Massive Conservative $85 Billion Dollar Deficit

[jdobbin]

I've often observed that you seem to feel the need to believe you're having some massive emotional effect on people despite no evidence to support that. But by all means, if it makes you happy.

I think your frothy mouthed personal responses show there is an emotional effect.

Oh I'll admit that the opposition has done an excellent job of panicking and scaring people - in concert with the media, which always likes the worst possible news so they can breathlessly cover it. So congratulations. You helped cause a lot of people to lose their jobs, and gained a temporary political advantage by your scaremongering.

What utter crap. Blaming the Liberals for the jobs losses? What gall. Not that anyone is believing that message. Take some responsibility for the fact that your party has been in power for 2006. Last I remember the Liberals left things pretty good for the incoming government.

I'm not sure you were referring to anything as it was very nearly incomprehensible.

Kind of what I think about your gritted teeth posts on immigrants and the like.

Oh I'll certainly agree they should have tried harder to curb spending. At the same time, I have no doubt whatsoever that your party would have violently opposed ANY and all cuts to spending, as would the BQ and NDP. As for Sask and Manitoba, their "reserve funds" were chicken feed. In order to have fended off this deficit the Tories would have had to have poured tens of billions into any such funds, and as I've already explained earlier, that would have been idiotic in light of the debt servicing costs we have.

What is idiotic is some conservatives defending going into deficit and saying nothing could be done. Or worse, blaming the Liberals for it.

Don't think that story is resonating with the electorate.

[jdobbin]

Your contention they should have simply stuffed tens of billions away in a giant piggy back is economic nonsense. It's certainly true they should have tried harder to cut the budget earlier, but where? I cannot think of a single major cut that would not have put the Liberal Party into hysterical opposition.

The Liberals certainly didn't support the restoration of money to VIA, the military college and other areas the Tories pumped cash in. Get a grip when you try to blame them for that.

There is just no way under the current minority that they could have cut spending.

How about just keeping spending to what was promised in the election? You keep saying that huge increases were needed but really what was that $3 billion about in the last election? A UFO museum? C'mon. This is the Tories you support?

None of the opposition parties would have supported cuts to spending in ANY area - other than the military, of course. And since it was your party, more than any other, that ran around screaming and howling and demanding a huge incentive package you guys have no right to whine about the deficit. In fact, last I heard, your finance critic was demanding yet another incentive package even before they had passed this one. Apparently the Tories just can't spend money fast enough to please the Liberal Party.

Utter and and complete crap. Time for the right wing to grab some balls and stop blaming others for their deficit.

[jdobbin]

It is moronic to keep very much money in the bank earning little or no interest while you are paying interest on a large debt. Paying down the debt is more profitable, and if, in the end, you need money, you can then borrow it back again. But at least in the interim you weren't paying interest on it.

It is moronic to go into deficit for years.

Even the banks keep reserve funds. You think that governments shouldn't? What?

[capricorn]

You know dobbin, you have reverted to calling posters who disagree with you as being "angry". When I read some of your posts here, it it YOU that sounds very angry. Maybe you need a holiday.

[jdobbin]

Isn't that the same as taking money out of one pocket and putting it in the other? I don't see how you can profit at that without printing more money.

It is how a lot of governments put money to work while having it in reserve. I don't see how having years of deficits is profitable. All the money paid down on the debt will be used up by borrowing.

Inflation has been at record lows the past few years as have interest rates. There has been no better time to pay down debt. Double digit interest rates made it impossible in the eighties resulting in mammoth deficits. The low global interest rates of the late nineties and this century were a huge factor in our returning to surplus. It would have been impossible without them.

It was keeping inflation down that helped. Paying the debt faster causes inflation which causes interest rates to rise.

So you would bank money at 1% and carry an 18% Visa balance. Carry on. You objected to large surpluses but think the government should have been building a contingency fund. Where was that money to come from? I'm saying that reducing debt is the same thing as saving. It is the only thing to do if you can pay off more debt than you can save. There is only one taxpayer and there is only one purse.

I don't subscribe to your bogus numbers a bit.

I have already detailed the four places surpluses should have gone to.

Then the post about the government running a $85B must be wrong. What size contingency fund would you consider adequate to remain out of deficit?

That was the total over a number of years. It is $34 billion this year.

We could have handled that if there had been $15 billion of spending cuts in 2007/08 and roughly the same amount from a contingency fund.

No deficit was necessary in 2009 despite what Tories keep saying now. To do that required the same foresight that a number of provinces had.

Are you saying those provinces were wrong?

And they might not, in which case they will not only have to service new debt but the debt they didn't pay off in order to have a contingency fund. Since interest rates are at record lows, they will be paying more interest on their old debt than they will on new debt. The bottom line is their contingency fund will end up costing them money if they are still carrying old debt at higher rates.

So you think these provinces should have paid faster and caused inflation that pushed interest rates up that would have hurt the country further in a downturn?

Well where is all this money going to come from that Iggy Jack and Gilles want to spend on stimulus? I'm sure they saw all this comming when no other western government seemed to, right?

Ah yes, blame the Opposition when Tory overspending even in good times left nothing for when things got bad.

I suppose the Conservatives could have done a few things if their crystal ball had forcast the global economic meltdown but I doubt they could have done much in two years to make a difference.

Really? They certainly had a lot of money left over to them to do something more than they did.

[jdobbin]

You know dobbin, you have reverted to calling posters who disagree with you as being "angry". When I read some of your posts here, it it YOU that sounds very angry. Maybe you need a holiday.

I have no anger. I do find it funny that I see anger in posts about immigrants and Liberals in general. I find it funny when people lie about their chosen candidate not having two separate words for English and French Canada on those they oppose. It obviously was noticed in Quebec given the fact that support for the Tories have plummeted there.

[Wilber]

It is how a lot of governments put money to work while having it in reserve. I don't see how having years of deficits is profitable. All the money paid down on the debt will be used up by borrowing.

How can you put money to work by lending it to yourself?

It was keeping inflation down that helped. Paying the debt faster causes inflation which causes interest rates to rise.

So less debt means more inflation. Why are you bitching about deficits then?

I don't subscribe to your bogus numbers a bit.

I have already detailed the four places surpluses should have gone to.

What's bogus about them? The bank rate is 1%, Visa rates are still around 18%+ are they not. Any time you are borrowing for more than you are making on your savings you are losing money. I can't believe I'm having to explain this to you.

That was the total over a number of years. It is $34 billion this year.

We could have handled that if there had been $15 billion of spending cuts in 2007/08 and roughly the same amount from a contingency fund.

No deficit was necessary in 2009 despite what Tories keep saying now. To do that required the same foresight that a number of provinces had.

Are you saying those provinces were wrong?

Quite possibly they were wrong if they end up having to service old debt at three times the rate of new debt because they didn't pay that old debt off when they had a chance. Those old outstanding bonds are now yielding so much they would have to pay a hefty premium to buy them back now.

Assuming a minority government could have gotten away with a 15 billion reduction in program spending during good times, you would still be paying over 4% interest on the 15 billion you didn't pay off when the bank rate is now 1%.

Ah yes, blame the Opposition when Tory overspending even in good times left nothing for when things got bad.

They left us with less debt. You don't seem capable of understanding that debt and deficites are the same thing. Money you owe!

Really? They certainly had a lot of money left over to them to do something more than they did.

See above

[jdobbin]

How can you put money to work by lending it to yourself?

That's how provincial bonds work.

So less debt means more inflation. Why are you bitching about deficits then?

Paying debt faster causes inflation. If you don't believe me, look it up.

What's bogus about them? The bank rate is 1%, Visa rates are still around 18%+ are they not. Any time you are borrowing for more than you are making on your savings you are losing money. I can't believe I'm having to explain this to you.

I can't believe you keep referring to a Visa card.

Quite possibly they were wrong if they end up having to service old debt at three times the rate of new debt because they didn't pay that old debt off when they had a chance. Those old outstanding bonds are now yielding so much they would have to pay a hefty premium to buy them back now.

Given that paying that debt would have added to inflation and higher interest rates, they chose a rate that kept debt servicing charges low.

Assuming a minority government could have gotten away with a 15 billion reduction in program spending during good times, you would still be paying over 4% interest on the 15 billion you didn't pay off when the bank rate is now 1%.

Certainly manageable if you are not adding the same amount of debt as was paid off going into deficit.

They left us with less debt. You don't seem capable of understanding that debt and deficites are the same thing. Money you owe!

You don't seem to get that the deficit they are planning erases all the debt payments made.

See above

See above.

The Tories are erasing all the money they paid on debt just to go into deficit again and for years to come.

[MontyBurns]

The Tories are erasing all the money they paid on debt just to go into deficit again and for years to come.

This was forced by the opposition. Liberals advocated it and supported it all the way.

[capricorn]

I find it funny when people lie about their chosen candidate not having two separate words for English and French Canada on those they oppose.

Here is what Ignatieff said in a speech he delivered in Embrun, Ontario on March 14, 2009.

«Les séparatistes parlent de défaite et de conquête. Eh bien, il s'agit au contraire d'une incroyable épopée de survivance et d'épanouissement dont nous pouvons être fiers», affirme-t-il dans son discours.

http://www.cyberpresse.ca/actualites/quebe...rancophones.php

Looks like your chosen candidate is not averse to using the word "separatists" in his speeches outside Quebec. I have never heard him use the term "separatists" when he speaks in Quebec.

"What I don't like, frankly, is that sovereigntists are trying to dominate a free debate. As someone who likes Canada and knows a thing or two about its history, I want to have my say," Ignatieff told reporters at a separate event in Quebec City.

http://www.windsorstar.com/news/Battlefiel...1107/story.html

[Progressive Tory]

The only province to ever go into default in Canadian history is Alberta.

Alberta has always done a very good job, but their latest bubble is bursting.

Alberta no longer holds economic bragging rights

The energy bonanza has come to a crashing halt, suddenly putting the province near the bottom of the pack for economic growth in the country this year.

The latest Conference Board of Canada outlook projects growth of minus 0.5 per cent, the first negative figure the province has seen in nearly a quarter of a century. That's in stark contrast to a place that led the country in growth for three years starting in 2004.

They've actually done worse under the Conservatives. Most of us predicted the opposite.

They are second behind Ontario for recent job losses from this recent crisis.

"Ontario continued to be the hardest hit, losing another 35,000 positions in February. Alberta, until recently considered an economic juggernaut, saw 24,000 jobs disappear.

"The government's dithering leaves us months behind other jurisdictions in responding to the crisis, but better late than never. The total job loss is now above 36,000 jobs in the last three months. How many more Albertans must lose their livelihood before this government acts?"

"Manufacturing shed 11,000 jobs last month. Retail lost 7,500 jobs. This says to me that the crisis is spreading to all sectors of Alberta's economy, and that is worrying."

[Progressive Tory]

As if this recession isn't bad enough, now the full implications of a political culture that tolerates fraudulent budgets and statistics will frustrate any recovery.

He doesn't have Mike Harris in his gov't does he? I know Flaherty still haunts us federally, but this is classic Harris and his Accenture magicians.

[Progressive Tory]

Not all governments are going into deficit. Harper didn't have to let this happen but he couldn't control his spending. He didn't think to have a reserve fund.

He did have a reserve fund. A gift from the Liberals. But he blew it during good times, leaving nothing in the bank for bad. Like I said before, as an economist he makes a great shoe salesman.

[Progressive Tory]

The deficit is $34 billion. That's bad enough. No need to exaggerate it.

It is a projected 85-105 billion.

[Progressive Tory]

governments are incapable of saving money -

The Liberals managed to save 13 billion dollars and start to pay down the debt.

[Progressive Tory]

I think Flaherty budgeted $2 billion in his first two budgets as a reserve.

This should have been easy to do considering he inherited a 13 billion dollar reserve. He couldn't even save that.

[Progressive Tory]

This was forced by the opposition. Liberals advocated it and supported it all the way.

The brilliant leader Harper said that he would never be forced into a deficit. Guess he's not much a leader afterall, huh? He's nothing more than a puppet to all Opposition parties, not just the Liberals. If they asked him to run around Parliament Hill wearing nothing but a pair of red highheels and a dog collar, half of Ottawa would be blind by now.

Can't blame this one on Liberals. It's all about Harper keeping his job, which he doesn't even seem to want anymore. We'll put him out of his misery soon. We just want to play for awhile.

[jdobbin]

This was forced by the opposition. Liberals advocated it and supported it all the way.

The Liberals forced the Tories to spend like crazy from 2006? I think not.

[Wilber]

That's how provincial bonds work.

Actually no, provinces raise money buy selling bonds on the open market. Selling them to themselves would make no sense. Besides, where would they get the money to buy them?

Paying debt faster causes inflation. If you don't believe me, look it up.

Then why are you bitching about deficits?

I can't believe you keep referring to a Visa card.

I can't believe you keep wanting to carry old debt at higher rates than exist now.

Given that paying that debt would have added to inflation and higher interest rates, they chose a rate that kept debt servicing charges low.

Well, I don't buy that given at all. The more debt I carry, the higher risk I am and the more someone is going to charge me for money. Just ask any company that is already carrying a lot of debt and trying to raise more money. You can't chose a rate, you have to pay the going rate or no one will buy your debt. We now have some of the lowest rates in history.

Certainly manageable if you are not adding the same amount of debt as was paid off going into deficit.

Yeesh. If you were 400 billion in debt and you paid off 15 billion last year but then go out and borrow it again this year, at the end of the year you are still 400 billion in debt. The only variable is the amount you pay to carry that debt and this year you are paying less than half that you paid last year. Whats so difficult about this for you to understand.

See above.

The Tories are erasing all the money they paid on debt just to go into deficit again and for years to come.

Well, if they hadn't paid down debt so that they could raise a contingency fund, once that fund was gone, the debt load would be the same, wouldn't it.

[Progressive Tory]

The Liberals forced the Tories to spend like crazy from 2006? I think not.

I agree.

[jdobbin]

Here is what Ignatieff said in a speech he delivered in Embrun, Ontario on March 14, 2009.

I notice the French press calls the article Ignatieff Reaching Out to Francophones. The tone of the speech does seem to indicate that.

Looks like your chosen candidate is not averse to using the word "separatists" in his speeches outside Quebec. I have never heard him use the term "separatists" when he speaks in Quebec.

Well, according to the Hills Times today, he does use the word separatists in Quebec.

http://www.hilltimes.com/members/login.php...korski/&c=2

He promised Liberals would 'keep an eye on the Bloc,' and referred to 'sovereigntists, or separatists,' whatever you want to call them...

Harper made the mistake of making many people in Quebec feel like they were traitors for supporting an MP they thought would represent them better in Ottawa. The feeling he was trying to convey in the rest of Canada was an anti-Quebec tone. It worked. I still remember the blistering attack in these forums that didn't just stick to the BQ but the entire province and the people of Quebec.

I think the recent polls in Quebec show that Harper overplayed his hand on that one.

Edited March 16, 2009 by jdobbin

[jdobbin]

Actually no, provinces raise money buy selling bonds on the open market. Selling them to themselves would make no sense. Besides, where would they get the money to buy them?

The money is budgeted for.

The two key things that fiscal stabilization funds look for are interest and liquidity. Floating rate bonds offer annualized liquidity and better interest than bank accounts.

Then why are you bitching about deficits?

Because we didn't need to have one this year. Given that Bernanke said yesterday said that the recession looks like it might break this year, this deficit lasting numerous years seems rather foolish.

I can't believe you keep wanting to carry old debt at higher rates than exist now.

I can't believe you think that old debt has to be paid faster even when it results in higher inflation and interest rates. If you want to keep low inflation and low interest rates, you don't pay down debt faster just to watch the economy slow down as a result.

Well, I don't buy that given at all. The more debt I carry, the higher risk I am and the more someone is going to charge me for money. Just ask any company that is already carrying a lot of debt and trying to raise more money. You can't chose a rate, you have to pay the going rate or no one will buy your debt. We now have some of the lowest rates in history.

I know you don't buy it. Look it up if you don't believe me. It isn't theory. It has been shown to happen. Paying off national debt at ever greater rates causes inflation and higher interest rates. In other words, it can lead to economic slow down.

Yeesh. If you were 400 billion in debt and you paid off 15 billion last year but then go out and borrow it again this year, at the end of the year you are still 400 billion in debt. The only variable is the amount you pay to carry that debt and this year you are paying less than half that you paid last year. Whats so difficult about this for you to understand.

What is difficult to understand about causing higher inflation and interest rates by paying debt at ever faster rates?

Well, if they hadn't paid down debt so that they could raise a contingency fund, once that fund was gone, the debt load would be the same, wouldn't it.

If we were looking at many years of downturn. We are now hearing that we could be heading out of it in 2009.

[Argus]

I think your frothy mouthed personal responses show there is an emotional effect.

Okay, sure, whatever. You DA MAN!

What utter crap. Blaming the Liberals for the jobs losses? What gall.

Your scaremongering certainly had a significant effect on the mood of consumers and business, and resulted in a not-insubstantial amount of the drastic cut in consumer and business confidence and spending which has been helping to increase job losses. Harper was trying to calm things, telling people not to panic, not to get scared, and your party were running around shrieking at the top of their lungs, arms waving in the air, eyes bugging out. It was pathetic.

Not that anyone is believing that message. Take some responsibility for the fact that your party has been in power for 2006. Last I remember the Liberals left things pretty good for the incoming government.

Yeah, the recession is all the Tories fault, and the deficit - due mostly to the incentive package you insisted on - not at all your fault. Of course not. Who could think otherwise!

Words like "honesty" and "responsibility" are largely foreign concepts to most Liberals.

What is idiotic is some conservatives defending going into deficit and saying nothing could be done. Or worse, blaming the Liberals for it.

I'm not defending going into deficit. I was in favour of them letting your clownish little gang of three take over, and stumble into a huge deficit with their "incentive program" once they decided on what it would be. I am, however, pointing out that there is no way in hell your party would not have violently opposed any significant cuts to program spending, no matter what they were. So yet again, your sniveling about the deficit is more than a touch dishonest and hypocritical. Personally I would have liked to see massive cuts in all kinds of programs, beginning with most arts funding, but no way in hell would the Liberals or NDP or BQ have gone along with that.

[Argus]

It is a projected 85-105 billion.

Yes, over multiple years. But mostly because you guys insisted on it. You were going to bring down the government if it didn't bring in a huge "incentive" program. Have you already forgotten that? Because I assure you the rest of us haven't. I'm not exempting the Tories from blame for the deficit. But unlike you I'm reserving an equal amount of blame for the opposition, which demanded that huge spending. And continues to demand it.

[MontyBurns]

The Liberals forced the Tories to spend like crazy from 2006? I think not.

Liberals supported it.