Canada no longer leading the G7 in economic growth


Machjo
#91
Quote: Originally Posted by mentalflossView Post

How is cutting into a recession a sustainable way of managing the economy?

How is borrow-and-spend any more sustainable?

There are ways of cutting spending while avoiding a deflationary spiral:

1. lower the bank rate,

2. in the event that you've lowered the Bank of Canada rate right down to zero and are still experiencing deflation, print as much money as is necessary to counter the deflation (and no more, of course),

3. eliminate minimum-wage legislation and other impediments to employment.
 
mentalfloss
#92
Quote: Originally Posted by MachjoView Post

How is borrow-and-spend any more sustainable?

I never said it was black and white like that.

Somehow, people on this board like to believe you're either a tax and spend leftist or hack n' slash tightie rightie.

I don't disagree with spending, unless it's wasteful spending on services that people don't want or need. And I don't disagree with cuts unless they put us into recession (which is what this article suggests).
 
Machjo
#93
Quote: Originally Posted by mentalflossView Post

I never said it was black and white like that.

Somehow, people on this board like to believe you're either a tax and spend leftist or hack n' slash tightie rightie.

I don't disagree with spending, unless it's wasteful spending on services that people don't want or need. And I don't disagree with cuts unless they put us into recession (which is what this article suggests).

But I'm saying it's easy enough to counteract the effects of the recession. Remember, in a recession prices will likely fall, so lowering minimum wage could help, and absolute worst case scenarion in the event of an free-fall deflationary spiral, the government could print money in moderation.

Mild recession is no more harmful than moderate debt or moderate inflation or moderately high bank rates. It's even better than exorbitant debt and inflation.
 
mentalfloss
#94
Why do we even need to get into a recession in the first place?
 
Machjo
#95
Quote: Originally Posted by mentalflossView Post

Why do we even need to get into a recession in the first place?

Recession is no more ideal than let's say debt and inflation. But we can also ask ourselves why we need to get into debt and inflation and high interest rates in the first place.

Often it's like a seesaw. If we lower interest rates, print money and borrow, we can fight recession at a cost. By cutting spending and raising taxes we can fight inflation, debt and high interest rates at a cost. It's a trade-off. However, sometimes the government does have other tools at its disposal to try within reason to avoid all these ills, though usually there will be a price to pay in terms of high taxes which I'm not necessarily against either.
 
mentalfloss
#96
Quote: Originally Posted by MachjoView Post

Recession is no more ideal than let's say debt and inflation. But we can also ask ourselves why we need to get into debt and inflation and high interest rates in the first place.

Often it's like a seesaw. If we lower interest rates, print money and borrow, we can fight recession at a cost. By cutting spending and raising taxes we can fight inflation, debt and high interest rates at a cost. It's a trade-off. However, sometimes the government does have other tools at its disposal to try within reason to avoid all these ills, though usually there will be a price to pay in terms of high taxes which I'm not necessarily against either.

Right, and I don't disagree with cutting the right amount for the right things and changing tax rates to the right amount for the right things either.

I just think we can do it in such a way that continues GDP growth to pull us out of deficit. I have no problem with it being an incremental growth to ensure sustainability. There may even be the opportunity to create economic growth drastically in the short term without any fiscal kick-back or loss of environmental stewardship as well.
 
Machjo
#97
Quote: Originally Posted by mentalflossView Post

Right, and I don't disagree with cutting the right amount for the right things and changing tax rates to the right amount for the right things either.

I just think we can do it in such a way that continues GDP growth to pull us out of deficit. I have no problem with it being an incremental growth to ensure sustainability. There may even be the opportunity to create economic growth drastically in the short term without any fiscal kick-back or loss of environmental stewardship as well.

I disagree with the government even trying to "grow" the economy. It ought to focus on sustainability, and if the economy grows, bonus.

Generally speaking, I won't blame a government for slow growth any more than I'll credit it for rapid growth, since often that growth is the result of policies passed decades ago only now starting to come to fruition, along with the state of the global economy and luck.

I'd rather credit or criticise the government for things more within its short-term control, such as keeping inflation down, paying off the debt, and keeping the Bank rate down. I also expect long-term planning from the government, such as investing generously in universal compulsory education (funding for education on our reserves is atrocious!), promoting free labour-movement agreements, promoting common educational standards for various trades and professions across jurisdictional boundaries, lowering the minimum-wage, and other measures to remove obstacles to employment. But again, usually the benefits aren't felt for decades, only for some other government decades later to take the credit. But honestly, what kind of long-term investment are the Conservatives doing? There is free trade agreements harper's working on, and I applaud him for that, but then he undermines it with his prison and military industries.
 

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