We're Not Back In 1995

[Shady]

We're Not Back In 1995

The federal deficit is out of control. Canada is in the midst of another fiscal crisis. Or so goes the conventional wisdom. But the conventional wisdom is wrong.

To be sure, the federal deficit, now $56 billion, is non-trivial. But it is nothing like the deficits of the 1980s and 1990s in its size relative to the economy, or as a percentage of Gross Domestic Product (GDP), the most important measure. In those days, deficits charted in at five to eight per cent of GDP, as opposed to about 3.5 per cent today.

More importantly, the Trudeau and Mulroney deficits of the '70s, '80s and '90s eventually came to have a pernicious effect on the economy overall, fuelling inflation, driving up interest rates and exacerbating unemployment. Today's federal deficit is quite the opposite. It was designed to stimulate the economy to weather the worst global recession in 80 years. It is mostly time-bound, consisting of temporary program spending that will tail off in two to three years.

So to sum up, 2009 is not 1995 -- a time when deficits were the source of almost all ills and had to be the focal point of federal action.

Ottawa Citizen

I think the author makes a pretty strong point. I myself am not a very big fan of any deficits. I consider myself a Mike Harris conservative. However, seeing as though we've gone through one of the worst global recessions in quite a long time, it baffles me as to why some people are so bent out of shape about our current deficit. Especially when the vast majority of it is non-structural in nature.

It's as if certain people want to ignore the economic reality of the last year or so, and pretend that it didn't happen. If there's anytime when running a deficit is necessary, it's during difficult economic times. That being said, when strong economic growth returns, I expect and demand that the budget is tightened, so that debt can be paid off again on an annual basis.

[Sir Bandelot]

It's as if certain people want to ignore the economic reality of the last year or so, and pretend that it didn't happen.

Honky Jive

My view is, it didn't happen. Not in Canada. At least that was the initial reaction of our own government before the lying started. Why we ended up paying anyway is subject to debate.

Edited October 21, 2009 by Sir Bandelot

[GostHacked]

It's as if certain people want to ignore the economic reality of the last year or so, and pretend that it didn't happen. If there's anytime when running a deficit is necessary, it's during difficult economic times. That being said, when strong economic growth returns, I expect and demand that the budget is tightened, so that debt can be paid off again on an annual basis.

You have GOT to be kidding me Shady. You will give this a pass, but yet blame Obama in the US for all their financial woes, and say that there is no reason to have that kind of deficit.

Just wanted to point this out to you.

[dre]

To be sure, the federal deficit, now $56 billion, is non-trivial. But it is nothing like the deficits of the 1980s and 1990s in its size relative to the economy, or as a percentage of Gross Domestic Product (GDP), the most important measure.

The guy is flat out wrong. GDP isnt the pool that money used to maintain the federal debt comes from. That money needs to come from the federal budget, and the important measure is debt as a percentage of the federal budget. The link between GDP and federal revenue is loose at best. Its almost like the author doesnt even know what the federal debt is.

[Shady]

My view is, it didn't happen. Not in Canada.

Well, I suggest you take a visit to places like Windsor and Oshawa, and explain that to them. And while you're there, maybe you can give them their old jobs back.

You have GOT to be kidding me Shady. You will give this a pass, but yet blame Obama in the US for all their financial woes, and say that there is no reason to have that kind of deficit.

Just wanted to point this out to you.

Surely you can acknowledge the difference between a small deficit, mostly attributed to stimulus spending, versus a nearly 2 trillion dollar deficit, which consists of mostly non-stimulus spending.

Cutting spending and/or raising taxes during a recession is the last thing you want to do. And the same is even more true for a bad recession. Unless of course you want to make things worse.

[Sir Bandelot]

Well, I suggest you take a visit to places like Windsor and Oshawa, and explain that to them. And while you're there, maybe you can give them their old jobs back.

True enough, the difference being they are dragged down by the US economy, and are US companies. But in regards to the banks, or the health of the Canadian economy, it's all smoke and mirrors.

Harper noted Canada has not had to subsidize its banks, has a low and stable inflation rate, and has a diverse economy that should help the country weather the storm.

"The reality is this: Things are very tough," he said. "We know that. But Canadians should not lose sight of the fact that we remain in a relatively good position compared to other countries."

http://www.cbc.ca/canada/story/2009/03/18/...ge-economy.html

Hard to find the other quotes by Harper and Flaherty at the time, due to excessive media obfuscation (information overload)

But you get the idea

[Dave_ON]

I myself am not a very big fan of any deficits. I consider myself a Mike Harris conservative.

So many problems with these two sentences so little time.

Suffice it to say that if you're not a big fan of deficits you are ipso facto not a Mike Harris conservative. You are perhaps 1 of about 5 people in all of Ontario, if not Canada, that is a Harris Fan.

If however you believe in cooking the books, selling off crown assets to cover up fiscal shortfalls and leaving your province in worse shape than you found it in, well then by all means carry on.

[Shady]

So many problems with these two sentences so little time.

Suffice it to say that if you're not a big fan of deficits you are ipso facto not a Mike Harris conservative. You are perhaps 1 of about 5 people in all of Ontario, if not Canada, that is a Harris Fan.

If however you believe in cooking the books, selling off crown assets to cover up fiscal shortfalls and leaving your province in worse shape than you found it in, well then by all means carry on.

That's complete nonsense. However, if you actually meant balancing the budget, cutting people's taxes, creating hundreds of thousands of new jobs, improving Ontario's credit-rating, paying off billions of dollars of provincial debt, and turning around the province after the disasterous Ray Days, then yes.

[Dave_ON]

That's complete nonsense. However, if you actually meant balancing the budget, cutting people's taxes, creating hundreds of thousands of new jobs, improving Ontario's credit-rating, paying off billions of dollars of provincial debt, and turning around the province after the disasterous Ray Days, then yes.

You're right utter nonsense. The balanced budget was a result of selling crown assets, not due to sound fiscal management. Driven on the 407 recently? That's an excellent example of Harris Conservatism. Oddly enough it turns out when the Harris Conservatives were tossed right proper; the budget wasn't as "balanced" as he had led us to believe. We're still dealing with the fall out of the shortfalls to this very day in Ontario.

However, I digress and this is vastly off topic for the Federal forums. Perhaps we should move this discussion to the provincial politics forums?

[Shady]

However, I digress and this is vastly off topic for the Federal forums. Perhaps we should move this discussion to the provincial politics forums?

Yes, that's probably a good idea.

[Moonbox]

So many problems with these two sentences so little time.

Suffice it to say that if you're not a big fan of deficits you are ipso facto not a Mike Harris conservative. You are perhaps 1 of about 5 people in all of Ontario, if not Canada, that is a Harris Fan.

If however you believe in cooking the books, selling off crown assets to cover up fiscal shortfalls and leaving your province in worse shape than you found it in, well then by all means carry on.

Other than the 407 sell off, which was a fiasco, he did a good job. Mike Harris is well liked and and still supported by the vast majority of the people who voted for him. It took Ernie Eves and John Tory (both political idiots) to give crybaby Dalton a chance. Look how he's done...

[Smallc]

It took Ernie Eves and John Tory (both political idiots) to give crybaby Dalton a chance. Look how he's done...

Yes, the crybaby Dalton...way to keep it above the belt. The fact that he balanced the budget that was never really balanced by Harris shows that he was a terrible fiscal manager.

As I said before, there are about 6 people in Canada that like Mike Harris...about the same number that like Bob Rae...about half of them post here.

[normanchateau]

I myself am not a very big fan of any deficits.

You're not alone.

October 6, 2008: "I know economists will say well, we could run a small deficit but the problem is that once you cross that line as we see in the United States, nothing stops deficits from getting larger and larger and spiralling out of control." - Stephen Harper

[Hydraboss]

Yes, the crybaby Dalton...way to keep it above the belt. The fact that he balanced the budget that was never really balanced by Harris shows that he was a terrible fiscal manager.

As I said before, there are about 6 people in Canada that like Mike Harris...about the same number that like Bob Rae...about half of them post here.

"I will not raise taxes."

Ring a bell?

"I will get rid of the GST!"

Ring another bell?

Dalton is a bold faced liar. Please, try to dispute that.

[Smallc]

"I will not raise taxes."

I do. I also remember him finding a hidden structural deficit. I don't dispute that he broke his promise though.

"I will get rid of the GST!"

I do, and I also know that he was actually sneakily speaking of the creation the HST which didn't spread like he had hoped at the time....I don't know what Chretien has to do with McGuinty though.

[Hydraboss]

I do. I also remember him finding a hidden structural deficit. I don't dispute that he broke his promise though.

I do, and I also know that he was actually sneakily speaking of the creation the HST which didn't spread like he had hoped at the time....I don't know what Chretien has to do with McGuinty though.

Just noting the similarities between two liberals. Seems to be a pattern.

When people slam Harris as the "evil conservative", they most often forget to look in the mirror to see a liberal standing there.

[Smallc]

When people slam Harris as the "evil conservative", they most often forget to look in the mirror to see a liberal standing there.

I wasn't doing any such thing so I think your plan backfired. I don't like Harris...it has very little to do with him being a conservative and more to do with a dislike of his style and his policies. I happen to like McGuinty, and not because he's a Liberal. I feel like I can trust most of what he says. He seems like a generally warm a good person, who is in a very tough situation at the time.

Chretien was a completely different kind of Liberal. I certainly don't feel the same about him as I do about McGuinty. I respect him, much in the same way I respect Harper. I have little problem with the way the current Conservative government has preformed on the federal stage. I do have problems with the corruption and dishonesty that seems to have become more constant over the last year and as such it gives me pause. That said, the Conservatives are still the best people for the job as of now, and so I support them in a tentative way.

As I told you the other day, things are very rarely black and white.

[Keepitsimple]

I wasn't doing any such thing so I think your plan backfired. I don't like Harris...it has very little to do with him being a conservative and more to do with a dislike of his style and his policies. I happen to like McGuinty, and not because he's a Liberal. I feel like I can trust most of what he says. He seems like a generally warm a good person, who is in a very tough situation at the time.

Chretien was a completely different kind of Liberal. I certainly don't feel the same about him as I do about McGuinty. I respect him, much in the same way I respect Harper. I have little problem with the way the current Conservative government has preformed on the federal stage. I do have problems with the corruption and dishonesty that seems to have become more constant over the last year and as such it gives me pause. That said, the Conservatives are still the best people for the job as of now, and so I support them in a tentative way.

As I told you the other day, things are very rarely black and white.

I can understand saying the Conservatives are less than forthright, if not dishonest at times - and certainly they've been highly partisan......but I have not seen any "corruption" from this government.

[normanchateau]

I can understand saying the Conservatives are less than forthright, if not dishonest at times - and certainly they've been highly partisan......but I have not seen any "corruption" from this government.

Are you suggesting that the Cadman family lied?

http://www.ctv.ca/servlet/ArticleNews/stor...me=&no_ads=

[Smallc]

but I have not seen any "corruption" from this government.

I can see the starts of it with the defense of the most recent 'scandal'. The Liberals did it, so it's ok. I didn't think it was much of anything, until that excuse came up. I see the beginnings of complacency and dishonesty. Corruption can't be far behind.

[Keepitsimple]

I can see the starts of it with the defense of the most recent 'scandal'. The Liberals did it, so it's ok. I didn't think it was much of anything, until that excuse came up. I see the beginnings of complacency and dishonesty. Corruption can't be far behind.

I understand your concerns but I feel compelled to defuse the stimulus "scandal". The quote about the Liberals doing it so it's OK is misworded.....I doubt anyone ever said "so it's OK". I posted this a few minutes ago in another thread but it bears repeating because there really is no "scandal" - which is actually absolutely amazing given the speed and size of the stimulus......I'm sure there will be a few snafus coming though. It's just a shame that one of the biggest undertakings in Canadian history at one of our most difficult times has to be attacked.....but I guess that's the job of the Liberals at this sorry point in their history.

The issue is not whether through various calculations, more money went to Tory ridings...the issue is whether there was any overt partisanship in selecting the "projects". Projects are chosen in conjunction with the Provinces and Minicipalities - that's a fact. George Smitherman has acknowledged that at this point in time, more money has gone to Tory ridings - but in working with the Harper government, he has not seen any unfair treatment and across all Federal funding envelopes, he expects things will work out equitably - that's a fact. The Smitherman article also pointed out that Toronto fared better than other parts on Ontario - and they have NO Tory ridings - that's a fact. And from one of the previous articles, here's a quote from the Federation of Canadian Municipalities:

In Ottawa, leaders of the Federation of Canadian Municipalities complained of delays in getting federal infrastructure cash out the door and they worried about the rules for some of the programs. But, they too, had no complaints about partisan interference.

"I personally have not heard anything about a conspiracy or the fact that perhaps the money was going to the wrong ridings for the wrong reasons," said Hans Cunningham, a vice-president with the Federation of Canadian Municipalities and the director of the regional district of Central Kootenay, B.C.

[Jerry J. Fortin]

All this is very nice, but the real consideration is the fact that spending is off the scale and debt is piling up. The issue of where the money goes seems to be of popular concern, the fact that it is going somewhere at all doesn't seem to be.

All of this spending is going into private interests, with the hope that jobs are being created. It is a false hope. The truth is that the private sector is being "given" tax dollars. For me, that isn't something that is good. It is bad. We are getting things ass backward here. Private interests should be interested in anything but government funding. The entire stimulus effort is a net transfer of public wealty into private hands.

[Smallc]

I understand your concerns but I feel compelled to defuse the stimulus "scandal". The quote about the Liberals doing it so it's OK is misworded.....I doubt anyone ever said "so it's OK".

Actually, John Baird said something rather close to that. It was certainly implied. It's the beginning of abuse of power, and it's worrying.

[Smallc]

The issue is not whether through various calculations, more money went to Tory ridings...the issue is whether there was any overt partisanship in selecting the "projects". Projects are chosen in conjunction with the Provinces and Minicipalities - that's a fact. George Smitherman has acknowledged that at this point in time, more money has gone to Tory ridings - but in working with the Harper government, he has not seen any unfair treatment and across all Federal funding envelopes, he expects things will work out equitably - that's a fact. The Smitherman article also pointed out that Toronto fared better than other parts on Ontario - and they have NO Tory ridings - that's a fact. And from one of the previous articles, here's a quote from the Federation of Canadian Municipalities:

I would be fine if they had defended it that way, and I agree, there is no scandal. The answer is the problem for me.