Economy headed for the dumper

[socred]

Is it that we saved up in the previous years, and cut all the excess spending as to have money to spend in the down times. Wait no wait our government has made it do we will surely have a deficit in the coming years.

The money earned as income is costed into the cost of goods sold. If people saved their money for the "down times" they would instantly create the "down times" because the proportion of the money saved would immobilize the equivalent amount in goods and services.

Edited April 26, 2008 by socred

[socred]

Contrary to popular belief it is not spending that drives economic growth but saving.

Really??

So if everyone saved all their income, there would be unparalled economic growth?

Tell me, how would the companies producing goods and services sell their goods if nobody spent?

[sharkman]

Is it? Why is that? You'd think YOU'VE never heard of the Austrian Theory of the Business Cycle.

The Austrian Theory of the Business Cycle says that economies are not SUPPOSED to have recessions every now and then, but rather the business cycle is a product of artificial manipulations of the interest rates, and the malinvestment that is a result thereof.

Let me break it down for you.

Interest rates are artificially lowered (the 'real' interest rates should be determined by the market and it's determined by the percentage of savings) creating the boom. Entrepreneurs are fooled into making investments that look profitable, but aren't. Eventually these investments are proven to be uneconomic, and so they are liquidated. This is the bust.

If we abolished the Bank of Canada and went back to sound money there would be no more business cycle.

I'd say the Austrians have a pretty dim view of our business cycle. People that make investments are fooled? All investments look profitable, but aren't? Whatever.

Let's deal in the reality of the situation, shall we? Our country is run using business theory based on capitalism. We've been having recessions since the nation started. Another one is on the way. Deal with it.

[socred]

I'd say the Austrians have a pretty dim view of our business cycle. People that make investments are fooled? All investments look profitable, but aren't? Whatever.

Let's deal in the reality of the situation, shall we? Our country is run using business theory based on capitalism. We've been having recessions since the nation started. Another one is on the way. Deal with it.

"By an accounting method of analysis, the conclusion is reached that the value, at the current retail price-level, of goods produced far exceeds the flow of purchasing-power from permanent sources. In other words, recurring periods of business depression are shown to be the result of present financial and business policies." (C.H. Douglas, "Social Credit")

[Topaz]

This is the way I look at it and you can tell how wrong I am. First we have an inexperience Fed government, secondly, this government decided to extend the war and so, the military has to have its equipment which is quite expensive. Our economy is connected to the US which should be corrected so when they fall we don't. The OPEC raising prices for oil is out control and all the biofuels that are using grains causing people to either starve or pay double for food around the world. As far as Canada concerned I think Harper should have watched the spending more. How can a country have tax cuts, spend like they have and still face debts from a war which are a billion so far and climbing. Just look at the debt the US has from the war.

[Wild Bill]

http://www.fin.gc.ca/toce/2005/frt_e.html

The report shows that NDP governments have balanced the books 46 per cent of the time.

Liberals have the worst fiscal record overall. Liberal federal, provincial and territorial governments have posted year-over-year budget deficits an astonishing 79 per cent of the time.

Conservative governments have only a slightly better record than the Liberals, logging deficits 65 per cent of the years in which they’ve been in power.

You'll have to forgive my skepticism. You see, I survived Bob Rae's NDP government here in Ontario.

Do you watch "Corner Gas"? They have a bit where whenever someone mentions the name of their neighbouring town everybody in the room spits on the floor!

That's similar to the reaction here in Ontario when someone mentions the NDP or Bob Rae, except for the usual small cadre in the heart of old Toronto. No one pays any attention to them because Toronto has absolutely nothing in common with the values and culture of the rest of Ontario, or Canada for that matter.

Or maybe even the rest of the planet!

[sharkman]

This is the way I look at it and you can tell how wrong I am. First we have an inexperience Fed government, secondly, this government decided to extend the war and so, the military has to have its equipment which is quite expensive. Our economy is connected to the US which should be corrected so when they fall we don't. The OPEC raising prices for oil is out control and all the biofuels that are using grains causing people to either starve or pay double for food around the world. As far as Canada concerned I think Harper should have watched the spending more. How can a country have tax cuts, spend like they have and still face debts from a war which are a billion so far and climbing. Just look at the debt the US has from the war.

Yes you are mostly wrong. We are connected economically to the US. 80% of all that Canada exports goes to the US market. This can't be corrected anyone soon. So when the US economy slows down and consumers stop buying stuff, it affects us in a big way. I heard this morning that their economy is now 70% based on consumer spending.

OPEC doesn't raise or lower prices. They raise or lower production which should affect prices, but the main thing that is affecting prices is war and instability in oil producing countries, among other things.

Harper's spending (or budget surplus) had nothing to do with the US recession. After almost 3 years, you can not call them inexperienced. Our military being in Afghanistan is costing very little, our surplus of 13 billion (can't remember for sure) can cover that quite easily.

Your rant on biofuels I agree with.

[eyeball]

Our economy is connected to the Earth, and its costing us more to extract its basic necessities and some of the most vital necessities like fuel, arable land and fresh water are dwindling. Its also gettng more expensive to ensure the planet's sink resources, the capacity for absorbing and recycling our economy's waste stream, aren't overwhelmed.

We're increasingly liquidating and drawing down the natural capital that underwrites our economy. If reserves of natural capital were growing we'd be seeing increases in things like salmon and other endangered species. Natural abundances of wildlands containing fresh water and food for their growing animal populations - wild grasses, nut, berry and other fruit bearing plants - would be expanding instead of shrinking. Mainstream economists and their subscribers usually get a look on their face when confronted with this sort of thinking. The real world after all is external to our economy or so conventional wisdom has it.

It could be the real fundamentals of our economy are unsound because the constant growth (of wealth) model is inherently unsustainable and our economy's recessions will be increasingly characterized by natural capital recessions. The thought of a natural capital depression could be pretty depressing. Thank goodness for conventional wisdom eh?

[eyeball]

OPEC doesn't raise or lower prices. They raise or lower production which should affect prices, but the main thing that is affecting prices is war and instability in oil producing countries, among other things.

There's no war or instability in Canada so I see little reason why we should have to pay the same war premium others pay. Not for our own oil, that's just plain nuts.

[sharkman]

There's no war or instability in Canada so I see little reason why we should have to pay the same war premium others pay. Not for our own oil, that's just plain nuts.

Welcome to Arab oil cartel 101.

[punked]

You'll have to forgive my skepticism. You see, I survived Bob Rae's NDP government here in Ontario.

Do you watch "Corner Gas"? They have a bit where whenever someone mentions the name of their neighbouring town everybody in the room spits on the floor!

That's similar to the reaction here in Ontario when someone mentions the NDP or Bob Rae, except for the usual small cadre in the heart of old Toronto. No one pays any attention to them because Toronto has absolutely nothing in common with the values and culture of the rest of Ontario, or Canada for that matter.

Or maybe even the rest of the planet!

Ohhhhh I will forgive you see I lived through the Tories spending Canada into the ground in the 80's so I understand where you come from.

[sharkman]

Uh, the Tories didn't spend into the ground in the 80's. Once they righted the Trudeau recession of 1981-82, we had a prolonged period of growth and expansion.

[eyeball]

Welcome to Arab oil cartel 101.

Alberta joined OPEC? Those bastards. Whose side are they on anyway?

[punked]

Uh, the Tories didn't spend into the ground in the 80's. Once they righted the Trudeau recession of 1981-82, we had a prolonged period of growth and expansion.

I was pointing out the Idiotic statement about Bob Rea with a Statement about the Conservatives of the same period. The conservatives had the same problem in the NDP did a world wide recession. Do I blame the Tories for that, while I would like too I don't. I do blame them for a huge deficit the birth of the Bloc Quebecois and Reform Parties and the resulting division in our country. Cause it is clear from "the Bob Rea=everything wrong ever happening in Ontario" arguement, as I like to call, it if happened when you were in office and got better when you were gone we should never vote for that party again.

I am voting NDP f it.

[WarBicycle]

You'll have to forgive my skepticism. You see, I survived Bob Rae's NDP government here in Ontario.

Do you watch "Corner Gas"? They have a bit where whenever someone mentions the name of their neighbouring town everybody in the room spits on the floor!

That's similar to the reaction here in Ontario when someone mentions the NDP or Bob Rae, except for the usual small cadre in the heart of old Toronto. No one pays any attention to them because Toronto has absolutely nothing in common with the values and culture of the rest of Ontario, or Canada for that matter.

Or maybe even the rest of the planet!

Rae's government nearly ran Ontario into the ground which is understandable when one considers that many of his MP's never finished high school.

[Wild Bill]

I was pointing out the Idiotic statement about Bob Rea with a Statement about the Conservatives of the same period. The conservatives had the same problem in the NDP did a world wide recession. Do I blame the Tories for that, while I would like too I don't. I do blame them for a huge deficit the birth of the Bloc Quebecois and Reform Parties and the resulting division in our country. Cause it is clear from "the Bob Rea=everything wrong ever happening in Ontario" arguement, as I like to call, it if happened when you were in office and got better when you were gone we should never vote for that party again.

I am voting NDP f it.

Don't misunderstand me. I'm well aware that we have little or no control over what cards are dealt to us. However, we have total control as to how we play them.

Rae's government is despised not because of the circumstances they found themselves in but how they tried to handle them. They had wrong and boneheaded policy!

Why should I care that you hurl insults at Tories in my face? I don't have blind faith in a party. I'm willing to call a bonehead of ANY party a bonehead! I've switched my vote over the years from Liberal to Conservative, depending on how capable a crew one or the other is offering. It was always a vote for the best of the worst choices. I did have some enthusiasm when I could vote for Reform but after they merged with the Tories they very rapidly abandoned ALL of Reform's principles and became the Tory Party that I had bailed from, all those years ago with Mulroney and Campbell. They still appeal to me more than Dion's bunch of academics and losers. Perhaps Ignatieff will instill some fresh air, we'll see.

In actuality I guess I'm a Utilitarian Libertarian. The rights of the individual in the light of what is workable and practical. So far the NDP have never seemed a good match for my values.

[fellowtraveller]

The report shows that NDP governments have balanced the books 46 per cent of the time.

Like Manitoba "balances" their budgets?

Once you take out the couple billion per year in gravy awarded by the federal govt every year to this long-suffering and curiously badly managed province, it doesn't exactly "balance".

Just a coincidence it has a longtime NDP govt, no doubt.

[MontyBurns]

I am voting NDP f it.

You must like paying taxes.

[punked]

Don't misunderstand me. I'm well aware that we have little or no control over what cards are dealt to us. However, we have total control as to how we play them.

Rae's government is despised not because of the circumstances they found themselves in but how they tried to handle them. They had wrong and boneheaded policy!

Why should I care that you hurl insults at Tories in my face? I don't have blind faith in a party. I'm willing to call a bonehead of ANY party a bonehead! I've switched my vote over the years from Liberal to Conservative, depending on how capable a crew one or the other is offering. It was always a vote for the best of the worst choices. I did have some enthusiasm when I could vote for Reform but after they merged with the Tories they very rapidly abandoned ALL of Reform's principles and became the Tory Party that I had bailed from, all those years ago with Mulroney and Campbell. They still appeal to me more than Dion's bunch of academics and losers. Perhaps Ignatieff will instill some fresh air, we'll see.

In actuality I guess I'm a Utilitarian Libertarian. The rights of the individual in the light of what is workable and practical. So far the NDP have never seemed a good match for my values.

Fair enough respect!

[sharkman]

Alberta joined OPEC? Those bastards. Whose side are they on anyway?

I'm sorry, I simply can not believe that your reading skills are such that you actually believe I was saying any such thing. I may be wrong, however...

[eyeball]

I'm sorry, I simply can not believe that your reading skills are such that you actually believe I was saying any such thing. I may be wrong, however...

I know its a global market, I've heard the drill. And yet...gasoline is around $0.90 a gallon in Saudi Arabia and $4.30 in Alberta. Nationally owned oil companies can and do keep prices down to provide benefits to their citizens. If other oil producing nations can do it so can we.

[M.Dancer]

I know its a global market, I've heard the drill. And yet...gasoline is around $0.90 a gallon in Saudi Arabia and $4.30 in Alberta. Nationally owned oil companies can and do keep prices down to provide benefits to their citizens. If other oil producing nations can do it so can we.

What percentage GST does Saudi have?

Lets say $0.90 is the base...for BC

.90 + .10 Fed Excise tax + 0.145 BC Tax + 6% GST

Is the price a litre in BC near.....$1.1237?

Canada ranked 37th with an average price of $1.04 per litre and the U.S. was 45th at $0.81 cents per litre. Most of the countries above $1.75 per litre were European, but overall, excluding taxes, there is relatively little price variation in retail gasoline prices around the world. In fact, of the gasoline price, taxes accounted for more than 50% of the retail price per litre in 23 countries, mostly in Western Europe, but also in Uganda, Slovenia, Poland, Czech Republic, Hong Kong, South Korea and Brazil. Countries with very low gasoline prices, such as Saudi Arabia, Kuwait, Iran, Venezuela, Egypt and China, have significant government subsidies, often selling gasoline below the price of crude oil on the world markets. For example, some producing countries spend as much as 14% to 17% of their total state revenues to subsidize gasoline.

http://fuelfocus.nrcan.gc.ca/issues/2008-0...upplement_e.cfm

How much taxes are you willing to spend to subsidize my hummer?

[M.Dancer]

I know its a global market, I've heard the drill. And yet...gasoline is around $0.90 a gallon in Saudi Arabia ....

It was .91 in march 05...I imagine it is higher now.

[eyeball]

How much taxes are you willing to spend to subsidize my hummer?

None. I'd use the GST you paid on your Hummer.

[eyeball]

It was .91 in march 05...I imagine it is higher now.

I imagine its still a lot lower that what we're paying.