You're proposals for Canada's anti-inflation strategy.

[Machjo]

Now that we're out of recession, the threat of rising inflation, interest rates, and federal debt will increase. I say threat because it's not a guarantee, and is preventable if a government takes a pro-active as opposed to reactive approach to it.

What would be your proposals for a pro-active approach to fight these threats?

Personally, I could recommend the following:

Raise the gas tax or some other kind of resource tax. (One way of keeping inflation under control is to take money out of the economy by increasing government revenue but reducing its spending. A gas tax could help increase government revenue.) Also, a resource tax would promote more resource efficiency in businesses, efficiency helping to fight inflation in the long run (maybe not in ths boom, but possibly in a future boom) by reducing overhead costs and promoting energy efficiency and self-sustainability.

Reduce federal government spending in all areas least likely to hurt the most vulnerable members of Canadian society. This could include cutting federal spending on language training for federal public servants (how do the poor benefit from that?). Other areas might include spending on such non-essential services as 'arts and culture' funding. Military spending is a tough one. I might agree with it, but would have to consider it's potential effect on the soldiers in Afghanistan.

This combination of increased government revenue and reduced government spending coudl also help pay off the debt and keep interest rates down.

Promote more free labour-movement agreements with other countries so that when companies are hit by worker shortages, they have the option of hiring from abroad more easily rather than be forced to compete for scarce labour resources by raising salaries, leading to rising prices (what's the point of higher salaries if costs go up soon after?).

Reduce unnecessary overhead costs on companies. For example, some companies are required to guarantee bilingual access even when the market doesn't demand it. We could also consider requiring French-language labelling and packaging in Quebec and Labrador, and English outside, with bilingual labelling and packaging being optional. This would save overhead costs in the production of packages and labels, and would also reduce the cost of imports from the US, UK, etc. more easily available in English Canada, and the same for products from France, Belgium, Madagascar, etc. in Quebec. We could also remove the ban on measurements other than metric on Canadian packaging as long as the metric system is included and clearly indicated. This would likewise reduce some overhead costs in packaging for US imports.

Any other ideas?

 

[SirJosephPorter]

I would put it in a slightly different way. The deficit monster must be slain, that must be the priority, once the recession is over and we are back into the period of economic growth.

That means spending cuts and tax increases. And spending cuts must hit everybody, rich and poor. The poor must also do their part in getting rid of the deficit. Also, there must be tax increases and not only for the rich.

While the rich must be taxed to keep the tax system fair, that does not raise a lot of revenues, there just aren’t that many rich people around. Bulk of revenue can only be raised by taxing the middle class, and middle class must be taxed.

It will need a combination of a lot of factors, tax increases, spending cuts, reallocation of resources, more free trade etc. to get rid of the deficit. But it must be done.

Only a majority government can take such unpopular measures. Conservatives have proved themselves to be totally inept at managing the economy. Wherever and whenever conservatives have been in power (Mulroney, Mike Harris, Harper, Reagan, Bush etc.), the result has invariably been huge, ballooning deficits.

My hope is that Liberals get a majority next time so they can tackle the deficit.

 

[Machjo]

I would put it in a slightly different way. The deficit monster must be slain, that must be the priority, once the recession is over and we are back into the period of economic growth.

That means spending cuts and tax increases. And spending cuts must hit everybody, rich and poor. The poor must also do their part in getting rid of the deficit. Also, there must be tax increases and not only for the rich.

Wouldn't a gas tax hit everyone, rich and poor, anyway?

While the rich must be taxed to keep the tax system fair, that does not raise a lot of revenues, there just aren’t that many rich people around. Bulk of revenue can only be raised by taxing the middle class, and middle class must be taxed.

It will need a combination of a lot of factors, tax increases, spending cuts, reallocation of resources, more free trade etc. to get rid of the deficit. But it must be done.

In an economic boom, especially if the threat of inflation begins to rear its ugly head, I don't think free trade alone would suffice. It helps of course by making the market more efficient. After all, why waste precious resources shipping a chocolate bar from Vancouver to Halifax while shipping the same bar from a different factory from New York to Los Angeles. Clearly it would be more efficient for the Halifax store to buy from the New York factory and the Vancouver store to buy from the LA factory. While efficiency is always important, it's often taken for granted as a 'make-work' scheme in recession, but in a boom, when all resources are maxed out, then it's importance becomes really obvious.

Only a majority government can take such unpopular measures. Conservatives have proved themselves to be totally inept at managing the economy. Wherever and whenever conservatives have been in power (Mulroney, Mike Harris, Harper, Reagan, Bush etc.), the result has invariably been huge, ballooning deficits.

I don't fully agree here. Scott Reid has proposed ideas for promoting more efficiency and reducing unnecessary overhead costs on companies, and on some cuts to government services that would not hurt the poor at all, and might even benefit them! I strongly recommend his book 'Lament for a Notion'. I don't agree with everything in it, and it's not directly related to thsi thread, but some of the ideas in there could certainly help reduce unnecessary spending in both the private and public sectors, promote more efficiency and, most importantly, do so without hurting the most vulnerable members of society. And he's a member of the Conservative Party of Canada. I'm sure there are some in the Liberal Party with good ideas too, just as others would want to 'spend our way out of inflation'8O

In the end, it really does come down to the MP.

By the way, Halifax MPP Graham Steele I think has some good ideas on education reform that could benefit not only his province, but Canada as a whole if other provinces followed suit, helping to improve efficiency in the economy even further, yet he's a... wait for it... a Dipper, a member of the NDP. So I really don't think this is a party issue per se. Vote in a good candidate in your riding, and that's all that matters.

My hope is that Liberals get a majority next time so they can tackle the deficit.

I would not be so blind. I hope those Liberals with hearts and brains win their seats, those Conservatives with hearts and brains win theirs, and Dippers and Greens the same, along with independents. Then things will get done. If we just vote blindly for Libs or CPC or whatever, we end up with the Liberal and Conservative riff raff we had in my riding last election, though the Green candidate had some good ideas, independently minded too, not particularly blindly partisan. And the local Dipper wasn't too bad either. In the end, party only refelcts the quality of its members.

 

[SirJosephPorter]

Scott Reid has proposed ideas for promoting more efficiency and reducing unnecessary overhead costs on companies, and on some cuts to government services that would not hurt the poor at all, and might even benefit them!

Machjo conservatives always talk a good game. They always talk of fiscal responsibility, balanced budget, sound economic management etc. Unfortunately once they are in office, they throw all that overboard.

They are ideologically opposed to tax increases, they want to cut taxes. When taxes are cut, the only way to balance the budget is to borrow. That is why conservatism has become synonymous with borrow and spend. Tell me, when was the last time you saw a conservative leader balance the budget?

What is needed is somebody who is not ideologically tied to the right (borrow and spend) or left (Tax and spend). Spending must be cut where it can be (there must be hardships to everybody, otherwise they are not real spending cuts), taxes must be increased. This is not a left or right position, it is a centrist, liberal position.

 

[Machjo]

Scott Reid has proposed ideas for promoting more efficiency and reducing unnecessary overhead costs on companies, and on some cuts to government services that would not hurt the poor at all, and might even benefit them!

Machjo conservatives always talk a good game. They always talk of fiscal responsibility, balanced budget, sound economic management etc. Unfortunately once they are in office, they throw all that overboard.

They are ideologically opposed to tax increases, they want to cut taxes. When taxes are cut, the only way to balance the budget is to borrow. That is why conservatism has become synonymous with borrow and spend. Tell me, when was the last time you saw a conservative leader balance the budget?

What is needed is somebody who is not ideologically tied to the right (borrow and spend) or left (Tax and spend). Spending must be cut where it can be (there must be hardships to everybody, otherwise they are not real spending cuts), taxes must be increased. This is not a left or right position, it is a centrist, liberal position.

Scott Reid has voted against his party on a few occastions. He's not exactly our typical Conservative sheep. Graham Steele too has some ideas that are uniquely his, and again, are not necessarily just NDP policy. He too has a mind of his own. I'm sure Steele and Reid would not see eye to eye on a great many issues, but I like the fact that they are not afraid to share their own ideas as opposed to just parrotting the party platform, unlike the Conservative MP in my riding who's about as partisan as they come.

I should also point out that another thig I like about Steel and Reid is that, though they may be on opposite ends of the political spectrum, they are not afraid to share specific ideas on how to make the economy more efficient, unlike the generalizations we often hear from the Conservatives (we'll cut taxes and spending, but aren't too sure where yet.), from the Liberals (we'll spend less, but we'll figure out what cuts to make as they come along) or NDP (we'll raise taxes, but aren't too which yet). At least Steele and Reid are willing to stick their necks out, point out specific inefficiencies in the system, and ignore sacred cows. Seldom do we come across MPs who've done their hoework to identify specific areas where restructuring could save money without too much hardship on anywone.

In fact, surprisingly enough, some of Reid's and Steele's ideas overlap in spite of one being Conservative and one NDP. Gains in efficiency are more of a technocratic trait than an ideological one. Who knows, maybe I'm attracted to more technocratically minded politicians?

 

[Machjo]

Another point, SJP, what would happen if the Liberal Party won a majority, with all the idiots winning their seats, but all the smart Liberals having lost their seats to attack adds? What kind of Liberal party would we end up with then? Teh same could apply to the Conservative Party too. But when we blindly vote party, the possibility of this becomes too palpable.

Now let's say we all voted for the best candidate. So then, we'd have some smart Conservatices with heads on their shoulders, and smart Liberals too, and smart Dippers too, same with the Bloc and independents. Suddenly, it wouldn't matter as much who forms the government because we'd have competents there instead of sheep just wearing pretty party colours.

Let's face it, the Liberal candidate in my riding could answer no question of mine without flipping through his party manual and reading the answers out to me or, alternatively, to just say 'we have no policy on that'! For crying out loud, is this the kind of person you're suggesting I vote for just because he wears red as his colour? No thanks. The Green party candidate last election was smart. I'd rather have him in there and then maybe he could form a co-alition with the Liberals or something. But the last thing I'd want to be to vote for a sheep considering teh salary he'd be getting.

Man, I'm sure we've got some unemployed folks with more brains than to just quote from a friggin' party manual.

 

[AnnaG]

Easy, regulate the heck out of business to keep prices from skyrocketing or dropping drastically, same with wages and taxes, same with percentage rates, make it a law that bank money cannot sit for longer than a month (it has to circulate), reduce international lending and reduce the national debt.

 

[Machjo]

Easy, regulate the heck out of business to keep prices from skyrocketing or dropping drastically, same with wages and taxes, same with percentage rates, make it a law that bank money cannot sit for longer than a month (it has to circulate), reduce international lending and reduce the national debt.

How exactly? Similar has been tried with rent ceilings and minimum wages. Such solutions often simply lead to a black market when they conflict with market equilibrium prices.

 

[AnnaG]

How exactly? Similar has been tried with rent ceilings and minimum wages. Such solutions often simply lead to a black market when they conflict with market equilibrium prices.

I know. The whole problem stems from small numbers of individuals messing with things. They are a constant problem and will never go away. So we have to live with the fact that the dysfunctional society we live in has dysfunctional activities going on in it that cause unpleasantries.

 

[Machjo]

It seems governments are starting to preplan for this very threat already:

Central banks united on recovery, divided on inflation

 

[Machjo]

I hope Canada is among them.

 

[Liberalman]

Let the market prevail.

The more you try to fix it the more erratic it will be.

Supply and demand dictates prices.

A depression would have brought the value of money down through mass unemployment, which would put a strain on the government through welfare.

Either cut the supply of money or devalue the currency.

The problem with society is they are living beyond their means people and businesses.

Businesses have to borrow money to meet payroll and pay suppliers.

If everybody were to keep a supply of money in his or her bank account the economic situation would have been bearable.

The market will always fix the problem

 

[Machjo]

Let the market prevail.

The more you try to fix it the more erratic it will be.

Supply and demand dictates prices.

A depression would have brought the value of money down through mass unemployment, which would put a strain on the government through welfare.

Either cut the supply of money or devalue the currency.

The problem with society is they are living beyond their means people and businesses.

Businesses have to borrow money to meet payroll and pay suppliers.

If everybody were to keep a supply of money in his or her bank account the economic situation would have been bearable.

The market will always fix the problem

No, the government has a responsibility to maintain the stability of the currency. In times of inflation, people's savings wither away, the poor being hardest hit since the rich can still hedge against inflation by buying stocks and property that will go up with it. And deflation hurts the poor the most too. If theprices drop, so will salaries, but ones debt remains the same dollar-value wise, thus increasing in reality. Add to that that with a minimum wage, deflation would make them more expensive and so price them out of the market. Mind you, I would agree with removing minimum wages, but I'm just pointing out that just as it's the government's responsibility to fight inflation, it's also it's responsibility to fight deflation. The question is, can it do it in a responsible and competent manner, and has it got the brains to plan ahead instead of just governing by the seat of their pants, patching up holes as they come along in an ad hoc manner with no clear direction or overarching global and long-term plan.

 

[Machjo]

And as for everybody keeping some money in their bank account, not everyone has money to keep in their bank account.