Massive Conservative $85 Billion Dollar Deficit

[madmax]

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.

Argus, no one on the opposition suggested that the Conservatives run an $85 Billion Dollar deficit. Infact the BQ and the NDP voted against the Conservative Budget. And the LPC have taken the approach that the budget the CPC wrote is a piece of shit, but reasoned it wasn't worth bringing the government down on.

The LPC have taken responsibility for allowing the Conservatives to govern, but that is about it. That is nothing new, they have been supporting the CPC since 2006 and have yet to vote against the Conservatives.

The CPC should have drafted up a fiscally sound budget. That is their job. Trying the blame the opposition may only work if presented to the CPC base, who must be wondering what party Stephen Harper Belongs to, or whether or not he really does have economic credentials.

The CPC should have provided budget cuts. Your Salary, pensions, benefits, and paid sick days would be a good place to start.

[madmax]

And the Tories had no balls?

Considering they were facing Dion. Pretty Sad really.

[jdobbin]

What money? Issuing bonds is borrowing, In order to borrow, you have to offer a rate that will entice people to buy your debt. Who is paying that interest? The tax payer.

Bonds are considered investments in government programs many of which generate jobs that generate tax money.

Sure, we could of have put 30 billion in a piggy bank instead of using it to pay down debt and use it to cover this years deficit, but then we would still be the same amount in the hole at the end of the year.

Actually, we wouldn't. We'd still be paying down debt through our regularly scheduled rate.

I can't believe that you think hanging on to older debt that is costing you more is better than acquiring new debt that is costing you less than half what it is costing you to service that older debt.

I can't believe you won't look at evidence that paying down debt faster can cause in inflation. Inflation leads to higher interest rates, higher interest rates mean paying more on the debt that remains. Worse, it means a slowdown in the economy when you might need it most.

First you tell me buying down debt causes an economic slowdown, then you complain that government spends too much. It seems to me that you think government spending is OK as long as it is being spent on servicing debt so why do you get so sweaty about a deficit? How on earth could reducing public debt slow down the economy other than reducing the stimulus government spending provides? I'm not looking up anything, it's your theory.

It isn't my theory. It is what has been shown to happen. Increasing debt and paying debt fast can be inflationary. Steady and continuing debt payment keeps inflation at bay. That keeps the interest rates down and economic growth the continue.

You will have to explain it to me. I would like to know how being in debt makes me richer. The only way it could cause inflation is through increased spending made possible by lower taxes and greater net revenues to the government because less money is needed to service the national debt. If you want your tax dollars going for interest payments to government bond holders (many of whom are outside Canada) instead of staying in your own pocket or providing services such as health care, count me out.

Think I have explained it to you. Growing debt doesn't make you richer but steady payment on it does. Pay too fast and risk inflation. Keep inflation lower and keep economic growth going steady. That makes you richer.

As we have seen in Alberta, the danger of mighty surpluses being spent in Alberta had an enormous rate increased inflation there.

I am for a cautious steady approach to financing. Most financial planners tell people to not spend big money unless they have about six months of cash at hand. It is to safeguard against unexpected events like job loss, slowdowns and the like. Does it make sense for the individual investor to plow money into mortgage payments if they are cash poor? Does it make sense for them to borrow while looking for a job if they can get the credit? Not really. It is better to be able to draw on savings for a while.

Who knows, I don't suppose people knew the Great Depression would last a decade when they were only seven months into it. From a fiscal point of view, the only thing that really matters is what our total debt load will be when the budget is finally balanced again. When we borrowed the money will not matter, only the cost of servicing it.

With a fiscal stabilization fund, we know at least a year or two is covered and that debt won't grow but continue to be paid.

I guess the difference between us is as a rule, I have always put a priority on paying down debt over saving. Debt is an anchor around my neck. Without debt, I have flexibility and the option of going into debt at the lowest rates available if I need to.

And you keep absolutely no savings around for the unexpected?

[Argus]

"Mulroney's inability to improve the government's finances, as well as his use of tax increases to deal with it, were major factors in alienating the western conservative portion of his power base. .... Annual budget deficits ballooned to record levels, reaching $42 billion in his last year of office. These deficits grew the national debt dangerous close to the psychological benchmark of 100% of GDP, further weakening the Canadian dollar and damaging Canada's international credit rating. (Wikipedia)

Chretien was elected in 1993 and "By 1995, Canada had eliminated the federal deficit, becoming the only G7 country to have a budget surplus." (Wikipedia)

2006 Harper inherits 13 billion dollar surplus, which he blew when times were good, leaving nada to help us now.

Conservatives drained coffers: Watchdog

Congratulations. You learned how to cut and paste. Now if you only knew enough about economics, history and budgeting to actually understand anything about what you're posting.

[Argus]

The Conservatives plan is to run a massive $85 Billion dollar deficit. I quote financial Reports on Business and Right Wing Media Reports.

I read the articles it is a massive $85 Billion Dollar deficit that the Conservative Government is intent on running.

I don't know how to put it any clearer. The budget deficit is $34b. You can insist on using multi year terms to describe the current year but that's just - real stupid. But I'm not going to try and point that out to you any more because you clearly aren't able to understand clear English.

[Argus]

you need to man-up to your Harper Conservative government's actions/budget - otherwise you're stating an Opposition party had direct input to the budget (which doesn't seem to be common/public knowledge)

Did you just crawl out from under a rock or something? Where have you been the last few months? You missed that whole business of the three stooges and then Harper shutting down parliament and all that biz?

please detail the Opposition party supplied items that Harper incorporated into his budget... into your Conservative party's budget

Read a newspaper some day. Or have someone read it to you.

[madmax]

When Argus has nothing of substance to offer. He offers Sarcasm. PT = 1 pt. for historical references.

When Argus has nothing of substance to offer. He offers Sarcasm. Waldo = 1 pt. for pointing out who singularly drafted the budget.

Edited March 16, 2009 by madmax

[Argus]

You defend poor fiscal policy.

No, I'm attacking a really dumb idea.

The Conservative government fiscal record prior to the 08 Election was underwhelming.

I believe I've stated that a time or two.

The post 08 Conservative Government is fixated on throwing money at every special interest, Billions For Banks, Billions for Billionaires and in the corporate sector. Increased billions to be spent and Decreased Billions to be collected.

Yes, one would almost think they were Liberals.

This fiscal policy will neither stimulate the economy or balance the books. But lots of lobbyists are going home with full bellies.

The main cause of the deficit is the recession - which only an insane person would blame them for - and the massive

incentive program all three opposition parties absolutely demanded. I'm not suggesting the Tories did a great job economically BEFORE the recession hit, only that it's dishonest of Liberal hacks to try and pretend they had nothing to do with the current deficit. As for cutting spending - I have still not heard a single thing the Liberals and their opposition friends would have allowed the Tories to cut. The CBC? Massive cuts to arts spending? Multiculturalism? The firearms registry? What exactly?

[Argus]

And you must have frequent visits to the doctor over the rage that must be doing damage to your heart

Oh yes, I'm enraged at your pathetic attempts at denying your party's responsibilities. It's such a shock given how honest you Liberals have always been in the past, how ready to admit guilt and own up to responsibilities.

And you talk like an angry white guy who sits at their desk hoping no one knows they are typing on a government computer when they should be working.

I have the day off, actually. And you? You seem to spend just about all day, every day posting here. Do you have a job or is this it?

[Argus]

Argus, no one on the opposition suggested that the Conservatives run an $85 Billion Dollar deficit.

Right. They insisted on a huge, multi-billion dollar incentive program or they'd bring down the government. And they hadn't a clue this was going to result in a deficit. Is that what you're seriously suggesting?

Infact the BQ and the NDP voted against the Conservative Budget

.

Both announced they would vote against it prior to the budget being announced. They didn't care what was in the budget, they were going to vote against it regardless because they wanted to bring down the government. No doubt they were still hoping they could get together as the three stooges with Iggy and form a new government.

And the LPC have taken the approach that the budget the CPC wrote is a piece of shit, but reasoned it wasn't worth bringing the government down on.

The LPC is never going to say anything approvingly of anything the Tories do. However, they accepted this budget with the huge deficit where they were threatening to throw the government out earlier without one. And they had made clear prior to the budget's release that there better be huge, whopping "incentives" in there or else...

I don't recall any complaints from the LPC when the budget was released that the Tories were spending too much money. They might have quibbled with some of the targets of those programs, wanting this instead of that, more here, less there, etc. etc., but there were no complaints about a huge deficit.

The LPC have taken responsibility for allowing the Conservatives to govern, but that is about it.

Yes, the LPC doesn't take responsibilities for its actions. It never has.

The CPC should have drafted up a fiscally sound budget. That is their job.

There was considerable consultation with the Liberals prior to that budget. It was clear to everyone and their grannie that if the Tories had not had a whopping big package of incentives the Liberals would have voted it down. I don't know what planet you guys have all been living on but I remember it quite clearly.

The CPC should have provided budget cuts. Your Salary, pensions, benefits, and paid sick days would be a good place to start.

It always comes down to your jealousy that I'm living well while you're in you mom's basement on your old student desk, eh?

Don't worry. I'm sure Burger King will soon get a hefty package of benefits for its employees too.

[Argus]

When Argus has nothing of substance to offer. He offers Sarcasm. PT = 1 pt. for historical references.

When Argus has nothing of substance to offer. He offers Sarcasm. Waldo = 1 pt. for pointing out who singularly drafted the budget.

When madmax has nothing to offer he comes to Mapleleaf Web and posts it here.

[bjre]

And if current trends continues, economists say, Prime Minister Stephen Harper and Finance Minister Jim Flaherty may rue their bold prognostications last week that Canada will exit the slump first and strongest.

http://cnews.canoe.ca/CNEWS/Canada/2009/03...8758156-cp.html

[madmax]

It always comes down to your jealousy that I'm living well while you're in you mom's basement on your old student desk, eh?

Don't worry. I'm sure Burger King will soon get a hefty package of benefits for its employees too.

Argus, you were asking for cuts. I put out the first one that comes to mind. I am certain there are lots here who think public servants, such as yourself could help out the Conservative Government and their desire to keep the Deficit in the $85 Billion range. You should be offering up your benefits, and Salary and Pension as a patriotic and fiscally prudent Canadian. And as a good Conservative, you should recognise yourself as an overpaid public servant and immediately make sacrifices for the betterment of Canada.

BTW

A Burger king Whopper is better then a Conservative Whopper of a deficit. But I don't eat fast food.

[madmax]

When madmax has nothing to offer he comes to Mapleleaf Web and posts it here.

[jdobbin]

Oh yes, I'm enraged at your pathetic attempts at denying your party's responsibilities. It's such a shock given how honest you Liberals have always been in the past, how ready to admit guilt and own up to responsibilities.

Where have I denied Liberal responsibility?

I have the day off, actually. And you? You seem to spend just about all day, every day posting here. Do you have a job or is this it?

I have a flexible schedule although probably not as flexible as working for the government as some do.

[waldo]

you need to man-up to your Harper Conservative government's actions/budget - otherwise you're stating an Opposition party had direct input to the budget (which doesn't seem to be common/public knowledge).

please detail the Opposition party supplied items that Harper incorporated into his budget... into your Conservative party's budget

.

.

or

.

.

man-up... accept that Harper and his Conservative party have responsibility for the budget... they own it... as Ingatieff continues to reinforce.

besides - what's the problem... have you no confidence in Harper and his crew to actually manage the economy and turn around those deficits? C'mon, just think how good it will feel to pull the ole 'told you so' card... unless you have no confidence in Harper/Flaherty - oh my!

Did you just crawl out from under a rock or something? Where have you been the last few months? You missed that whole business of the three stooges and then Harper shutting down parliament and all that biz?

Read a newspaper some day. Or have someone read it to you.

c'mon... man-up... and show a modicum of consistency. Your man Harper repeatedly stated ("complained") he received no input from the Opposition towards the budget makeup - you know, his repeated attempts to demean the Opposition as non-contributors. As Ignatieff stated, it's not the job of the Opposition to create the budget... it's a Conservative (non-conservative) budget - Harper owns it.

now Harper (and I guess you) like to play both sides of it while not accepting any responsibility and ownership - apparently, you feel Harper was forced to craft such a budget under threat of losing government - since he'd already played the perogy card. Apparently, you feel Harper compromised Conservative policy/principles in order to retain government.

just say it... you'll feel better... just say, "Harper's overwhelming need to retain power trumped Conservative party policy/principles". C'mon - you can say it!

[Wilber]

Bonds are considered investments in government programs many of which generate jobs that generate tax money.

They are borrowing and are debt. Debt that must be paid back by you and I. Interest on which must be paid by you and I. What that debt is used for is a different issue.

Actually, we wouldn't. We'd still be paying down debt through our regularly scheduled rate.

Doesn't matter, every dollar you put in the piggy bank is a dollar you can't use for debt reduction.

I can't believe you won't look at evidence that paying down debt faster can cause in inflation. Inflation leads to higher interest rates, higher interest rates mean paying more on the debt that remains. Worse, it means a slowdown in the economy when you might need it most.

If it is so simple, I can't believe you can't explain how.

It isn't my theory. It is what has been shown to happen. Increasing debt and paying debt fast can be inflationary. Steady and continuing debt payment keeps inflation at bay. That keeps the interest rates down and economic growth the continue.

See above

Think I have explained it to you. Growing debt doesn't make you richer but steady payment on it does. Pay too fast and risk inflation. Keep inflation lower and keep economic growth going steady. That makes you richer.

As we have seen in Alberta, the danger of mighty surpluses being spent in Alberta had an enormous rate increased inflation there.

I am for a cautious steady approach to financing. Most financial planners tell people to not spend big money unless they have about six months of cash at hand. It is to safeguard against unexpected events like job loss, slowdowns and the like. Does it make sense for the individual investor to plow money into mortgage payments if they are cash poor? Does it make sense for them to borrow while looking for a job if they can get the credit? Not really. It is better to be able to draw on savings for a while.

I see, Alberta's problem was having no debt. If they had debt, they could be giving all that money to foreign bond holders instead of investing it in their own booming economy. How foolish.

You are only cash poor if you spend too much. One kind of spending I try to avoid is paying other people to use their money. I don't pay interest on money I don't owe, so I am in fact richer. If a person does plow money into mortgage payments, they are increasing their equity in their property plus lowering the cost of financing it, so they are also in fact richer. I take your point however about individuals having a cash reserve depending on how risky their job situation is but governments don't lose their jobs and they can always borrow provided they don't already have too much debt. Just elected politicians lose their jobs and they are a dime a dozen.

With a fiscal stabilization fund, we know at least a year or two is covered and that debt won't grow but continue to be paid.

Ya right, how big should this fund be then? I've asked you several times but you won't give a number. All the parties are clamoring to throw tons of money at the economy, money we don't have, money we wouldn't have even if there was 30B in the kitty, 30B in debt we would still have because we put it into the kitty instead of paying it off. At this point they are not arguing about whether there will be a stimulus pie or how big the pie will be, just who gets the biggest pieces. Are you trying to tell me that a Liberal or any government would have foreseen the extra 80B in stimulus spending that all the parties seem to think is necessary? If so, you are waisting your time.

And you keep absolutely no savings around for the unexpected?

Of course I have investments that could be sold in an emergency but no, I keep little cash on hand.

[Oleg Bach]

So you think that the Americans are going wacko with their huge bail out packages...we have surpassed them!

85 billion - is one hell of a bail out package - THAT IS WHAT THIS IS - IT'S NOT DEFICIT SPENDING - THIS IS WHY OUR BANKS "are the most stable in the world" WE BAIL THEM OUT INDIRECTLY.

All of this money will end up being held by the banks and doled out to us at a later date.

At an interest...brilliant plan.. AND very very covert - we have a socialist capitalist system ...we are all socialist except for THEM..and socialism has no problem scraping up the cash to had over to the bosses..who just love socialism and liberalism it's henchman.

[jdobbin]

They are borrowing and are debt. Debt that must be paid back by you and I. Interest on which must be paid by you and I. What that debt is used for is a different issue.

It is why I said it is an investment in yourself.

Doesn't matter, every dollar you put in the piggy bank is a dollar you can't use for debt reduction.

But it is a dollar that can be used to keep from adding to debt if there is the downturn.

If it is so simple, I can't believe you can't explain how.

It is so simple that I can't believe you don't get it.

See above

See above. I explained it pretty simply. You just don't believe it.

I see, Alberta's problem was having no debt. If they had debt, they could be giving all that money to foreign bond holders instead of investing it in their own booming economy. How foolish.

I think it is foolish to believe I said anything about Alberta having no debt.

I said that Alberta spending money as fast as they did was inflationary.

I take your point however about individuals having a cash reserve depending on how risky their job situation is but governments don't lose their jobs and they can always borrow provided they don't already have too much debt. Just elected politicians lose their jobs and they are a dime a dozen.

Poor government can cause many people to lose their jobs. I don't believe the solution is to borrow money to add to the debt. If you can't cut service or raise taxes, it is better to have a reserve fund to have fiscal stabilization.

Ya right, how big should this fund be then? I've asked you several times but you won't give a number.

I've already indicated that the federal government should have had about $15 billion in a reserve fund. I believe it was possible in by 2008 to have shaved off $15 billion in spending if the Tories had been serious about in when they first got into power.

Of course I have investments that could be sold in an emergency but no, I keep little cash on hand.

Then you must be supremely confident of not losing your job or seeing a cut in wages.

I suppose if you have no debt whatsoever, it is possible to get by if you know that you can sell investments.

People as well as governments need liquid assets at different times. No point losing your house or your country to default if you plan ahead for a downturn.

[Wilber]

It is why I said it is an investment in yourself.

So more debt is good depending what it is spent on. You should have no problem with a deficit then as long as it is used to stimulate the economy and generate more wealth.

But it is a dollar that can be used to keep from adding to debt if there is the downturn.

The debt is already there because you didn't spend that dollar to reduce it.

It is so simple that I can't believe you don't get it.

You can't explain it can you.

I think it is foolish to believe I said anything about Alberta having no debt.

I said that Alberta spending money as fast as they did was inflationary.

They had the money to spend because they had no debt, so what is your point then about Alberta, they would have been better off with lots of debt?

Poor government can cause many people to lose their jobs. I don't believe the solution is to borrow money to add to the debt. If you can't cut service or raise taxes, it is better to have a reserve fund to have fiscal stabilization.

No need, you already had the debt because you didn't pay it off.

I've already indicated that the federal government should have had about $15 billion in a reserve fund. I believe it was possible in by 2008 to have shaved off $15 billion in spending if the Tories had been serious about in when they first got into power.

15 billion won't come close to covering what all the parties are talking about now.

Then you must be supremely confident of not losing your job or seeing a cut in wages.

I suppose if you have no debt whatsoever, it is possible to get by if you know that you can sell investments.

People as well as governments need liquid assets at different times. No point losing your house or your country to default if you plan ahead for a downturn.

I'm not supremely confident of anything. I've been retired for almost three years but I had plenty of wage cuts during my career. Factoring in inflation, it was all downhill in my industry since the late eighties. Even more reason to not be in a situation where you are carrying more debt than you can handle if there is a downturn. I guess one reason to carry a lot of debt is that you can always declare bankruptcy and walk away from your responsibilities letting someone else take the loss. Government doesn't need liquid assets. Government always has the option of taxing or borrowing as long as they aren't too far in debt already.

Edited March 17, 2009 by Wilber

[jdobbin]

So more debt is good depending what it is spent on. You should have no problem with a deficit then as long as it is used to stimulate the economy and generate more wealth.

Didn't say anything about more debt.

The debt is already there because you didn't spend that dollar to reduce it.

Didn't say that either.

You can't explain it can you.

You couldn't understand it.

They had the money to spend because they had no debt, so what is your point then about Alberta, they would have been better off with lots of debt?

The point was about inflation but you missed it.

No need, you already had the debt because you didn't pay it off.

Think I made the point that debt continues to be paid off throughout.

15 billion won't come close to covering what all the parties are talking about now.

$15 billion plus $15 billion of cuts as I mentioned would have gotten us through the next year just fine.

I'm not supremely confident of anything. I've been retired for almost three years but I had plenty of wage cuts during my career. Factoring in inflation, it was all downhill in my industry since the late eighties. Even more reason to not be in a situation where you are carrying more debt than you can handle if there is a downturn. I guess one reason to carry a lot of debt is that you can always declare bankruptcy and walk away from your responsibilities letting someone else take the loss. Government doesn't need liquid assets. Government always has the option of taxing or borrowing as long as they aren't too far in debt already.

According to many on the right you can't tax so that leaves borrowing for the moment. What we aren't hearing from the Tories is that massive cuts in service are likely coming from them when things improve.

I disagree that it was necessary to go into deficit this year. The Tories were spending too much and not considering how a downturn could wreak havoc with lower revenues coming in.

We could have avoided deficit this year, had fiscal stabilization and would have been able to direct some stimulus to areas to get the economy through the next year.

Considering how Manitoba, Saskatchewan and Alberta are doing it, it seems that it can be done without going several years into deficit.

[Argus]

But it is a dollar that can be used to keep from adding to debt if there is the downturn.

This really is insanely stupid.

Let me try and put this into terms even you can underestand.

You have an extended line of credit with your bank. You owe a million dollars, and are regularly paying 5% interest on it. Now let's say you come up with a spare $100,000. You can either pay down your credit line or put it into the bank where it will earn 1% interest.

Putting it into the bank earns you $1000 each year.

But you are paying $5000 in interest each year on that same amount of money you still owe the bank for. If you'd paid down your credit line, you'd be ahead. And if there were rough times, well, you could still borrow it back from your credit line since you'd paid that down by $100k.

[Argus]

I disagree that it was necessary to go into deficit this year. The Tories were spending too much and not considering how a downturn could wreak havoc with lower revenues coming in.

We could have avoided deficit this year, had fiscal stabilization and would have been able to direct some stimulus to areas to get the economy through the next year.

This is total fiction. In order to have avoided a deficit we would have either had to have saved over $30 billion in a little piggy bank somewhere - or not introduced this massive "incentive" program.

Your party insisted on the deficit program.

In order to have saved $30b we would have either had to have started several years back - like when your party was in power - or raised taxes. I don't think Canadians would have much liked the idea of you increasing their taxes just to stick the money into a piggy bank.

Besides, we all know that money would have been spent first close election. The Liberals had whopping big budget surpluses for years. Not only did they NOT start up some kind of huge reserve fund with tens of billions in it, but the first election where they saw a legitimate threat Martin ran around the country throwing money out in buckets at anyone likely to vote Liberal.

[jdobbin]

Let me try and put this into terms even you can underestand.

Let me put it in terms even you can understand. The money in the Fiscal Stabilization Funds wasn't earning 1%.

This was plainly demonstrated in Saskatchewan and Manitoba's reports on their funds.

[jdobbin]

This is total fiction. In order to have avoided a deficit we would have either had to have saved over $30 billion in a little piggy bank somewhere - or not introduced this massive "incentive" program.

Utter crap. The Harper Tories had plenty of resources left over to them when they got into power. They blew it all.

Your party insisted on the deficit program.

The Liberals didn't insist on a deficit. Try to get that straight. Your party rode this country straight into deficit with a lack of planning.