74

Pay later


 

Mike Moffatt questions post-dated promises.

On the surface, waiting for a surplus to implement a costly new program may seem like a prudent way to control government spending. However, since these programs are not one-time costs, but rather ongoing spending, it is in fact a recipe for fiscal disaster.


 

Pay later

  1. Or in other words, the CPC has a plan to throw us back into deficit the moment we get out of it.

  2. Or in other words, the CPC has a plan to throw us back into deficit the moment we get out of it.

    • You are assuming we will ever get out of deficit. I have serious doubts about that.

      • Nope. not assuming that at all, just pointing out that should by some fluke we manage to get out of deficit, they're ready to take us back in.

  3. So if we follow Mike Moffatt's line of thought – implementing costly new programs while in deficit will NOT result in a recipe for fiscal disaster?????

  4. So if we follow Mike Moffatt's line of thought – implementing costly new programs while in deficit will NOT result in a recipe for fiscal disaster?????

    • Maybe stop implementing costly new programs in the first place.

    • I think that the actual conclusion of Mike Moffatt's line of thought is that 'when implementing costly new programs the government needs to find a new source of revenue to cover those costs'. It doesn't matter matter if the government is in deficit or not. I.e. If the government wants to lower income tax for everyone, then it should raise some other tax (i.e start taxing CO2 emissions) or cancel some program (get rid of the Air Force).

      • This of course assumes, contra Harper, that the economy will never grow.

        • It assumes that you can't predict the growth of the economy in such a manner as to balance proposed program spending against it.

          You'd think the CPC and their supporters would understand this.. you shouldn't buy a car on the assumption you'll get a raise, you really should either wait until you've gotten the raise to go ahead, or found another way to bring in the money you'll need to pay for it, just in case. That used to be the definition of a "conservative" budget.

          (and yes, I chose CPC vs conservative deliberately)

          • Yes, that is good wisdom, though of course Harper has said he will not buy the car for a few years, and he is assuming he will have his raise by then. And on your last point, about finding money, they have claimed to be able to slash 4 billion in annual government operations (11 billion over 4 years). No need for us to fight about whether this is possible or not. They have proposed to do just what you are saying they should do, i.e. find another way to bring in the money you'll need to pay for it.

          • But it's nowhere near what he'll need to come up with to do what he says he's going to, and that's WITHOUT the new programs he's talking about once the deficit is gone.

            And as an aside, the deficit being gone doesn't mean that we have extra money, remember, it just means we're finally spending only what we earn. Then on top of that he's going to add new programs *before* we've had any demonstration that a surplus to pay for them can be found.

  5. The same would apply to the Liberal and NDP ecomomic promises. And not to mention the BQ demands coming up before a new coalition agreement is signed.

    The G&M (and others) are getting pretty, pretty desparate to find more negative stories about Harper.

    But keep it up. The more nonsense is touted about Harper, the more votes he will gather up in his favour.

    The anti-Harper sentiment has gone way over the top and the voters are catching on.

    And what's with Ignatieff's understanding of a working democray if he can't even stand up for democratic principles himself? Which party leader chooses to be appointed rather than be elected by the party at large? Ignatieff and his democratic insights; what a fake!

  6. The same would apply to the Liberal and NDP ecomomic promises. And not to mention the BQ demands coming up before a new coalition agreement is signed.

    The G&M (and others) are getting pretty, pretty desparate to find more negative stories about Harper.

    But keep it up. The more nonsense is touted about Harper, the more votes he will gather up in his favour.

    The anti-Harper sentiment has gone way over the top and the voters are catching on.

    And what's with Ignatieff's understanding of a working democray if he can't even stand up for democratic principles himself? Which party leader chooses to be appointed rather than be elected by the party at large? Ignatieff and his democratic insights; what a fake!

    • The Liberals in the Liberal Party did vote on that Francien. For our Constitution, which allowed for a leader to be chosen that way, in such specific circumstances. For the 300th time.

      • Jenn: I am not saying that your Constitution would not allow for a party leader to be appointed. Nor am I saying that the Liberal party does not have the right to appoint a leader.

        This is a fact: Ignatieff was not elected by the party membership at large. If you try and tell otherwise, you are lying.

        Ignatieff had a choice; he could have said:"No, I don't want this appointment by the Liberal elites – I want to be elected by the party membership at large." ParticularcCircumstances at the time were created by the Liberals as much as by anyone else. Don't try to paint Ignatieff as if he was an outsider to the circumstances being presented. He was part of how the circumstances came to be formed.

        In the end, Ignatieff did have a choice. That is what democratic principles are all about – to show the world on which side of the choice you stand. Ignatieff chose to be appointed.

        • no.

        • There's nothing democratic about being elected by a few thousand rabid partisans. You're falsely imbuing that with some kind of legitimacy. All legitimacy flows through Parliament. I'd say it'd be more democratic for the party caucus to select the PM than the membership.

        • When you have a member of the Liberal party telling you they're okay with it, I think that trumps your ignorant assumptions.

        • Your concern for Liberal Party members is touching.

    • You're right that they're desperate for stories. Illegally appropriating funds for pork isn't juicy enough.

    • And parties are not democratic. Leadership selection processes have no democratic legitimacy under our system of government.

  7. Harper …bringing us one fiscal disaster after another.

  8. Harper …bringing us one fiscal disaster after another.

  9. You are assuming we will ever get out of deficit. I have serious doubts about that.

  10. Maybe stop implementing costly new programs in the first place.

  11. The Liberals in the Liberal Party did vote on that Francien. For our Constitution, which allowed for a leader to be chosen that way, in such specific circumstances. For the 300th time.

  12. You're right that they're desperate for stories. Illegally appropriating funds for pork isn't juicy enough.

  13. And parties are not democratic. Leadership selection processes have no democratic legitimacy under our system of government.

  14. Jenn: I am not saying that your Constitution would not allow for a party leader to be appointed. Nor am I saying that the Liberal party does not have the right to appoint a leader.

    This is a fact: Ignatieff was not elected by the party membership at large. If you try and tell otherwise, you are lying.

    Ignatieff had a choice; he could have said:"No, I don't want this appointment by the Liberal elites – I want to be elected by the party membership at large." ParticularcCircumstances at the time were created by the Liberals as much as by anyone else. Don't try to paint Ignatieff as if he was an outsider to the circumstances being presented. He was part of how the circumstances came to be formed.

    In the end, Ignatieff did have a choice. That is what democratic principles are all about – to show the world on which side of the choice you stand. Ignatieff chose to be appointed.

  15. I think that the actual conclusion of Mike Moffatt's line of thought is that 'when implementing costly new programs the government needs to find a new source of revenue to cover those costs'. It doesn't matter matter if the government is in deficit or not. I.e. If the government wants to lower income tax for everyone, then it should raise some other tax (i.e start taxing CO2 emissions) or cancel some program (get rid of the Air Force).

  16. "On the surface, waiting for a surplus to implement a costly new program may seem like a prudent way to control government spending."

    Depends on how cynical/naive you are.

    From my point of view, when pols promise to do something 3-5 years in future, I am fairly certain it is not going to happen. Promising to do something, instead of actually doing it, is a prudent way to control spending.

    And what mistake did Mancini make the other night?

  17. "On the surface, waiting for a surplus to implement a costly new program may seem like a prudent way to control government spending."

    Depends on how cynical/naive you are.

    From my point of view, when pols promise to do something 3-5 years in future, I am fairly certain it is not going to happen. Promising to do something, instead of actually doing it, is a prudent way to control spending.

    And what mistake did Mancini make the other night?

    • But you're ok with the said pol getting electoral credit during an election anyway?

  18. This of course assumes, contra Harper, that the economy will never grow.

  19. Riveting. A three line rebuttal of Harper's emphasis on eliminating the deficit. Thanks Mike Moffat. And thank you Aaron Wherry.

  20. Riveting. A three line rebuttal of Harper's emphasis on eliminating the deficit. Thanks Mike Moffat. And thank you Aaron Wherry.

  21. Nope. not assuming that at all, just pointing out that should by some fluke we manage to get out of deficit, they're ready to take us back in.

  22. There's nothing democratic about being elected by a few thousand rabid partisans. You're falsely imbuing that with some kind of legitimacy. All legitimacy flows through Parliament. I'd say it'd be more democratic for the party caucus to select the PM than the membership.

  23. Ah, I see. Here's the real heart of the article, I think:

    "Asking can we afford this program right now?' is the wrong question. Rather we need to ask ‘can we afford this program over the entire business cycle?' If we can afford the program over the entire business cycle, then there is no reason to wait for a surplus. If we cannot, then the program should not be implemented at all, rather than implemented later."

    Perhaps Harper thinks that we can afford the programs over the entire business cycle, but he is just too eager to eliminate this ugly deficit which makes him look so unCon-like.

  24. It assumes that you can't predict the growth of the economy in such a manner as to balance proposed program spending against it.

    You'd think the CPC and their supporters would understand this.. you shouldn't buy a car on the assumption you'll get a raise, you really should either wait until you've gotten the raise to go ahead, or found another way to bring in the money you'll need to pay for it, just in case. That used to be the definition of a "conservative" budget.

    (and yes, I chose CPC vs conservative deliberately)

  25. Ah, I see. Here's the real heart of the article, I think:

    "Asking can we afford this program right now?%E2%80%99 is the wrong question. Rather we need to ask ‘can we afford this program over the entire business cycle?%E2%80%99 If we can afford the program over the entire business cycle, then there is no reason to wait for a surplus. If we cannot, then the program should not be implemented at all, rather than implemented later."

    Perhaps Harper thinks that we can afford the programs over the entire business cycle, but he is just too eager to eliminate this ugly deficit which makes him look so unCon-like.

  26. Yes, that is good wisdom, though of course Harper has said he will not buy the car for a few years, and he is assuming he will have his raise by then. And on your last point, about finding money, they have claimed to be able to slash 4 billion in annual government operations (11 billion over 4 years). No need for us to fight about whether this is possible or not. They have proposed to do just what you are saying they should do, i.e. find another way to bring in the money you'll need to pay for it.

  27. But it's nowhere near what he'll need to come up with to do what he says he's going to, and that's WITHOUT the new programs he's talking about once the deficit is gone.

    And as an aside, the deficit being gone doesn't mean that we have extra money, remember, it just means we're finally spending only what we earn. Then on top of that he's going to add new programs *before* we've had any demonstration that a surplus to pay for them can be found.

  28. Close.

    According to Con platform, deficit at the end of this year is 30B. What is it this year, 40B? The year after this deficit will be 20B. Year after that 7.7B. Year after that we run a surplus of 3B. So, the Cons are predicting something in the manner of a structural (is that the right term?) surplus of approx. 10B a year, for the next 4 years. Then the new spending kicks in. I get to income split. You get to save on getting buff. And we all get to double our yearly contributions to our TFSA's, and the surplus the next year is 5B, an increase of 3B rather than 10B.

    All of that to say that we are demonstrating that the ANNUAL surplus is there. That's how we're paying down the deficit. Then, a portion of that annual surplus will go to new spending when the deficit is eliminated. And, in a perfect world, we'll be getting a raise or two in that time also.

  29. "So, the Cons are predicting something in the manner of a structural surplus"

    "the Cons are predicting something"

    "Cons are predicting"

    "predicting"

    What was my original point about conservative budgeting?

  30. "So, the Cons are predicting something in the manner of a structural surplus"

    "the Cons are predicting something"

    "Cons are predicting"

    "predicting"

    What was my original point about conservative budgeting?

    • Yes well, if you are simply going to revert to "I don't believe a word the Cons say", then I guess our discussion is indeed over.

      I would have gone by the Liberal projections, but they don't seem to be planning to eliminate the deficit.

      • They don't exactly inspire a lot of confidence.

        I don't mind deficit spending if its productive long term, but what I do mind is a clear and consitent effort to decieve and mislead that borders on pathological.

        But supposedly taxes will continue to decrease while spending increase (many spending figures are around 60% of what they'll likely cost), intended areas of savings rest on little more than hopes and wishes, and the magic bullet is that the economy is somehow supposed to grow to cover the difference… Given the fact that tax cuts are targetted at the one segment of the economy that will likely see any growth im unconvinced.

        Still deficit spending isnt a huge deal in the short term.

      • It's not "I don't believe a word the Cons say" it's "Why are they making a budget based on unknowables.. how is that a conservative budget?

        They're predicting economic growth that nobody knows if it will really happen, or if it does, at the speed they say.

        They're predicting cutting 11 billion dollars, despite only a few weeks before they themselves saying they haven't done the reviews yet to see how much money they might possibly save.

        It has nothing to do with whether I believe them, it has to do with the very notion of using numbers pulled from their arse. Even if I believe that they believe they can do it (and to be frank, I don't) it still runs into the problem of it's only a belief on their part, with no factual backing, and they're making budgets for the country based on this.

  31. Yes well, if you are simply going to revert to "I don't believe a word the Cons say", then I guess our discussion is indeed over.

    I would have gone by the Liberal projections, but they don't seem to be planning to eliminate the deficit.

  32. When you have a member of the Liberal party telling you they're okay with it, I think that trumps your ignorant assumptions.

  33. Mr. Harper is running a credibility deficit. If truth were like debt, he'd be bankrupt — in fact, at the rate he's going he'll take all of us with him.

  34. Mr. Harper is running a credibility deficit. If truth were like debt, he'd be bankrupt — in fact, at the rate he's going he'll take all of us with him.

    • cute

  35. cute

  36. But you're ok with the said pol getting electoral credit during an election anyway?

  37. Isn't the fact that Harper and Flaherty have no handle on their financial numbers, cannot defend them, are often contradicted by independent sources (most notably the PBO) already a recipe for financial disaster? It is probably that kind of ignorance and/or sloppiness which caused the structural deficit independent of the financial downturn. No reason they won't do more of the same if Canadians tell them they want more of the same.

  38. Isn't the fact that Harper and Flaherty have no handle on their financial numbers, cannot defend them, are often contradicted by independent sources (most notably the PBO) already a recipe for financial disaster? It is probably that kind of ignorance and/or sloppiness which caused the structural deficit independent of the financial downturn. No reason they won't do more of the same if Canadians tell them they want more of the same.

    • Thx for the link BGL – even though we don't agree on much, you have a regular library of links. :-)

      A poster's from the article says it all………

      too bad the politicians and this writer don't see that the money has already been taxed once (before deposited into the ROTH) and isn't that enough?

      if I'm frugal and don't need the money later and maybe have a streak of good luck and am employed continuously through my life I'd like to leave some $ to my kids. Is that a bad idea? Really, the $ won't 'sit idle' for generations. someone will use it. and it's not like it's buried under the back 40 acres in a coffee tin. It's at a financial institution where (in the past) the money would be used to fund loans that promote business and home ownership.

      All good.

      If the government can't see that the taxes they get now are not necessarily all to be used in the calendar year it was generated…and fix the spending/budget laws accordingly, why are we the people to blame?

      Keep your stinkin' democratic hands off my money!

    • TFSA = fair

      This is an opinion piece, and it is full of it. Governments are scared silly that people are not saving for their retirement, so they come up with some programs to promote it. Of course, a liberal would see the act of not taxing the money when it comes out as a loss. Someone else would see that fact that the person saved, had control over their own money, and didn't need as much government help to retire, as a win. Not to forget that all of the money will eventually be taken out of said programs, and spent, creating jobs, etc.
      Basically, a win in every sense of the word (unless your goal is to have retirees not save, and need social assistance in the future).

      • Yes, absolutely: the Tax Free Savings Account are the most fairest of all.

        It means that individual savings (money already made and paid taxes on once) can now start generating a tax free income. Things could not be more fair.

        The monies you manage to put into a tax free account are monies which taxes have been paid on already once, namely when you've earned them within a specific year. To then be wise and save some of that earned money, and to be allowed to let it generate income tax free is the ultimate fairness to any individual. !!

  39. Thx for the link BGL – even though we don't agree on much, you have a regular library of links. :-)

    A poster's from the article says it all………

    too bad the politicians and this writer don't see that the money has already been taxed once (before deposited into the ROTH) and isn't that enough?

    if I'm frugal and don't need the money later and maybe have a streak of good luck and am employed continuously through my life I'd like to leave some $ to my kids. Is that a bad idea? Really, the $ won't 'sit idle' for generations. someone will use it. and it's not like it's buried under the back 40 acres in a coffee tin. It's at a financial institution where (in the past) the money would be used to fund loans that promote business and home ownership.

    All good.

    If the government can't see that the taxes they get now are not necessarily all to be used in the calendar year it was generated…and fix the spending/budget laws accordingly, why are we the people to blame?

    Keep your stinkin' democratic hands off my money!

  40. Your concern for Liberal Party members is touching.

  41. Thx for the link BGL – you always have good ones. From a poster on the article, says it all………

    "too bad the politicians and this writer don't see that the money has already been taxed once (before deposited into the ROTH) and isn't that enough?

    if I'm frugal and don't need the money later and maybe have a streak of good luck and am employed continuously through my life I'd like to leave some $ to my kids. Is that a bad idea? Really, the $ won't 'sit idle' for generations. someone will use it. and it's not like it's buried under the back 40 acres in a coffee tin. It's at a financial institution where (in the past) the money would be used to fund loans that promote business and home ownership.

    All good.

    If the government can't see that the taxes they get now are not necessarily all to be used in the calendar year it was generated…and fix the spending/budget laws accordingly, why are we the people to blame?

    Keep your stinkin' democratic hands off my money!"

  42. Thx for the link BGL – you always have good ones. From a poster on the article, says it all………

    "too bad the politicians and this writer don't see that the money has already been taxed once (before deposited into the ROTH) and isn't that enough?

    if I'm frugal and don't need the money later and maybe have a streak of good luck and am employed continuously through my life I'd like to leave some $ to my kids. Is that a bad idea? Really, the $ won't 'sit idle' for generations. someone will use it. and it's not like it's buried under the back 40 acres in a coffee tin. It's at a financial institution where (in the past) the money would be used to fund loans that promote business and home ownership.

    All good.

    If the government can't see that the taxes they get now are not necessarily all to be used in the calendar year it was generated…and fix the spending/budget laws accordingly, why are we the people to blame?

    Keep your stinkin' democratic hands off my money!"

  43. TFSA = fair

    This is an opinion piece, and it is full of it. Governments are scared silly that people are not saving for their retirement, so they come up with some programs to promote it. Of course, a liberal would see the act of not taxing the money when it comes out as a loss. Someone else would see that fact that the person saved, had control over their own money, and didn't need as much government help to retire, as a win. Not to forget that all of the money will eventually be taken out of said programs, and spent, creating jobs, etc.
    Basically, a win in every sense of the word (unless your goal is to have retirees not save, and need social assistance in the future).

  44. zzzzzzzzzzzzzzzzz

  45. zzzzzzzzzzzzzzzzz

  46. They don't exactly inspire a lot of confidence.

    I don't mind deficit spending if its productive long term, but what I do mind is a clear and consitent effort to decieve and mislead that borders on pathological.

    But supposedly taxes will continue to decrease while spending increase (many spending figures are around 60% of what they'll likely cost), intended areas of savings rest on little more than hopes and wishes, and the magic bullet is that the economy is somehow supposed to grow to cover the difference… Given the fact that tax cuts are targetted at the one segment of the economy that will likely see any growth im unconvinced.

    Still deficit spending isnt a huge deal in the short term.

  47. It's not "I don't believe a word the Cons say" it's "Why are they making a budget based on unknowables.. how is that a conservative budget?

    They're predicting economic growth that nobody knows if it will really happen, or if it does, at the speed they say.

    They're predicting cutting 11 billion dollars, despite only a few weeks before they themselves saying they haven't done the reviews yet to see how much money they might possibly save.

    It has nothing to do with whether I believe them, it has to do with the very notion of using numbers pulled from their arse. Even if I believe that they believe they can do it (and to be frank, I don't) it still runs into the problem of it's only a belief on their part, with no factual backing, and they're making budgets for the country based on this.

  48. Yes, absolutely: the Tax Free Savings Account are the most fairest of all.

    It means that individual savings (money already made and paid taxes on once) can now start generating a tax free income. Things could not be more fair.

    The monies you manage to put into a tax free account are monies which taxes have been paid on already once, namely when you've earned them within a specific year. To then be wise and save some of that earned money, and to be allowed to let it generate income tax free is the ultimate fairness to any individual. !!

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