2009 Deficit could hit $14 billion

[jdobbin]

"Modest" is how it is described by the author of the report. He's also predicting 'modest' surpluses in the next few years. Over a four year period, the predicted deficit is $700 Million.

Overlooked the big hedge here, huh?

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

Page briefed MPs on the report saying the "modest" deficit he's predicting in the fiscal year starting April 1, 2009 is based on an average reached from a survey of economic assessments.

But on CTV's Mike Duffy Live, Page said the deficit could be as large as $14 billion if the economy contracts in 2009.

So if we don't have a modest deficit, the Tories are in big trouble. Would you agree with that?

If not, they can always ask Dion. He was going to find $12 Billion in savings. We need to tap this valuable resource while he's still around.

Sure. They should ask the Liberals. They have a reputation of controlling costs. Seems the Harper Tories don't.

[Mr.Canada]

Overlooked the big hedge here, huh?

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

So if we don't have a modest deficit, the Tories are in big trouble. Would you agree with that?

Sure. They should ask the Liberals. They have a reputation of controlling costs. Seems the Harper Tories don't.

I like a deficit as much as you do jdobbin but Harper's going to do it anyhow. $3-4 Billion dollars than none next year, so he says. We'll see I guess.

Mr. Dion has the luxury of being able to say anything he wants because theirs no way to prove or disprove it. It's a cheap shot imo but hey, this is politics and it's all about cheap shots lol.

[blueblood]

And when the economy is up you cut spending and raise taxes?

that's what PMPM and chretien did.

Would you rather have a depression or go into deficit?

Oh well, May canola is still 430 bucks a tonne.

4 billion bucks is chump change, Harper has to go into deficit because those in the cities aren't keen on fiscal conservatism. They like tax and spend politicians, the Liberals fit the bill. Harper would love to slash costs, however there is this little problem called an election he has to face. Harper is a politician, not a CEO. Politicians are not good financial managers as much as you would like to believe them.

Should all employees of the gov't and anyone receiving gov't tax dollars as a salary take a 10% paycut? Those on gov't paychecks (Doctors, civil servants, teachers, senators, etc.) crying that Harper is a poor financial manager have no business making such an opinion.

[jdobbin]

that's what PMPM and chretien did.

They did? Please show me where.

Would you rather have a depression or go into deficit?

If Harper had managed things better in 2006 and 2007 when Canada was booming maybe we wouldn't face either problem.

Oh well, May canola is still 430 bucks a tonne.

For how long?

4 billion bucks is chump change, Harper has to go into deficit because those in the cities aren't keen on fiscal conservatism. They like tax and spend politicians, the Liberals fit the bill. Harper would love to slash costs, however there is this little problem called an election he has to face. Harper is a politician, not a CEO. Politicians are not good financial managers as much as you would like to believe them.

He can start by cutting the ethanol subsidy. Farmers are not keen on fiscal conservatism.

Should all employees of the gov't and anyone receiving gov't tax dollars as a salary take a 10% paycut? Those on gov't paychecks (Doctors, civil servants, teachers, senators, etc.) crying that Harper is a poor financial manager have no business making such an opinion.

Actually, I wasn't thinking pay cuts so much as not filling many positions. Harper has been hiring like crazy according to a few cites we have previous posted here. The size of the civil service has increased under him. Time to tighten the belt.

Why is it the Tories are so convinced that running a deficit was the only option when for two years people kept telling them to cut spending and build up reserves?

[jdobbin]

I like a deficit as much as you do jdobbin but Harper's going to do it anyhow. $3-4 Billion dollars than none next year, so he says. We'll see I guess.

Mr. Dion has the luxury of being able to say anything he wants because theirs no way to prove or disprove it. It's a cheap shot imo but hey, this is politics and it's all about cheap shots lol.

If it is truly $14 billion as the budget officer says it could be then the Tories will have a hard time even justifying that to their base.

[noahbody]

Actually, he did say it could be $14B at the high end for next year.

That's not his prediction. It's his worse case scenario based on the unexpected.

[noahbody]

Overlooked the big hedge here, huh?

No, the $14 Billion worst case scenario if the unexpected happens was actually quoted by me back on page 1. I guess you overlooked that.

So if we don't have a modest deficit, the Tories are in big trouble. Would you agree with that?

Of course. Canadians, as Ms May said, are stupid.

Sure. They should ask the Liberals. They have a reputation of controlling costs. Seems the Harper Tories don't.

Yes they should ask them. They'll be able to cut waste without hearing "Harper is against women," "Harper is against arts," etc. Of course, Jack will still be there as usual.

[jdobbin]

No, the $14 Billion worst case scenario if the unexpected happens was actually quoted by me back on page 1. I guess you overlooked that.

Nope. Just noted that you keep downplaying it as if it is totally impossible which many economists have been saying is more like a reality given the Tory policies at present.

Of course. Canadians, as Ms May said, are stupid.

Seems to be the view of a lot of Tories too.

Yes they should ask them. They'll be able to cut waste without hearing "Harper is against women," "Harper is against arts," etc. Of course, Jack will still be there as usual.

He is against those things in general. What he should try is to do cross the board cuts.

[blueblood]

They did? Please show me where.

If Harper had managed things better in 2006 and 2007 when Canada was booming maybe we wouldn't face either problem.

For how long?

He can start by cutting the ethanol subsidy. Farmers are not keen on fiscal conservatism.

Actually, I wasn't thinking pay cuts so much as not filling many positions. Harper has been hiring like crazy according to a few cites we have previous posted here. The size of the civil service has increased under him. Time to tighten the belt.

Why is it the Tories are so convinced that running a deficit was the only option when for two years people kept telling them to cut spending and build up reserves?

your the one that said the Liberals cut spending, now they didn't? The Libs didn't cut the GST and allowed for high income taxes on top of it.

harper managed things alright, more canadians have more money in their pocket and businesses had a friendlier environment. But we should be gouging businesses and Canadians so the feds can be in the black?

Canola has been jumping around 430 bucks all throughout this financial hoopla, and will hover around there for a while. This is the futures price mind you.

Yes lets devalue our exports, cut more jobs and throw our economy further down the toilet while we're at it.

I'm thinking pay cuts and not filling so many positions. Your right its time to tighten the belt pay cuts and a hiring freeze, dare I say layoffs. 10% pay cut would help things out immensely.

[kengs333]

Of course its nobody's fault with the Conservatives in power, but were the Liberals in power and such a headline came out all of you neocons would have been howling bloody murder. I hope we have an election in 2009.

[jdobbin]

your the one that said the Liberals cut spending, now they didn't? The Libs didn't cut the GST and allowed for high income taxes on top of it.

They did cut spending. They also cut taxes.

Harper has not cut spending. He has cut taxes. This is a problem and the sooner the Tories realize this, the better.

harper managed things alright, more canadians have more money in their pocket and businesses had a friendlier environment. But we should be gouging businesses and Canadians so the feds can be in the black?

Most economists are saying the issues of a deficit lays right in the hands of the Tories.

Canola has been jumping around 430 bucks all throughout this financial hoopla, and will hover around there for a while. This is the futures price mind you.

Oil was $147 a barrel a few months ago. Look where it is now.

You really think grains are going to stay high?

Yes lets devalue our exports, cut more jobs and throw our economy further down the toilet while we're at it.

The reckless spending in the two years prior to the problem of a downturn and the ill considered GST tax cut is why we are on the precipice of a a deficit.

I'm thinking pay cuts and not filling so many positions. Your right its time to tighten the belt pay cuts and a hiring freeze, dare I say layoffs. 10% pay cut would help things out immensely.

The Liberals have a record of that. The Tories so far have a record of increasing a bloated government.

[blueblood]

They did cut spending. They also cut taxes.

Harper has not cut spending. He has cut taxes. This is a problem and the sooner the Tories realize this, the better.

Most economists are saying the issues of a deficit lays right in the hands of the Tories.

Oil was $147 a barrel a few months ago. Look where it is now.

You really think grains are going to stay high?

The reckless spending in the two years prior to the problem of a downturn and the ill considered GST tax cut is why we are on the precipice of a a deficit.

The Liberals have a record of that. The Tories so far have a record of increasing a bloated government.

Canola was 750 dollars per tonne in the spring time. It came down by over 300 dollars per tonne. That's significant enough. I'm surprised canola is as high as it is for not being an essential crop. People do need to eat and there are a lot of mouths to feed.

Minority parliaments = high spending in order to buy votes, that's politics. In a majority situation, I think we know Harper would do different and would probably wait until the bitter end to call an election in tough economic times.

Cut civil services and their wages would bring down costs as well.

[Visionseeker]

The GST cuts bled the treasury of 10 or 12 billion a year without stimulating any depressed sector of the economy. Harper's cuts fuelled the speculative economy by offering greater rewards to high-end economic activity (i.e., new housing, luxury cars, etc..). "The more you spend, the more your save" was the philosophy in a nutshell.

Well guess what? No one is any wealthier from a 2% cut to the GST and many who bought into the speculative model these economic anarchists advanced are now facing a world of hurt. My prediction is that the Tories will be wiped-out in the next election. If held in the summer, they are left with 60 seats; if held in the fall, maybe 30.

Harper needed his majority to survive long-term, he didn't get it and now it is only a matter of time before the centre right starts to look at the Liberals to spare them of their pain.

[August1991]

They did cut spending. They also cut taxes.

Harper has not cut spending. He has cut taxes. This is a problem and the sooner the Tories realize this, the better.

It is Harper's decision to raise spending that will cause him problems, and so it should.

The government's budget deficit/surplus should be of supreme indifference to all of us, as Canadian taxpayers.

Whether the federal government spends our money using our tax dollars, or it spends our money using our good name, it is still spending our money. I have repeated often on this forum that the measure of a government is not whether it balances its budget. A profligate government can raise taxes and have a budget surplus. An efficient government can spend wisely and yet run a budget deficit.

When it comes to government, it is spending that matters - not budget deficits or surpluses.

In this, I have to agree with Dobbin. This Harper government has been profligate. First, they bought all kinds of expensive military toys (without having the honesty to say that we should reduce spending elsewhere). Second, as typical neophytes, Harper's Conservatives don't understand government, Canada or how governments spend. (They were pound foolish and penny wise.) Third, Harper foolishly believed in "incremental Conservatism" and that by being a pretend Liberal (or a Liberal as perceived by Harper), he could win and maintain power. IOW, Harper believed that if he spent wads of taxpayer money, he'd win a majority.

Well, Harper doesn't have a majority now. His thesis of "incremental conservatism" is as false as Claude Morin's étapisme. I venture to predict that Harper will not be PM next year at this time, November 2009.

Edited November 21, 2008 by August1991

[Visionseeker]

Cut civil services and their wages would bring down costs as well.

Total outlays to the civil service is about 14% of all expenditures (roughly $27 billion). You might shave $500,000 from this without causing much fuss, but once you go beyond that, you start to drastically impair service delivery.

Which services are you proposing to cut?

[Visionseeker]

It is Harper's decision to raise spending that will cause him problems, and so it should.

The government's budget deficit/surplus should be of supreme indifference to all of us, as Canadian taxpayers.

Whether the federal government spends our money using our tax dollars, or it spends our money using our good name, it is still spending our money. I have repeated often on this forum that the measure of a government is not whether it balances its budget. A profligate government can raise taxes and have a budget surplus. An efficient government can spend wisely and yet run a budget deficit.

When it comes to government, it is spending that matters - not budget deficits or surpluses.

In this, I have to agree with Dobbin. This Harper government has been profligate. First, they bought all kinds of expensive military toys (without having the honesty to say that we should reduce spending elsewhere). Second, as typical neophytes, Harper's Conservatives don't understand government, Canada or how governments spend. (They were pound foolish and penny wise.) Third, Harper foolishly believed in "incremental Conservatism" and that by being a pretend Liberal (or a Liberal as perceived by Harper), he could win and maintain power. IOW, Harper believed that if he spent wads of taxpayer money, he'd win a majority.

Well, Harper doesn't have a majority now. His thesis of "incremental conservatism" is as false as Claude Morin's étapisme. I venture to predict that Harper will not be PM next year at this time, November 2009.

August, I agree with everything above with the exception of deficits being something we can ignore. Dept and deficits reduce fiscal flexibility and can represent a theft of wealth from future generations if accrued for consumption rather than investment.

[jdobbin]

Canola was 750 dollars per tonne in the spring time. It came down by over 300 dollars per tonne. That's significant enough. I'm surprised canola is as high as it is for not being an essential crop. People do need to eat and there are a lot of mouths to feed.

Think you might see it drop further. All commodities are including food staples.

Minority parliaments = high spending in order to buy votes, that's politics. In a majority situation, I think we know Harper would do different and would probably wait until the bitter end to call an election in tough economic times.

Do we?

Did all that spending result in a majority? I'd hate to think that we have to wait for a majority to see Harper cut spending. If Canada is anything like the 1960s, we might see a number of these minorities. Hope Harper isn't intending on having us in deficit all those years because he can't control spending.

Cut civil services and their wages would bring down costs as well.

Don't disagree. Is Harper capable of it?

[August1991]

August, I agree with everything above with the exception of deficits being something we can ignore. Dept and deficits reduce fiscal flexibility and can represent a theft of wealth from future generations if accrued for consumption rather than investment.

In a country as rich as Canada, debt is irrelevant. The federal government has the power to take money from the bank accounts of anyone in Canada. If the federal government takes money from someone, that just means you will leave less in your heritage, your will.

IOW, using your logic, the government cannot make Canada rich or poor; it can only shift wealth between old and young.

Edited November 21, 2008 by August1991

[noahbody]

Nope. Just noted that you keep downplaying it as if it is totally impossible which many economists have been saying is more like a reality given the Tory policies at present.

No, I'm just being accurate. It's not predicted. I never said it was totally impossible. The last thing the economy needs though is fear mongering. A $700 Million deficit over 4 years isn't that scary. Doesn't sell papers, which is the problem.

Seems to be the view of a lot of Tories too.

I'm not loyal to any party. Clouds your judgement you know.

He is against those things in general. What he should try is to do cross the board cuts.

Because the Liberal Party says so, it must be true.

[jdobbin]

No, I'm just being accurate. It's not predicted. I never said it was totally impossible. The last thing the economy needs though is fear mongering. A $700 Million deficit over 4 years isn't that scary. Doesn't sell papers, which is the problem.

The last thing the economy needs is a leader and party who ignore the signs of trouble and blow sunshine.

There was no need for this impending deficit. It was created by present Harper policies of not controlling spending.

I'm not loyal to any party. Clouds your judgement you know.

Is that what you are saying about Harper? That is judgment is clouded?

Because the Liberal Party says so, it must be true.

I think we can judge this by the political nature of the cuts Harper makes.

[Oleg Bach]

The nature of Harper is not politica per say. The nature that guides him is strickly monetary. He was installed by big buisness. Big buisness peaks as it enters into a state of total enrichment - then it has no where else to go. It's not that our buisness elite are bad people - it is in the fact that they are human and are habitualists. They know no other way other than the collection of money and power...this is what happens after fifty years of Canadian enterprise - success...but what now? Harper only performs as well as he is being instructed...IF big buisness has come to a standstill and lacks purpose - someone had better start thinking about what the purpose is and what the original intent should have been for the accumulation of power. Apparently the rich got so rich they are now poor...It's up to big buisness to figure out what to do at this point - and maintaining the status quo through an enforced deficit is not the answer. The rich have a disabling fear - that of sharing their money. They feel that if they "give it up" they are worthless - this is not the case - but creating more current with currency they might just find a purpose...lets wait and see if the old dogs can learn new tricks...I have faith they can.

[noahbody]

e

The last thing the economy needs is a leader and party who ignore the signs of trouble and blow sunshine

.

Saying the fundamentals of the economy are strong is basically saying there's no need to panic. Given the predictions in the report, this is the right message. Panic can initiate a false recession.

There was no need for this impending deficit. It was created by present Harper policies of not controlling spending.

Part of controlling spending is making cuts where appropriate and making money work more efficiently. That has proven difficult to do with the minority government. That's the one good thing about difficult times. It will enable the government to make cuts without so much political backlash. The best political gift to the Tories iwas Dion declaring he could free up $12 Billion from the budget.

Is that what you are saying about Harper? That is judgment is clouded?

I think you misjudged what I said.

I think we can judge this by the political nature of the cuts Harper makes.

The women's literacy program was a great example of the type of program that should be cut. It's not because I'm against women's literacy programs, I'm against ineffective programs.

[blueblood]

Think you might see it drop further. All commodities are including food staples.

Do we?

Did all that spending result in a majority? I'd hate to think that we have to wait for a majority to see Harper cut spending. If Canada is anything like the 1960s, we might see a number of these minorities. Hope Harper isn't intending on having us in deficit all those years because he can't control spending.

Don't disagree. Is Harper capable of it?

Inputs are dropping as well, fertilizer has been taking massive hits. I am however surprised Canola is staying at its levels now instead of dropping further considering its status as a luxury crop. All the ag analysts say we are one weather phenomenon away from very high prices (adjusted for today's times) As the stock market crashed Canola has held around this level for about a month, crude oil has not held this steady.

Harper took a gamble and it looks like it's backfiring on him. I understand the logic behind his decision and am giving him a pass on it. We will be seeing a number of these minorities for some time. We already have seen Harper's intentions in that report posted earlier, probable minor deficits with modest surpluses in two years. The key is, can Harper survive when we return to surpluses? Harper has tried to make cuts, he has been met with backlash every single time and this is in areas where he needs to make inroads. Perhaps he shouldn't have been vocal about making cuts in an election campaign, his mistake.

[Oleg Bach]

Being vocal about important issues can bring harm to a careerist. The competition that is careerism has draw backs. Personal glory and interests sometimes overshadow duty. Harper should have done what is right - but - he would have been driven from office by the very voters he was trying to help - the average person is pretty simple and panics easily. It's a strange system we have. IF Harper took on the position of benevolent dictator..He could be more out spoken and he would have had good results...but- this is Canada and we are a fearful bunch - who will not all on their sword to save the people.

[scribblet]

The nature of Harper is not politica per say. The nature that guides him is strickly monetary. He was installed by big buisness.

Absolute nonsense..

While I wouldn't like to see deficits, I'm not sure why we should worship at the alter of surpluses. A surplus only means that we are way overtaxed, or taxed unfairly.