Is the worst of this mandate behind us?

[Machjo]

The Conservative Government has angered me many times for various reasons, including on the fiscal side when it cut taxes and extended tax credit while we're still in debt while increasing government spending at the same time.

It appears though that the government might actualy be finally smartening up somewhat. It has not cut taxes for some time at least and is now talking about cutting spending finally:

Ottawa warns deeper spending cuts coming - Politics - CBC News

The spending cuts do come across as a little random rather than targeted, so still not perfect (though I don't expect much better from teh Conservatives at this stage), but at least they finally recognize that you can go the Reagan way and raise spending while cutting taxes, that something's got to give. The two Bushes had made that error too.

 

[taxslave]

Unfortunately both tax cuts and increased spending were both necessary for the last few years. I don't like the spending increases at all but for a short period they helped keep us out of doo doo. Now the government must concentrate on cutting spending until we have a small surplus every year. This will have to be done gradually since much as we would like to we cannot fire 20000 bureaucrats at once, we must do it by attrition since their only other job qualification is welfare recipient.
Time to get the population used to doing for them selves instead of demanding that the "government" must supply every little whim. At one time we put on dances and raffles and volunteered work to better our community. How much of that do you see now? In fact it is even against the law to run a community bingo without a license.**

 

[Machjo]

Unfortunately both tax cuts and increased spending were both necessary for the last few years. I don't like the spending increases at all but for a short period they helped keep us out of doo doo. Now the government must concentrate on cutting spending until we have a small surplus every year. This will have to be done gradually since much as we would like to we cannot fire 20000 bureaucrats at once, we must do it by attrition since their only other job qualification is welfare recipient.
Time to get the population used to doing for them selves instead of demanding that the "government" must supply every little whim. At one time we put on dances and raffles and volunteered work to better our community. How much of that do you see now? In fact it is even against the law to run a community bingo without a license.**

You don't lower taxes when you have a government debt to pay off. Also, increasing spending was not necessary to stimulate the economy. Printing money and using it to pay off the debt would have been another way to stimulate the economy. That way, we'd be introducing more money into the economy via money-lenders. This would also have brought interest rates down too. Any inflation caused by such printing could also have been compensated for after the recession by simply reducing government spending further.

 

[captain morgan]

You don't lower taxes when you have a government debt to pay off. Also, increasing spending was not necessary to stimulate the economy.

How would you propose to stimulate an economy in recession?

Printing money and using it to pay off the debt would have been another way to stimulate the economy. That way, we'd be introducing more money into the economy via money-lenders. This would also have brought interest rates down too. Any inflation caused by such printing could also have been compensated for after the recession by simply reducing government spending further.

Please tell me you're kidding..... You are kidding, right?

 

[Machjo]

Please tell me you're kidding..... You are kidding, right?

To stimulate the economy, all you have to do is introduce more money into circulation. If you print more money and use it to pay off the debt, you are in fact introducing more money into the economy. Now the question is whether the lenders will then spend that money. But even if they don't spend it and instead, seeing that the government would not need to borrow money anymore since it would be printing it, would lend it to the private sector. The reduced competition for money would thus push interest rates down thus encouraging borrowing.

So whether the money lenders spend the money or not, the stimulating effect is there. The Bank of Canada can also lower interest rates too.

 

[taxslave]

You don't lower taxes when you have a government debt to pay off. Also, increasing spending was not necessary to stimulate the economy. Printing money and using it to pay off the debt would have been another way to stimulate the economy. That way, we'd be introducing more money into the economy via money-lenders. This would also have brought interest rates down too. Any inflation caused by such printing could also have been compensated for after the recession by simply reducing government spending further.

You lower taxes when you are trying to encourage investment in the country. Particularly manufacturing jobs which tend to go where muscle is cheap. Normally I would agree with you but his was not a normal recession. Otherwise trimming the fat in government would be the proper move to cut spending. Problem with that is that the people in charge don't know the meaning of the word streamline and politicians are more concerned with reelection than doing their job.

 

[captain morgan]

To stimulate the economy, all you have to do is introduce more money into circulation. If you print more money and use it to pay off the debt, you are in fact introducing more money into the economy. Now the question is whether the lenders will then spend that money. But even if they don't spend it and instead, seeing that the government would not need to borrow money anymore since it would be printing it, would lend it to the private sector. The reduced competition for money would thus push interest rates down thus encouraging borrowing.

So whether the money lenders spend the money or not, the stimulating effect is there. The Bank of Canada can also lower interest rates too.

The Germans tried that and it didn't work out too well.

Fact is, the lenders will deflate the dollar making the cost of living rise significantly and you also open the door to foreign groups buying up Canadian resources, land, etc in buying lots of cheap Cdn dollars with their currency.

 

[Machjo]

The Germans tried that and it didn't work out too well.

Fact is, the lenders will deflate the dollar making the cost of living rise significantly and you also open the door to foreign groups buying up Canadian resources, land, etc in buying lots of cheap Cdn dollars with their currency.

That's why you'd need higher taxes too so that as soon as the economy picks up you can rake that money up as soon as inflation kicks in. Generally you won't have inflation until the economy starts to pick up and that's when you start to cut spending or raising taxes as necessary. Also, I'm talking about printing enough money to stimulate the economy, no more than that. Not Weimar-style.

 

[Cannuck]

If deficit spending is a must, it should be because of infrastructute programs.

 

[captain morgan]

That's why you'd need higher taxes too so that as soon as the economy picks up you can rake that money up as soon as inflation kicks in. Generally you won't have inflation until the economy starts to pick up and that's when you start to cut spending or raising taxes as necessary.

The base cost of living will skyrocket for the same reasons that it did in the German example, add in another tax and the locals won't be able to survive... You might succeed in generating a strong black market, but then again, you don't collect taxes from that sector.

Further, raising taxes will have a net effect of driving away investment dollars (both domestic and foreign) which in turn will prolong the recessed economic conditions.

Also, I'm talking about printing enough money to stimulate the economy, no more than that. Not Weimar-style.

How much is 'enough money'?... You don't know that amount until it is too late and the rest of the globe sees your currency as worthless.

 

[wulfie68]

That's why you'd need higher taxes too so that as soon as the economy picks up you can rake that money up as soon as inflation kicks in. Generally you won't have inflation until the economy starts to pick up and that's when you start to cut spending or raising taxes as necessary. Also, I'm talking about printing enough money to stimulate the economy, no more than that. Not Weimar-style.

There is a lot of tightrope walking that needs to be done by the Canadian government and their colleagues all over the world. Some people like to blame various parties or countries but the bottom line, whether its Obama and the Democrats in the US, Harper and the Conservatives here or any other government, we need non-partisan solutions, not apportioning of blame and partisan shenanigans. Its a balancing act when you raise taxes: if taxes are too high, the standard of living drops and consumer confidence follows it, slowing your economy further. Its another tenuous balance when you talk about printing money, because of the potential for your currency to be devalued by trading partners. And as much as we all love to talk about cutting spending, its yet another perilous path, as we strive to cut non-essential services more than others, while our definitions of essential are extremely subjective.

I don't envy any government and especially the finance ministers their task in the next couple years...

 

[JLM]

There is a lot of tightrope walking that needs to be done by the Canadian government and their colleagues all over the world. Some people like to blame various parties or countries but the bottom line, whether its Obama and the Democrats in the US, Harper and the Conservatives here or any other government, we need non-partisan solutions, not apportioniung of blame and partisan shenanigans. Its a balancing act when you raise taxes: if taxes are too high, the standard of living drops and consumer confidence follows it, slowing your economy further. Its another tenuous balance when you talk about printing money, because of the potential for your currency to be devalued by trading partners. And as much as we all love to talk about cutting spending, its yet another perilous path, as we strive to cut non-essential services more than others, while our definitions of essential are extremely subjective.

I don't envy any government and especially the finance ministers their task in the next couple years...

It doesn't really matter what you do you are going to piss someone off. Canada is really in pretty good shape. Most of those who REALLY want jobs have them. We bitch about taxes but we want services- we bitch about politicians but only 50% get out to vote. We bitch about the corporate entity not being taxed enough, but when their taxes are raised and they raise prices accordingly to recoup the money again we bitch. We bitch that the rich aren't taxed enough but when they shut down operations and lay people off we bitch again. We bitch that there are too many hungry people in the country but yet we don't bitch about all the mal nutritioned people who plug their faces at Big Mac's. Harper sure isn't perfect and when someone better shows up I'll vote for him but until then we should make the best of it and struggle along with Harper.

 

[Mowich]

Canada does not exist in isolation from the influences of other countries and as such is subject to the whims of other governments that simply can`t get their financial houses in order - no matter the reason behind that inability.

I think our government is doing well to stay on the course it is for now. I too would not like to be in the shoes of financial ministers who are trying to find their way out of this `recession` without doing harm to the economy and thus the lives of their people.