$1 billion Federal Aid Package & Employment - Why?

[blueblood]

I don't know that greenhouse gases have anything to do with my ego.

Ethanol has been sold as a green energy. It isn't. It is doing more damage than oil is doing now.

Unemployment is at historic lows. If there is to be rural development, it shouldn't come by investing in an energy scheme that is worse than what we have presently. It shouldn't be done if are going to face retaliation from NAFTA and the WTO.

Reducing taxes for companies shouldn't result in trade action from NAFTA and the WTO.

[August1991]

I don't know that greenhouse gases have anything to do with my ego.

Ethanol has been sold as a green energy. It isn't. It is doing more damage than oil is doing now.

Dobbin, read to the end of your cited article:

One the more positive side of the equation, both research teams conclude producing biofuel from waste and growing biofuel on abandoned agricultural lands will incur little or no carbon debt.

The study's extreme and misleading stats are based on the idea of burning Indonesian jungles and planting soya instead. At present, no one is suggesting that. Instead, the idea is to use existing or abandoned farmland to grow corn. This kind of ethanol does less harm to the environment than fossil fuels.

The article raises relevant questions about carbon sinks however. We simply don't know how we emit carbon dioxide into the atmosphere and how the environment absorbs it.

Edited February 12, 2008 by August1991

[msj]

Touché.

Anyway, for all I know, the unemployment rate in China is very low but that doesn't make China a rich society.

Or considering your idea at face value, I wonder how taking $1 billion from one group of people and giving it to another group of people really makes a country overall better off?

Which is my idea? That you are hypocritical?

I never commented on the $1 billion waste in my post above.

I did point out that the CPC cannot seriously claim to be even attempting to do the right thing especially when they continuously increase spending at rates higher than population growth + inflation.

There's the administrative costs of moving the money around, and surely the group who loses the money will find ways to avoid handing over the cash. I'm sure too that the group of potential recipients will jockey to get a bigger share. As they say, it's costly to hand out money for free and a government that indulges in this too often just seems to impoverish everyone.

They should just do what the US has been doing for 20+ years now - print money like it's never going to go out of style and allow deregulation create liar loans which can be covered up for a few years by ABCP's and CDO's.

Yeah, that sure is gonna turn out well in the end.

[jdobbin]

Dobbin, read to the end of your cited article:

The study's extreme and misleading stats are based on the idea of burning Indonesian jungles and planting soya instead. At present, no one is suggesting that. Instead, the idea is to use existing or abandoned farmland to grow corn. This kind of ethanol does less harm to the environment than fossil fuels.

The article raises relevant questions about carbon sinks however. We simply don't know how we emit carbon dioxide into the atmosphere and how the environment absorbs it.

They are not just based on the Indonesian jungles. It is based on moving onto Canadian wetlands, grasslands and peat to chase bio-fuel dollars. That is in the article too.

There may be a market for wood chip bio-fuel but why does the Canadian public have to subsidize it and other ethanol use?

Edited February 12, 2008 by jdobbin

[August1991]

I did point out that the CPC cannot seriously claim to be even attempting to do the right thing especially when they continuously increase spending at rates higher than population growth + inflation.

I agree completely. (It's worse than what you state. Federal spending is growing faster than nominal GDP.) The one favourable point here is that in this particular case, Harper held the damage to $1 billion which is probably spread over several years. IOW, this is minor given the size of the federal budget.

They should just do what the US has been doing for 20+ years now - print money like it's never going to go out of style and allow deregulation create liar loans which can be covered up for a few years by ABCP's and CDO's.

It doesn't appear that you know much about recent US monetary policy. Since 1979 and Paul Volcker, the US Fed has followed a relatively tight monetary policy dedicated to controlling inflation. This compares to the post-war period up to 1979 when the US Fed opened or closed the spigot according to political pressure.

If the US federal budget has pork and the occasional bridge to nowhere, the Canadian federal budget is an awe-inspiring cornucopia of transfers between individuals, to special interest groups and to other levels of governments.

msj, you seem to be under the delusion that government spending actually makes a country richer. The OP intended to draw attention to the fact that government largesse often has nothing to do with poverty.

As to your comment about deregulation and ABCP, this is the way financial markets work. Government regulations generally make things worse because they just confuse everyone. You have to take the long term view here.

Edited February 12, 2008 by August1991

[blueblood]

They are not just based on the Indonesian jungles. It is based on moving onto Canadian wetlands, grasslands and peat to chase bio-fuel dollars. That is in the article too.

There may be a market for wood chip bio-fuel but why does the Canadian public have to subsidize it and other ethanol use?

In one of your previous posts you were suggesting to lower corporate taxes, but when myself or August is suggesting that for a wood chip ethanol or grain ethanol industry you are crying out subsidies and stuff, why the double standard on lowering taxes?

[msj]

I agree completely. (It's worse than what you state. Federal spending is growing faster than nominal GDP.) The one favourable point here is that in this particular case, Harper held the damage to $1 billion which is probably spread over several years. IOW, this is minor given the size of the federal budget.

It doesn't appear that you know much about recent US monetary policy. Since 1979 and Paul Volcker, the US Fed has followed a relatively tight monetary policy dedicated to controlling inflation. This compares to the post-war period up to 1979 when the US Fed opened or closed the spigot according to political pressure.

If the US federal budget has pork and the occasional bridge to nowhere, the Canadian federal budget is an awe-inspiring cornucopia of transfers between individuals, to special interest groups and to other levels of governments.

msj, you seem to be under the delusion that government spending actually makes a country richer. The OP intended to draw attention to the fact that government largesse often has nothing to do with poverty.

As to your comment about deregulation and ABCP, this is the way financial markets work. Government regulations generally make things worse because they just confuse everyone. You have to take the long term view here.

Actually, I was being sarcastic but I guess my comment "Yeah, that sure is gonna turn out well in the end" is over your head.

You are completely wrong about US Fed policy. Yes, Volker did a great job only to be undone by Greenspan and, possibly, Bernanke.

The US, and by extension Canada, couldn't properly measure inflation even if it was staring them in the face.

It should also be obvious that I don't think government spending makes a country richer given that I have been critical of the CPC for spending more in their two budgets as I have already mentioned above - twice actually - and now thrice!

As for deregulation - well the US is in the process of finding out just what happens when you let the markets do whatever they like.

I suggest you read people like Barry Ritholtz and John Mauldin and wake up. The MSM is feeding you a bunch of nonsense and you obviously swallow it hook, line, sinker, and fisherman (or woman, as they say in Life of Brian).

[jdobbin]

In one of your previous posts you were suggesting to lower corporate taxes, but when myself or August is suggesting that for a wood chip ethanol or grain ethanol industry you are crying out subsidies and stuff, why the double standard on lowering taxes?

Because lowering taxes is not a subsidy. It is a cross the board reduction in taxes for business. A subsidy is money going to a single industry. I don't believe that the subsidy for ethanol is a good one.

[blueblood]

Because lowering taxes is not a subsidy. It is a cross the board reduction in taxes for business. A subsidy is money going to a single industry. I don't believe that the subsidy for ethanol is a good one.

So lowering taxes for corporations/small business is bad when the oil industry/ethanol industry benefit from it, but when the manufacturing (automakers for instance) sector benefits from it, it's good.

If that's a Liberal position on things, I'm confused. That's their position on lots of other things.

[jdobbin]

So lowering taxes for corporations/small business is bad when the oil industry/ethanol industry benefit from it, but when the manufacturing (automakers for instance) sector benefits from it, it's good.

If that's a Liberal position on things, I'm confused. That's their position on lots of other things.

I never said lowering taxes was bad. That was you. I said that lowering corporate taxes was the better solution than a subsidy for the ethanol business.

The ethanol business forces consumers to use their product. We have no choice. In Manitoba, all consumers of gas have to use ethanol whether they want to or not. What are you farmers? Socialists?

[blueblood]

I never said lowering taxes was bad. That was you. I said that lowering corporate taxes was the better solution than a subsidy for the ethanol business.

The ethanol business forces consumers to use their product. We have no choice. In Manitoba, all consumers of gas have to use ethanol whether they want to or not. What are you farmers? Socialists?

You also say that when lowering corporate taxes in Alberta is a subsidy for the oil industry.

Well we are forced to use the CWB whether we want to or not and those ethanol consumers are not going to be faced with jail time. We're also forced to use low sulfur diesel fuel and put catalytic converters on all exhaust. What's a little ethanol?

So what if the gov't helps out with these plants, they get the money back through taxes and a strengthened economy. That's why the gov't invests in businesses, it makes economic sense. It's also why shareholdes invest in corporations, what's wrong with the gov't being a shareholder? Is it not allowed to make money and reduce taxes across the board?

[jdobbin]

You also say that when lowering corporate taxes in Alberta is a subsidy for the oil industry.

Well we are forced to use the CWB whether we want to or not and those ethanol consumers are not going to be faced with jail time. We're also forced to use low sulfur diesel fuel and put catalytic converters on all exhaust. What's a little ethanol?

So what if the gov't helps out with these plants, they get the money back through taxes and a strengthened economy. That's why the gov't invests in businesses, it makes economic sense. It's also why shareholdes invest in corporations, what's wrong with the gov't being a shareholder? Is it not allowed to make money and reduce taxes across the board?

Where did I say that lowering corporate taxes was a subsidy? I said direct subsidies for an industry like oil is not needed when the market is setting record rates. I have no problem with lowering corporate taxes across the board. The ethanol business is getting a direct $1.5 billion investment and forcing consumers to use their product. And all of this is occurring under the dubious premise of being better for the environment. Farmers are all too happy about getting great prices on their product even if it does nothing for the environment and in fact, might hurt it. One wonders how they will feel if warming temperatures actually force them out of business anyway.

Last I heard, a majority of farmers want the Wheat Board. If you don't want it, vote Tory. However, you can't have an open market and the Wheat Board. It is one or the other. The WTO does not allow a state trading enterprise if it is not a single desk market.

What you are suggesting is socialism. Are you not a Conservative?

Edited February 12, 2008 by jdobbin

[blueblood]

Where did I say that lowering corporate taxes was a subsidy? I said direct subsidies for an industry like oil is not needed when the market is setting record rates. I have no problem with lowering corporate taxes across the board. The ethanol business is getting a direct $1.5 billion investment and forcing consumers to use their product. And all of this is occurring under the dubious premise of being better for the environment. Farmers are all too happy about getting great prices on their product even if it does nothing for the environment and in fact, might hurt it. One wonders how they will feel if warming temperatures actually force them out of business anyway.

Last I heard, a majority of farmers want the Wheat Board. If you don't want it, vote Tory. However, you can't have an open market and the Wheat Board. It is one or the other. The WTO does not allow a state trading enterprise if it is not a single desk market.

What you are suggesting is socialism. Are you not a Conservative?

For the record I don't approve of the 1.5 billion investment, rock bottom taxes are a better way of doing things.

What I am suggesting is not socialism, it is a way of prolonging our oil reserves, creating an industry that provides jobs so we don't have people on welfare, so we can have lower taxes. I am forced to burn low sulfur diesel fuel, why can't others burn some ethanol?

A majority of farmers want the Wheat Board when it's convenient for them in a full free market where they can choose to go with or without the wheat board when it best suits them. If your worried about duties being slapped on wheat because of the WTO, then we'll pay the damn things or use the grain ourselves, we are the 5th largest exporter of grain, if others want to play games like that they can go without. China charges a 9% tariff on Canola.

The WTO thing is concerning Canada is hypocrisy anyways; Canola and the other grains for export don't fall under the CWB, yet Wheat and Barley do. Why should one grain be excluded and others included. Why does Ontario get to export it's grain without paying duties? IMO the WTO already allows the state trading in a non single desk market.

[jdobbin]

For the record I don't approve of the 1.5 billion investment, rock bottom taxes are a better way of doing things.

What I am suggesting is not socialism, it is a way of prolonging our oil reserves, creating an industry that provides jobs so we don't have people on welfare, so we can have lower taxes. I am forced to burn low sulfur diesel fuel, why can't others burn some ethanol?

A majority of farmers want the Wheat Board when it's convenient for them in a full free market where they can choose to go with or without the wheat board when it best suits them. If your worried about duties being slapped on wheat because of the WTO, then we'll pay the damn things or use the grain ourselves, we are the 5th largest exporter of grain, if others want to play games like that they can go without. China charges a 9% tariff on Canola.

The WTO thing is concerning Canada is hypocrisy anyways; Canola and the other grains for export don't fall under the CWB, yet Wheat and Barley do. Why should one grain be excluded and others included. Why does Ontario get to export it's grain without paying duties? IMO the WTO already allows the state trading in a non single desk market.

I'm glad that you agree that lower taxes is the way to go. I have been advocating lower income and corporate taxes for the last number of years.

The $1.5 billion investment in grain ethanol is distorting the market and changing farming practices. And all of this is done on the false premise that it is great for the environment. I'd rather have farm supports that take land off the market so that the land that is used for food is more profitable. That would be a true investment in farmers and in the environment. Ethanol can only operate in a subsidized and protected market that forces consumers to use it and makes them pay for it with taxes and higher food prices.

Once the open market happens, the Wheat Board will be gone. It would be best if farmers understood that. It isn't just grain that duties get slapped on when you are violation of the WTO. It will be on things like manufacturing or services. The Wheat Board will never operate in an open market system.

When oats went into the free market, the Wheat Board no longer traded in it. And so it would go with barley and wheat.

[Topaz]

Part of the problem for the auto sector was when the governments didn't renew the Auto Pact. That would force automakers who want to sell cars in Canada to produce them here and that would have kept the jobs here. Harper is now concerning it after talking to Hargrove today.

[geoffrey]

On the news tonight a company just announced that it will be moving out of the country with the lose of 1200 jobs, they made bumbers for ford, Another in Barrie that makes car parts is also moving out, lose of $300 jobs.

There are lots of people looking for work right now, there is something funny going on in the figures we are getting. Does Harper have his hand in this too?

Come to Calgary, we've got lots of jobs. Or Fort Mac.

The government shouldn't be in the business of propping up (aka "revitalizing") towns just because they look nice or that people like living there. Alberta has a labour shortage (and now Saskatchewan and BC are feeling labour tightening) because the government encourages people to not work and be unemployed bums.

The solution to unemployment is quite simple. Put these people on a bus and move them out here. We can put apparently skilled autoworkers to use out here. They may have to realise they've been overpaid all along and their union bosses won't protect them, but hey, that's real life.

The government should never get involved in this sort of activity. This is a primary reason for my dismissal of equalisation. The Federal government tends to act completely contrary to our (Alberta's) interests when Ontario or Quebec are weak or vice versa. It esclates economic imbalances more so that it corrects them. The fundamentals are jobs and inflation, not government spending per capita. We shouldn't be funding the machine that is making us suffer with high inflation.

[blueblood]

Come to Calgary, we've got lots of jobs. Or Fort Mac.

The government shouldn't be in the business of propping up (aka "revitalizing") towns just because they look nice or that people like living there. Alberta has a labour shortage (and now Saskatchewan and BC are feeling labour tightening) because the government encourages people to not work and be unemployed bums.

The solution to unemployment is quite simple. Put these people on a bus and move them out here. We can put apparently skilled autoworkers to use out here. They may have to realise they've been overpaid all along and their union bosses won't protect them, but hey, that's real life.

The government should never get involved in this sort of activity. This is a primary reason for my dismissal of equalisation. The Federal government tends to act completely contrary to our (Alberta's) interests when Ontario or Quebec are weak or vice versa. It esclates economic imbalances more so that it corrects them. The fundamentals are jobs and inflation, not government spending per capita. We shouldn't be funding the machine that is making us suffer with high inflation.

Alberta has also gotten a nice hand up from the government as well. If it weren't for the pro-business policies of the government, where would Alberta be? The NDP accuses the feds of offering subsidies to the oil companies which enables them to make money and provide jobs and boost the economy.

[geoffrey]

Alberta has also gotten a nice hand up from the government as well. If it weren't for the pro-business policies of the government, where would Alberta be? The NDP accuses the feds of offering subsidies to the oil companies which enables them to make money and provide jobs and boost the economy.

The accelerated CCA also exists for many manufacturing applications. It essientially just defers income tax expense into a longer term liability. It's not a tax break for anyone that understands how this works, just spreads the tax effects revenue earned on expensive equipment over a long period. The government does lose the time value of the earnings but realises the nominal value of the taxes quite closely (unless there are overall corporate tax changes).

[HistoryBuff44]

I'm glad that you agree that lower taxes is the way to go. I have been advocating lower income and corporate taxes for the last number of years.

The $1.5 billion investment in grain ethanol is distorting the market and changing farming practices. And all of this is done on the false premise that it is great for the environment. I'd rather have farm supports that take land off the market so that the land that is used for food is more profitable. That would be a true investment in farmers and in the environment. Ethanol can only operate in a subsidized and protected market that forces consumers to use it and makes them pay for it with taxes and higher food prices.

Once the open market happens, the Wheat Board will be gone. It would be best if farmers understood that. It isn't just grain that duties get slapped on when you are violation of the WTO. It will be on things like manufacturing or services. The Wheat Board will never operate in an open market system.

When oats went into the free market, the Wheat Board no longer traded in it. And so it would go with barley and wheat.

I am curious to hear what your opinion is in regards to the multi billions that have been spent by the liberals in their vain attempt to keep the auto industry afloat. do you consider that to be a waste?

its interesting that you say the WTO doesnt allow state run and open market selling of grain, why then is the "Canadian" wheat board only really for the praries; the east isnt bound by it? Does Ontario have a provincial system for selling grains produced there?

[jdobbin]

I am curious to hear what your opinion is in regards to the multi billions that have been spent by the liberals in their vain attempt to keep the auto industry afloat. do you consider that to be a waste?

I do.

its interesting that you say the WTO doesnt allow state run and open market selling of grain, why then is the "Canadian" wheat board only really for the praries; the east isnt bound by it? Does Ontario have a provincial system for selling grains produced there?

Federal state trade enterprises that operate as single desk sellers of a product are allowed. Provincial trade boards are not covered under NAFTA or under certain WTO guidelines.

Once the single desk is gone on a product, the state trade enterprise is not allowed.