"Uh-Oh Canada?" - Macleans.ca

“Uh-Oh Canada?”


America’s Nobel-toting pessimist worries about the Canadian economy.

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“Uh-Oh Canada?”

    • Krugman is quite right.

      Is there a single subject that Emily is not a world renowned expert on? Because if there is, I won't know who to trust.

      • Knowledge bugs you that much huh?

        • Knowledge bugs you that much huh?

          I do find that it occasionally distracts me from pursuing my boneheaded ideological agenda, yes.

        • O-love has been on here defending the CONs and promoting a lower dose of harperitis for a couple of years now, with the confusing manner of rational thought. Knowledge is his friend, but he can't get there with his chosen mode of horse and buggy…

          • I dunno. I don't read many colunists but in the course of my own schooling I took about ten economics courses so on the basis of my reumatiz and my aching elbow I agree with waht Paul Krugman is saying. Moreover I put my debt where my mouth is and paid it off. Once again I think Emil;y is right on this one.

  1. Growing provincial and federal debt levels are also of great concern. Unless provinces like Ontario and Quebec reign in spending and balance their budgets well before the next economic downturn (which may not be possible), they will become economic basket cases like California. Unfortunately, rather than cutting spending, governments find it all too easy to balance their budgets through the use of increased taxes and so-called user fees.


    • Voters don't want to cut spending. They also don't want to raise taxes.

      They want magic.

    • Can you cite a single economist of any stature who is seriously worried about debt levels of Canadian governments? (As opposed to Canadian households.)

      All I see are the same people who wanted spending cuts in good times now calling for spending cuts in bad times.

      Makes one suspect that maybe they have a hidden political agenda of some sort.

      • Can you cite a single economist who is usually, no more often right than not. Mr Harper is an economist. Have I made my point. Sorry for th typos. Mine eyes have seen the glory but not much else I guess.

  2. Interesting that Krugman is suddenly worried about levels of debt. He is right, of course. And, as mentioned by Open_Democracy, provincial basket cases deserve special highlight for scorn.

    But his nattering on for several years about how American public finances have not indebted themselves enough is bizarre. Has he finally found religion about the evils of excessive, unsustainable debt loads?

    • Name a province not running a deficit.

      • Based on their own accounting and published budgets: SK. Your point was…?

        • So we should 'highlight for scorn'….9 out of 10 provinces?

          Wanna toss the first stone?

          • There are those in the red, and then there are BASKET CASES that are micro-steps behind the Greek model of extra-mural-subsequent-financing-of-prior-spending.

            And, yes, the provincial basket cases deserve special highlight for scorn. And your problem with that idea was…?

          • We don't have any 'basket cases' just behind the Greeks. Sorry.

            And it's interesting that the prize-winner in your eyes was NDP for years.

            Perhaps you could come up with ideas for moving the country ahead, rather than gathering stones?

          • Among the Canadian provinces, Quebec is arguably in the most precarious fiscal situation. The provincial net debt now stands at $129 billion—equal to 43 per cent of provincial GDP. (Two decades ago, Quebec's net debt-to-GDP ratio was only 22 per cent.) According to figures released by the Organisation for Economic Co-operation and Development, Quebec is in the fifth-worst position in terms of fiscal debt burden in the western industrialized world. Only Italy, Japan, Belgium, and Greece have higher debt-to-GDP ratios. http://www.conferenceboard.ca/topics/economics/bu
            What's missing is that one should not compare provinces with whole countries and call QC "fifth-worst," since other subnational jurisdictions would likely crowd out. And what is also missing is an accurate reflection of how much public debt Quebec is still hiding from its own books by keeping them only within hospitals, school boards, Hydro-Québec, etc. But yeah, cas de panier applies.

          • Oh I see….you're merely a Quebec basher.

            Well fortunately Quebec has far more resources as a province, than most countries do as countries, so there is no reason for concern.

          • One of their most important resources being a federal sugar-daddy bailing out their profligate irresponsibility year after year after year. One day, the ROC might start to learn how to count and ask some tough questions.

            And the nouveau-né in Trois-Rivières in 2019 will be most relieved by your reassuring reminder that there is a ton of asbestos just ripe for the harvesting. All them seniors expecting health care and home care and prescription drugs and hearing aids and a pension and heavily subsidized transportation? No problem, there must be another stream to dam up somewhere…

          • Well most provinces are getting equalization payments. Ontario just gets a rebate.

            I take it you know little about Quebec resources, so that ends that.

          • Why do you suppose they can afford a wide-spread day care and other social services? Most of the coin they take in is from the feds and their only cash cow is hydro and much of that is taken from Newfoundland perhaps legally, but morally it is theft. Last time I heard pulp and paper and lumber was down, they are having trouble selling their airplanes, manufacturing either went down thed drain or moved to Ontario or Mexico. Watch how Emily calls me a socon or some such cute name. Let's face it, if there wasn't such a thing as love and if government were the private sector, Quebec would have been sold long ago. I have to whisper that as my better half is from Montreal and she is fiercly loyal.

          • This is a blog post about the dangers of private debt, the alarm being pulled by a guy only too happy to wallow in ever-increasing public debt. But thanks for waving orange around here, just for fun.

            I am sure the Alberta NDP Party will also happily share the credit you wish to bestow, for their many years of surpluses, too.

          • You'll mischaracterize anybody and anything, eh?

          • You want ideas?


            Is that clear enough, even for Emily?

          • Gee…what a marvellous idea…I'm sure no one's thought of that before.

            What public services are YOU williing to give up.

            Perhaps you could look at MAKING more money?

          • Apparently, few people seem to arrive at that idea, sad to say.

            You probably wouldn't like the list of *cough* services that would disappear if I were in charge.

            I will assume that even you are not advocating something as damaging as the inflationary scheme of printing money. I will precariously assume that you feel instead that governments, as they continue to spiral on to ever-increasing distortions of our economy as the decades pass, should simply find a way to confiscate more and more wealth from that economy in order to properly fund its ever-increasing distortions of the same economy. You will not be surprised, I hope, that such is not the direction I advocate.

          • Oh I can imagine the services YOU would cut.

            Thing of it is, other people would prefer cuts to things you support.

            Had you thought of the knowledge economy, and it's innovations and inventions?

    • No no no. Krugman is all for "stimulus" spending, he just doesn't like "debt". That he can hold these two conflicting ideas in his head is what makes him so special.

      • That's because the 'debt' isn't from stimulus spending.

      • Not necessarily conflicting. . . you ought to read more of his musings before you question his views, no? I'll wager his grasp of economics is a tad better than Stephen Harper's.

    • You do realize there is a difference between spending by individual members of the public, and by the collective of the public we refer to as government, correct? That's why they call it public and private spending as opposed to public and.. uhh.. public.

      Ideally, the collective of the public will spend counter-cyclically to the individuals, in order to balance the economy. So the problem is not that the American government is indebting itself too much now, when private spending has dropped off precipitiously. The problem is that it was spending too much before when American spending was rampant as well. However, since two wrongs rarely make a right (though three lefties can..) their failures before should not encourage them to take up the wrong course of action again.

      That said, as it seems Canadians have, by and large, not yet learned their lesson, I will agree with you that our government should be cutting back on spending and raising taxes. We could start by taking back the money for the gazebos, returning the GST to it's 7% levels, begin taxing energy and water usage appropriately, and perhaps we should consider halting the sending of 10%ers, and not staging anarchist magnets in the centre of a dense urban business district. Once that's done, we could perhaps consider cutting the ministerial positions down to more useful numbers, or at very least start demanding proper performance from them, eliminate tax deductions based on the spreading of religion, and perhaps even spending less on the census by maintaining the mandatory status of the long form and cutting the amount to be sent. We could then cease pursuing the case against BC's provincial government and insite, and, if we're very, very lucky, demand that Mr. Harper honour his promise to Canadians and return to them the 1 billion dollars he gave away to America in order to drop our winning trade suit against them.

    • and just as many including employees of the fed could be found that disagree

    • Slightly? Oh, sorry, it's Holly…

    • Must be from a non-stupid NDPer. Canadian manufacturing has been tanking fior a good number of reasons. Alberta oil is hardly the only reason. I think this is probably an imncorrect correlation, Comoparing employment in the manufactring sector is a non sequitur in my opinion. Manufacturing is far more labour intensive than oil recovery I would think. And it's not hard to see where teh Tyee stands in things. Anti-Albert, anti-harper, pro labour?? Sorry I don't buy it .

  3. Just for the record, starting off your comment with "I didn't read the article", while refreshingly honest, makes your subsequent commentary on the unread article of questionable value, at the very best.

    • Why? If he doesn't ask for a stimulus, he's certainly laying down the basis for one, isn't he? Want to bet that he gets quoted by the left as justification for another stimulus?

      • Haha, why do we have to bet? It's freely available online. You can just look.

        • I did. It's a lot less substantive than I thought, even for him. Scare-mongering about our economy based on two graphs. I expected more,even for him. But my guess is that his solution is as follows: more stimulus, higher taxes.

  4. I don't care how many Nobel prizes Krugman has won, and how many left-leaning papers he writes for, I would not take this guy's economic opinions seriously. His economic idee fixe, for all governments on all levels, is more stimulus money now, always, damn the future generations that will have to pay for it. Krugman makes Keynes look like a von Mises henchman.

    • Mmm no, he didn't say anything like that.

      • Krugman is a supporter of even more stimulus in the States, on top of the almost $1 trillion already spent. Who is going to pay for all this?

    • May I remind you that although Lord keynes advocated spending in a downturn, he also advocated paying off debt and, yes, and even saving when the books are in the black. The real problem in the long run is that very few governments pay attention to the second part of the mantra.

  5. Amazing how some idiots like to comment about things they didn't even read!

    • Can you be an ass somewhere else? Thanks. Next.

  6. Why don't you read the article, Dennis, if only to learn how wrong your prediction was?

    At least your preamble saves you from the even more damning implication: "I read the article, and Krugman clearly advocates that Canada needs more stimulus…"

    • I find Krugman to be a predictable bore. So, if he didn't argue that Canada needs a stimulus, he's laying the foundation, right?

      For the record, the campaign has already begun here. Leftists want a second stimulus, don't they? It never ends.

      • Trust me, Dennis. Read it. He's talking about… no, I should first tell you to sit down and remove all food / drink / potentially-asphyxiating-objects from your airway. Ready? He's talking about the dangers of excessive debt. No, really.

        • Stop being a jerk, and maybe I'll take your posts seriously for once. Dear God. Next.

          • Oh well. I tried.

          • You sure tried something alright.

          • MYL, why do you hate yourself today? Engaging Emily and Dennis? Are you serving penance for something?

          • Didn't you see the Flaherty – Harper Budget for 2010-11? I am a miserable failure at getting truth and common sense to sink into thick skulls. It is well past time I started trying again. I just thought I would start down in the minor leagues.

          • How do you figure that Emily and Dennis are in the minor league of thick skulledness? You're trying to climb the Everest of illogic, my man, and right out of the gates, too.

          • I was using importance as the metric, not thick-skulledness.

            And, I now paste my newest macro that might help your understanding:

            I do not bother to rebut Emily in the misguided notion that Emily might see the error of her ways. Only to be sure that any interested reader might not fall into her disinformation trap.


          • Hahaha, thanks Olaf I needed a laugh today and MYL you are a brave man : )

          • You too, Claudia. If you have something to say to me, then say it. Nothing brave about what Olaf said, nor about your knee-jerk applause of it.

          • Olaf, you're more than welcome to take me on directly, instead of engaging in this kind of cowardly pettiness.

          • Ah, Olaf, still smarting from something, aren't you. If you have something to say to me, then say it. Otherwise, enough with this sniping. Geez.

  7. I think it should also be noted that Krugman did not win a Nobel for his liberal thoughts on the economy, but rather for his contributions to a rather arcane field of economic theory. Indeed, the label "Nobel prize winning" is used often in contexts that have little to do with the field being discussed. Global warming is a good example of this. Many "Nobel prize winning" scientists who make news about the environment often don't have specific expertise in the field. Just an FYI.

    • Could it be that persons with large heads and small brains are doomed to suffer perpetual concussion?

  8. While we are agreeing with or bashing Krugman (or, like me, doing both at the same time, above), here is the Op-Ed in his name over at the NYT's site: http://www.nytimes.com/2010/08/16/opinion/16krugm

    The howler: Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won't have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program's actuaries don't expect to happen until 2037 — and there's a significant chance, according to their estimates, that that day will never come.

    Uh, Paul, you neglected to mention where those "surpluses" have been invested.

    • Probably like Canada's pension money for retired civil servants they exist as a book-entry only. The annual requirements for the program payout are obviously real dollars in the budget and not from any fictitious pension fund. . It's called a contingent reserve and exists only in the mind of the Comptroller General. The actuarial meaning of this amount is meaningless because if the actuarial amount to discharge the pension liability were required they wouldn't have it in cash, and if you were in the lineup to receive your share you would probably get zilch. That's what confidence is all about because if you don't believe in the financial integrity of the federal government you shouldn't have worked for them. Seriously, the whole country's business is a matter of confidence.

      • Yup. A massive fictional book entry: These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense…. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government's ability to pay benefits. (from FY 2000 Budget, Analytical Perspectives, p. 337) As quoted by Wikipedia: http://en.wikipedia.org/wiki/Social_Security_Trus


      • … cont'd.

        So, Mr. Nobel-Prize-equivalent-winning economist Krugman, the problem does not arise when the "trust fund" is exhausted in 2037, or 2038, or maybe a decade later. Take a peek inside the trust fund piggy bank, Mr. Krugman. It's filled with Uncle Sam's IOUs. The Social Security Trust Fund "accumulated surplus" is itself a massive liability, not an asset. The problem arises when the government itself opens the piggy bank as "net surplus" drifts over into "net deficit" on an annual basis, and the government itself (and the American people) suddenly remember that the piggy bank is empty.

  9. Actually, he doesn't say much of anything, does he. No wonder no direct quotes.Two graphs, and some scare-mongering without any suggestions. If he did have suggestions, my guess: more stimulus, higher taxes.

    Sorry. I thought there would have been more substance, even for him.

  10. Just for the record:

    'Paul Krugman
    Princeton University, NJ, USA

    "for his analysis of trade patterns and location of economic activity"

    International Trade and Economic Geography
    Patterns of trade and location have always been key issues in the economic debate. What are the effects of free trade and globalization? What are the driving forces behind worldwide urbanization? Paul Krugman has formulated a new theory to answer these questions. He has thereby integrated the previously disparate research fields of international trade and economic geography.

    • Yes, which has nothing to do with just about everything he writes about in his liberal column and blog at the New York Times, right?

      • When do we get the scholarly dissertation defining Paul Krugman's liberalism? Or is it simply that anyone with an idea not endorsed by the ghost of Ayn Rand must be liberal?

        • I have been doing some heavy reading lately and I have come to the conclusion that writing heavy books, particularly on economics, is a cottage industry in the egghead trade. You must do it to keep your job and it does bring in some cash if it gets to be a textbook.

          By contrast, lawyers get paid whether they win or lose. As Lord Coke said when asked by James I to prep[are a case in the Sir Walter Raleigh affair, "For or against, your Majesty?

          • Intellectuals are expected to be able to make an argument.

            And Krugman developed new theory in his field.

            'Heavy books' ….what an interesting phrase. So is 'the egghead trade'.

            Next we'll get 'edjumacated'

        • The title of the Krugman blog that was originally linked to is: The Conscience of a Liberal

          For someone who calls themselves "Reader", you don't do a heck of a lot of it, do ya.

          And who says I'm a fan of Ayn Rand? Geez.

          • @Dennis_F. I am a frequent reader of Krugman's blog, thus aware of it's moniker. Reading your comments on this blog is also a frequent indulgence. If you are not a fan of Ayn Rand or John Locke then you must come by your position by some other means.

            You might be interested in this site as a means to broaden your grasp of the many and varied ideas of economic thinkers (please stifle the impulse to read only those agreeing with your own view):

            [ http://www.voxeu.org/ ]

            And here is a rejoinder to all those "free market" thinkers out there:

            [ http://economistsview.typepad.com/economistsview/… ]

            I apologize if I have wrongly interpreted your political leanings — I simply get exercised when I read a lot of the "anti-anything-but-my-rightist-view" and ill thought out drivel that appears here so often.

          • You are some piece of work. Here you were wondering how in the world anyone could describe Krugman as a liberal, yet he describes himself as one, and quite unapologetically so.

            You then turn around and hurl a knee-jerk characterization of my political views at me.

            If those bits of brilliant intellectual wisdom weren't enough, you then have the gall to suggest that I'm the one in need of more reading, even though you haven't displayed any extensive ability of it yourself.

            I guess my expectation that some people base their posts on substance is way too much to ask for.

          • And your "substance" is. . . where?

            So pleased you deigned to respond, nonetheless, Mister superior intellect. I will forthwith treat your every pronouncement with the awe it deserves.

          • Amazing that someone who calls themselves a "Reader" is apparently incapable of doing so to any significant extent.

            I have made numerous comments about Krugman, one of which you specifically tried to refute without success, which is that he's a LIBERAL. Self-proclaimed at that.

            Liberals want spending and high taxes to fuel it.

            Liberals in Canada are talking about a second stimulus, unsurprisingly, which Krugman appears to be laying the groundwork for by posting two graphs trashing our economy.

            Not enough for ya? Didn't think so.

  11. LOL rightwingers love Ayn Rand…they just never actually read her books.

    Otherwise they'd know themselves for moochers and looters.

    • Why do some of you have to engage in these knee-jerk childish tactics? You only expose yourself to be far worse than the people you have to attack.

      For the record, I am not a fan of Ayn Rand. I am not a libertarian and I don't consider the individual to be a god. I believe God to be God.

      Got it? Didn't think so.

  12. Holly once again proves her genius by using the TYEE as her reference material.

    Umm..Holly, you do know that Paul Krugman is a bit of a lefty-flake who's been taken to task by far more respectable economists correct? He's Keynesian to a fault. In fact, I'm sure that in the MacroEconics of Mr. Krugman's philosophy…..the Government should have ALL the money…and control all the Spending.
    In fact…Krugman is actually Jack Layton in disguise.

  13. As for the references to Krugman's Nobel Prize…..sorry, the Nobel Prize lost it's meaning when it was awareded to folks like:

    Yassar Arafat
    Al Gore
    Barak Obama

    Now…it's more of a politically correct decoration awarded by lefties….to other lefties.

    It means nothing now.

    • To be fair, Krugman did receive a Nobel for his contribution to a specific field in economic theory; one that has little to do with his partisan writing. Whether or not the Nobel people favoured him as a result of such partisan writings I can't specifically state, although they have favoured leftists in the past. We know that.

  14. Oh wow. You consider that rant to be a post of any substance? Never ceases to amaze me.

    I have no idea where you get any of the claims you made. Conservatism has been successful, which is maybe why you're so angry about it and can't post clearly. I don't know.

  15. Yep…sadly, that is what happens when you devalue something to such an extent that it loses all meaning.

    Everyone who ever earned or deserved the Nobel…..is now lumped in with:

    an avowed terrorist
    an avowed snake oil salesman and serial adulterer
    a "community activist" who's main claim to fame is knowing how to read a teleprompter displaying a speech written by someone else.