The Budget

[Big Guy]

GDP growth goes to 2.5%, oil goes to $60 a barrel and we have a balanced budget in two years. Then we up the HST by 2% where it was before Harper fiddled with it and we have surplus where we can purchase Cuba.

"Happy days are here again

The skies above are clear again
So let's sing a song of cheer again
Happy days are here again."

[Argus]

With that logic, we'd never have any government programs.

We'd have the ones we could afford.

[Smallc]

We'd have the ones we could afford.

What we can afford is a function of taxation and the ability to borrow, made possible by the will of the electorate, not what you determine that we can afford.

[Argus]

What we can afford is a function of taxation and the ability to borrow, made possible by the will of the electorate, not what you determine that we can afford.

What you consistently fail to understand is the health of the economy is often an inverse to the degree of taxation. Go ahead, double everyone's taxes. You'll need all that money with 30% a unemployment rate.

[Wilber]

What we can afford is a function of taxation and the ability to borrow, made possible by the will of the electorate, not what you determine that we can afford.

The ability to borrow has nothing to do with being able to afford something. The ability to pay for it does. If you are borrowing, you aren't paying for something, your creditor is.

[cybercoma]

Federal spending isn't the same as personal finance. In those case we're borrowing to make it easier to pay off later.

[TimG]

Federal spending isn't the same as personal finance. In those case we're borrowing to make it easier to pay off later.

That logic only applies if debt growth is less than growth of government revenues (not GDP). No government that chooses to run a deficit in good times can claim to meet that objective because to meet it you need a surplus in good time to balance the large deficits in bad times.

[cybercoma]

Good times these ain't.

[TimG]

Good times these ain't.

This is as good as it gets now a days. Anyone who believes growth is going to return to levels seen in the past needs to stop using drugs. Deficit spending in good times is irresponsible.

[Wilber]

Federal spending isn't the same as personal finance. In those case we're borrowing to make it easier to pay off later.

There is no intention to pay off federal debt. Our creditor only pays for what we want once, in return, we pay him forever.

[cybercoma]

Tim, not much point having a discussion with someone who's just going to make up their own facts. I'm sure I don't need to repost the global economics reports because you've already seen them. And it's a bit hypocritical that you never once had a word to say about Harper's deficit spending during the good times.

Edited March 29, 2016 by cybercoma

[TimG]

'm sure I don't need to repost the global economics reports because you've already seen them.

What matters to the Canadian government is the Canadian economy and the Canadian economy is growing as is the economy of our largest trading partner.

Harper was castigated for refusing to run deficits when the 2008 crisis hit. Once he realized he had no choice his first priority was bringing the budget back into balance. Trudeau, on the other hand, runs deficits in good times so it means he has no intention of every balancing the books. There is also no chance of him keeping his 'constant relative to gdp' target because to do that one needs to run deficits which are much smaller than GDP growth when times are good.

[hitops]

Federal spending isn't the same as personal finance.

Ya it's worse. Federal debt damages everyone in the country, not just a single debtor.

In those case we're borrowing to make it easier to pay off later.

And how's that going to work exactly? If we just believe hard enough?

Tim, not much point having a discussion with someone who's just going to make up their own facts. I'm sure I don't need to repost the global economics reports because you've already seen them. And it's a bit hypocritical that you never once had a word to say about Harper's deficit spending during the good times.

Ya 2008-09 and the aftermath. Ah the 'good times'.

Edited March 29, 2016 by hitops

[Wilber]

Tim, not much point having a discussion with someone who's just going to make up their own facts. I'm sure I don't need to repost the global economics reports because you've already seen them. And it's a bit hypocritical that you never once had a word to say about Harper's deficit spending during the good times.

Harper did run deficits but the focus was on getting back to a balance budget, which he did. Many didn't agree with the way he did it and the same can be said for Chretien/Martin but the focus of both was to return to a balanced budget. I see no such focus with the present government and until we see one, everyone should be concerned.

[dre]

What matters to the Canadian government is the Canadian economy and the Canadian economy is growing as is the economy of our largest trading partner.

You're ignoring all of the huge structural problems in our economy, and the fact its so heavily propped up with consumer debt. We have the worst economic position in my lifetime (42 years) or at the very least the second worst. Confidence in the economy is at its lowest point in 1/4 of a century and investors around the world are starting to short sell us.

[Smallc]

Harper did run deficits but the focus was on getting back to a balance budget, which he did. Many didn't agree with the way he did it and the same can be said for Chretien/Martin but the focus of both was to return to a balanced budget. I see no such focus with the present government and until we see one, everyone should be concerned.

Morneau has said multiple times that the plan is to balance the budget in 5 years. The budget is simply overly cautious in terms of revenue.

[dre]

Harper did run deficits but the focus was on getting back to a balance budget, which he did. Many didn't agree with the way he did it and the same can be said for Chretien/Martin but the focus of both was to return to a balanced budget. I see no such focus with the present government and until we see one, everyone should be concerned.

Harper's real debt was in the private credit markets through a program of massive easing. Almost a trillion in new debt was added.

The federal debt is just one small piece of the picture. Credit market debt is a lot larger and a lot more dangerous.

[hitops]

There was a rumor that Trudeau would try to shut down personal professional corps. No idea how that was supposed to work in reality. Looks like they gave up on that.

[Wilber]

Harper's real debt was in the private credit markets through a program of massive easing. Almost a trillion in new debt was added.

The federal debt is just one small piece of the picture. Credit market debt is a lot larger and a lot more dangerous.

If people want to add to their personal debt, that's their business. If government wants to add to the public debt, that's everyone's business. Harper didn't force anyone to over expose themselves. This government has done nothing to change interest rates and the BOC didn't start talking about negative interest rates until after the last election, so nothing has changed in that respect.

[dre]

If people want to add to their personal debt, that's their business. If government wants to add to the public debt, that's everyone's business. Harper didn't force anyone to over expose themselves. This government has done nothing to change interest rates and the BOC didn't start talking about negative interest rates until after the last election, so nothing has changed in that respect.

Wrong. The government can add to both. Private debt is heavily controlled by the government and banks through incentives to borrow, programs like the CMHC, monetary policy, and credit conditions.

Harper's real debt legacy is that 1.7 trillion dollars in household debt which will be an anchor chained to our legs for decades to come.

[dre]

Morneau has said multiple times that the plan is to balance the budget in 5 years. The budget is simply overly cautious in terms of revenue.

The economy is so unstable right now that the government doesn't even know what it would take to balance a budget. Predictions on growth from economists have changed from 2.2% to 1..4% in just a few months.

[Spiderfish]

Morneau has said multiple times that the plan is to balance the budget in 5 years. The budget is simply overly cautious in terms of revenue.

After delivering a budget deficit 3 times what they campaigned on , it would be understandable for any reasonable person to doubt the credibility of anything he says and foolish to put any stock into any 5 year projection he comes up with.

[Spiderfish]

The economy is so unstable right now that the government doesn't even know what it would take to balance a budget. Predictions on growth from economists have changed from 2.2% to 1..4% in just a few months.

All it takes is heart to grow an economy, haven't you heard?

[eyeball]

The economy is so unstable right now that the government doesn't even know what it would take to balance a budget.

That's because the government doesn't know what the instability stems from.

I'm betting if our natural capital was accounted for to the same deep degree fiscal and financial capital is we'd come to realize that the economy is staggering under the weight of a badly overdrawn account.

[Smallc]

After delivering a budget deficit 3 times what they campaigned on , it would be understandable for any reasonable person to doubt the credibility of anything he says and foolish to put any stock into any 5 year projection he comes up with.

It's almost as if revenues were down, or something.