I’m very tired of reading articles in the media about how Canada (or Ontario) has a “record debt” and how this is a terrible thing. The articles tend to miss the point that the total amount of debt is not as important as the ratio of debt to GDP (gross domestic product, a measure of the total economic activity of the country/province).

Analogy time: Suppose you owe the bank 1 million dollars. A lot of money, right? Well, it depends. If you earn $20 000 a year, your debt-to-income ratio is 50, and paying that back is going to take a very, very long time (50 years even if 100% of your income went to debt repayment and you had to pay no interest). The bank would be reasonable in being concerned if you could ever pay that off. But if you earn $10 million a year, your debt to income ratio is 0.1 and you could pay that debt off easily this year.

(Surgeon General’s Warning: comparing the economy of a state/province/country to household economics may be hazardous to your analogy)

Scaling this up to a country, although GDP is not “income”, it does represent a measure of ability to pay. So the total amount owed is not as important as how the amount owes compares to the government’s ability to pay. Now because Debt-to-GDP is a ratio (it’s one number divided by another), there are two ways for governments to reduce this ratio.

#1) Reduce the debt - this is the popular choice all around the world these days, under various austerity programs and paying down the debt.

#2) Increase GDP - this option appears to be ignored, probably because governments seem to believe that they have no ability to increase GDP through their actions. This is a point of ideological contention (but for the record, I believe government actions can increase GDP).

Angela Merkel and friends appear to be very, very fixated on the first option — reduce the debt — but her new Euro-partner François Hollande thinks the second is much more important.

As for whether the austerity plans are working or if growth is more important, that’s another post entirely - but this concludes the public service announcement.

I work from home relatively frequently (although I do go into the office sometimes). When I tell people this, the number one most frequently asked question is if I have trouble remaining focused and getting work done. The answer is no; for me it’s rather like it was at university. It requires some self-discipline but I needed that to get through engineering school. 

More than that, however, I can avoid a number of work impediments that happen in typical offices:

1. The Commute
Technically this isn’t in the office at all, but the co,ute is one thing I love to skip. Even if the commute is relatively short, who hasn’t had the experience of a frustrating commute (bus doesn’t come, train breaks down, traffic unbelievably horrible, road construction). Arriving at the office frustrated and stressed is bad for productivity.

2. Bad Meetings
Just about everyone has had to go to a boring meeting that was nothing but a work impediment now and again. Although there can be very productive meetings, there are lots of bad ones too. And I rarely have to attend meetings when working from home.

3. Co-worker Interruptions
When was the last time somebody came by your desk and attempted to strike up an irrelevant conversation (or show you the latest awesome cat video on YouTube)? At home, nobody wanders by my desk for a random chat.

4. Weather
If the winter weather prevents me from going to work, it doesn’t prevent me from doing work (maybe this is a negative in some people’s books). Similarly, if the weather has just turned awesome and there’s some “spring fever” in the air (preventing people from concentrating because of the nice weather) — I just relocate to the outdoors and continue working in the beautiful sunshine.

Obviously, there are lots of downsides to not being at the office - I miss the good meetings, don’t get to interact with co-workers, and sometimes teamwork is a struggle - but I just set out to counter the perception that working from home makes it harder to get work done.

Here’s a scandal that could get ugly: in the 2011 Canadian Federal Election, voters received calls with pre-recorded messages that were intentionally misleading about where their polling stations were. Other reports indicate that some calls came from actual humans who were  impersonating opposing candidates and their organizations and being intentionally rude to voters. 

There is an investigation pending. Thus far it isn’t proven that there was some sort of concerted effort, but report show around 30 different election campaigns were involved. So it’s probably not a coincidence.

Let’s assume when the investigation is complete it is proven that this was a concerted effort by the Conservative Party and that they benefited from this.  

But what would be an appropriate punishment for the crime? Obviously direct perpetrators would face fines and jail time, but what of the party that benefits from it?  Should there be by-elections in the contested ridings?

Whatever solution you propose, remember that it needs to be 1) appropriate to the crime and 2) has to be strong enough that it discourages bad behaviour in the future.

My pessimistic (realistic?) expectation would be that a bunch of campaign workers will be (metaphorically) thrown under the bus, and nothing will actually happen to the government or any of its leaders. There will be no by-elections, and no serious consequences. The end result will be that these tactics will become commonplace in the future.  After all - if cheating carries no punishment (or a trivial one), people are going to cheat.

One of the best things I’ve ever read about safety rules comes from a book called “The Logic of Failure” by Dietrich Dörner (original German title: „Die Logik des Misslingens”)

… breaking safety rules is usually reinforced, which is to say it pays off. Its immediate consequence is only that the violator is rid of the encumbrance the rules impose and can act more freely. Safety rules are usually devised in such a way that a violator will not be instantly blown sky high, injured, or harmed in any other way, but will instead find that his life is made easier.

In general, I think this is an excellent book and should be required reading for engineering students.

Book link (English): http://www.amazon.ca/Logic-Failure-Recognizing-Avoiding-Situations/dp/0201479486/ref=sr_1_1?ie=UTF8&qid=1324354694&sr=8-1

Book link (German): http://www.amazon.de/Mi%C3%9Flingens-Strategisches-Denken-komplexen-Situationen/dp/3499615789/ref=sr_1_cc_2?s=books-intl-de&ie=UTF8&qid=1324354728&sr=1-2-catcorr

US Speaker of the House John Boehner has suggested that an amendment to the US Constitution is needed to ensure a balanced budget. 

A balanced budget amendment sounds like a good idea, but they are not very practical. There are some economics arguments as to why, but we don’t even have to go into them. Let’s pick a practical example: wartime.

Suppose the US had such an amendment and another country declared war on the USA in 2020. With such an amendment, the USA would have to pay immediately for all the costs of fighting the war, either by raising taxes or by changing spending in the 2020 budget. Wars aren’t cheap, however, and the tax rates that would be necessary to fund such a war are astronomical. Normal (and rational) behaviour would be to accumulate some debt in the war years and then pay it back over a period of time once the war is over.

But, you say, what if there is a loophole for wartime?

The problem is, that a loophole like that is big enough to drive a truck (tank?) through. The US has been at war in Afghanistan for a decade and I’m sure if there had been a balanced budget amendment with a war exception, this exception would have been invoked every year of this past decade to cover all spending, war-related or not. 

A study of US constitutional law suggests that when an exemption or loophole exists in the law (particularly the constitution), over time, the definition of what qualifies to meet the terms of the exemption expands through various acts of congress or the interpretation of the courts. Suppose the bar were lower - a state of emergency, perhaps - well, it would not be hard to declare a state of emergency every year, would it?

Thus, I think a balanced-budget amendment without an exception would be dangerously constraining, and an amendment with an exemption would likely have no meaningful effect.

For the record, I believe the US needs to get its federal finances in order — I just think a balanced budget amendment might sound good as some sort of political posture, but it wouldn’t really work.

Soon it will be 10 years since the terrorist attacks of 11 September, 2001. As always, there are people who think there was a conspiracy or a coverup or something. Why don’t these theories die? The answer is quite simple, of course. 

Conspiracy theories never die because any evidence disproving that theory is dismissed as part of an even larger conspiracy. Expert analysis shows that it was plausible that the planes brought down the towers? The experts must have been in on it.