Who's to blame for the Budget Deficit?

[drewski]

according to our independent parliamentary budget officer its...and here's a shocker...Harper

http://www.cbc.ca/canada/story/2008/11/20/report-budget.html

"The weak fiscal performance to date is largely attributable to previous policy decisions as opposed to weakened economic conditions," the report says.

It pinpoints the government's second one-percentage-point reduction in the goods and services tax and reductions in corporate income taxes for causing the lowest budget balance in the first five months of the fiscal year in recent times.

[Smallc]

I remember not liking the GST cut. I also remember saying something about it causing this at the edge financing. I guess I'm not all that stupid.

[Topaz]

I remember not liking the GST cut. I also remember saying something about it causing this at the edge financing. I guess I'm not all that stupid.

I can't believe that Harper being an honour student in economics would go over board on the spending. When 3x we thought we could go into election there was Harper out there throwing money to various groups and to Quebec. My understanding also is that they took the 45 Bil of EI and put to pay down the debt and now there's a court cases going on to sue the Harper government for doing so. What is going to happen if the worse happens in the maufacturing sector and we have close to a million more people drawing for the 2 Bil. they left for EI. Again, the Conservative are not good at managing our money. You are right about the GST and then he went and gave Canadians an income tax cut which would have been ok if he hadn't spent 12 BIL and then 3Bil emergency fund left by the Libs. I bet his wife looks after their finances or they would be broke!!

[Oleg Bach]

Harper is a hockey player - economics come second...You may take the boy out of the country but you will never take the country out of the boy.... Harper may have been a great student but that does not make him wise - Look at that robotic americanized Ignatius..everyone calls him brilliant but he is a mere acedemic and not an intellectual.

[Mr.Canada]

I want the GST scrapped but in order to do so tey must cut spending by the same amount that the GST brings in which is completely acceptable to me. Given the economic times at present we need to cut all non essential spending. This isn't the time to give massive cash to pet projects and the special interests. Special interests have run this country for long enough. If the special interests cause is so great than they should have no problems raising their own cash. I don't want to pay for it anymore.

[Topaz]

I want the GST scrapped but in order to do so tey must cut spending by the same amount that the GST brings in which is completely acceptable to me. Given the economic times at present we need to cut all non essential spending. This isn't the time to give massive cash to pet projects and the special interests. Special interests have run this country for long enough. If the special interests cause is so great than they should have no problems raising their own cash. I don't want to pay for it anymore.

I agree and I hope it means that the ministers will curve their use of government planes to come and go to their homes, Blackburn has done this since elected because he lives in some part of Quebec.

[Oleg Bach]

You have my permission - stop paying taxes. Or better yet - stop working - no income - no income tax....BUT there will be a problem...You will be taxed on money you don't have.. THEN if they really don't like you they will jail you for evasion and not paying money that you do not have. Joke aside. Special interest groups really have no interest in the common good - just interest in themselves and you are right - they are small in number but collectively they are expensive and accomplish nothing. Harper is right as far as arts grants. If the artist is bright and creates great work...the work will sell itself. You don't need to pay his rent though grants...If the special interest artist is truely crafty he can have someone privately pay for the studio rental...so....lets make them fend for themselves...besides - most art stinks. It bugs me when someone is given 50 thousand dollars to create some work that actually harms society and they call it "cutting edge".

[cybercoma]

according to our independent parliamentary budget officer its...and here's a shocker...Harper

http://www.cbc.ca/canada/story/2008/11/20/report-budget.html

It does nobody any good to point fingers at the piece of legislation that Canadians mostly supported--the GST cuts. Canadians are so opposed to taxes being raised that even mentioning tax in the same sentence as the popular topic of environment caused the crushing defeat of the Liberals in the last election. So, no. It's not the reduction in taxes that is the problem. It's overspending on the part of the government, which won't be curbed until people stop complaining about every last cut they make. Canada will not shake the deficit until we shake our nanny state mentality. It is not possible to have extravagant social programs and no taxes. It is also not a good idea to over-burden business with taxes because it's crippling to the economy. An over-taxed working class cannot survive. The only answer lies in a reduction of government spending. But, the unpopularity of such actions makes our servants in office reluctant to do so. Until public perception about program cuts is changed, we cannot advance past our debt.

[jdobbin]

You have my permission - stop paying taxes. Or better yet - stop working - no income - no income tax....BUT there will be a problem...You will be taxed on money you don't have.. THEN if they really don't like you they will jail you for evasion and not paying money that you do not have.

Is that what has happened to you? Are you wanted by the police?

[blueblood]

It does nobody any good to point fingers at the piece of legislation that Canadians mostly supported--the GST cuts. Canadians are so opposed to taxes being raised that even mentioning tax in the same sentence as the popular topic of environment caused the crushing defeat of the Liberals in the last election. So, no. It's not the reduction in taxes that is the problem. It's overspending on the part of the government, which won't be curbed until people stop complaining about every last cut they make. Canada will not shake the deficit until we shake our nanny state mentality. It is not possible to have extravagant social programs and no taxes. It is also not a good idea to over-burden business with taxes because it's crippling to the economy. An over-taxed working class cannot survive. The only answer lies in a reduction of government spending. But, the unpopularity of such actions makes our servants in office reluctant to do so. Until public perception about program cuts is changed, we cannot advance past our debt.

i agree, well said

[madmax]

It does nobody any good to point fingers at the piece of legislation that Canadians mostly supported--the GST cuts. Canadians are so opposed to taxes being raised that even mentioning tax in the same sentence as the popular topic of environment caused the crushing defeat of the Liberals in the last election. So, no. It's not the reduction in taxes that is the problem. It's overspending on the part of the government, which won't be curbed until people stop complaining about every last cut they make.

Cutting Taxes and overspending is the responsibility of the government. The Conservative government. It is no one elses. These are there programs, their choices, and it isn't people who were "complaining" that put this country into deficit. It was the Conservative Government.

This has nothing to do with a nanny state. That is a copout. That is the answer for whiners who cannot explain how a government blew a surplus Prior to the economic downturn.

You have a terrible memory if you cannot grasp that the Liberals put together a succession of surplusses. The Liberals failed to support the services of the state, the reason you pay taxes in the first place, but they didn't run deficits.

The Conservatives don't have a good answer for this other then incompentence.

Services, deficits and surplus is a matter of choice.

Harper was to busy ignoring the finances, and playing games.

Don't going blaming the general public who elected the Harper Conservatives, for the incompetence of the Prime Minister, his finance Minister and his cabinet.

It wasn't the General Public who lied in the General Election, it was the Conservatives who said their would be no deficits with their last ELECT ME breath.

Blaming the public is cowardly.

[cybercoma]

Cowardly? You seem to think that politicians are capable of making decisions. The number of public opinion polls that are conducted on a weekly basis should give you some sort of indication that this is not the case. People voted the Conservatives into office in 2006 because Harper promised to reduce the GST. People also chose not to vote for the Liberals in 2008 because they were talking taxes. It is very clear whose agenda is reduced taxes: the taxpayer. It is also quite clear from the public outcry when Harper put a refinancing of the Arts in his platform that a vocal percentage of Canadians do not want programs cut.

The Liberals did have surpluses during their time in office; however, the economy was not what it is today and commodity prices were a lot higher. With gas, in most parts of Canada, under $0.90/L, the federal government, on top of reduced revenues from the GST, is losing money from commodity taxes.

No one could have foreseen just how bad the current economic situation would be. Regardless, of the developed nations, Canada is in one of the strongest financial positions. If now is not the time to run deficits, then when? It is for the benefit of the country that the federal government at this time temporarily run deficits to keep the economy afloat as we get through this downturn.

The only other option is to raise taxes further or cut programs, both of which Canadians have made clear they do not want. If the Conservative government wants to continue to lead this country, the must govern by the will of the people. If they were to break their promise, which got them elected originally, and raise the GST back to 7%, the voters would react next election by tossing them out. If they were to slash funding to programs, they would be broad-brushed as hating Canadian values and meet the same fate.

So, when the question is asked, who is responsible for the government running deficits, the answer is the electorate. Their unwillingness to make sacrifices in difficult economic times means the government needs to go into the red to meet their expectations. Therefore, until the nanny-state mentality is changed and people realize that tax-dollars are not infinite, the government will need to run deficits when revenues drop with the economy. The government is left with no other choice and Canadians only have themselves to blame.

Edited November 21, 2008 by cybercoma

[Moonbox]

This whole debate is just silly. Comparing Conservative finances now to Liberal Finances post 1993 is ridiculous. It's like comparing the skill of two skippers on a 24 foot yacht where one captain is sailing in a hurricane and the other is sailing on a bright sunny day. You can't compare.

The liberals federally have had the great fortune to have not faced a recession in 25 years and were fortunate enough to be in power during Canada's biggest economic boom in 50 years.

I've already said on numerous occasions that I think Harper could really curb his spending. I also think an income tax cut would have been better than a GST tax cut. With that said politics is ALWAYS about comparisons. Right now our country IS a nanny state. WE, as Canadians, have turned our government into a pandering slave to uneducated and ignorant public opinion.

We saw what happens when the government announces spending cuts in Quebec. It's worse than raising taxes almost.

Aside from that, we DON'T WANT a government right now that's goin to drastically cut spending. It's bad economic policy. A deficit is a good idea right now. We just don't want unsustainable Trudeau/Mulroney style deficits.

[drewski]

The liberals federally have had the great fortune to have not faced a recession in 25 years and were fortunate enough to be in power during Canada's biggest economic boom in 50 years.

when that boom went bust at the start of this decade, there was a world wide recession, save for a few countries, including Canada. one of the reason's that have been cited for our ability to stay out of that global recession was the fiscal policies that the Liberals had put in place

Edited November 21, 2008 by drewski

[Oleg Bach]

Those policies were not put in place by Liberal politians. They were put in place by Canadian bankers who for the most part are old school conservatives.

[Shady]

Harper is ultimately responsible. Since he's been in office, he's been spending like he's NDP-lite. However, obviously the recession plays a large part of it too. He needs to tighten the belt, and start acting like a fiscal conservative.

On a side note, the budget deficit would be 10 times worse under NDP or Liberal leadership. So in a way, we're kind of lucky.

[Oleg Bach]

Let me be the simplistic that I am. Conservative once meant to conserve (fiscally). To be wise and be ready for a rainy day. Liberals were supposed to be liberators. Looks like the Liberals take away freedoms and the conservatives have forgotten their roots. Running a tight ship was once the hallmark of conservatism...I guess after a few generation they get spoiled - much like the children of the original hard working Italian immigrants who were very economy minded - but now their kids waste time and money looking good and street racing in hot cars their grand parents bought them.

[Moonbox]

when that boom went bust at the start of this decade, there was a world wide recession, save for a few countries, including Canada. one of the reason's that have been cited for our ability to stay out of that global recession was the fiscal policies that the Liberals had put in place

Haha...cited by whom? What policies, pray tell?

High taxes?

No, the Liberal government was extremely lucky in that it lead a government for 13 years that pretty generally was booming worldwide. The dot com boom busted but that was NOT what was really propelling the economy forwards. Huge real estate markets, record profits for resource and finance companies and unheard of cheap lending were the leading factors in NORTH AMERICA'S 10+ year economic boom. The Liberals benefited from that and were not responsible for it.

Now the Conservatives are inheriting what turns out to be an artificially inflated economy. The cheap lending turned out to have a price. The real estate market was over develloped. Financial companies were basically fixing the books and an unsustainable auto industry has finally proven itself unsustainable. Add to that the fact that resource prices, which were sky rocketing due to speculation, are now plummeting and this is why we're about to face deficits. We have yet to see what the 2009 budget is going to be. If Harper lowers spending it would be interesting to see how long it takes for him to be voted out of office.

[Moonbox]

On a side note, the budget deficit would be 10 times worse under NDP or Liberal leadership. So in a way, we're kind of lucky.

and the truth shall set us free.

[Oleg Bach]

and the truth shall set us free.

Correction "The truth will make you free" - free to be stationary. Never tell the truth to liars...I believe that is "don't toss pearls before swine" One the deficit has run it's course we will all recieve bills in the mail similar to the ones sent by our now semi-privatized electrical suppliers. Loss of product due to birds getting sapped on a wet transmission line - and they will call it....pay down the debt...much like a music producer who explains in the contract that the artist will be paid once the producer has recouped his cost of production... every time the producer goes out to lunch for the next ten years he continues to class his expenditure as a recouping of costs..it's never ending and the artist never gets paid - much like the Canadian tax payer will never be paid back the loan that IS the deficit.

[madmax]

Cowardly? You seem to think that politicians are capable of making decisions. The number of public opinion polls that are conducted on a weekly basis should give you some sort of indication that this is not the case.

Yes, I do know politicians are capable of making decisions. Just as they are capable of lying, avoiding and behaving worse then most parents children.

The fact that the CPC requisitioned more polls then any party in history and failed to excercise commons sense is a tribute to their inability to be fiscally responsible.

People voted the Conservatives into office in 2006 because Harper promised to reduce the GST.

Coulda sworn the people were punishing a tired and corrupt party. Most people couldn't give a rats ass about the GST cut. Wow! Save 2cents, hardly an enticing prospect which while voter friendly doesn't win voters over. That is a diversion from the real reasons for the removal of the Martin Government.

People also chose not to vote for the Liberals in 2008 because they were talking taxes. It is very clear whose agenda is reduced taxes: the taxpayer. It is also quite clear from the public outcry when Harper put a refinancing of the Arts in his platform that a vocal percentage of Canadians do not want programs cut.

No and no again. People didn't like Dion more then Harper, which is difficult to do. Dion was an egghead and trying to hatch his legacy before he laid an egg. People were smart enough to recognize that the Carbon Tax would have NO effect on the environment. It was rejected wholly by his own party.

People did choose a Government who stated they were not going to run a DEFICIT. Yes they voted for a lying government who were facing a deficit because of their fiscal incompetence, and now it will be worse because of them. They have blown the rainy day funds.

As for the Arts, you missed that Harpers Seat count went up, not down.

The Liberals did have surpluses during their time in office; however, the economy was not what it is today and commodity prices were a lot higher. With gas, in most parts of Canada, under $0.90/L, the federal government, on top of reduced revenues from the GST, is losing money from commodity taxes.

Get me a violin. I expect to hear nonsense like this on these forums. The LPC inherited huge deficits from the Previous Conservative Regime. The economy did not recover for sometime.

The CPC inherited HUGE surpluses and stated that they had no intention of maintaining huge surpluses.

The CPC have done this damage in just over 2 years. Infact if you choose to say that the economy was in trouble in 2006, there isn't any sense of urgency from the CPC. They sat on their hands and claimed up until October 2008 that all is well, no deficits.

No one could have foreseen just how bad the current economic situation would be. Regardless, of the developed nations, Canada is in one of the strongest financial positions. If now is not the time to run deficits, then when? It is for the benefit of the country that the federal government at this time temporarily run deficits to keep the economy afloat as we get through this downturn.

The CPC was tone deaf. Didn't care. I know business groups that had meetings in Ottawa, and came back furious with regards to the disconnect of the CPC ministers. It cost alot of business security in Ontario. The message was clear then as it was in 2008. Get out of Ontario. Don't do business here we don't care.

The only other option is to raise taxes further or cut programs, both of which Canadians have made clear they do not want. If the Conservative government wants to continue to lead this country, the must govern by the will of the people. If they were to break their promise, which got them elected originally, and raise the GST back to 7%, the voters would react next election by tossing them out. If they were to slash funding to programs, they would be broad-brushed as hating Canadian values and meet the same fate.

So, when the question is asked, who is responsible for the government running deficits, the answer is the electorate. Their unwillingness to make sacrifices in difficult economic times means the government needs to go into the red to meet their expectations. Therefore, until the nanny-state mentality is changed and people realize that tax-dollars are not infinite, the government will need to run deficits when revenues drop with the economy. The government is left with no other choice and Canadians only have themselves to blame.

Harper Lied. He lied to the public a few short weeks ago. Flaherty lied. They mislead, spin and will run deficits.

[Wilber]

Rant all you want about who is at fault but when you get right down to it, "it's the economy stupid". Revenues are going down but everyone still wants a bigger piece of the pie. The worse things get, the more people will expect from governments that have less to give.

Edited November 21, 2008 by Wilber

[Oleg Bach]

Taking an intrest free loan from the public that you will never pay back in order to maintain you operation is standard political practice - just don't let the public know that a deficit is the loaning of pubic money from the public...kind of like bailing out American banks - which is in fact asking me for all my money and then lending it back to me at an interest and stupid me says thanks for the hand out.

[jdobbin]

Rant all you want about who is at fault but when you get right down to it, "it's the economy stupid". Revenues are going down but everyone still wants a bigger piece of the pie. The worse things get, the more people will expect from governments that have less to give.

Seems to be it is the spending. The Tories were warned that the tax cuts without subsequent spending cuts was a dangerous thing but did it anyway.

[madmax]

Harper is ultimately responsible. Since he's been in office, he's been spending like he's NDP-lite. However, obviously the recession plays a large part of it too. He needs to tighten the belt, and start acting like a fiscal conservative.

On a side note, the budget deficit would be 10 times worse under NDP or Liberal leadership. So in a way, we're kind of lucky.

10 times worse

The real issue is "what party has the history of being the most fiscally

> responsible?" The objective evidence would suggest it's the NDP.

>

> Figures from the federal Department of Finance confirm that, on average,

> NDP governments stayed out of deficit 49 per cent of their years in office

> from 1984 to 2006, while Conservatives managed that same feat only 39 per

> cent and Liberal governments only 23 per cent of the time.

>