Steven Hawking's Tutor
Posts: 4,995 
Location: Florida, Hurricane Central
Location: Florida, Hurricane Central
September 15th, 2007, 06:27 AM
From the excellent Worthwhile Canadian Initiative blog
From the excellent Worthwhile Canadian Initiative blog
Quote:
FTA/NAFTA: The treaty and the 1988 election upon which it was largely based occurred when I was in grad school. At the time, my impression of the general consensus among economists was that the FTA was on the whole a good idea (we understand the theory of comparative advantage), but that it wasn't all that big a deal. The US and Canadian economies were fairly similar, and already highly integrated: all the low-hanging fruit from the gains to trade had been pretty well picked over. And that consensus pretty much characterises what actually happened. The canonical study of the effects of FTA/NAFTA on the Canadian economy is Dan Trefler's 2004 AER article (26-page pdf), which concludes that its effects were - after a not-inconsiderable period of adjustment - small and positive: "a 3-percent rise in earnings spread over eight years will buy you more than a cup of coffee, but not at Starbucks." Nor is this view confined to the ranks of trained economists: public opinion polls suggest that 70% of Canadians support NAFTA. Small wonder it has survived five federal elections since then.
The GST: If you asked a specialist in public finance how best to raise tax revenues without tanking the economy, the answer would be 'Consumption taxes. Theory suggests that these are the least harmful to economic growth, and available evidence supports the theory.' This advice would be accompanied by the caveat that consumption taxes are regressive; it would be a good idea to implement a program of direct transfers to low-income households in order to compensate. I haven't read Mulroney's memoirs yet, but I'd be surprised if the decision to set up the GST didn't follow this scenario. The GST has never been popular, but it too has survived five elections. Sadly, it was wounded in the aftermath of the Conservative victory in 2006, when it lost a percentage point. But the GST credit survives - and is still the only federal targeted transfer program aimed at supplementing the incomes of low-income households.
Inflation targeting: Strictly speaking, this was a decision taken by the Bank of Canada, but Mulroney's government lent whatever credibility it could to the project. Implementing it was a painful process - the recession of the early 1990's was a brutal affair - to Kim Campbell's and John Crow's cost. But again, this policy is still in place after five elections - and inflation has fluctuated in a narrow range around 2% for some 15 years.
Fiscal Policy: Although the Liberals - and Paul Martin in particular - get pretty much all the credit for finally conquering the federal government deficit, they really only deserve about half of it. As documented here, slaying the deficit dragon required transforming an operating deficit of -3% of GDP to a surplus of 6% during the period 1984-2000. The Mulroney government turned the -3% deficit into a 2% surplus before the 1991-2 recession brought it back down again. The Liberals are to be congratulated for finishing the job - but then again, they were the ones who had created the problem in the first place.
The GST: If you asked a specialist in public finance how best to raise tax revenues without tanking the economy, the answer would be 'Consumption taxes. Theory suggests that these are the least harmful to economic growth, and available evidence supports the theory.' This advice would be accompanied by the caveat that consumption taxes are regressive; it would be a good idea to implement a program of direct transfers to low-income households in order to compensate. I haven't read Mulroney's memoirs yet, but I'd be surprised if the decision to set up the GST didn't follow this scenario. The GST has never been popular, but it too has survived five elections. Sadly, it was wounded in the aftermath of the Conservative victory in 2006, when it lost a percentage point. But the GST credit survives - and is still the only federal targeted transfer program aimed at supplementing the incomes of low-income households.
Inflation targeting: Strictly speaking, this was a decision taken by the Bank of Canada, but Mulroney's government lent whatever credibility it could to the project. Implementing it was a painful process - the recession of the early 1990's was a brutal affair - to Kim Campbell's and John Crow's cost. But again, this policy is still in place after five elections - and inflation has fluctuated in a narrow range around 2% for some 15 years.
Fiscal Policy: Although the Liberals - and Paul Martin in particular - get pretty much all the credit for finally conquering the federal government deficit, they really only deserve about half of it. As documented here, slaying the deficit dragon required transforming an operating deficit of -3% of GDP to a surplus of 6% during the period 1984-2000. The Mulroney government turned the -3% deficit into a 2% surplus before the 1991-2 recession brought it back down again. The Liberals are to be congratulated for finishing the job - but then again, they were the ones who had created the problem in the first place.
Member
Posts: 149
Location: Alberta
Location: Alberta
September 15th, 2007, 09:12 AM
But the Liberal Voting Fleeced Sheep beleive the lies they are told.
Many think there was no Tax on goods until the GST. We had "manufacturers" Tax for many decades. If the GST were ever recinded they would replace it with something else. The spin doctors try to influence voters with hype that in most cases ignores the other side of the coin.
But the Liberal Voting Fleeced Sheep beleive the lies they are told.
Many think there was no Tax on goods until the GST. We had "manufacturers" Tax for many decades. If the GST were ever recinded they would replace it with something else. The spin doctors try to influence voters with hype that in most cases ignores the other side of the coin.
Mighty Intellect
Posts: 1,603
September 15th, 2007, 09:15 AM
Quoting jjaycee98
Liberals don't ever lie; just ask them.
But the Liberal Voting Fleeced Sheep beleive the lies they are told.
Many think there was no Tax on goods until the GST. We had "manufacturers" Tax for many decades. If the GST were ever recinded they would replace it with something else. The spin doctors try to influence voters with hype that in most cases ignores the other side of the coin.
Many think there was no Tax on goods until the GST. We had "manufacturers" Tax for many decades. If the GST were ever recinded they would replace it with something else. The spin doctors try to influence voters with hype that in most cases ignores the other side of the coin.
Chief Mogrifier
Posts: 8,885
September 15th, 2007, 11:28 AM
Mulroney's real legacy was his nine years of heavy deficit spending that added almost half a trillion dollars to the national debt that our grandchildren, and their children, will still be paying off.
Quoting Walter
Come on Walter. The GST was a new name for an expanded federal sales tax that had been around for years. Anybody in business knows all about this. Liberals don't ever lie; just ask them.
Mulroney's real legacy was his nine years of heavy deficit spending that added almost half a trillion dollars to the national debt that our grandchildren, and their children, will still be paying off.
Steven Hawking's Tutor
Posts: 4,995
Location: Florida, Hurricane Central
Location: Florida, Hurricane Central
September 15th, 2007, 02:49 PM
As in the OP
Quoting #juan
Nice revisionism, but structural spending and a lack of a political will belies the reality of what occurred from 1984 to 1993.
Come on Walter. The GST was a new name for an expanded federal sales tax that had been around for years. Anybody in business knows all about this.
Mulroney's real legacy was his nine years of heavy deficit spending that added almost half a trillion dollars to the national debt that our grandchildren, and their children, will still be paying off.
Mulroney's real legacy was his nine years of heavy deficit spending that added almost half a trillion dollars to the national debt that our grandchildren, and their children, will still be paying off.
As in the OP
Quote:
Simply put, if the Liberals hadn't left a fiscal mess for Mulroney, i.e. if there had been no deficit, there would have been no deficit when Mulroney left either. The account would have been well in surplus.
Fiscal Policy: Although the Liberals - and Paul Martin in particular - get pretty much all the credit for finally conquering the federal government deficit, they really only deserve about half of it. As documented here, slaying the deficit dragon required transforming an operating deficit of -3% of GDP to a surplus of 6% during the period 1984-2000. The Mulroney government turned the -3% deficit into a 2% surplus before the 1991-2 recession brought it back down again. The Liberals are to be congratulated for finishing the job - but then again, they were the ones who had created the problem in the first place.
Chief Mogrifier
Posts: 8,885
September 15th, 2007, 03:05 PM
Quoting Toro
Absolute nonsense. Kim Cambell handed Chretien a 46 billion dollar deficit. In each of the nine years Mulroney was in office he ran a forty to fifty billion dollar deficit. For all his faults, Chretien balanced the budget in a couple years and actually paid off some of the debt Admittedly Trudeau left a debt of a hundred and twenty odd billion dollars. Mulroney didn't help. Mulroney just kept running up the debt and ran like the thief he was when he found a scapegoat....Cambell....to take the heat.
Nice revisionism, but structural spending and a lack of a political will belies the reality of what occurred from 1984 to 1993.
As in the OP
Simply put, if the Liberals hadn't left a fiscal mess for Mulroney, i.e. if there had been no deficit, there would have been no deficit when Mulroney left either. The account would have been well in surplus.
As in the OP
Simply put, if the Liberals hadn't left a fiscal mess for Mulroney, i.e. if there had been no deficit, there would have been no deficit when Mulroney left either. The account would have been well in surplus.
Steven Hawking's Tutor
Posts: 4,995
Location: Florida, Hurricane Central
Location: Florida, Hurricane Central
September 15th, 2007, 03:44 PM
As the OP states, Mulroney increased the fiscal balance such that the operational budget was in surplus, at least until the recession. In fact, until the recession, Mulroney had increased the balance by 5% of GDP, as much as the Liberals had.
This argument is so disingenuous. It was the Left, from Lloyd Axworthy to Bob White to Maude Barlow to Ed Broadbent, who screamed at the top of their lungs that cutting the deficit was a "right-wing corporate agenda" that would be borne on the backs of working people. Bob White, Maude Barlow, John Ralston Saul et al were openly advocating default on Canadian federal debt. The shrill Liberal Rat Pack, and their NDP allies stood up every day in Parliament and chastized the Tories for cutting programs, or for what little they did. And polls at the time generally were against the Tories for doing so.
Then, of course, the argument is that "What, you're blaming everyone but the Tories?!" which essentially a backdoor argument that Canada should have had a PM who would have given a great big F-U to the political winds and do what they pleased, a la Margaret Thatcher. Back then, the Left amusingly and simplistically tried to link Thatcher, Reagan and Mulroney together, which was as wrong as it was right. Today, the revisionist Left is saying that Mulroney should have been more like Thatcher.
As for this idea that Mulroney will be linked to deficits, it might be to those on the Left who are so blinded by animosity that they'll grasp at any stick, no matter how great a stretch, to beat on the Tories. But to those in the financial world - those who actually do the funding - the perception is that Mulroney and Wilson, as the OP stated, started Canada down the road, but the political winds at the time were blowing against them.
Two words: "Solange Denis." If you don't understand this event, you don't understand that time period.
Quoting #juan
Again, more revisionism.
Absolute nonsense. Kim Cambell handed Chretien a 46 billion dollar deficit. In each of the nine years Mulroney was in office he ran a forty to fifty billion dollar deficit. For all his faults, Chretien balanced the budget in a couple years and actually paid off some of the debt Admittedly Trudeau left a debt of a hundred and twenty odd billion dollars. Mulroney didn't help. Mulroney just kept running up the debt and ran like the thief he was when he found a scapegoat....Cambell....to take the heat.
As the OP states, Mulroney increased the fiscal balance such that the operational budget was in surplus, at least until the recession. In fact, until the recession, Mulroney had increased the balance by 5% of GDP, as much as the Liberals had.
This argument is so disingenuous. It was the Left, from Lloyd Axworthy to Bob White to Maude Barlow to Ed Broadbent, who screamed at the top of their lungs that cutting the deficit was a "right-wing corporate agenda" that would be borne on the backs of working people. Bob White, Maude Barlow, John Ralston Saul et al were openly advocating default on Canadian federal debt. The shrill Liberal Rat Pack, and their NDP allies stood up every day in Parliament and chastized the Tories for cutting programs, or for what little they did. And polls at the time generally were against the Tories for doing so.
Then, of course, the argument is that "What, you're blaming everyone but the Tories?!" which essentially a backdoor argument that Canada should have had a PM who would have given a great big F-U to the political winds and do what they pleased, a la Margaret Thatcher. Back then, the Left amusingly and simplistically tried to link Thatcher, Reagan and Mulroney together, which was as wrong as it was right. Today, the revisionist Left is saying that Mulroney should have been more like Thatcher.
As for this idea that Mulroney will be linked to deficits, it might be to those on the Left who are so blinded by animosity that they'll grasp at any stick, no matter how great a stretch, to beat on the Tories. But to those in the financial world - those who actually do the funding - the perception is that Mulroney and Wilson, as the OP stated, started Canada down the road, but the political winds at the time were blowing against them.
Two words: "Solange Denis." If you don't understand this event, you don't understand that time period.
Mighty Intellect
Posts: 1,986
September 15th, 2007, 03:56 PM
The GST is a far superior tax scheme, as any business simply adds up the GST they have charged to customers, subtracts the GST paid on purchases, and remits the difference. It is FAR, FAR easier to administer, and far more efficient.
One thing that anyone with a brain can say - Mulroney's economic iniatives paved the way for Martin's success. Unfortunately, Mulroney pizzed away a lot of money as well. But overall, he set the stage for our economic state now.
Quoting #juan
Anybody in business knows that before the GST, the old FederalST was 13.5% on the wholesale cost of goods. Unless your customer was exempt, in which case it didn't apply. Plus, there were some items at a different rate. It also was not a value added tax. It was also not visible, it was hidden in the price of goods.
Come on Walter. The GST was a new name for an expanded federal sales tax that had been around for years. Anybody in business knows all about this.
The GST is a far superior tax scheme, as any business simply adds up the GST they have charged to customers, subtracts the GST paid on purchases, and remits the difference. It is FAR, FAR easier to administer, and far more efficient.
One thing that anyone with a brain can say - Mulroney's economic iniatives paved the way for Martin's success. Unfortunately, Mulroney pizzed away a lot of money as well. But overall, he set the stage for our economic state now.
Mighty Intellect
Posts: 1,986
September 15th, 2007, 06:21 PM
Quoting #juan
Actually, by superior, I meant that it was easier to administer for businesses, easier to understand for consumers, more fair to consumers....
You mean it brings more money into government coffers? I've never complained about the GST.. I just think it should be one hundred percent dedicated to debt reduction.
