The rise of Harper populism

[jdobbin]

You must mean he should have undid all of the reckless growth in government that was instituted by Trudeau. Cutting spending is not easy....even Paul Martin couldn't do it - he just starved the Military, cut transfer payments to the province, increased EI payments and rolled all the excess EI into General revenues.

And cut the civil service and program spending and so on and so. Martin did cut spending. You say he didn't?

Mulroney made no significant cuts in program spending in comparison. He simply raised taxes.

[Visionseeker]

You must mean he should have undid all of the reckless growth in government that was instituted by Trudeau. Cutting spending is not easy....even Paul Martin couldn't do it - he just starved the Military, cut transfer payments to the province, increased EI payments and rolled all the excess EI into General revenues. There is no getting away from the fact that Trudeau is the genesis of our National debt and we are still paying for his "vision" to this day.

Transfer payments to the provinces were the problem. The 50/50 cost shared arrangement negotiated under Pearson had the provinces giddy to spend as many federal dollars as they could. Repudiating the 50/50 formula and cutting transfer payments was the deficit elixer.

Trudeau is not "the genesis of our National debt". But he didn't solve the problem either. Nor did Mulroney.

[Alta4ever]

Nice cop out. Mulroney had almost 10 years of majority to fix the problem and he didn't. The Liberals did. That's the truth and there's no getting around it.

Lets assume (for example) mulrooney was in a suplus postition for government spending every year of his government. Small debt repayments were made of say 1 Billion per year.

Trudeaus debt year one of mulrooney 127 bill - 1 bill = 124 + 12% interest = 138.88 Bill

Mulrooney year two 138.88 bill-1bill= 137.88bill + 12%= $154.43 Bill

year 3 154.43 - 1 = 153.43 +12%=172.96

year 4 172.96 -1= 171.96 +12%= 193.71

year 5 193.71 -1=192.71 +12%= 216.96

year 6 216.96 - 1= 215.96 + 12%= 242.99

year 7 242.99-1= 241.99 + 12%= 272.15

year 8 272.15 -1 = 271.15 +12%=303.69

year 9 303.15-1= 302.15 + 12%= 339.01

year 10 339.01-1= 338.01 +12%= 378.57

So now you can see what running surpluses would have done at an average interest rate of 12%.

This is an example of what happened in the 80's. While I am no fan of mulrooney the economics of the time vindicate him. The difference between the 90's and the 80's was the interest rate, by the time Chretien took over and started making repaiments in '96 the intrest rat had dropped dramatically.

[Molly]

Vindicates him?

High interest rates don't vindicate him. The message of high rates is, "He-llo-o?" this is urgent! " It was a compelling reason to try a heck of a lot harder, not an excuse!

[Alta4ever]

Vindicates him?

High interest rates don't vindicate him. The message of high rates is, "He-llo-o?" this is urgent! " It was a compelling reason to try a heck of a lot harder, not an excuse!

I didn't know that the PRime Minister had direct control over the global lending cost of money.

It does vindicate him on the dramitic increase of our debt during the late 80's and early 90's. As I proved even with some debt repayment the economic realities of the time took the debt that trudeau created and ballooned it to what it was at the end of Mulroney's government. The only way for this to have not to happaned was to pay off the debt in its entirety in the first 2 years. Which was the worst recesion in decades.

Although he did make a few changes that put us in a postition where we would be able to start addressing the debt and the biggest and most important of all of these was Nafta.

[jdobbin]

So now you can see what running surpluses would have done at an average interest rate of 12%.

This is an example of what happened in the 80's. While I am no fan of mulrooney the economics of the time vindicate him. The difference between the 90's and the 80's was the interest rate, by the time Chretien took over and started making repaiments in '96 the intrest rat had dropped dramatically.

Mulroney didn't cut spending which lent itself to inflation which led the Bank of Canada to raise interest rates which increased the debt. Either way, Mulroney did not cut spending.

[Alta4ever]

Mulroney didn't cut spending which lent itself to inflation which led the Bank of Canada to raise interest rates which increased the debt. Either way, Mulroney did not cut spending.

What did ou say again about the current conservatives back in Novemeber when they weren't going to add spending going when the effects of the recession were very prevelant? I seem to recall more more more, and no we would not accept you cutting taxpayer money funding political parties.

[jdobbin]

What did ou say again about the current conservatives back in Novemeber when they weren't going to add spending going when the effects of the recession were very prevelant? I seem to recall more more more, and no we would not accept you cutting taxpayer money funding political parties.

I said at the time it was a game played by the Tories that was hard to believe since they increased the size of the cabinet at the same time. There was no money saving.

It was a plan to hurt the Opposition and then the Tories would call an election before May to avoid taking heat for the economy. All the while, there was no real plan to deal with the economy.

By the way, this all has nothing to do with Mulroney and cutting spending. Mulroney raised taxes which can cause inflation which causes higher interest rates which causes higher debt.

Edited March 20, 2009 by jdobbin

[Alta4ever]

By the way, this all has nothing to do with Mulroney and cutting spending. Mulroney raised taxes which can cause inflation which causes higher interest rates which causes higher debt.

The intrest rates were climibing before he raised taxes, try again.

[jdobbin]

The intrest rates were climibing before he raised taxes, try again.

I'm sorry they weren't. They rose up to nearly 20% and dropped down to around 10% just prior to Mulroney getting into power.

[Alta4ever]

I'm sorry they weren't. They rose up to nearly 20% and dropped down to around 10% just prior to Mulroney getting into power.

Did Mulrooney cause the increase of intrest in other countries too.? Look it was the conomics of the time that caused the interest problem. Our debt grew by that interest, and it was another 3 years into liberal government before intrest rates were at a point were something could be done.

Trudeau was the begining of our debt problems, and know how much you don't like ot hear that. Although I wish that Mulrooney would have had the balls to reverse it all back to pre trudeau. If he had maybe we would have owed a 100 billion less.

[jdobbin]

Did Mulrooney cause the increase of intrest in other countries too.? Look it was the conomics of the time that caused the interest problem. Our debt grew by that interest, and it was another 3 years into liberal government before intrest rates were at a point were something could be done.

Interest rates were helped by cutting spending which the Liberals did. Please try to keep that straight.

Trudeau was the begining of our debt problems, and know how much you don't like ot hear that. Although I wish that Mulrooney would have had the balls to reverse it all back to pre trudeau. If he had maybe we would have owed a 100 billion less.

Mulroney had two majorities and cutting spending was not his priority.

[Alta4ever]

Interest rates were helped by cutting spending which the Liberals did. Please try to keep that straight.

Mulroney had two majorities and cutting spending was not his priority.

Yet you don't like when the Harper conservatives cut taxes hmmmm.

[jdobbin]

Yet you don't like when the Harper conservatives cut taxes hmmmm.

If you don't cut spending at the same time, you run into problems.

[DrGreenthumb]

If you don't cut spending at the same time, you run into problems.

Plus consumption taxes are the wrong taxes to cut. The government should be moving into more revenue from consumption taxes, and less from income tax.

[Smallc]

Lets assume (for example) Mulroney was in a surplus position for government spending every year of his government.

Ok see, you're talking about an operational surplus....and not an actual surplus. And it doesn't really matter....because he still didn't get it done.

[Alta4ever]

Ok see, you're talking about an operational surplus....and not an actual surplus. And it doesn't really matter....because he still didn't get it done.

So in a recession you wanted the government to slash spending by 40%? Don't be silly.

I didn't like mulrooney either but weight of the deficit was not on his shoulders, it sits squarely on the liberals.

[Smallc]

it sits squarely on the liberals.

see, it's always the Liberals' fault....except when they are the ones eliminating the surplus.