If you were PM, what would you do?

[dre]

I think TimG has more knowledge about trade vs debt, so I'll leave it to him but I don't accept that these things are necessarily related.

Well the only only way you can deny the link between trade and debt is if you have no idea what either of these things are, and I explained it very accurately and carefully. I get the feeling you didnt even read it. From the basic wiki article...

In economics, the current account is one of the two primary components of the balance of payments, the other being the capital account. The current account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid).

So not only is there a LINK between trade defecits and debt, one is actually a direct component of the other. You CANNOT run a trade defecit without accumulating debt. Try and do it!!! Consume more than you produce over an extended period of time and see what happens! DEBT.

But more importantly, for all your talk about a new kind of voter, and a new kind of political discourse, its odd that you would recite a slogan and then parachute out of the conversation when you actually have a chance to talk about the consequences of all this "free trade" and the fact all this stuff is way more complex then either free traders or protectionists would have you believe, and the glaring and unescapable fact that this cannot continue for long.

If "all trade is good", then you should willingly accept my challenge to run your household finances the way western countries run trade and debt. Because after all you borrowing money to live beyond your means will create trade, and trade is good!

The reality is that trade is only good if both of the parties involved in the trade are taking into account their interests over the long term. If they arent, then trade can be a disaster. And the problem is that people confuse free trade with the current temporary trade imbalance we see now between the east and the west and the recent glut of offshoring. This is NOT free trade and it can only continue as long as all the debt based consumption continues, and as long as our trading "partners" continue give the spoils back to us through the bond market so that we can borrow more money for more consumption.

Ok. Do you have a counter example ? Who on the right is complaining about 'big money' or 'corporate influence' for example ?

Sure, the entire libertarian wing of conservativism and most traditional fiscal conservatives. Pretty much all of them except for the neocons. They come at it from a different angle, in that they think the real problem is that the government has too much influence to peddle in the first place, but thats just a different ideological slant on the same problem.

Edited January 16, 2012 by dre

[TimG]

We are going to see their currencies increase dramatically in comparison to ours (we already would be seeing that if we were really in a "free market".

You are touching on the real problem. We really don't have a free market because so many nations seeks to manipulate their currencies to their advantage - bond buying is part of that manipulation. By providing bonds to sell governments allow other countries an easy low risk way to 'balance the books' without causing their currencies to rise. The solution to this problem is to stop issuing bonds (a.k.a. debt).

You argument sounds like an overweight person blaming the food producers when the real problem is the amount of food being shoveled into their mouth.

Edited January 16, 2012 by TimG

[cybercoma]

Oh, some ideas... the PM can't unilaterally do many things. Let's presume as PM we wouldn't so much "do" these things as promote them.

• Defend the Arctic and Northwest Passage as part of Canada's sovereign geography.
  
• Encourage the provinces to recommend Senators and make Senate appointments from those recommendations.
  
• Encourage the United States to legalize gay marriage, so we don't have to deal with the headaches we saw earlier this week.
  
• Appoint an MP that's actually from an indigenous background to be the Minister of Aboriginal Affairs and Northern Development. If necessary appoint someone from a different party, if someone from my caucus isn't available.
  
• Reduce the number of cabinet positions substantially from the bloated Conservative cabinet.
  
• Replace Stephen Harper's personal photo gallery in the government lobby of the House of Commons with pictures of various former notable figures in Canadian political history, regardless of their party affiliation.
  
• Launch an inquiry into improving conditions on Reserves.
  
• Launch an inquiry into the impact of our aging population and whether or not our social services need to adapt accordingly
  

Edited January 16, 2012 by cybercoma

[TimG]

So not only is there a LINK between trade deficits and debt, one is actually a direct component of the other.

You are mixing up cause and effect. Any trade deficit has to be closed by currency valuation changes. If governments choose to issue debt they are giving their competitors an easy way to 'balance the trade books' without causing their currencies to rise.

There is NOTHING in the concept of free trade that forces governments to run deficits. Running deficits is a CHOICE made by developed world governments and the consequence is the gradual destruction of the industrial base as trade competitors use those deficits to maximize their competitive advantage.

[TimG]

Why this strategy? In two words, High Treason. Better to be like Caeser's wife than be accused in that manner.

I have read your post many times and can't seem to understand what you are proposing. It seems like you left sentences out (I do this when I write fast). Can you reword and re-post?

[dre]

You are touching on the real problem. We really don't have a free market because so many nations seeks to manipulate their currencies to their advantage - bond buying is part of that manipulation. By providing bonds to sell governments allow other countries an easy low risk way to 'balance the books' without causing their currencies to rise. The solution to this problem is to stop issuing bonds (a.k.a. debt).

You argument sounds like an overweight person blaming the food producers when the real problem is the amount of food being shoveled into their mouth.

I read a study on cocaine addiction using rats. Turns out that if you put a pile of cocain in the rats cage it will get addicted right away, and keep consuming the stuff until they are dead. This pretty much sums up the wests behavior in terms of consumption and debt. Its easy to say that a person that abuses their credit created their own problems and its partly true. But your solution is to keep putting cocaine in the rat cage and hope that the rats magically wise up... regardless of how you assign blame its pretty easy to see why that isnt a viable solution. Blame the rats all you want, but after a while a reasonable person is going to just stop putting piles of cocaine in the rat cage.

The market is supposed to address this by taking away credit from those that abuse it. But the current trade paradigm renders this natural mechanism ineffectual, because our creditors actually WANT us to keep all the debt based consumption going and keep abusing our credit, so they help us paper over all these structural problems.

[cybercoma]

dre, I can't help but notice that arguing with TimG is your cocaine.

[dre]

There is NOTHING in the concept of free trade that forces governments to run deficits. Running deficits is a CHOICE made by developed world governments and the consequence is the gradual destruction of the industrial base as trade competitors use those deficits to maximize their competitive advantage.

Not in the concept but in the practical application. Since free trade so far has simply meant that more of the goods consumed are produced in places where labor is dirt cheap it has resulted in large trade deficits, which turn into current accounts deficits. Huge trade IMBALANCES. Those trade imbalances result in the producer nations not only having a glut of capital and super high savings rates, but an incentive to lend us money at very low rates... thats what creates the moral hazzard and puts the cocaine in the rat cage, and western governments predictably snort every bit they can get their nostrils on.

Oh well... at least youve moved beyond the ridiculous denial of the link between trade and debt.

[TimG]

Since free trade so far has simply meant that more of the goods consumed are produced in places where labor is dirt cheap it has resulted in large trade deficits

There is no rational connection between the two. If governments had not been running decifits then the period of cheap goods would have been short lived as currencies adjust to cover the imbalance. You insist on painting governments as helpless actors in but they are not. They choose to run deficits and they are to blame for the consequences. Free trade is not the problem.

Oh well... at least youve moved beyond the ridiculous denial of the link between trade and debt.

I only said there is no causal link and I maintain there is no causal link (i.e. free trade does NOT cause debt). Edited January 16, 2012 by TimG

[sharkman]

There's a mechanism to deal with complaints. Overall, globalized trade is better for the economy.

Why do you think every Canadian and American government has taken steps to liberalize trade over the past 25 years ?

That mechanism has no teeth. How many more products with high levels of lead should be ignored? Toothpast with crap in it, drywall that makes people sick, food products with all kinds of unsafe ingredients. All from China. It's too late, China will have their way.

[cybercoma]

That mechanism has no teeth. How many more products with high levels of lead should be ignored? Toothpast with crap in it, drywall that makes people sick, food products with all kinds of unsafe ingredients. All from China. It's too late, China will have their way.

Not to mention the fact that it's a race to the bottom when corporation can freely move between borders to find labour, but labour can't freely move between borders to find jobs. Of course companies are going to hire labour at pennies a day, which leaves people here jobless.

[Smallc]

If you think official languages and multiculturalism are Canada's most important 'institutions' it's you who's out of touch with the mainstream.

I was also referring to the list above what I responded directly too, but yess, I do think they are two of Canada's most important institutions, and they always have been, even before they were enshrined in law and constitution.

[jbg]

I was also referring to the list above what I responded directly too, but yess, I do think they are two of Canada's most important institutions, and they always have been, even before they were enshrined in law and constitution.

You have a great sense of humor.

[g_bambino]

You have a great sense of humor.

What's so funny about what he said?

[dre]

You insist on painting governments as helpless actors in but they are not.

The blame lies squarely on government for all the policies Ive mentioned. The idea that Im giving them a pass is retarded.

Free trade is not the problem.

Seems like a silly statement since we already both agreed that what we are seeing in the global economy is not free trade anyways. Its STUPID trade and running perpetual trade deficits that IS a big part of the problem. Signing "free trade" deals with countries that manipulate their currency and stack the deck for the specific purpose of bleeding your industrial base.

Edited January 16, 2012 by dre

[TimG]

Signing "free trade" deals with countries that manipulate their currency and stack the deck for the specific purpose of bleeding your industrial base.

Manipulations that are only possible because developed world governments run massive deficits. The root problem is the choice to run a deficit to fun social programs. So one could argue that lavish social programs are the root cause of the trade imbalances.

[dre]

Manipulations that are only possible because developed world governments run massive deficits. The root problem is the choice to run a deficit to fun social programs. So one could argue that lavish social programs are the root cause of the trade imbalances.

No China can manipulate its currency regardless of anyone elses policy. Its an outright PEG. They can do whatever they feel like.

The root problem is the choice to run a deficit to fun social programs.

No the root problem is consuming more than you produce for a prolonged ammount of time. Ideological hacks like to pick one kind of spending and blame it for everything... like you with entitlements or other that focus on military spending, and paying for global socialist programs like providing a world police force, or spending 3 trillion dollars blowing up another country then rebuilding it.

Trotting out you favorite ideological boogeyman might be fun for you but it just really doesnt mean all that much. The current situation is the result of ALL spending, and ALL policy, but more simply put its just a matter of consuming way more than you produce across the board.

[TimG]

No China can manipulate its currency regardless of anyone elses policy. Its an outright PEG. They can do whatever they feel like.

No they can't. There are fundemental rules of economics which apply. Specifically, supply must always meet demand. The can only cover the short fall by printing money (which causes inflation) or by buying dollar denominated assets (a.k.a. bonds) or my limiting investment in the country (which makes it difficult to do business). Take away those bonds and they find it much more difficult to keep that peg.

No the root problem is consuming more than you produce for a prolonged ammount of time.

A motherhood statement that does come with any obvious remedy. I am offering concrete measures: end deficit spending - which does not rule out tax increases but really requires a rethink of the entitlement programs. Edited January 16, 2012 by TimG

[Smallc]

You have a great sense of humor.

Look, I'm not one that thinks that this country should simply bend to the will of every immigrant, nor am I one that thinks it should be unwilling to bend in the face of them. Canada is a country of immigrants, made by them, and shaped by them. At the same time, we have managed to keep many of our most important traditions over the years (responsible government, constitutional monarchy, the common law side by side with laws based on the Latin system, etc.). In other words, as the immigrants shape the country, the country shapes the. One of those traditins, btw, is the recognition of both languages we now call official. That seems to be a recipe for relative success when compared to much of the rest of the world.

[Guest Derek L]

If I were PM……..hmmm……..First attempt to change all laws that restrict personal freedoms, based on a criteria that said new laws comply with the following principles:

1. Any individuals acts don’t affect others

2. Said act is done by the consent of adults

3. Others are not forced to directly subsidized said act

Insert your perceived injustice into this formula (Gun control, recreational drugs, prostitution etc)

The collection of taxes associated with and in turn management of many areas that I believe the Federal Government shouldn’t be involved in, would be handed over to the Provinces (i.e. Healthcare, Education, EI etc)

End the federal GST/HST and allow Provinces to collect and set their own rates, well also lowering personal income and corporate taxes, well ending corporate welfare and subsidizes

Settle all First Nations land claims, with a national lottery of Crown & Federal Government land, along the lines of what was successfully done in Alaska.

End all foreign aid……

Pull out of NATO, well remaining in NORAD and strengthen beneficial defence treaties with namely the United States………Also, making a requirement that prior to committing to a foreign war outside of treaty obligations), the governing party is required to have the support of the next largest party in Parliament, and in turn form a War Cabinet with said party

Reduce the size of the regular force Army by 1/3rd, well increasing the size and usefulness of the militia. Increase the size of the Navy and Air Force, well giving the Canadian Coast Guard a role in law enforcement.

I’ll think of more later………

[TimG]

End the federal GST/HST and allow Provinces to collect and set their own rates

Can't be done without also ending transfers from the feds to the provinces. Good luck convincing the provinces to support this.

Settle all First Nations land claims, with a national lottery of Crown & Federal Government land, along the lines of what was successfully done in Alaska.

Can you provide more details? My first reaction is it is impossible to settle ALL claims because some groups demand too much. I am also certain that charter.rights will tell you that it is too little given what (under his self-serving interpretation) the SCC has already given them.

Pull out of NATO

Why? It is not like it costs us a lot. I don't see the stategic benefit. Edited January 16, 2012 by TimG

[bjre]

If I were the PM, the first thing I want to do is the set cash reserve ratio to 100%. Any one has the equal right to lend money to others as mortgage, not just the privileges of banks. That would stop banks from law protected robbing the wealth from everybody immediately .

The second thing I want to do is to stop creating any new law. And begin to review old laws one by one, and abolish most obsolete laws that only for interest groups to rob from all people.

The third one is the abolish CAS immediately. and let the parents to have the freedom to take care of their own kids. So that brilliant kids will be there, the future criminals will be less.

The fourth thing I want to do is to let anyone be a doctor, and people choose their own doctor he trust, if a doctor made a mistake, then he can not be a doctor again. So that people need not to go to American when they need a doctor in unguent. And most people need not to waste time in family doctor's waiting room or emergency waiting room in hospitals.

When the these things done properly and efficiently, the economy will grow like rocket, most people will benefit from it. Only the greedy super interest groups will take less wealthy in short period of time.

Edited January 16, 2012 by bjre

[jbg]

What's so funny about what he said?

That publicly subsidized celebration of cultures with marginal import to Canada and subsidized over-use of French are central Canadian values?

Look, I'm not one that thinks that this country should simply bend to the will of every immigrant, nor am I one that thinks it should be unwilling to bend in the face of them. Canada is a country of immigrants, made by them, and shaped by them. At the same time, we have managed to keep many of our most important traditions over the years (responsible government, constitutional monarchy, the common law side by side with laws based on the Latin system, etc.). In other words, as the immigrants shape the country, the country shapes the. One of those traditins, btw, is the recognition of both languages we now call official. That seems to be a recipe for relative success when compared to much of the rest of the world.

Your points are not bad ones. But as far as official languages it needs to cut both ways. Quebec should be as bi-lingual as the rest of the country is forced to be, maybe more so since Quebec's English-speaking minority is far larger than, say, Manitoba's French-speaking minority. I'd see something different for the St. Boniface riding, for example, but not Manitoba as a whole.

As far as other immigrant cultures, some are compatible with Canadian values, some not. I don't see a problem with the Ukrainian or Hutterite cultures. I do see a problem with cultures that consider a woman's exercising freedom to be against their culture and subject to violent punishment.

Edited January 16, 2012 by jbg

[jbg]

No they can't. There are fundemental rules of economics which apply. Specifically, supply must always meet demand. The can only cover the short fall by printing money (which causes inflation) or by buying dollar denominated assets (a.k.a. bonds) or my limiting investment in the country (which makes it difficult to do business). Take away those bonds and they find it much more difficult to keep that peg.

In a dictatorship, sure they can. They can give the people what they want to and arrange for themselves to have dollars, euros or yen. They may not fear inflation until it's too late.

I do think that eventually China collapses into either economic meltdown or social disorder.

[Jerry J. Fortin]

In a dictatorship, sure they can. They can give the people what they want to and arrange for themselves to have dollars, euros or yen. They may not fear inflation until it's too late.

I do think that eventually China collapses into either economic meltdown or social disorder.

Social disorder is where my money goes! We should study India in order to understand China. Keep in mind they (India) are the largest democracy in the world. They have 40 times our population!