Get Your Fiscal House in Order, Because You're Dragging Ours Down

[Smallc]

OTTAWA — Canada's fiscal advantage will only go so far in protecting the country against a debt crisis growing in the world's advanced nations and Asia's emerging economic powerhouses, Bank of Canada governor Mark Carney warns.

Trying out a theme he will likely take to Washington later this week, Carney told the Canadian Club of Ottawa on Monday that the world is in the midst of a major economic power shift and governments must prepare by getting their fiscal houses in order.

Advanced economies face a protracted period of slow growth as they struggle to come out from under a mountain of debt, while emerging economies such as China will face the opposite challenge of restraining inflation.

"In this environment, domestic macro stability is paramount," he said in notes from the speech released prior to his address.

"Sustained fiscal adjustment is now required in most advanced economies. Debt-to-GDP (gross domestic product) in G7 countries is now the highest since the Second World War. The age of austerity is not a slogan but a timetable."

High debt in other countries will impact Canada: Carney

So what does everyone think about this? I'm getting quite worried, especially listening to the wrestling match going on in the US. It just seems like a problem that no one knows how to fix, or that no one is willing to. Then there's Europe, and the mounting debt crisis there. Yes, places like Germany and the UK now seem to get it, but what about Spain, Italy, and France? What about others in Europe? What about Asia, taking on debt and experiencing massive inflation? Canada is doing well on its own, but none of this bodes well for us.

[RNG]

I have thought for a long time that we are screwed. The US is an economic wreck. Unfortunately we are their largest trade partner, and even worse, they are our largest trade partner. Their deficit, and more importantly their debt is going to kill them. As soon as oil transitions to being traded in Euros or Rhimbi their currency will tank, and our economy will follow them into the gutter. The only hope we have is if we railroad the first nations into allowing us to build the gas and oil pipeline to Kitimat so we can export liquified natural gas and oilsands oil to Asia and Europe.

I got the Chinese currency wrong, but you know what I mean.

[Jack Weber]

I have thought for a long time that we are screwed. The US is an economic wreck. Unfortunately we are their largest trade partner, and even worse, they are our largest trade partner. Their deficit, and more importantly their debt is going to kill them. As soon as oil transitions to being traded in Euros or Rhimbi their currency will tank, and our economy will follow them into the gutter. The only hope we have is if we railroad the first nations into allowing us to build the gas and oil pipeline to Kitimat so we can export liquified natural gas and oilsands oil to Asia and Europe.

I got the Chinese currency wrong, but you know what I mean.

Renminbi....

[nittanylionstorm07]

This will be the much-needed death of the globalisation movement.

I really feel sorry for Canada. There is absolutely no reason the great dumb ones in Washington should take Canada down with them.

[Topaz]

I know a numbe rof you don't believe in the new world order but please go to the follwing site and read and you will see the conection to what is happening in the world today. I would like to debate this when you finish reading. http://www.threeworldwars.com/new-world-order.htm

[punked]

I think if the US cut military spending they would be in fine financial shape and someday they will realize having 10 times many bombs as everyone else in the world put together doesn't give you health care or education and come to their senses or at least I hope.

[Smallc]

I think if the US cut military spending they would be in fine financial shape

That's not even true anymore. They need to cut spending and raise taxes. They need to cut spending everywhere.

[Moonlight Graham]

Canada's economy is strong compared to others right now, but we are still up to our eyeballs in debt ourselves. Thanks Trudeau!

[RNG]

This will be the much-needed death of the globalisation movement.

I really feel sorry for Canada. There is absolutely no reason the great dumb ones in Washington should take Canada down with them.

I don't think you will ever see the death of globalization. The fact that Halliburton moved their head office to one of the UAE give you a hint? So dream on. We had better react to this reality and adjust as necessary rather than futiley trying to hold back the tsunami of world wide free trade.

[nittanylionstorm07]

That's not even true anymore. They need to cut spending and raise taxes. They need to cut spending everywhere.

Start with the military, stop funding defense contractors, end oil subsidies, rearrange social welfare programs, and raise taxes across the board would be a great way to reduce debt.

Unfortunately the populace as a whole here wants to have our cake and eat it too. I never, ever want to hear "cut taxes!!" again.

[Michael Hardner]

The countries of the world need to form a union against fast money that evades all taxes, and to force their banks to act properly. That would help.

[Smallc]

Canada's economy is strong compared to others right now, but we are still up to our eyeballs in debt ourselves. Thanks Trudeau!

We're really not all that badly in debt, actually. Canadians have far more debt than their government....it really takes a bite out of the idea that Canadians can spend their money more wisely than the government.

[Smallc]

Start with the military, stop funding defense contractors, end oil subsidies, rearrange social welfare programs, and raise taxes across the board would be a great way to reduce debt.

Definitely, but there's no political will to do what's needed.

[nittanylionstorm07]

Definitely, but there's no political will to do what's needed.

It would require some sort of revolution (nonbloody, I hope). The corporate greed and laziness of the masses is too entrenched.

[punked]

That's not even true anymore. They need to cut spending and raise taxes. They need to cut spending everywhere.

Defense spending is around 700-900 Billion dollars factor in tax cuts for the Wealthy and I call that a good start.

[Smallc]

Defense spending is around 700-900 Billion dollars factor in tax cuts for the Wealthy and I call that a good start.

Well, they aren't going to cut defence to zero though. They would probably never go lower than the 2% of GDP, which is around $300B.

[RNG]

Start with the military, stop funding defense contractors, end oil subsidies, rearrange social welfare programs, and raise taxes across the board would be a great way to reduce debt.

Revenue is not the problem, spending is the problem. Martin did good, but by robbing CPP, EI and other things. We need to spend way less. I'm not sure if the military is the place to do it, but there are tons of entitlement gimmee's that could be axed.

[Smallc]

Martin did good, but by robbing CPP,

Ummm....no. When it comes down to it, after all the efficiencies that have been found in the Government of Canada, it's hard to keep finding more.

Edited May 16, 2011 by Smallc

[nittanylionstorm07]

I don't think you will ever see the death of globalization. The fact that Halliburton moved their head office to one of the UAE give you a hint? So dream on. We had better react to this reality and adjust as necessary rather than futiley trying to hold back the tsunami of world wide free trade.

Who cares about Halliburton? They and their ilk are a huge part of the problem.

At its current state, our world is not able to sustain free trade. There is way, way too much monetary inequality. The wish of international free trade is equivalent to the wish of many communists in the former Soviet Union... hoping for an ideal economic society before society can even handle it. It will result in massive crises, mostly in industrialized nations... then the developing nations relying on the industrialized nations for progress will fall after the industrialized nations fall because they held too much debt.

[nittanylionstorm07]

Revenue is not the problem, spending is the problem. Martin did good, but by robbing CPP, EI and other things. We need to spend way less. I'm not sure if the military is the place to do it, but there are tons of entitlement gimmee's that could be axed.

In the US, it is a huge part of the problem. There are too many people who want to cut taxes... well that's only sustainable after a certain point we are well past.

The military is a huge, huge debt hog.

[punked]

Well, they aren't going to cut defence to zero though. They would probably never go lower than the 2% of GDP, which is around $300B.

Oh I agree but a roll back of the Bush tax cuts could easily make up the rest. They are to busy looking for magic bullets that don't exist though.

[RNG]

In the US, it is a huge part of the problem. There are too many people who want to cut taxes... well that's only sustainable after a certain point we are well past.

The military is a huge, huge debt hog.

Let the US worry about themselves. I'm trying to help Canada. Lets get our oil and gas to world markets.

[punked]

Let the US worry about themselves. I'm trying to help Canada. Lets get our oil and gas to world markets.

We have plenty of things besides oil and gas we need to get to world markets your Alberta is showing. We have Gold, Iron, Nickel, Uranium, Softwood, Hardwood, Diamonds, Pulp and Paper, we have plenty of industry which we need to not only get to world markets but which we should think of refining and adding value you to as well. Canada needs to think big. Oil and Gas run this country but for how long?

[RNG]

We have plenty of things besides oil and gas we need to get to world markets your Alberta is showing. We have Gold, Iron, Nickel, Uranium, Softwood, Hardwood, Diamonds, Pulp and Paper, we have plenty of industry which we need to not only get to world markets but which we should think of refining and adding value you to as well. Canada needs to think big. Oil and Gas run this country but for how long?

I agree with most of your post. But you have railways and the St. Lawrence going for you. Our products need a pipeline. Not a big deal, if done correctly. But our First Nations want to hold us to ransom.

[punked]

I agree with most of your post. But you have railways and the St. Lawrence going for you. Our products need a pipeline. Not a big deal, if done correctly. But our First Nations want to hold us to ransom.

No I agree lets run pipelines from coast to coast. Like it or not though 70% of all our "stuff" goes to the US we need that to change.