Deficit Continues to Shrink

punked · July 30, 2012

A bigger stimulus can't compensate for a global recession. Unless you wanna borrow a trillion dollars like your buddy Obama did. All we'd be doing is adding to our debt to GDP without anything to show for it. It's better to hold the fiscal line now, and reap the rewards when the global economy recovers some. But you're all about short term gain for long term pain. You need to see the bigger picture and think more long term and stop being so short-sighted.

Hold it right there with your false comparisons and lies Shady. The US GDP is 15 TRILLION dollars. The Canadian GDP is 1.7 Trillion dollars. The Canadian Stimulus was around 40 Billion while the US Stimulus was 800 billion BUT 1/3rd of it was tax cuts. So in the end you end up with equivalent measures when we talk about stimulus spending. Both were to small to kick start the economy both were however big enough to stop the free fall. I know though when Harper does the same thing as Obama it is great that Harper did it but bad Obama did it. However you again are acting the fool.

Edited July 30, 2012 by punked

Shady · July 30, 2012

Hold it right there with your false comparisons and lies Shady. The US GDP is 15 TRILLION dollars. The Canadian GDP is 1.7 Trillion dollars. The Canadian Stimulus was around 40 Billion while the US Stimulus was 800 billion BUT 1/3rd of it was tax cuts.

Actually, it was $831 billion dollars. And it wasn't 1/3rd tax cuts, they were mostly tax credits. Big difference.

So in the end you end up with equivalent measures when we talk about stimulus spending. Both were to small to kick start the economy both were however big enough to stop the free fall. I know though when Harper does the same thing as Obama it is great that Harper did it but bad Obama did it. However you again are acting the fool.

You coulda made it 2 trillion, it ain't gonna make up for the Euro debt problems and the American housing problems. Until solutions are implemented to correct those issues, deficit spending on stimulus is only going to add useless debt. Stop the maddness.

punked · July 30, 2012

Actually, it was $831 billion dollars. And it wasn't 1/3rd tax cuts, they were mostly tax credits. Big difference.

More lies from the Shady.

http://www.politifact.com/truth-o-meter/statements/2010/feb/10/jon-stewart/stewart-claims-stimulus-bill-one-third-tax-cuts/

You coulda made it 2 trillion, it ain't gonna make up for the Euro debt problems and the American housing problems. Until solutions are implemented to correct those issues, deficit spending on stimulus is only going to add useless debt. Stop the maddness.

Must be why opinion is swinging the way of public spending right? Now it is two ALIVE noble prize winning economist that are saying public spending is holding the economy back. Not only even the austerity people are starting to let up on the whole austerity thing. Soon you are going to be the only left standing on that one. I'll just link to todays business insider title of which is "A Dam Has Burst. More People Admit That Public Sector Cuts Are Holding Back The Recovery". If it wasn't for people like you we could have gotten the stimulus the world needed and never lost 4 years. Stop you are now hurting all of us with your bad opinions (most of which as I have pointed out are lies).

http://www.businessinsider.com/aei-mark-perry-maybe-the-private-sector-is-doing-fine-2012-7#ixzz226ntqxY2

WWWTT · July 30, 2012

A bigger stimulus can't compensate for a global recession. Unless you wanna borrow a trillion dollars like your buddy Obama did. All we'd be doing is adding to our debt to GDP without anything to show for it. It's better to hold the fiscal line now, and reap the rewards when the global economy recovers some. But you're all about short term gain for long term pain. You need to see the bigger picture and think more long term and stop being so short-sighted.

You are ignoring the fact that corporate tax cuts inflate the deficit.

True that increased spending on improving our infrastructure/education/health care facilities increase the deficit.

But infrastructure spending is a win win investment!Jobs now and jobs later!

The better infrastructure Canada has,the more competitive we are and our production levels dramatically increase attracting even more business and job growth!

And when the whiner baby corporations(Cat) start crying and leave,guess what,the infrastructure stays put!

WWWTT

WWWTT · July 30, 2012

Complete nonsense. They didn't slash the government's fiscal capacity. What do you define as a so-called slash? Anyways, keeping in place lower businesses tas rates keeps Canada more competitive in the global economy and actually aids Canada's fiscal capacity in the long run.

Sorry no evidence.

Corporate tax cuts are a waste of our money

WWWTT

Shady · July 31, 2012

Sorry no evidence.

Corporate tax cuts are a waste of our money

WWWTT

It's not your money. A business allowed to keep more of the money it earns has nothing to do with you. Furthermore, lower tax rates keep Canadian businesses more competitive, with on turn leads to more Canadians with jobs. Your way is the way of Greece. Take a good look at your policies in action. Not too pretty when fully implemented eh?

Shady · July 31, 2012

More lies from the Shady.

How is saying that the stimulus consisted of mostly tax credits a lie? Did you even read your own link?

From punked's link...

Among other things, the mix of tax cuts includes a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families

Punked, do you know the difference between a tax cut and a tax credit? :rolleyes:

Amoung the many tax credits in Obama's stimulus was $5000 dollar tax credit to businesses that hired new employees. Well, anyone with half a brain knows that a business isn't going to take on a new employee, with an average salary of $40,000, plus benefits, for a credit on their taxes of $5000 dollars if they don't have work for said new employee. Except of course the economic neophyte Obama. Who knows nothing about running a business or how an economy works.

madmax · July 31, 2012

As I've already told you, more than once, the opposition was right to force a stimulus, and the government needed to go into deficit.

Well, no one ever accused you of critical thinking. In a few years, the debt to GDP ratio will be back where it was. Canada can easily handle the current load.

I think its pretty obvious whats going on...

Unfortuneately Smallc is one of the few on here looking through the least partisan eyes.

Seems those complaining can't be happy that...

A) the deficit is slowly moving back in the right direction

the opposition moved the government towards required Stimulus spending (Regardless of the chosen Projects)

Regardless, its still early days... and there is a LONG WAY to go towards eliminating the deficit let alone tackling the debt.

Its not pretty, but considering some other countries its not anything like a basketcase.

I don't give the goverment alot of credit one way or the other, as most of the stronger fundamentals were created by the previous liberal government, so, short of being totally incompetent, staying the course is a sound direction, could it be done better, I think so, could it be done worse, I think so.

Signals.Cpl · July 31, 2012

What happened.What happened?

This is what happened according to you!

What?

You have completely neglected the fact that the conservatives cut the GST/HST.

Have you presented any facts that would suggest that such a thing was a bad thing? How do you know that this specific thing was a bad thing?

You have completely neglected the fact that the conservatives increased military spending by over a wopping 50%!

Have you neglected the fact that the Liberals got us in to a war we were not equipped to fight? If the Conservatives had not increase the military spending than there would have been many more dead soldiers coming back, but then that would give you grounds to complain that the conservatives did not increase the military budget...

You have completely neglected the fact that the conservatives cut corporate tax rates while corporations feed the super fat CEO's.

How do you know this was a bad thing? Maybe it kept companies in Canada rather than help the economy of India or China.

You have completely neglected the countless other useless spending binges the conservatives have been on.

Name some of them.

You have completely fabricated what it was the opposition before the last election actually supported (increase stimulus spending on much needed infrastructure!)

Just because the Opposition(Liberals) were willing to send the military to Afghanistan but was unwilling to increase the funds suggests hat they didn't care if the CF members were slaughtered like dogs. The Opposition including the NDP asked for increase in spending, when that spending was put forth the opposition including the NDP blamed the government for doing it, you seem to ignore that the Conservatives were a minority, so the other parties hold some of the blame...

And then you've got the nerve to tell me that I'm saying the opposition is twisting the facts to support a fantasy?!?!?!

Yeah, the opposition is responsible for the deficit and increase just like the Conservatives... what it comes down to is that the NDP and the Liberals will gladly take credit when it comes out that a policy was right but will at the same time blame the government for that policy. You can't have it both ways.

And that the opposition does not understand how the government works?!?!?!
WWWTT

When the opposition twists the facts, and hides their previous record in order to score points it does not give me much faith in their abilities. What the NDP is saying is that the Conservatives increased the Deficit and the Debt all alone, while the other parties looked from the sidelines helpless to do anything, ignoring that the Conservatives were a minority and someone had to agree with them.

Shady · July 31, 2012

I don't give the goverment alot of credit one way or the other, as most of the stronger fundamentals were created by the previous liberal government, so, short of being totally incompetent, staying the course is a sound direction, could it be done better, I think so, could it be done worse, I think so.

I totally agree.

WWWTT · July 31, 2012

It's not your money. A business allowed to keep more of the money it earns has nothing to do with you. Furthermore, lower tax rates keep Canadian businesses more competitive, with on turn leads to more Canadians with jobs. Your way is the way of Greece. Take a good look at your policies in action. Not too pretty when fully implemented eh?

Its not my money?Either you are lying or you have absolutely no sense/knowledge of economics?!?!?!

Any business operating in Canada earns money by providing service or products to Canadians who in turn give them the money.You think that businesses just made the money out of thin air?

Therefore any business operating within Canada must then contribute.Why should businesses get a free ride???Better yet why should I have to pay more in taxes so that they can get a free ride?What are you going to say now,I wouldn't have any money from a job that a business gave me???Man that's something backwards and messed up!

My way is the way of Switzerland,Norway,Japan,Israel,Germany and maybe another 6-8countries that have a stronger economy than Canada since Harper took over.

Your argument is not with me,your arguments are with the facts!

WWWTT

WWWTT · July 31, 2012

I totally agree.

I sense a disturbance in the force!

WWWTT

CPCFTW · July 31, 2012

Tax Revenue is down from is peak in 2008. Also revenue grew slower after the tax cut then before it which is obvious from the cross tabs on that one. So I am unsure what conclusion you are drawing here, besides the one where you hope no one will post the actual government revenue charts. Here they are.

http://www.statcan.gc.ca/pub/11-402-x/2011000/chap/gov-gouv/tbl/tbl02-eng.htm

It doesn't matter because this years isn't the highest revenues ever anyway. Even if it was we lost 4 years from the revenue high and are only gaining now because the government didn't go with a big enough stimulus to prevent 4 lost years of growth. Thus we are still 4 years behind where we could have been.

Oh, I know it. I just like pointing out how his conclusions are wrong even when someone accepts the wrong things that he's saying.

That goes up until FY 2010-11. We've already finished FY 2011-12 and are currently in FY 2012-13. Try reading the budget which was just passed a month and a half ago... are your memories that bad?

Table 6.5 sets out the Government’s projection for budgetary revenues reflecting both Budget 2012 measures and the adjustment for risk, which for planning purposes is applied to tax revenues and other revenues. Revenues are expected to increase by 4.6 per cent in 2011–12 based on year-to-date results and the economic projections. Over the remainder of the forecast horizon, revenues are projected to grow at an average annual rate of 4.7 per cent.

Personal income tax revenues—the largest component of budgetary revenues—are projected to increase by $7.4 billion, or 6.5 per cent, to $120.9 billion in 2011–12. Over the remainder of the projection period, personal income tax revenues increase somewhat faster than growth in GDP, averaging 5.4 per cent annual growth, reflecting the progressive nature of the income tax system combined with real income gains.

Corporate income tax revenues are projected to increase by 8.8 per cent to $32.6 billion in 2011–12. Over the remainder of the projection period, corporate income tax revenues are projected to grow at an average annual rate of 4.1 per cent, based on projected profit growth and measures announced in this budget.

http://www.budget.gc.ca/2012/plan/chap6-eng.html#a13

Edited July 31, 2012 by CPCFTW

Shady · July 31, 2012

Any business operating in Canada earns money by providing service or products to Canadians who in turn give them the money.You think that businesses just made the money out of thin air?

Yep, private citizens choose whether or not they want to purchase a private good or service. Said business then provides it. You don't. You just think you're entitled to a piece of the action, kinda like the mob.

Therefore any business operating within Canada must then contribute.

Businesses DO contribute. They pay taxes. They employ Canadians. Those employees pay taxes.

Why should businesses get a free ride???

Nobody's getting a free ride. As I just stated. They pay taxes. They employ people. Those people pay taxes. Where's the so-called free ride?

Better yet why should I have to pay more in taxes so that they can get a free ride?

You don't pay more in taxes so they get a free ride. And they don't get a so-called free ride anyways. You're delusional.

WWWTT · July 31, 2012

Name some of them.

Sorry but the list is too lengthy and I have no time.I think we are done with this subject for now.But I am sure there others here that will continue to debate this one with you.

By the way,the NDP is not the liberals.Nor does the NDP bear any responsibility for the actions of the previous liberal government!

If you got a beef with the previous liberal government then I might very well agree with you!

WWWTT

WWWTT · July 31, 2012

Yep, private citizens choose whether or not they want to purchase a private good or service. Said business then provides it. You don't. You just think you're entitled to a piece of the action, kinda like the mob.

Man if the average citizen can be as notorious mobsters as say the big banks,oil companies,telecommunication companies,auto manufacturers,meat packers,mining companies,retail distributors,utility companies,insurance companies then we would be on even ground maybe.

WWWTT

WWWTT · July 31, 2012

You don't pay more in taxes so they get a free ride. And they don't get a so-called free ride anyways. You're delusional.

:rolleyes:

WWWTT

cybercoma · July 31, 2012

It's not your money. A business allowed to keep more of the money it earns has nothing to do with you. Furthermore, lower tax rates keep Canadian businesses more competitive, with on turn leads to more Canadians with jobs. Your way is the way of Greece. Take a good look at your policies in action. Not too pretty when fully implemented eh?

Maybe we should ALL just stop paying taxes, eh? We can be just like Greece.

Edited July 31, 2012 by cybercoma

cybercoma · July 31, 2012

I think its pretty obvious whats going on...

Unfortuneately Smallc is one of the few on here looking through the least partisan eyes.

Seems those complaining can't be happy that...

Because political criticism is "complaining" now?

You think complex fiscal policy issues are "obvious"?

Reducing the deficit is great. Reducing the deficit by setting fire to the public sector is making the economic recovery drag on.

The fundamental problem with the economy right now is that people can't vote with their wallets for what products and services they want. The government is doling out money to banks and companies (whether it's through tax credits or otherwise), but doing little to nothing to the people losing the shirts off their backs. What incentive do businesses have to expand, build infrastructure, create jobs, when people are having a difficult time buying things? Investing in jobs and infrastructure at this point would be like throwing darts at a dartboard blindfolded and in a room with no lights.

So that's wonderful that they're reducing the deficit. They're doing it in a way that benefits a small portion of Canadians at the expense of the majority.

blueblood · July 31, 2012

How is cutting public sector jobs a bad thing. One of the biggest complaints of the public sector is waste. Nothing wrong with trimming the fat. Not only that public sector jobs are not as beneficial to the economy as private sector jobs due to the fact that public sector jobs don't create wealth, they redistribute it.

How is cutting taxes doling out money? It isn't. They aren't taking as much and allowing businesses namely small businesses (which just make it into the high income tax bracket and hire the most people) to buy,save, and invest in things that are usefull rather than have the govt sink it in a black hole.

There is always going to be an elite small portion of the population in any society. At least in ours, the business class is at the mercy of the consumer, just ask the execs at RIM. Would you rather have an elite political class like in heavy left leaning countries where the elite is far fewer in number?

bleeding heart · July 31, 2012

Just because the Opposition(Liberals) were willing to send the military to Afghanistan but was unwilling to increase the funds suggests hat they didn't care if the CF members were slaughtered like dogs.

I doubt this is quite true, unless you honestly beliueve that the principled conservatives really, really care about the Forces, while the other parties just don't give a damn if they live or die.

It sounds unlikely.

Edited July 31, 2012 by bleeding heart

madmax · July 31, 2012

Because political criticism is "complaining" now?

You think complex fiscal policy issues are "obvious"?

No I don't, which is why I scorn a polarized Debate on the Economy.

Reducing the deficit is great. Reducing the deficit by setting fire to the public sector is making the economic recovery drag on.

It could, then the government will pay a price for that decision.

Two things normally occur, the Consumer (AKA TAXPAYER in this case) demand the services restored, or the Private sector fills the gap and the costs to the consumer increase. Anyone dealing with a company and a government contract has seen this game many times.

The fundamental problem with the economy right now is that people can't vote with their wallets for what products and services they want. The government is doling out money to banks and companies (whether it's through tax credits or otherwise), but doing little to nothing to the people losing the shirts off their backs. What incentive do businesses have to expand, build infrastructure, create jobs, when people are having a difficult time buying things? Investing in jobs and infrastructure at this point would be like throwing darts at a dartboard blindfolded and in a room with no lights.

So that's wonderful that they're reducing the deficit. They're doing it in a way that benefits a small portion of Canadians at the expense of the majority.

As I said, I don't have to agree with their choices. I also agreed (Although less so then Smallc, that deficit spending was required, as I believe its more like pissing in a lake, if you spend your stimulus unwisely) And I don't agree with a number of the Conservative Choices for cuts, but we haven't seen them all. I am even more offended by their omnibus bill.

That said, Paul Martin did notorious cuts to public services, he reduced the deficit and it was time those cuts were restored or the benefits of those cuts demonstrated to Canadians and not to billions upon billions of corporate tax cuts. In that discussion is where Martin and Harper share idealogy, and its in this way that the services to the public decline and profits to corporations increase.

One must then believe that corporations increase benefits to Canadians in reinvestment and while it was good to see the government get their fiscal house together, the benefits to the corporate tax cuts, trickle down effects, investments and job creation, never occurred.

Regardless their is a point where cuts shrink the economy, and I don't know if we are close to that point yet but I also don't think we are to far away from it.

I would be nervous.

madmax · July 31, 2012

How is cutting public sector jobs a bad thing. One of the biggest complaints of the public sector is waste. Nothing wrong with trimming the fat. Not only that public sector jobs are not as beneficial to the economy as private sector jobs due to the fact that public sector jobs don't create wealth, they redistribute it.

Corporations also redistribute wealth. Wealth can be take from Canada and redistributed in China. Public Sector Services often perform cheaper, more affordable and effecient then there corporate counterparts. And while the waste is there, and we taxpayers are more critical, corporations have HUGE WASTE, incompetence along with brilliance, just like any other organization.

Whenever I see a public service transferred to the private sector, the costs of the service increase, and ironically the wages to the employees decrease.

How is cutting taxes doling out money? It isn't. They aren't taking as much and allowing businesses namely small businesses (which just make it into the high income tax bracket and hire the most people) to buy,save, and invest in things that are usefull rather than have the govt sink it in a black hole.

Perhaps you need to break your argument into 3 parts. Government, Corporations, and Small business. Comparing a Corporation to a small business is a huge mistake. Even a small Company run by an owner/operator yet far above the scope and definition of a small business is far and away nothing comparable to Manulife, Cibc, or Shell.

There is always going to be an elite small portion of the population in any society. At least in ours, the business class is at the mercy of the consumer, just ask the execs at RIM. Would you rather have an elite political class like in heavy left leaning countries where the elite is far fewer in number?

Actually in heavily left countries (Norway, Sweden, Finland) the elite is smaller while the middleclass is larger and the poor is smaller.

The Highly right and Capitalist countries have an elite and smaller middle class and a larger portion of poor.

Pick your poison.

I find Canada has done well and the more we move to the Liberal Economic Policy adopted by the Conservative Party, the greater chance we have to be more like those third world countries.

Edited July 31, 2012 by madmax

Wild Bill · July 31, 2012

One must then believe that corporations increase benefits to Canadians in reinvestment and while it was good to see the government get their fiscal house together, the benefits to the corporate tax cuts, trickle down effects, investments and job creation, never occurred.

Regardless their is a point where cuts shrink the economy, and I don't know if we are close to that point yet but I also don't think we are to far away from it.

I would be nervous.

I've been nervous for about 30 years now, Max!

I started to believe way back in the early 80's that we were headed for economic trouble. I had been in the new Computer chip age for only a couple of years and we had entered a recession. Business managers began to do the business things to ride out the storm. So did finance ministers and other politicians.

We saw a lot of unexpected things happen in the economy during those times. We had interest rates go through the roof - 22% mortgges! Traditional government actions toward reducing unemployment didn't seem to work.

I began to see some parallels with what I was seeing in the market I served. The world was changing! We were still going through the same cycles but the details were changing. Yet the way "the powers that be" attempted to deal with things did not.

I watched secretary pools disappear! The computer was eliminating a huge number of jobs. The government seemed blissfully unaware of how things were changing. They would do the same old things to try to stimulate employment but the trend for the computer to eliminate clerical jobs was fighting them and winning by a landslide! The same thing was happening with accounting.

I saw this with the production line in factories, in the office staff and almost everywhere I looked. As I said, the government didn't see it. For that matter, a lot of business managers didn't either and I watched their firms go under.

I was reminded of Hitler's invasion of Poland. He understood the new technology of warfare and launched his blitzkrieg. The Poles responded with cavalry - troops on horses against tanks.

The same situation seemed to be at play in society and its economy. Everybody was using the tools they had used for decades if not centuries - tools that had become obsolete with the newfangled technology.

"Trickle down economics" was also an old fashioned concept. Perhaps it is still true as an academic idea but new changes meant that businesses were doing different things with stimulus handouts. The trickle thus became not even a drip but just a damp seep on the ground! Government needs to understand these changes better and put stimulus money perhaps into different areas, with new strings on the money so that business has to spend it in ways that would increase that trickle!

Up until the mid 70's, a politician could spend his entire life in Parliament and when he finally went home things were not all that different from when he had left. The rate of change was slower and he didn't get too out of touch. After the mid 70's he was like Bill & Ted's Napoleon, dragged into the late 20th century. He loved that water slide but he had absolutely no idea of how to build one!

It took about 15 years before re-training programs not just came on the scene but were focused on jobs for the new economy. At first, they were aimed at those vanished secretarial pools!

I'm pointing out a difference here Max between the validity of a concept and the way it is applied. I still believe in "trickle down", but not when it's applied by old guys, unaware of the specifics of how the world has changed and using the tools they were taught years ago, before revolutionary technologies made it not just a new ball game but a new TYPE of game!

Moonbox · July 31, 2012

Corporations also redistribute wealth. Wealth can be take from Canada and redistributed in China. Public Sector Services often perform cheaper, more affordable and effecient then there corporate counterparts. And while the waste is there, and we taxpayers are more critical, corporations have HUGE WASTE, incompetence along with brilliance, just like any other organization.

The nice thing about corporations, especially in a competitive environment, is that long term incompetence is unsustainable. Privately, it most certainly is and we see it regularly.

Whenever I see a public service transferred to the private sector, the costs of the service increase, and ironically the wages to the employees decrease.

A lot of the time, however, this is not due to any inefficiencies in the private model vs the public model, but rather due to the fact that the corporation isn't going to endlessly underwrite huge losses year after year, like Ontario Hydro did. 7-10% of your energy bill here is spent paying back the debt the public company accumulated over 14 years ago prior to privitization....

Actually in heavily left countries (Norway, Sweden, Finland) the elite is smaller while the middleclass is larger and the poor is smaller.

I think that's more fact than anything. These countries, however, are small, homogenized (by race, climate, background etc) and are far from the paradises that they're popularly made out to be.