their noses out of income redistribution, and let people choose to move to where the jobs they are suited for are; and to where they want to live.

Going back for our future

Dave

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