Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Tuesday, June 07, 2005

Vouchers for Child-Care?

Back in February, when assessing the new Canadian budget, I wrote:

The big mistake: federal gubmnt funding for child care, which has likely created yet another costly entitlement programme. This is almost a moral hazard problem in that guaranteeing young couples that the gubmnt will pick up the day-care tab will induce more of them to have more children(see these links for other criticisms); I don't see any reason to subsidize this activity any more than subsidizing the purchase of big recreational vehicles (Phil Miller refers to his children as "the durables"). As of now, it appears to be a voucher-like plan, but just wait. My prediction is that the feds will become increasingly involved and squeeze the private schools out.
My prediction is already coming true. Our interventionist minority gubmnt has proposed a federal-provincial partnership to provide child-care.

This particular program is for regulated child care, regulated early learning," he said.
[Former hockey goalie great and minister in charge of the programme, Ken] Dryden said Ottawa is building the foundation for a national early learning child-care system through the program, which will bolster infrastructure and improve training and pay for child-care workers."This is not custodial; this is not babysitting; this is something that has very important learning and development intentions," he said.
Brian Ferguson has a detailed smackdown of the plans at A Canadian Econoview. He sardonically points out,

Giving families a children's allowance would permit them to spend it on the type of child-care that est suits their needs, and would also permit it to be taxed back from high income families. That won't happen, for the simple reason that the feds don't trust us to spend money wisely. Ottawa knows that if they don't control how every dollar is spent, the whole fabric of society will crumble.
The more I see of the plan, the more I'm reminded of Maoist China: take the kids out of the home, make the parents work, and make the kids attend only those schools/camps that teach the approved approaches to life. Phhht.

I hope Canadians don't buy into this centralization and control by elitists who think they know what is good for everyone.

For a very sensible view of child care economics, see the most recent Fraser Forum, which is devoted to the topic.
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