This government sucks. Unless it blows…

This government sucks. Unless it blows…

Went to hear Paul Martin speak at the Canadian Club today. He was impassioned, articulate, and compulsively boastful, as all former politicians are — an endless recitation of his many achievements and visionary ways, all the good works he was performing before, you know…

On one point I sort of agreed with him, though: the present government cannot escape blame for the coming deficit, having raised spending at such a reckless pace since it came to office. (I would not be so churlish as to point out that spending rose even faster in the last years of the Martin government.) Still, I am stuck on one point: Martin also said he favoured running a deficit, as a means of “stimulating” the economy in this time of worldwide economic crisis.

I wanted to ask him, but didn’t: So if you were prime minister today, would you run a deficit or not? If not, then what becomes of any putative Keynesian stimulus? If so, then what’s your beef with Harper? If deficits are what’s on order, that’s what he’s fixing to deliver.

It’s one thing for green-eyeshade types like me to grump about the Harper spending record, since I don’t actually think deficits stimulate anything, except a lot of hurried, ill-thought-out “infrastructure” schemes: the bureaucrats have already been given their marching orders by the current Finance minister, namely to “get the money out the door.”

But it makes no earthly sense to be attacking the govenment for running a deficit in one breath, and calling on it to do so with the next.

CONTRARIWISE: Mind you, this sort of incoherence is rampant these days. The problem is that consumers have been spending too much — unless it’s that they’re saving too much. Banks lent far too freely, but under no circumstances should they lend less. The United States has been living beyond its means for far too long. So we’ll pitch the US government headlong into trillion dollar deficits in the name of stimulating more consumer spending, much of which will go to suck in imports. I guess this is that “pragmatism” we’ve been hearing so much about…




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This government sucks. Unless it blows…

  1. High water, meet Hell…

    Which is more surprising, that Mr. Let-There-Be-No-Doubt Martin is suddenly in favour of a budget deficit, or that he is actually sharing that opinion in public after his earlier deficit-slaying bravado?

    Shrug, a minor deficit in one year is no biggie, if the recent past trends of debt-retiring surpluses is the overall rule in the future. But a big whopper of a (cough) “stimulus” deficit is inexcusable. Stealing the next generation’s prosperity to make the current troubles less painful is shameful.

  2. “don’t actually think deficits stimulate anything, except a lot of hurried, ill-thought-out “infrastructure” schemes”

    Even this doesn’t happen anymore. Between environmental assessments and NIMBY’s I would be amazed if any infrastructure scheme cooked up in the past few months will start within 3 years.

    I, too, am bewildered by the incoherence of our pols these days. It seems there is lots of complaining about how we got where are today but no one is willing to change much except throw even more money at the problems. No one is accountable for anything anymore, we are all just helpless victims.

  3. Personally, I have been energized by the Libs and NDPs resolute opposition to having a recession.

  4. Paul Martin at the Canadian Club. Wait a sec — Bob Rae was there last week. Is there a leadership race or something?

  5. But to be fair to the deficit-if-necessary / but-Harper’s-deficit-is-self-created-and-sucks point of view, the federal government would have a fair bit more fiscal room to implement “stimulus”measures without going into deficit if the Harper Government hadn’t rushed the second GST cut (all other things being equal).

  6. AH! but soemone is accountable and the real culprit in all of this = US! that’s right all of us are a responsible for this some to a largerdegree. Look at the language that is being used = we must free up credit! Wait a sec folks maybe that is what the real problem in current economics is – the credit has been too easy to get more oftten than not easy credit is what got us into this mess The Clintons forced their financial institutuions to agressively lend out money and then Bush continued the process as well as make things worse by reducing regulations on financial compnies and the banks selling their paper without having to disclose the contents. So what we basically have is irresponsible borrowers, lenders and shareholders who got greedy and did not pay attention to the old maxim what goes up will come down andmore often than not harder and faster than it went up!

  7. oops I almost forgot as to Harpers giving back too much of our tax money. The most ridiculous concept being promulgated at present. One of the many reasons that we have been doing as good as we have for as long as we have is the tax cuts, had they not been given we would be in even worse shape.

  8. Paul Martin was articulate? I find that hard to believe. But maybe I’ve only heard him give speeches in the evening after he’s been drinking like a fish at dinner…

    “Well I believe…okay you have to understand…the thing is…we don’t need… what we need to do is…”

  9. Wayne: do you really think these two piddling (for consumers) GST cuts had an appreciable impact on spending in such a way as to minimize our exposure to the coming global recession?

  10. I wanted to ask him, but didn’t: So if you were prime minister today, would you run a deficit or not?

    Of course, isn’t his point that if he were PM today he very well might run a deficit, but he wouldn’t get there nearly so fast, because he wouldn’t have pissed away our federal surpluses the way someone (cough, cough) did (not to mention cutting the GST).

    It’s one thing to say you’d run a deficit, if need be, during trying economic times like today. It’s another thing to gamble away government surpluses during a healthy economy such that the very moment trying economic times hit there’s no option whatsoever but to run a deficit immediately.

    Which isn’t to say we wouldn’t have run through the $12 billion surplus Martin left behind pdq given the trials of the times, but still. Better to have $12 billion to play with before going into deficit then to go immediately into deficit, isn’t it? Even if the $12 billion only buys you a day, wouldn’t it be nice to have one less day in deficit?

  11. Andrew have you ever run a business? The so called piddling little gst cut you mention along with with the other broad based tax cuts has saved god knows how many small businesses out there this year (whichn incidentally is one of the reasons our employment numbers are so high – they would be lower with higher taxes). Then we have the car dealerships in canada this year that all things considering have had an amazing year why – the piddling little gst cut. Do you really want me to continue as it is quite a list of beneficial things that have come about for the consumer of that piddling little cut. What I find hilarious is that al the people complaining about the piddling little tax cut are the very ones who would be yelling the loudest if it were to start proceeding in the other direction. Taxes are taxes – period case closed – the gov’t should only be collecting what it needs and no more and if we have a tough fiscal year then borrow a little.

  12. andrew,

    Somebody must think there is something to this approach…Great Britain’s stimulus package includes cutting the European VAT (equivalent to the GST) from 17.5% to 15%.

  13. andrew, those GST cuts have put a $21 billion stimulus into the Canadian economy. It’s nothing to sneeze at. Domestic consumption was what kept the Canadian economy from going into recession earlier this year.

    I don’t like deficits, but really people, get a grip. A $3.9b deficit like Kevin Page was talking about amounts to 0.24% of GDP. I doubt such a deficit would even result in a bump-up in our debt-to-GDP ratio. Such a deficit would be a quarter the size of the Ontario deficit McGuinty discovered upon his election (1.03% of GDP), or 1/16th the size of the deficit that Harris inherited from Bob Rae in 1995 (4% of Ontario’s GDP at the time).

    Let’s remember people, that when our deficit situation was bad, it was BAAAAAAAD. When Mulroney came to power in 1984, Canada had its worst-ever deficit in peacetime (8.2% of GDP). Think a $127 billion deficit today, with an operating deficit (program spending before debt charges > gov’t revenues) to boot!!! To instantly balance the books when he came into office, Mulroney would’ve had to cut government outlays by a THIRD!!!

    It’s a wonder we didn’t get sucked under then … Mulroney deserves some credit for lessening the downward pull from that vicious downward spiral, and getting us out of operating deficit (the first deficit to conquer).

  14. “Better to have $12 billion to play with before going into deficit then to go immediately into deficit, isn’t it?”

    No. It’s better to have a highly competitive economy. That’s where the Liberals have failed to communicate the poor choice of the GST as a tax cut. The issue they should be running on isn’t whether the government is running a deficit or not because of the GST cut. It’s that Harper’s GST cut did little to help Canadians become more productive and help them whether this storm. If the Opposition thinks people worried about losing their jobs are going to continue considering a balanced budget as a top priority, they’re in for another beating at the polls.

  15. Silly me. I thought all the car dealers in the country were ( or ran to be ) Conservative MPs. Guess they could see it coming.

  16. Wayne, take a breath. Have you ever taken an economics course? It seems that virtually every economist in Canada who has taken, tought or designed an economic course agreed that the GST cut was poor tax policy. I can’t remember who, but one such economist said that there are if there are a million ways of cutting taxes, than this GST cut was the millionth best way of doing it.

    As for this banner year for auto dealers, don’t get me started. For the average Canadian’s purchases this year, it amountedf to $20 off a mattress at full price, about $8 off a washer and dryer or $1 off a decent pair of shoes. What garbage.

    Why not cut our income taxes with that cash? A retroactive tax cut effective to this year would have put real money in most people’s pockets that could have been used for real purposes.

    The only regular purchase I made where I noticed this tax cut was Starbucks. What a waste of a golden opportunity to really reduce taxes in a way that will help the economy.

  17. Yes the reduction in GST “stimulated” the purchase of that luxury Lexus SUV that just went by the window. Very smooth running, hardly a sound except for the whooshing of $85,000 flying off to stimulate the Japanese economy.

  18. Sorry for all my typos, trying not to be noticed doing this on my iPhone (which I saved $2 on the upfornt cost of, thanks to the GST cut).

  19. Aidan : your advice is worth as much as the american dollar. First off yes indeed I have taken economics courses and the best thing that I learned in the 3 years was that it is NOT a science and at heart is more of an art than anything lese. The besat thing you can do if more than one ecobnmist tells you anything is the opposite. I agree with you an income tax cut is usefull as well however it does not have the impact of the entire supply chain as the gst cut. Have you ever run a small business?

  20. Let it be pot to kettle when a journalist is trying to paint politicians as contrarians.
    After Harper ditched the bath water along with the baby with his, in good times, uneconomically wise cut of the GST (as opposed to personal income tax cuts – which he first rose to cover said gimmick), the media sniffed, chased its tail and gave up on looking under Harper’s carpet for the goods. The so-called leader has gone thru more makeovers than the Maple Leafs offence yet still can’t shake the suspicion of the majority, but remains the chosen one by those who cut and paste headlines and dine with the publisher set.
    Now that there’s a technical recession, which he accordingly prevented us from getting into by his gst cuts, and just weeks ago denied could come to Canada, there’s to be little gnashing of teeth for all the twists and loops and knots that harper the leader has led us? The Canadian public has to suffer for this minority situation, where Harper holds his true designs by changing his party’s koolaid on a daily basis. I doubt even someone with the experience of Paul Martin could avoid a deficit under these circumstances, but let’s be clear about this, Harper and Flaherty have reduced Canada’s reputation on the international stage as an american puppy that pees on the leg of china for cheap political points, and now is playing penny-ante with the middle powers of Colombia and Astonia.
    In the end, the Harper gang remind me of an unfunny rehash of Duck Soup:

    Rufus T. Firefly: [singing] If any form of pleasure is exhibited, report to me and it will be prohibited! I’ll put my foot down, so shall it be… this is the land of the free! The last man nearly ruined this place he didn’t know what to do with it. If you think this country’s bad off now, just wait till I get through with it! The country’s taxes must be fixed, and I know what to do with it. If you think you’re paying too much now, just wait till I get through with it!

  21. My partner runs one, yes. He has yet to see the benefit of the tax cut – though commissions for collecting the tax are down. I don’t think there has been the slightest change in business for him since the cut(s), and he sells very stylish home furnishings ranging from $10 to over $1000.

  22. I have a small retail business selling products that range from 1.00 to a few thousand dollars. Neither reduction in the GST made any difference to my sales. That reduction was simply a political gimmick. The only people who benefited were those who had the disposable income to make large purchases. The average person would have been much better off with a reduction in income taxes. This is the same type of mumbo jumbo that the Conservatives said about the carbon tax/income tax reduction that Dion proposed. Instead of tax reductions for the average person, we’ll end up with a cap and trade system that will cost everyone and do nothing for the environment. And just think, it was only a couple of months ago that this same group told us there was nothing wrong with our economy and they’d not consider a deficit.

  23. Have to agree with “Lord Kitchener’s Own”. It would be a little easier to stomach the need for a deficit if Harper hadn’t so foolishly and short-sightedly eliminated our healthy surpluses with politically motivated, but largely meaningless cuts in the GST. Our lifestyle would be much better served by being able to hold a deficit at bay for a bit longer (who knows, perhaps even until things start to turn around) than by the few dollars we saved on purchases, due to GST cuts. Having Paul Martin as our Finance Minister now would be a real breath of fresh air. The current stench in Ottawa is choking us!

  24. Two remarks:

    Paul Martin would be the most credible leadership candidate if he was in the race. His strength is the economy and that is what the next election will be about. The current three do not inspire at all on this front. Strange as it sounds, the Liberals could do worse than a Martin comeback.

    To the those who opposed the Conservatives GST cuts: the Labour government just cut their VAT tax which is the same as our GST from 17.5 to 15 percent in order to stimulate their economy. Harper had better timing. HIs GST cut turns out to have been inspired and right for the times.

  25. In my comment above I am referring to the Brown Labour government in the U.K.

  26. Daddy blows the paycheque on hookers and its Mommy’s fault she has to put the baby’s medicine on the Visa?

    It really is a cruel world.

  27. HIs GST cut turns out to have been inspired and right for the times.

    No, it wasn’t. Economists have condemned it. Case closed.

  28. HIs GST cut turns out to have been inspired and right for the times.

    No, it wasn’t. Economists have condemned it. Case closed.

  29. hmmm, GST cuts were spectacularly useless. GST cuts singlehandedly wiped out, what, 6,12, 24 billion dollar surplus. So where did that useless (name your figure) tax cut go? Back into the economy- better there than in the governments pocket.

    Notice the same people who bemoan the useless tax cut, had 15 years to eliminate the GST as they promised to do so in 93, but left it place, completely untouched. At least curb your hypocrisy and thank Brian Mulroney for bringing in the consumption tax that slew the deficit and debt. Then maybe we can have an honest debate over what the proper level of that tax should be.

  30. Andrew, I was at the same speech – saw you there – and (full disclosure) I’m an unrepentant Martin hack. But the question “would you run a deficit in this circumstance?” is based entirely on the premise that you would be in the circumstance. Martin was pretty clear about this in his speech, where he criticized the government for eliminating the fiscal prudence and contingency reserve. So your criticism of his “calling on the government” to run a deficit is a little off the mark.

    But incoherence is, indeed, rampant elsewhere. After a decade of overspending, overindulging, and lending people outrageous sums to buy things they couldn’t afford, the near-unanimous solution seems to be to get those very same consumers spending again.

  31. Dithers…..thanks for the deployment to Kandahar.

  32. Sorry Marty, not enough white-out on the continent to sell that ‘mulroney saved us all’ pitch. It worked out well to remove the hidden tax and replace it with gst, but his regime was part of the early 90s ‘it sucks!’ period where the economy was slumping. He refused to make tough decisions, after throwing his eggs in the free trade basket. Other people made those decisions, others paid for it, and now you’ve got a new savior. Try keeping up with the times, or at least tell us where Lyin’ Brian is keeping his weimer loot.

  33. Cutting the GST was always an absurdly stupid idea. Cutting just about any other tax would have been more beneficial.

  34. Agreed that cutting the GST was not the right tax cut choice. There comes a point in time when even an efficient tax like the GST becomes inefficient to administer when the tax rate becomes absurdly low. And micro-targetting the kids’ ballet lessons and everybody’s bus passes is a silly waste of everyone’s time. Should’ve been broader income tax and corporate tax cuts. Yes, corporate tax cuts. Sorry, Jack, but the valuable jobs in any economy are private sector jobs, and now more than ever it would be good to have the best environment possible to encourage the private sector to invest and hire here.

    But now is certainly NOT the time to be bumping the GST back up. Now is certainly time to hurry up with the cuts in government spending that should have been axed long ago and-or never started in the first place. But that dream is going nowhere.

  35. Then why exactly, MYL, did you vote Conservative, when it has been the Liberals promising to reduce income and capital taxes while the CPC has been promoting GST cuts and inefficient tax credits?

  36. Andrew, that was YOU looking over my shoulder at the ballot box? Polite Canadian that I am, I didn’t say anything at the time, but it did creep me out a bit…

    FTR, I voted Tory in a landslide-Lib riding in the previous election because of Adscam. I voted Tory in the most recent election because I, initially happy that the Liberals found someone serious and smart, ultimately despaired of the notion of Prime Minister Stephane Dion, and even more of the notion of Defence Minister Denis Coderre. I am, actually, a former Liberal voter back when I was young and stup– uh, idealistic. To show you how stu– uh, idealistic, I was not too long ago, I voted Liberal in the scrap-da-tax election. I was mad Chretien lied to us then; I am now glad he ultimately avoided carrying out such a damaging campaign promise.

    And your tax glowing policy description left out the little Liberal detail of taxing carbon to finance a socialist’s wet dream of a spending orgy. That most certainly entered into consideration.

    I wish there was a limited-government party. There is none. The Tories came closest to paying that concept lip service. That won my vote.

  37. Carbon tax is quite similar to a value added tax–quite a bit more efficient than the income tax regime we have now.

    So yes, I would have loved to pay a bit more for everything if it meant higher foreign investment in Canada, and thus more jobs. That’s what we’d have seen with lower corporate taxes that the Liberals were proposing.

    Instead we get tuba-tax credits. Hooray!

  38. I can’t get a grasp on the notion that at any level, government, business or personal, it is responsible to continue to finance this economy almost solely on debt. That is the main issue. It is not that we may have to run a deficit to make a pakage to help the economy. Heck we do that to fix the roof at home or replace the furnace, pick your favorite household emergency and fill in the blank.

    The issue is that we were heading for a deficit even without the crisis because that is conservative financial philosophy. For all the talk about left wing, or liberal “Tax and Spend” it ignores the conservative history of “Borrow and Spend”. Whether Mulroney in Ottawa, Regan, Bush 1 and 2 in Washington, Harris in Toronto, Devine in Saskatchewan. Cut income to a level that can’t support the cost of running the business of government and then borrow so you can keep the operation going.

    We need people in government that understand the meaning of the word Balance.

  39. nice try, Dan. no partisan hack here, so your Mulroney rant reflects more on your worldview than mine.
    I’ll agree that the Libs under Chretien did more of the dirty work, actually cutting and eliminating programs, but the fact they didn’t touch the GST reflects the fact that, unpopular as it was (and as costly to the Tory party) the tax achieved what it was supposed to. (as you acknowledge before you went off)

    as I said, (maybe reread my original post with your blinkers off) debate the GST level all you want. just spare me the hypocrisy and partisan hackery that goes along with it. ie if Ti-guy thinks its such a useless tax cut, why isn’t he calling for the cut to be repealed? Either those billions are useless left in the hands of the consumers, or they aren’t. Pick one, and follow it through to its logical conclusion.

  40. The GST cut itself didn’t cause the trouble – but cutting taxes while raising government spending is the issue. While I personally also thought the GST cut was a bad idea, that any so-called ‘conservative’ government would raise spending as much as PM Harper did while simultaneously cutting taxes seems a bit strange.

  41. don’t you people get it? cutting the GST was cool. It prevents the Liberals ever bringing in something like public daycare, a long term immovable public entitlement with hordes of unionized workers and permanent lobbyists to defend its existence. Economists are right about GST vs income taxes ONLY IF you live in some kind of semi benevolent oligarch-dictatorship like Singapore or Hong Kong. In electoral politics, a free market economist must constrain the future moves of more free spending opponents, or at least make them more difficult to run on.
    The GST as mulroney conceived it was an emergency deficit fighting measure and was the greatest firehose of money ever created. Dion had to propose a carbon tax as an alternative way to create a new revenue stream since raising the GST would be toxic with the swing voter who decides whether Canada gets minority Lib or minority Tory governments.
    If we were ever truly screwed like we were when Mulroney conceived it, it’s a very easy tax to nudge up. So why isn’t Paul Martin asking for it to be nudged up? Because we aren’t screwed, and he knows he’d be handing the Tories a gift to campaign against Dion’s replacement.

  42. “I can’t remember who, but one such economist said that there are if there are a million ways of cutting taxes, than this GST cut was the millionth best way of doing it.”

    That was Jim Davies at UWO. I’m just waiting for someone to call Western’s Economics department a bunch of raving-leftists.

    The GST tax cut was rather pointless (at best), but as far as Tory finance policy goes probably their strongest one. Increasing spending at 3-4 times the rate of inflation and the dozens of little spending programs they introduced, disguised as tax cuts, were far far worse.

    The Tories have been an absolute train-wreck fiscally. I don’t know how anyone who considers themselves a fiscal conservative can consider these guys as anything but, at best, the least-bad of evils.

  43. Keith: that’s BS. The Liberals were proposing even bigger corporate tax cuts than the CPC. The Liberals were interested in creating a tax code that fostered investment and jobs in Canada, while the CPC were interested in cutting a tax on Chinese made goods.

  44. “The Government financed this financial requirement of $19.6 billion by increasing market debt by $17.6 billion and reducing cash balances by $2.0 billion.” – Fiscal Monitor August 08

    That market debt, would that show up as “Other investing activities” or as a recievable on “Table 4: The budgetary balance and financial source/requirement”. Curious, because neither of them are particularly close to $17.6B.

  45. Andrew is just hopping mad that the party he supported when in opposition, through their first mandate and during the last election — just as the majority of Canada’s press did — turned out to be liars, frauds and incompetents.

    It turns out that the folks we love to hate — those smug Liberals — have been on the right side of every economic argument and the Conservatives have not only been wrong, they’ve been spectacularly wrong.

    Harper and his Finance Minister had access to the same fiscal reports, from inside the finance dept. and from outside economists – before and during the campaign – that have now been made public. They knew they were lying but didn’t care. If I hear one more person say “no one could have foreseen the scale of this economic crisis” — I’ll crack. Reports on credit markets, mortgage markets, derivatives markets, bond markets, productivity, spending … all pointed to this freefall back in 2006. So what did these geniuses do? Cut gov’t revenue (GST), spend the surplus, keep personal income taxes at a high rate, and dramatically increase spending.

    Andrew, say you were wrong to support these guys and maybe we’ll give a fig about your next article.

  46. “Harper and his Finance Minister had access to the same fiscal reports, from inside the finance dept. and from outside economists – before and during the campaign – that have now been made public. They knew they were lying but didn’t care. If I hear one more person say “no one could have foreseen the scale of this economic crisis” — I’ll crack.”

    Since Canada is considered to be in the best shape of all the G8 countries in this fiscal crisis, Harper can’t be doing that badly. However crack on my statist friend.

    “It turns out that the folks we love to hate — those smug Liberals — have been on the right side of every economic argument and the Conservatives have not only been wrong, they’ve been spectacularly wrong.”

    Like opposition to NAFTA in 1988. But it seems that if I have to choose between the Conservatives who actually support free trade, lower taxes, freedom of speech, and individual freedom, I will go with them until we get a classical liberal party in Alberta.

    As for the Carbon Tax, one thing that any idiot will notice is that tax grab would have done little for the economy, it didn’t bother to even give a tax cut to the highest bracket, and it was more or less a scheme to fund government nurseries and wealth redistribution than anything else.

  47. “The Liberals were interested in creating a tax code that fostered investment and jobs in Canada, while the CPC were interested in cutting a tax on Chinese made goods.”

    By putting minor tax cuts on the lowest income brackets which rarely invest, while punishing productive Canadians and businesses. I’ve always found the liberal view that the best government is the one which taxes people the most somewhat odd. However when I look at the current economic state of Ontario with the highest corporate tax in the country I can’t say I’m surprised. Especially if these people such as Andrew have the strident belief that they must depend on the government and individual initiative should be punished.

  48. “Since Canada is considered to be in the best shape of all the G8 countries in this fiscal crisis, Harper can’t be doing that badly. However crack on my statist friend.”

    Just about all of that is attributable to the prudence of previous Liberal governments. If we had 15 years of CPC governance, I’m sure we’d be in a much less enviable position.

    “By putting minor tax cuts on the lowest income brackets which rarely invest, while punishing productive Canadians and businesses.”

    The Liberals have been proposing for several election to lower corporate tax rates. This past election, they promised steeper corporate tax reductions than the Conservatives. To attract investment in Canada, you don’t have to encourage Canadians to invest, you have to make Canada appealing for investment (ie, mostly foreign).

    I’m guessing most of those who have a hate-on for carbon taxes are dependent on the unabated development of the tar sands. If that is the case, I rather doubt your motives are driven by anything other than self-interest.

  49. Furthermore to take any of the rhetoric on here seriously, one would have to argue that Canada and the rest of the western world has incompetent governments.

    The fact that people think a politician can simply snap their fingers and make all their problems go away is ridiculous. Maybe if we were to adopt taxation policies similar to that of Hong Kong, however so far I haven’t seen a single party propose it. The Conservatives are to busy trying to hog the center while the Liberals think that the government should become the new mothers of the nation. Few politicians can do much about the economy, they can worsen it, but they can’t simply make it go away. It’ll likely be another year or two before we start to see improvements. However the idea of putting another tax on industry in the hopes that we can get enough money to fund universal daycare is ridiculous, and it won’t help the economy.

  50. “Especially if these people such as Andrew have the strident belief that they must depend on the government and individual initiative should be punished.”

    If you’re referring to me, you couldn’t be more wrong. I am a much stronger proponent of proper incentive schemes, which is why I support lower corporate taxes and increased carbon and consumption taxes. That belief is tempered by the fact that markets fail, and thus government has a role to play in correcting those market failures. I also believe there are some basic human necessities.

    On the other hand, it is rather clear that you don’t give a fig about the free market and are primarily interested in reducing any burden you bear for the society that makes your lifestyle possible.

  51. “Furthermore to take any of the rhetoric on here seriously, one would have to argue that Canada and the rest of the western world has incompetent governments.

    The fact that people think a politician can simply snap their fingers and make all their problems go away is ridiculous.”

    I think the incompetence enters in where they failed utterly to avert this disaster and indeed made many regulatory changes to make it more rather than less likely.

  52. “Just about all of that is attributable to the prudence of previous Liberal governments. If we had 15 years of CPC governance, I’m sure we’d be in a much less enviable position.”

    Awe yes, I’m sure the increased economic activity in Canada had nothing to do with NAFTA, which was opposed by the Liberals in 88. Good one sir.

    “The Liberals have been proposing for several election to lower corporate tax rates. This past election, they promised steeper corporate tax reductions than the Conservatives.”

    Which would pan out like their promise to cut the GST in 1993. Liberals are known to be expedient with values when it comes to actual governance.

    Much like the tax cuts in 2000 which were timed right before an election.

    “To attract investment in Canada, you don’t have to encourage Canadians to invest, you have to make Canada appealing for investment (ie, mostly foreign). ”

    I believe the Conservatives just opened free trade with Columbia, and are working on a free trade deal with Europe. However since you’re a hyper partisan Liberal, I’m sure you’re opposed to that as well.

    “I’m guessing most of those who have a hate-on for carbon taxes are dependent on the unabated development of the tar sands.”

    Yes, because shutting down Alberta’s economy and creating a stronger separatist movement is a great thing for the country. Unfortunately those of us in Alberta don’t really like quasi-socialist redistribution schemes.

    “If that is the case, I rather doubt your motives are driven by anything other than self-interest.”

    Yes, it’s all a conspiracy. Apparently I got help from the same cabal that committed 9/11.

    But it’s always gratifying to note that if someone disagrees with a Liberal plank they are automatically driven by self-interest. Which isn’t necessarily a bad thing considering all of the collectivist junk I here coming from the left.

    As well I love how Liberals like yourself assume that Canada would have a magical barrier up to ensure that a GLOBAL economic downturn would never effect Canada for some inane reason.

  53. “Awe yes, I’m sure the increased economic activity in Canada had nothing to do with NAFTA, which was opposed by the Liberals in 88. Good one sir.”

    I don’t think you can say the growth could be attributed to NAFTA, or at least not as a truism. The recovery in the 90s was due to increased US demand and much more advantageous currency exchange rates. It’s not at all clear what effect NAFTA had. Nonetheless, neither the PCs nor the LPC can take credit for US demand or, for the most part, exchange rates (domain of BoC).

    “Which would pan out like their promise to cut the GST in 1993. Liberals are known to be expedient with values when it comes to actual governance.

    Much like the tax cuts in 2000 which were timed right before an election.”

    Harper has broken a huge promise not 50 days after he made it WRT deficit financing, which he categorically claimed he would never, under any circumstances, ever condone. He made a seemingly earnest and sincere pledge to the Canadian people to not run a deficit.

    The Liberals have a track record of reducing taxation within the constraints of fiscal prudence. Yes it is politically motivated, just as Harper’s promise to cut our least harmful, but at least the Liberal cuts made some kind of sense aside from political motivations.

    “Yes, because shutting down Alberta’s economy and creating a stronger separatist movement is a great thing for the country. Unfortunately those of us in Alberta don’t really like quasi-socialist redistribution schemes.”

    Ah, yes. Socialism. You been getting Palin’s talking points.

    AFAIK, nothing requires emitting carbon to extract and process oil from the tar sands. Isn’t there a scheme to use a nuclear reactor instead? Even still, I doubt a few dollars per barrel would devastate the Alberta economy, especially when counteracted by significant reductions in CIT. If that is enough to shut down the Alberta economy, it is a house of cards which will be utterly annihilated by this recent decline in oil prices. Hope you have an exit strategy.

    “Yes, it’s all a conspiracy.”

    I didn’t mention a conspiracy. I’m guessing you’re someone who just wants the government to tax everyone else. That would fit your arguments better than ‘free market crusader’.

    “As well I love how Liberals like yourself assume that Canada would have a magical barrier up to ensure that a GLOBAL economic downturn would never effect Canada for some inane reason.”

    Rather the opposite. Harper reduced his capacity to deal with any kind of recession or economic downturn. This is highly imprudent as we all know how vulnerable we are to changes in the international economy through trade. Which is all the more reason to question the wisdom of trying to stimulate the Canadian economy through domestic consumption. Much of that consumption will leak out to foreign manufacturers (esp Chinese and American) through imported consumer and durable goods. Cuts in taxes on investment would be far more logical, or at least investment in infrastructure. Start paving roads, fixing sewers, and upgrading transit with gusto. More consumer debt is not the road out of our current difficulties.

  54. “I didn’t mention a conspiracy. I’m guessing you’re someone who just wants the government to tax everyone else. That would fit your arguments better than ‘free market crusader’.”

    No, as I stated before free marketeers don’t believe bureaucrats should be able to regulate and tax businesses to death. Unlike yourself.

    Any person who states they support the free market by putting in an extra mile of redtape like yourself is delusional.

    However your opposition to free trade is giving you alot of credence here. Especially when you state the reason why our economy did so well in the 90′s wasn’t due to the central planners in Ottawa but due to the US economy.

    “Harper has broken a huge promise not 50 days after he made it WRT deficit financing, which he categorically claimed he would never, under any circumstances, ever condone. He made a seemingly earnest and sincere pledge to the Canadian people to not run a deficit.”

    Oh I agree, however the difference is that with Harper he will take us into a deficit by putting more money into our military, law enforcement, and the CBSA. The Liberals on the other hand would put us into deficit by putting more financing to crappy artists and subsidies to half-baked regional development programs.

  55. That being said, I’m glad you recognize that the economy isn’t contingent on what a few old white men do in Ottawa, and soley what they do. Apparently when Bob Rae gets hit with a recession he’s a victim of the times, but if it happens to a Conservative it’s incompetence. A rather stupid claim considering the fact that we’re doing better than all other western nations.

  56. BDJ – Didn’t the Conservative Economic Action Plan To Try To Find Their Economic Arses With Both Hands just create a new regional development program and hike the budgets of those that already exist?

  57. I’ve never stated the CPC is perfect, they’re simply the lesser of two evils. That being said those who think the Liberals are economic super geniuses due to extra revenue from the GST and free trade, both Tory creations.

  58. “No, as I stated before free marketeers don’t believe bureaucrats should be able to regulate and tax businesses to death. Unlike yourself.”

    I like how you added that last bit. You don’t really know anything about my predilection for regulation. I rather oppose Harper’s costly new cap and trade regulations, for instance. A carbon tax with offsetting tax reductions would be a much more effective and efficient incentive scheme.

    “However your opposition to free trade is giving you alot of credence here. Especially when you state the reason why our economy did so well in the 90’s wasn’t due to the central planners in Ottawa but due to the US economy.”

    Opposition to free trade? I am quite in favour of it, and always have been. Just because I questioned the effect of NAFTA does not mean I am opposed to it. Although, I am opposed to NAFTA as it does not make trade free enough, leaving quite a few barriers.

    “Especially when you state the reason why our economy did so well in the 90’s wasn’t due to the central planners in Ottawa but due to the US economy.”

    Huh? I oppose free trade AND think that trade is what helped our economy recover?

    “Oh I agree, however the difference is that with Harper he will take us into a deficit by putting more money into our military, law enforcement, and the CBSA. The Liberals on the other hand would put us into deficit by putting more financing to crappy artists and subsidies to half-baked regional development programs.”

    Law enforcement is often good money after bad. I’d rather see highways, sewers, water treatment, hospitals, schools, electrical generating capacity, etc.

    Also, Harper seriously cut back on military spending prior to the election call, including the cancelling of the icebreakers we had planned to order. I thought that was an odd choice, since that is most related to our national sovereignty (moreso than heavylift aircraft, etc.)

    Do keep in mind that most military hardware is made elsewhere, so spending on those items won’t help the Canadian economy much.

    I don’t recall any regional development programs proposed by the Libs. Also, one Harper backtracked on arts funding, I don’t think there is much daylight between them.

    Face it, the CPC are out-Liberalling the LPC. I know it must be eating away at you.

  59. Just a thought, Andrew, and I mean no offence, but could you pick a different handle, so people don’t think you’re me?

  60. You have green eyes? Dreamy…

    I agree that more government spending is not the answer. A few protectionist hand-outs, such as the auto industry and banks are needed, not because these industries deserve them, but for other factors. On the one hand, all the nations are crying out to refrain from protectionism. On the other, it is clear that prices and valuations in world markets are hard to reconcile with national economies. I worry that cries to spend less will take the spin out of social problems that can only be solved with government money, solving which the workforce will finally become more inclusive of all and more productive. That is the vicous cycle to break. If the auto makers get some help, I am glad communities in Canada won’t be furthered degraded. I understand that the average Canadian with a family has seen a rise in the price of food and of education (for the hours when schools are closed) that is very hard to bear. Transportation costs are significantly higher for everyone. Canadian are least satisfied with their jobs and this is the biggest draw on productivity. Each system, whether it be law, education, medicine, skilled labour, or knowledge worker, has individual members whose individual contributions and success need assistance in order to turn this crisis around. That sounds like a tall order, but in fact it’s not. Thinking about the problem in this way would be a good way to set priorities.

  61. That approach would require strong federalism. For instance, beginning with a survey of job dissatisfaction among lawyers, you would find those in the family law speciality being the most stressed out dealing with so many social issues and provincial red tape and those in corporate law making the most money for the least benefit to society and think of ways to balance these different areas of law so that there is not such disparity between lawyers and between the value of the products of their work.

  62. Wait, Andrew Coyne is not the same as Andrew? Whoa. So much for my Jekyll and Hyde theory.

  63. and I think that’s not socialism or communism, is it? We have hate crime laws, human rights tribunals and the Charter of Rights and Freedoms is a law that can bind all our laws, provincial or federal. So we are ‘there’ already, in a system that seeks to fundamentally change the roles and responsibilities of citizens, one to another. I’m not aware of any system that has made an evolution of this nature. Daily, we are confronted with a need to change, to be better, yet thwarted by the obstacles to doing it. For instance, on this Sec. 13 debacle, the media (who feel some suffering at the hands of HRC’s) can cry loud, but the fundamental change to society has already been made. It’s accomplished. An attack on the HRC’s is misguided because our courts are not exactly bastions of protection for free speech. The media feel cornered, that the very thing they do is at stake. Well everyone feels that way!

    This interesting recent ruling shows that courts are willing to intervene in private organizations such that they abide by their own rules and by natural justice. This, to me, is a very responsible attitude of the court. So many important boards work to represent Canadians at work and toward social justice: The CMA, LSUC, the CRTC and so forth. Each one of these can be held accountable by the courts for a standard of democratic decision making. Yet each individual in society must find a way to contribute, and with such a need to hear the suggestions and hear the problems from Canadians, surely HRC’s don’t need to be abandoned even if a few notables suffer. HRC’s can help an individual understand whether his complaint is valid, without necessitating court action. HRC’s don’t get enough government support as it is when they make findings that might cause governments to have to spend or change their ways. They are the underdogs — to portray them as the evil empire is just wrong. What will happen eventually, is that Associations who maintain memberships will have to clearly register and advertise who they represent and how and why. This will be the result of many hate speech inquiries. That would be a good thing.

  64. Hey,
    I was able to buy my loaf of 5 day old bread and my can of spam today and I am dam happy. So poo on your GST.

  65. Gosh Andrew you really cleared up a lot of questions for me. Here I was thinking that the reason Harper broke his own edict by calling the election early was because he wanted to get it over with before the stuff hit the fan and his astute elimination of the federal surplus left no choice but to run a deficit. Martin sure doesn’t get it – if he hadn’t created the surplus in the first place, then Harper wouldn’t have had to pull out all the stops to get it spent before the global economy tanked. Sure am glad the country has brilliant minds like yours to turn to when economic events need explaining.

  66. Nothing like a fried Spam sandwich!

  67. Nice to see all of the economically/fiscally challenged lefties show up.

    Giving a government like a surplus is like giving an alcoholic free reign at a stocked bar. The party will be great, but the hangover will go on forever. As far as I am concerned, a government should only tax enough to deliver its services, and return the surplus back to the taxpayer, who owns the money in the first place.

    I’m not worried about a potential recession, but I am concerned that everyone wants the government to act now in a way that history shows is economically wrong; the only result will be to screw things up for the future. Running a deficit is like raiding your kid’s savings account to pay for your drug habit today – selfish and destructive to all involved.

  68. The surpluses have been going to paying the national debt. I heard a figure recently that we have put down nearly $100 billion since the surpluses started – that is a huge savings on interest. We are not in a position to “give back” or do anything else with a surplus until we have that old debt cleared up. Too bad the stoopid GST cut has made sure that will take longer than anticipated.

    To be clear, I think this idea of “government should only collect what it requires to deliver services” as being sound economic policy is a bit spurious. I’d like to see a contingency fund developed when times are good (or when we are profiting on one-time sales, like national assets or non-renewable resources) to see us through the cyclical rough patches. That way we do not resort to smashing the next generation’s piggybank with deficits, or as my boomer parents’ generation did, take a bunch of bad loans out in their kids’ names.

  69. I think Alan has said it best. I think the very last thing that we need right now is knee jerk reaction as the oppostion parties apparently wnat and to borrow money for the gov’t to spend as ‘ Stimulus ‘ . After all as of now we are in surplus and our unemployment numbers are still at record low levels so what’s the hurry I say wait until the next budget and if there is a deficit in the future deal with it then. I like what I hear about bringing the budget for next year in earlier I think that would be very appropriate. This idea of driving oursleves deliberately into a deficit right now with a stimulus package is absurd and more than like why the opposition parties are asking for it after all they have that luxury of scoring political points against the gov’t at this time.

  70. Wayne: the main way I think a stimulus package would be appropriate would be for government to fund and expedite all (or almost all) proposed infrastructure projects on the books. This would help to take up slack in construction, materials, design, etc. industries.

    Also, any money spent now is likely money that won’t need to be spent in the future (pulling capital expenditures forward in time). I don’t think stimulating consumer spending is really all that fruitful an avenue to pursue as consumers are nervous. A permanent cut in GST does nothing to make people spend money sooner. A GST holiday would, however, stimulate consumer spending. Still, consumers are skittish about their net wealth, and are likely to save any windfalls they receive in the near future.

  71. A balanced budget is one where revenue = expenditure. A surplus is not a balanced budget, it is overtaxation. The dangers of surpluses (surpli ?) is that they are a temptation to politicians to go spend anyway. If Martin hadn’t left such a big one, Harper wouldn’t have gone out and committed half of it to “programs”.

    In my opinion, there should have been a budget line item called “Debt reduction”, budgeted at equal to the amount of the expected erstwhile surplus, committed to, and “spent” accordingly. Either that, or stop overtaxing us. A deficit is just a surplus with a negative sign.

  72. This government sucks, unless it blows…

    However, I, Paul Martin, the Merciful, the Beneficent, can suck AND blow at the same time.

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