Deficit Continues to Shrink

[Smallc]

Considering its the Highest Deficit in Canadian History, I would hope its going down..

It's the highest deficit only if you look at unadjusted numbers. In terms of GDP percentage, it's not that high, definitely not now.

[pete t teepee]

It's the highest deficit only if you look at unadjusted numbers. In terms of GDP percentage, it's not that high, definitely not now.

Semantics. If you want to talk "adjusted" then add on the 12 billion surplus to their horrific money management. Don't only count the negative dollars. They pissed the surplus away as well. Plus 12ish to negative 50 something. It's the biggest run on Fed. govt. spending and corporate tax breaks EVER! EVER! EVER! Jean Chretien inherited a nearly 40 billion deficit from Mulroney and turned it into a 12 billion surplus that was paying down the national debt. Chretien's biggest mistake was to keep maintaining that huge surplus when Canadians were taxed to death and tax weary. If he'd thrown Canadians some substantial long overdue tax breaks while still keeping a surplus for debt management. He'd still be prime minister, sponsorship scandal or not. Check out the national debt clock http://www.debtclock.ca/ It goes up by a thousand dollars per second. My Mom pays ten grand a year in income tax. That maintains the interest on our national debt for 10 seconds before they have to move onto another taxed to death Canadian to pay the interest. Sickening. For over a decade we grit our teeth and made steady progress on deficit and debt reduction and Harper erased it at the behest of the 1%. If we were debt free, the money we're paying on interest on the debt right now would buy one of Harpers precious F-35's, every 11 hours. Two per day with change left over. This is at the auditor generals much higher cost projection. The entire fleet of 65 paid for in full, in one month. Staggering. I've seen some good posts of yours but this one? If your premise is that Harpers managing our money well? sorry buddy

not.

even.

close.

[Smallc]

Semantics. If you want to talk "adjusted" then add on the 12 billion surplus to their horrific money management. Don't only count the negative dollars. They pissed the surplus away as well. Plus 12ish to negative 50 something.

Yeah, sure whatever. So again, how many countries weren't running a massive deficit after 2008? How many of them were smaller as a percentage of GDP than Canada's?

It's the biggest run on Fed. govt. spending and corporate tax breaks EVER! EVER! EVER! Jean Chretien inherited a nearly 40 billion deficit from Mulroney and turned it into a 12 billion surplus that was paying down the national debt.

Actually, no, the Liberals started the Corporate tax breaks. We started at around 30%. It was already down to almost 20% when Harper started lowering rates further.

Chretien's biggest mistake was to keep maintaining that huge surplus when Canadians were taxed to death and tax weary. If he'd thrown Canadians some substantial long overdue tax breaks while still keeping a surplus for debt management.

The Liberals gave the largest tax break in Canadian history in the 90s, when they indexed the income tax rates to inflation.

He'd still be prime minister, sponsorship scandal or not. Check out the national debt clock http://www.debtclock.ca/ It goes up by a thousand dollars per second. My Mom pays ten grand a year in income tax. That maintains the interest on our national debt for 10 seconds before they have to move onto another taxed to death Canadian to pay the interest.

The interest costs about $1000 per Canadian, not $10000, and the Liberals brought the interest payments down by almost 25%. Canada has an excellent credit rating, and debt to GDP ratios are again decreasing.

Sickening. For over a decade we grit our teeth and made steady progress on deficit and debt reduction and Harper erased it at the behest of the 1%.

And that had nothing to do with a near world depression.

If we were debt free, the money we're paying on interest on the debt right now would buy one of Harpers precious F-35's, every 11 hours. Two per day with change left over. This is at the auditor generals much higher cost projection. The entire fleet of 65 paid for in full, in one month. Staggering. I've seen some good posts of yours but this one? If your premise is that Harpers managing our money well? sorry buddy

The interest on the debt is just over $30B per year. The F-35 cost is around $15B. You couldn't buy it with one month of interest.

[madmax]

Yeah, sure whatever. So again, how many countries weren't running a massive deficit after 2008? How many of them were smaller as a percentage of GDP than Canada's?

The deeper a country moved towards Neo Liberal Economic Policy, the greater the deregulation and the higher the tax cuts for corporations, the bigger the whole.

As a country we were buying as many spades as possible.

Good thing we ran out of time to get all the spades we wanted.

The countries with more spades have been hurt the worst.

While I might suggest we have returned a few spades. There is a long ways to go.

That is the nature of free open deregulated markets.

The Busts will be more dramatic and more difficult to recover then within a more closed and regulated economy.

[Wild Bill]

That is the nature of free open deregulated markets.

The Busts will be more dramatic and more difficult to recover then within a more closed and regulated economy.

You make a good point, Max. What is uncontrolled is always more erratic, if not chaotic. So being a Utilitarian the idea of a "more closed and regulated economy" is tempting.

The problem I have is I can't think of anything more likely to screw it up than a government, particularly a Canadian government!

I would have more faith in the proverbial million monkeys plying a million typewriters. In fact, sometimes I strongly suspect they have actually been in control not just of our economy but everything else run by the government for a long time.

[blueblood]

The deeper a country moved towards Neo Liberal Economic Policy, the greater the deregulation and the higher the tax cuts for corporations, the bigger the whole.

As a country we were buying as many spades as possible.

Good thing we ran out of time to get all the spades we wanted.

The countries with more spades have been hurt the worst.

While I might suggest we have returned a few spades. There is a long ways to go.

That is the nature of free open deregulated markets.

The Busts will be more dramatic and more difficult to recover then within a more closed and regulated economy.

And in a closed economy you never see the good times.

If govts don't interfere in the cyclical nature of markets the corrections aren't as harsh.

[Smallc]

If govts don't interfere in the cyclical nature of markets the corrections aren't as harsh.

That's certainly up for debate.

[pete t teepee]

Yikes! In my determination to not make a simple math error, I make a simple logic error lol. I promise to never ever post again with eyes burning while fading in and out of consciousness from fatigue. It's the total accrueing debt, not just interest, which incinerates mummys entire tax submission, in ten seconds flat. Accrueing debt,with it's utterly insane interest, buys a shiny, PROPERLY COSTED, f-35, every 11 hours. Auditor general costed entire fleet of 65 at 25 billion over 20 years. 40 mill apiece. Comparing us to other countries performance, in the context of the original post, is just trying to dig up some positive spin at the forensic level. We have the best banking system with balanced regulation, we damn well should do better than the rest and we did but it's our banking system that saved us, not Harpers money managing, as this attempt at positive spin would suggest. The States absorbed an economic atomic bomb because Bush deregulated and every financial institution went apeshit, giving mortgages to pet iguanas and such, selling them, then shaking twisting turning upside down and throwin em into an investment portfolio which they sluffed off on Joe Blow as terrific investments. Criminal behaviour and epic fraud, legalized! I identify with Wild Bills post very much. Globalization and open markets are economically freaky... but so is overregulation and beaurocracy. I think it's much of the reason we're often scrambling between just left of center to just right of center. Everyones growing weary of the choices and the scrambling and we're breaking records for lowest voter turnout.

[PIK]

Semantics. If you want to talk "adjusted" then add on the 12 billion surplus to their horrific money management. Don't only count the negative dollars. They pissed the surplus away as well. Plus 12ish to negative 50 something. It's the biggest run on Fed. govt. spending and corporate tax breaks EVER! EVER! EVER! Jean Chretien inherited a nearly 40 billion deficit from Mulroney and turned it into a 12 billion surplus that was paying down the national debt. Chretien's biggest mistake was to keep maintaining that huge surplus when Canadians were taxed to death and tax weary. If he'd thrown Canadians some substantial long overdue tax breaks while still keeping a surplus for debt management. He'd still be prime minister, sponsorship scandal or not. Check out the national debt clock http://www.debtclock.ca/ It goes up by a thousand dollars per second. My Mom pays ten grand a year in income tax. That maintains the interest on our national debt for 10 seconds before they have to move onto another taxed to death Canadian to pay the interest. Sickening. For over a decade we grit our teeth and made steady progress on deficit and debt reduction and Harper erased it at the behest of the 1%. If we were debt free, the money we're paying on interest on the debt right now would buy one of Harpers precious F-35's, every 11 hours. Two per day with change left over. This is at the auditor generals much higher cost projection. The entire fleet of 65 paid for in full, in one month. Staggering. I've seen some good posts of yours but this one? If your premise is that Harpers managing our money well? sorry buddy

not.

even.

close.

And now because of it we are paying pensions right our of the tax money coming in because martin cleaned out the PS pension fund and the UI fund, anybody could have done that. And the problems that harper had to deal with at the start, like the iso problem in chalk river, that should have been dealt with by the chretien goverment and there is more. Just imagine if trudeau never got in, how great and properous this country really could have been.

[madmax]

You make a good point, Max. What is uncontrolled is always more erratic, if not chaotic. So being a Utilitarian the idea of a "more closed and regulated economy" is tempting.

The problem I have is I can't think of anything more likely to screw it up than a government, particularly a Canadian government!

I would have more faith in the proverbial million monkeys plying a million typewriters. In fact, sometimes I strongly suspect they have actually been in control not just of our economy but everything else run by the government for a long time.

LOL, I don't know what to say except its the fine print between theory and practice.

[madmax]

And in a closed economy you never see the good times.

Canada has never had a "Closed Economy". It has never had a completely open economy either.

I can theorhetically disagree with your argument based on many societies over centuries experiencing good times in closed economies and using government to balance out the different.

I guess the first instance I heard of was as a child. His name was Joseph and he convinced the Egyptians to prepare for 7 years feast followed by 7 years famine......

What I would suggest is that it is called GOVERNMENT for a reason, just as a Governor is used on tractor trailers.

The intent is control economic forces.

Some argue it cannot be done, others argue it can.

The reality is that for CENTURIES governments have and will continue to intervene and with all the problems that can limit or create, it is always compared to the wild west of free market and market forces which also do not act like theory would have us to believe.

If they did, governments would always take the easy way out.

If govts don't interfere in the cyclical nature of markets the corrections aren't as harsh.

I think you would find few economists to agree with you.

There is a different drawback to government intereference but government engagement in an economic downturn generally has an effect that is Neutral to positive in nature.

I am sure a government can screw up anything.

However, governments allowing for the rush of deregulation in the housing market in the US shows what can happen when Mortgage Greed meets consumption.

We did well because we do not allow for No money down, low interest mortgages that are unsustainable to a person making $10 per hour.

Yet the "Free Market" in the US went directly down that path.

If one considers the Federal move changing the Terms of Mortgages and rolling them back, I consider that sound policy, yet it goes against the free market and could well slow down our housing market. However it will also maintain the stability of the housing market.

It is protectionist and limiting to rapid growth and accelleration of the economy. It is why the US had a huge housing boom followed by a housing bust.

Now repeat for Stock Markets... and you can see why the US went FUBAR in deregulation.

Edited September 5, 2012 by madmax

[dre]

Yeah, sure whatever. So again, how many countries weren't running a massive deficit after 2008? How many of them were smaller as a percentage of GDP than Canada's?

I dont think the defecit as a percentage of GDP is all that relevent actually. We should be looking at debt/deficit as a percentage of the FEDERAL BUDGET since that is the account debt maintenance payments have to be drawn on. You cant assume that a larger GDP necessarily means the government can maintain more debt, because how much of the GDP they can tap depends on the political climate... And Generation Deadbeat is so tax adverse that politicians of pretty much all stripes are afraid to make tax hikes part of their platform.

As for your assertion that Canadas deficit needs to be considered against the backdrop of the economic crisis, and the plight of its peers. Thats absolutely correct. Harper did exactly what everyone on earth expected him to do, and what anyone else would have done. When faced with the prospect of a recession he EASED, and dumped a whole lot of money into the system, and ran a deficit. Its a little crazy to blame Harper for that because that is quite simply the only gameplan we have... You can argue whether thats a good gameplan in the long term, because all that easy credit is what creates asset bubbles in the first place, but that IS the gameplan. And Harper followed it just like everyone else did.

These various world leaders dont really even make those kind of decisions. They sit down with a bunch of technocrats and they do exactly what they are told to do.