Should we Spend or Save the Surplus?

[SamStranger]

I think we shoud spend the surplus this way...

1. In the upcomming budget, make the GST cut 2% right away (7% to 5%) then, in the next election Prime Minister Harper could run on the idea of lowering it to 3%, or even totally getting rid of it!!!???

2. Keep the Income Tax cut that the Liberals wanted, and that the NDP pretends to want (the NDP only agreed to the Income Tax Cut because the Liberals were forced to change their budget to give money to affordable housing ect.- Dont be fooled!!! Layton hates tax cuts)

3. Increase the "Choice in Child Care Allounce" to $150 per child under 6.

4. Introduce a "Jobs for Bums" program, where Bums are FORCED to get a job, or be deported.

What do u guys think?

[Renegade]

Welcome Back, SS.

I think we shoud spend the surplus this way...

1. In the upcomming budget, make the GST cut 2% right away (7% to 5%) then, in the next election Prime Minister Harper could run on the idea of lowering it to 3%, or even totally getting rid of it!!!???

The GST cut was a bad idea. It was popular and it helped Harper get elected, but it is bad economics. They shoud not reduce the GST any further than already comitted. My wish is that with time that the extend the GST to all items (no exemptions) and increase the GST, but they should reduce income taxes accordingly.

2. Keep the Income Tax cut that the Liberals wanted, and that the NDP pretends to want (the NDP only agreed to the Income Tax Cut because the Liberals were forced to change their budget to give money to affordable housing ect.- Dont be fooled!!! Layton hates tax cuts)

I' d be ok with an income tax cut, however the CPC wants to do it their way. They probably won't do it in the same way as the Liberals proposed.

3. Increase the "Choice in Child Care Allounce" to $150 per child under 6.

Nope. Unfarily discriminates against non-parents and parents with older kids.

4. Introduce a "Jobs for Bums" program, where Bums are FORCED to get a job, or be deported.

Deported to where? Why should the unemployed be forced to work? They paid their EI, now that they have a claim, forced working may interfere with their ability to find a job in their profession. If by "bums" you mean welfare recipients, that is a different story, but that falls under provincial conrol not federal.

[PocketRocket]

In the upcomming budget, make the GST cut 2% right away (7% to 5%) then, in the next election Prime Minister Harper could run on the idea of lowering it to 3%, or even totally getting rid of it!!!???

The GST doesn't bother me all that much. I'd rather have a surplus than a deficit.

Increase the "Choice in Child Care Allounce" to $150 per child under 6.

My opinion has always been that if you can't afford kids, don't have them. Birth control comes in varied forms, and is inexpensive.

People who scream that they need more child-care money get no sympathy from me.

Introduce a "Jobs for Bums" program, where Bums are FORCED to get a job, or be deported.

Someone else responded that people on EI are entitled to iti because they paid into it.

I agree.

However, there are many habitual Welfare reecipients who are able-bodied and could easily hold down a job, but are simply too lazy to do so.

The "Workfare" program was something I always agreed with.

It should be strngly implemented.

If someone is ABLE to work, they should be MADE to work for their bread and butter.

If this means forcing welfare recipients to sweep sidewalks, or shovel driveways for elderly people, then so be it.

If they are forced to do such menial labour for miniimum wage, it just may motivate them to find a REAL job, and some of the self-respect that comes with earning your own keep.

What do u guys think?

I think the surplus should be partly banked, a "rainy day" fund if you will.

A large portion of the remainder should go into paying down the national debt.

[Riverwind]

1. In the upcomming budget, make the GST cut 2% right away (7% to 5%) then, in the next election Prime Minister Harper could run on the idea of lowering it to 3%, or even totally getting rid of it!!!???

Harper sould forget about the GST cuts as raise it by 2 cents instead. He should then use the extra revenue to reduce income taxes. Or - he could eliminate the GST AND reduce transfer payments to the provinces by an equal amount and tell the provinces to raise their own taxes if they want to replace the lost revenue.

4. Introduce a "Jobs for Bums" program, where Bums are FORCED to get a job, or be deported.

What is bum? Who decides?

Unexpected surpluses at the end of the year should go to debt - I am sick and tired of watching politicians run around like santa claus each year when the real numbers come in.

[Drea]

I think the surplus should be partly banked, a "rainy day" fund if you will.

A large portion of the remainder should go into paying down the national debt.

I agree. We should save it -- although we (the country, economically) are doing great right now, it's always wise to save for lean times.

And yes, some of it should go to paying off the national debt.

Some of it should go to national programs like the military for example).

[Drea]

oops double post

[sharkman]

I beg to differ on the GST, how soon we grow accustomed to a new wound! Reducing it as promised will put more into the economy as it is tempted to slow with rising interest rates. Most of the surplus( and it's gigantic) should be used for debt retirement which reduces the amount of interest that must be paid each year.

[Riverwind]

I beg to differ on the GST, how soon we grow accustomed to a new wound! Reducing it as promised will put more into the economy as it is tempted to slow with rising interest rates.

The problem is the BOC wants the economy to slow down! The stimulus caused by lowering the GST will lead directly to higher interest rates - which in turn will tax more money away from people than they save with the GST.

[Drea]

I beg to differ on the GST, how soon we grow accustomed to a new wound! Reducing it as promised will put more into the economy as it is tempted to slow with rising interest rates. Most of the surplus( and it's gigantic) should be used for debt retirement which reduces the amount of interest that must be paid each year.

RE: lowering the GST by 1 cent....

We are looking to buy a new TV. Probably going to spend $2000. We save whopping $20. If I buy a new suit for $200 I save -- whoo hoo -- $2! LOL I usually shop at Value Village so I will save a quarter of a penny on a $25 suit. Pretty piddly.

IMO that (the Great GST Cut) is almost as lame as the Great Baby Payment Plan.

I do agree with paying down some of the debt. But realize that we must also have some in "savings". If you came into a windfall would you pay off everything or would you put some away? In our household we would pay off some of our debt and put the rest into savings or investment accounts. There will be "rainy" days ahead and we should prepare for them.

[Canuck E Stan]

4. Introduce a "Jobs for Bums" program, where Bums are FORCED to get a job, or be deported.

Interesting concept.There seems to be a insinuation here that "bums" are foreigners and should be deported if not working.I don't think that's the case.

I don't believe anyone should be forced to work,but I would be in favor of a program that requires those collecting unemployment or even welfare to make themselves available at a government institution daily(punching a clock) everyday, where they would be helped in finding employment. They would only receive funds if they did this on a daily basis.

The idea of getting free money and going off to do as you wish would not be an option. In order to receive a handout,you would have to,say spend five hours a day,five days a week looking for employment with the help of a councilor or proving that you have applied for a job somewhere.

I don't think it would take long for people to find work with this incentive.

[Hicksey]

Well those are dubious choices.

Where's the choice that says: "If there's a surplus send our money back to us."?

Why has everyone posted a way to spend the money, but not to send it to its rightful owners?

[shoop]

Debt reduction is the one option that fairly deals with your objection.

If a surplus truly is "ours" as rightful owners, who then owns the National Debt?

Well those are dubious choices.

Where's the choice that says: "If there's a surplus send our money back to us."?

Why has everyone posted a way to spend the money, but not to send it to its rightful owners?

[sideshow]

i think they should raise the bottom limit for tax exemption to lets say 15k a year. everyone pays NO tax on the first 15k. this does several things-treats everyone equally (for at least the first 15k), raises the disposable income of everyone, and raises the disposable income percentagly (i know, its not a word) most for the lowest wage earners. everything else should go to debt reduction.

forget both childcare programs. forget the gst. forget any other tax reductions. just pay the debt. evenually (lets think longer term people) the interest that we pay can/could/will/would be used to fund all these cherry programs (which are all good ideas with various benefits for various people-we just cant afford everything and cut taxes, la la la).

[geoffrey]

Debt reduction is the one option that fairly deals with your objection.

If a surplus truly is "ours" as rightful owners, who then owns the National Debt?

Well those are dubious choices.

Where's the choice that says: "If there's a surplus send our money back to us."?

Why has everyone posted a way to spend the money, but not to send it to its rightful owners?

A government should only collect taxes for a service provided. Our government is should not be in the business of surpluses.

Any overpayments of taxes, so any surplus, should be promptely returned to tax payers. We are already paying down the debt through in budget spending, that's enough. We'll never pay it off in the next 300 years so really it doesn't matter anywho. There are more productive things to do with money, like give it back to those that earn it.

[sideshow]

that is flawed thinking. the amount we pay in taxes is partially related to the amount the government has to pay in debt reduction each year (along with running itself and social programs, etc.).

so by reducing debt, we will (though it may be a longer term goal) end up paying less in taxes. much like paying down your mortgage quicker will eventually result in you paying less interest-which longer term means more money in your pocket.

[August1991]

If the federal government has money for this, then it has too much money and doesn't need anymore.

I have argued elsewhere that it should cut taxes rather than pay down the debt but frankly, I don't care as long as they don't spend it.

forget both childcare programs. forget the gst. forget any other tax reductions. just pay the debt. evenually (lets think longer term people) the interest that we pay can/could/will/would be used to fund all these cherry programs (which are all good ideas with various benefits for various people-we just cant afford everything and cut taxes, la la la).

That might be good advice for a family, but it makes absolutely no sense for a government.

If anything, a large deficit might discourage politicians from approving any new spending crazy schemes.

The fundamental problem of modern democracy is to make governments spend money in the way citizens want. At the moment, there is a huge disconnect between what the payer wants and what the receiver gets. It's a recipe for disaster and this disaster has been increasingly apparent in the past 50 years or so.

As Hugo, a one time poster to this forum stated, government will take your neighbour's money to buy pink paint (not blue, green or red) to paint your house even though you don't even want your house painted.

----

I have just been reading a book about ex-politicians in Canada and I came across this quote from Peter Lougheed:

I would say the most insignificant day being premier of Alberta for fourteen years was still more interesting than any other day that I've spent before or after.

There you have the problem in a nutshell. Politics attracts busybodies who enjoy the excitement of spending other people's money. It's a trap that we've fallen into and it will only get worse. It is extremely hard to get these people to stop.

[shoop]

Hmmmm, still don't see the logic.

We could pay off the debt in a much more realistic timeline than you laid out.

Debt reduction will be part of the budget plan on Tuesday. How much gets paid down remains to be seen. But another payment will be made.

A government should only collect taxes for a service provided. Our government is should not be in the business of surpluses.

Any overpayments of taxes, so any surplus, should be promptely returned to tax payers. We are already paying down the debt through in budget spending, that's enough. We'll never pay it off in the next 300 years so really it doesn't matter anywho. There are more productive things to do with money, like give it back to those that earn it.

[August1991]

We could pay off the debt in a much more realistic timeline than you laid out.

Debt reduction will be part of the budget plan on Tuesday. How much gets paid down remains to be seen. But another payment will be made.

Gawd, shoop. You make it seem that the government should pay down the debt the same way that a family should pay off the mortgage and retire debt free.

Has it ever occurred to you that the government will never die? It will never retire?

Has it ever occurred to you that at any given moment, Canadians will always be in debt and hence "Canada" will always be in debt?

A country and a government are not at like a family and it is foolish and dangerous to organize the finances of a government the way one would organize the finances of a family.

[uOttawaMan]

What's with the "I'd like to save our surplus" and "its better than a defecit" mentality.

You shouldnt be running massive surpluses or defecits. You spend what you take in, have a small emergency fund (in comparison to the huge surplus size..) and then if you have excess money taken from taxes, give it back to the population where it belongs.

[shoop]

Gawd, shoop. You make it seem that the government should pay down the debt the same way that a family should pay off the mortgage and retire debt free.

Has it ever occurred to you that the government will never die? It will never retire?

I'm not arguing for the Government to build up an RRSP, but I still don't see your argument as a valid reason for not paying down the debt.

Has it ever occurred to you that at any given moment, Canadians will always be in debt and hence "Canada" will always be in debt?

wtf? Are you trying to compare the personal debt of Canadians to Canada's national debt?

A country and a government are not at like a family and it is foolish and dangerous to organize the finances of a government the way one would organize the finances of a family.

That is a valid point. That doesn't mean that your argument supports the assertion that the national debt shouldn't be paid down.

Care to actually adress why you don't think the national debt should NOT be paid down?

[shoop]

oops, double post

[sharkman]

We could pay off the debt in a much more realistic timeline than you laid out.

Debt reduction will be part of the budget plan on Tuesday. How much gets paid down remains to be seen. But another payment will be made.

Gawd, shoop. You make it seem that the government should pay down the debt the same way that a family should pay off the mortgage and retire debt free.

Has it ever occurred to you that the government will never die? It will never retire?

Has it ever occurred to you that at any given moment, Canadians will always be in debt and hence "Canada" will always be in debt?

A country and a government are not at like a family and it is foolish and dangerous to organize the finances of a government the way one would organize the finances of a family.

I see the point of this post, but none the less, a debt free Alberta is the envy of Canada. Having no debt to service or retire means you can reduce taxes and spend more on social programs than you would have been able. It is just a better position to be in.

[geoffrey]

The point is shoop is that either the government will be debt free or Canadians will be debt free. It's a choice we make. I'd rather have Canadians debt free.

[August1991]

A country and a government are not at like a family and it is foolish and dangerous to organize the finances of a government the way one would organize the finances of a family.

That is a valid point. That doesn't mean that your argument supports the assertion that the national debt shouldn't be paid down.

Care to actually adress why you don't think the national debt should NOT be paid down?

I'll give you three:

1. Government borrows at lower interest rates than you or I can.

2. When a government is in deficit, it is less likely to incur frivoulous spending.

3. Government debt creates important benchmarks for private capital markets.

My main point however is to counter this kind of thinking:

I see the point of this post, but none the less, a debt free Alberta is the envy of Canada. Having no debt to service or retire means you can reduce taxes and spend more on social programs than you would have been able. It is just a better position to be in.

The other provincial governments envy the Albertan government's ability to approve whatever spending scheme the politicians and bureaucrats can think of, with little political cost.

Having no debt may indicate an individual's fiscal prudence but it says nothing about a government. The only measure of government is how much it spends and what it buys.

Government is unlike you or I because it can, at any time, spend your money or spend money in your name. IOW, government can take money directly out of your bank account, or borrow money with your name on the debt. My point is that it makes no difference which it does, it matters more what government does with the money.

This power makes government an important institution of civilized society but also a dangerous one.

The point is shoop is that either the government will be debt free or Canadians will be debt free. It's a choice we make. I'd rather have Canadians debt free.

That's false. "Canada" has a positive net value. IOW, Canada is worth alot. By that, I include all the physical and human assets (natural resources, people's skills, talents, knowledge, buildings, roads and so on). The Canadian government can siphon off a portion of the stream of income generated by this wealth at any time it wants. Hence, it is absurd to speak of being "debt free" in such a context.

To go further, it is basically impossible for the federal government to know whether it is in deficit or not. For political reasons, the budget tomorrow will likely present a small surplus but it could just as easily present a deficit under different calculations. Why? The government has obligatory payments into the future (pensions for example) and if these payments are discounted to the present, it is easy to show a current budgetary deficit.

A budget deficit/surplus is now a PR exercice and little else.

Tomorrow's budget will give us an idea of the government's spending priorities and an idea of its current tax proposals. Since Harper has reviewed the budget, I am sure that he fully intends to carry out this plan.

I will pay attention to the overall projected spending - Harper has said that he wants federal spending to grow less quickly than economic growth. And I'm curious to see if Harper starts to cut some of the nonsense in current federal spending. No doubt, the budget will concentrate on areas of federal jurisdiction, for example defence.

As to taxes and transfers, I'll be curious to see what incentive effects these changes will have.

[shoop]

Yeeeeeesh, what a load of crap.

As much as what you suggest *could* happen ... it really wouldn't. Ever.

Believe it or not, Government cannot do whatever it wants with the way it presents financial figures.

No accountant would sign off on accounting for futurre payments in a current year. It would not be accepted and Bay Street would simply perform the calculations and the real figure would become the conventional wisdom. The Finance Minister would lose such credibility that it would materially effect the market's confidence in the Government (and the economy as a result).

There is no credibile scenario for presenting a budget surplus in the way you outline.

To go further, it is basically impossible for the federal government to know whether it is in deficit or not. For political reasons, the budget tomorrow will likely present a small surplus but it could just as easily present a deficit under different calculations. Why? The government has obligatory payments into the future (pensions for example) and if these payments are discounted to the present, it is easy to show a current budgetary deficit.

A budget deficit/surplus is now a PR exercice and little else.