What does Jean Chretien think of this? - Macleans.ca

What does Jean Chretien think of this?


Hello blog! Nice to see you after four months of maternity leave.

Nice to be back to share ponder such mysteries as: Given the the sorry state of US finances, and the threat of a downgrade of its credit rating, why are so many people still willing to finance the US government — and so cheaply?

And also, does Jean Chretien ever get annoyed that Washington is getting away with its fiscal mess, while back in the 1990s, the bankers took Ottawa into a dark alley until it came out with Program Review?

Just wondering.

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What does Jean Chretien think of this?

    • Interesting link. Thanks.

  1. "Nice to see you after four months of maternity leave."

    Welcome back, hopefully you will be posting somewhat regularly, and congratulations on your new baby.

  2. Your remembrance of the Liberal's "Program Review" exercise is inspiring. As I recall, this ended up becoming the signature initiative of the new, but tired and languid from the outset, Chretien government.

    Their political vision under Program review became doing less and less, if not directly, then indirectly, through provinces and municipalities, which would have to adjust to the new realities. Blah, blah, blah. But it did set the fiscal stage for Canada being something of a total oasis in the current recession.

  3. Welcome back!

    [W]hy are so many people still willing to finance the US government — and so cheaply?

    For much the same reason that others can look at a credit card balance in the thousands of dollars, several months old, and reach the happy-happy-happy conclusion that they are just fine because the minimum monthly payment is just a few hundred bucks.

    Because it feels better than the truth.

    • Yes, I agree, it's just the monthly payment that they really care about, and the next election.

  4. That "trip to the dark alley" was sorely needed, and one of the best things to happen to this country in a long time.

    Would that be a lesson for others in the neighbourhood.

  5. glad you're back. Not enough women on this site, frankly.

  6. "why are so many people still willing to finance the US government — and so cheaply?"

    Two reasons. First is that the US is still the largest economy in the world and the greenback is the world's reserve currency. When people get jumpy, US debt looks relatively stable, not because it is much more stable, but because if it collapses, chances are everything else is going to be in the pooper either just before or just after it anyone.

    Secondly, unlike Canada in the 1990's, the current fiscal issues of the US are relatively smaller. For one, I believe their total public debt, as a percentage of GDP is still well below that of our's in the 90's (though it'll probably grow close to it over the next decade). It's also stands out less in the crowd – Canada's public debt in the 90's, while not the only country with significant debt, was higher than most, having spent more or less two decades in deficits. Now, everyone's got US-level debt. What's the point of avoiding the US because of its debt when most other countries are as bad or worse?

  7. "why are so many people still willing to finance the US government — and so cheaply?"

    That is the million dollar question!

    I feel that it's just the herd mentality. People trust their money with treasuries and bonds because other people do, because people always have.

    When these types of things change, they change swiftly and dramatically. There will be no gradual progression. It will be like Greece: borrowing cheaply one day and then in just a few months or even weeks the conditions deteriorate dramatically.

  8. Hey, welcome back. Could you do some work on Obama's NSC? It's been a year or so in, and I would like to know how it is working out, if clinton is forced out vs Jones. Which cabinet positions still have access. How the homeland security and nsc merger worked out. There < a href=" http://rothkopf.foreignpolicy.com/posts/2010/05/2… might be a shakeup after the next set of elections.