Harper continues plan to 'debt' spend Canadians out of recessi

[William Ashley]

Keynesian economics totally appears as backwards logic to me. It says that what we do is spend a lot of public money, so that people get money.. OK hold on... who is making money? No people are still in debt, basically it is a funnel to private businesses, like construction firms working on all the infrastructure projects. At the same time provinces and municipalities are also in debt and

THE ONE THING THAT PISSES ME OFF is that actionplan signs only have the government of Canada on them YET only 1/3rd of the money comes from the federal government. It is like making it look like they are paying for the whole thing when only a maximum of 30% goes to it.

Back to deficit spending your way out of debt. I don't get how the guy can actually wake up in the morning and lead his life constantly lying to people.

Keynesian economics doesn't work because the government never pays the money back. The 500 billion in debt demonstrates this. Big Debt spending during "recessions... hold on" what caused all these recessions? Wasn't Canada insulated from the housing bubble burst.. why are these "global recessions" isn't the population the same? Have resources ran out? Hmm this is odd, why is there debt if there are still producers and still resources?

The reason is that recessions are engineered because they intentionally lower productivity. Instead of Harper printing money or taxing from the people hoarding the wealth -- oh there it is agian - who exactly is having the wealth migrate to them?

Blah blah, the bottom line here is that Keynesian Economics doesn't work it just transfers the debt to the government - and comes from private lenders who get an usary return. Meaning all the money the government gives, unless it increases inflation at a higher rate, creates more lost productivity, and more money needs to be borrowed, or higher taxes.

Currently the federal government is borrowing decades worth of debt each year, and is not gaining assets, it is transfering funds to private interests and organizations that have no requirement to pay back in turn - and worse GENERATE NO REVENUE. meaning they are dead investments, and sadly many actually remove productivity.

Keynesian economics doesn't work, and debt spending your way out of debt is a backward logic.

Voting for a backward logic man such as Stephen Harper is insane, and those who vote for him or his supporters much the same.

Edited March 18, 2011 by William Ashley

[Shakeyhands]

Way to burn a point against Rae here Mr Harper. The EAP II should end that criticsm once and for all.

[segnosaur]

Keynesian economics doesn't work because the government never pays the money back. The 500 billion in debt demonstrates this.

No, it doesn't.

The 500 billion in debt is because previous governments (primarily Trudeau) spent more than he was collecting, through both bad economic times (when the extra spending would supposedly boost the economy) and good. (If Trudeau had been following the Keynesian ideals, he would have had a surplus.)

So, don't blame the huge debt on Keynesian economics... blame it on people not following the principles.

Big Debt spending during "recessions... hold on" what caused all these recessions?

Recessions are a normal part of the economic boom-bust cycle.

Different recessions had different causes.

Late 2000s - bad lending practices, housing bubble, deregulation, bad handling of european governments

Early-90s - Stock market drop, gulf war and oil price increases

Early-80s - Oil crisis, Iranian revolution

We can't say there's any "one" cause.

Wasn't Canada insulated from the housing bubble burst..

Our housing market never got as 'hot' as the U.S. market. But, we do export products to the rest of the world. If the U.S. or Europe is not buying as much, then we will loose jobs. And if banks in the U.S. are 'cautious' about lending, Canadian banks will probably also restrict their loans.

...why are these "global recessions" isn't the population the same? Have resources ran out?

Resources don't have to 'run out'... even if there is a potential reduction in resources it can have a bad effect. (e.g. there was still plenty of oil available in the ground in the early 90s, but the risk that the middle east wouldn't be able to supply as much as they had been caused problems.

Blah blah, the bottom line here is that Keynesian Economics doesn't work it just transfers the debt to the government - and comes from private lenders who get an usary return.

Actually, a lot of Canada's debt is held by pension plans and mutual funds. They do earn interest on their loans, but the return is not really that great (interest rates are under 2%. See: http://csb.gc.ca/about/rates/) Of course, any interest earned by pension plans ends up going back to the citizens of Canada.

Voting for a backward logic man such as Stephen Harper is insane, and those who vote for him or his supporters much the same.

A little context is helpful here.

Even if you assume that having a deficit is "bad", you have to consider the alternatives. Both the Liberals and NDP were also proposing stimulus spending when Harper brought in the action plan. You cannot condemn Harper for a deficit, and turn around and vote for the Liberals/NDP without exposing yourself as a hypocrite.

[Mr.Canada]

If the Liberals, NDP and Bloc all don't agree with the way things are going then why did they all vote with the government on stimulus spending?

[punked]

To be fair I think you are ignoring Keynesian economics at its heart.

There are two arguments that can be made to spend ones way out of a recession. One is that you really never have to pay back the debt you take on during the recession as long as you freeze that debt in 10 years it is so much smaller due to inflation that you debt to GDP ratio goes way down that a Trillion dollar debt today is 100 billion dollar debt in 20 years. So by freezing you debt you effectively shrink your debt. It never has to be paid off.

The other thing is the true idea is during the good times you raise taxes to save for the bad so you can cut them and debt finance in that way it works just fine.

I think your argument ignores some points. It can sometimes be about the proper amount of debt although no debt is better, I would rather have some debt and have the Canadian people flourish then no debt and have us starve. That should be the true point are we better off? Can we manage our finances? Where will we be in 5 years? Not some number on a page.