Canada in deficit... NOW

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Michael Watkins
Canada in deficit... NOW

 

Michael Watkins

Folks,

Please use the following if it helps your cause, as I believe we all share common cause in trying to expose truth, and specifically, in using truth to rid the country of Stephen Harper.

I am trying to get as wide a distribution as possible.

I analysed Ministry of Finance data this week and have put together a comprehensive article with charts and a spreadsheet and sources to back it
up which show

a) Canada is currently in operational deficit
b) the amounts are far larger than any other point in this decade

Harper has been hiding behind cleverly chosen words.

I think the chart speaks for itself.

[url=http://mikewatkins.ca/2008/10/08/harper-government-running-deficit-...]h...

If you find the conclusions make sense, please help distribute this as
broadly as possible.

Editorial note - Why this matters: Harper has been claiming that his management of the economy is sound. I believe he was banking on continued high energy prices and has cut Canada's revenue / fiscal capacity to the bone; now that the world is in turmoil, the real prospect is govt revenues will be down due to both the energy price slump and economic activity reduction; this coupled with tax cuts and other program spending (including on war) increases means there's no money left in the piggy bank to pay for *existing* programs.

Thus the very next words, post election, we'll hear from Steven Harper are "here's what I'm cutting".

This won't trouble Harper at all if he wins, for it will allow him to further weaken the social safety net of our country and allow him to pursue his primary objective: further hobble future governments from ever enacting again any national program of significance.

If you agree with the data and conclusions please help by linking to the article link as broadly as possible.

Michael Watkins

ps, now that we rid my riding of David Emerson, I've set my sights a little higher.

remind remind's picture

Your link doesn't work, perhaps fix it so we can see? Moreover, can you quickly factor into your equations tomorrow, what are the implications of a huge previously undisclosed amount on military actions in Afghanistan, on our finances?

remind remind's picture
1springgarden

I believe this is THE breaking story and needs to be hammered from here to E-day. It will be unfortunate if this gets held off until post-election. Thanks for researching this, I'll do what I can to get the word out.

Mojoroad1

Michael,

I see where you are going with this and I have every reason to believe you.... The Finance Minister did it in Ontario and now he's most likely done it nationally.

What is your background?

[ 08 October 2008: Message edited by: Mojoroad1 ]

remind remind's picture

quote:


Originally posted by 1springgarden:
[b]I believe this is THE breaking story and needs to be hammered from here to E-day. [/b]

Yes it is, and Mansbridge actually alluded to this last night in the Harper interview, and Harper not very nicely brushed him off. It would be hoped that Mansbridge's research people look at this, as it will be a huge score for him on tonight's national.

quote:

[b] It will be unfortunate if this gets held off until post-election. Thanks for researching this, I'll do what I can to get the word out.[/b]

People need to send it to the news media, and ask them to get on it!

Mojoroad1

I just emailed the Canadian Centre for Policy Alternatives (and their big gun economist) to look at the numbers. Hope they do!

Michael Watkins

Folks, the full link is:

[url=http://mikewatkins.ca/2008/10/08/harper-government-running-deficit-now/]...

I have a follow up I'm working on which should put to rest that Harper was "leading" through this crisis.

Re the Mansbridge interview, there is a link to the video in the article and if you look betwen 9 - 10:30 minutes, also around 7, you can see Harper squirming. I thought Mansbridge had him but he didn't push hard enough.

Thanks for helping out.

M. Spector M. Spector's picture

Thanks, Michael!

[img]http://64.21.147.48/tv-20081008-011145.gif[/img]

[img]eek.gif" border="0[/img] [img]eek.gif" border="0[/img]

remind remind's picture

Have contacted all the national news media about this and asked them to investigate and cover it. Sent a note directly to Mansbridge applauding him for alluding to it last night and to go further tonight and expose that he was in fact correct and Harper was fudging the budget spending!

Michael Watkins

Thanks. I'm going to leave the front page of my site as is for a while to give it prominent display.

There's an email in the spreadsheet which media can use to contact me if they need to, although its pretty self explanaTORY.

Noise

Cheers Watkins... I'm spreading it around.

thorin_bane

MW I mentioned something a few weeks ago about this. The sell off of the spectrum to the tune of 4.1 Billion is the only reason they aren't in deficit TOTAL. Just like the last year of the Harris government, they sell off public assets to cook the books to make it look like they are in the black while operating in the red.

Michael Watkins

Thorin - in fact the auction was what got me to look at this, wondering how close Canada was on the edge, since 4B sounds like a lot of money, but when faced with $23 billion shortfall, it isn't.

The $4B, near as I can tell, is already on the government books - might be within the "budgetary balance".

If not, it will whittle down only slightly the $23B ($20B fiscal 09).

If I had to guess I think Harper and Flaherty cut things very close to the bone, expecting that rising energy tax revenue would keep them flush.

Imagine what incoming revenue will look like in the coming quarter or two... it would seem likely they have not planned for dramatically lower corporate taxation.

Jason J. W. Lis...

Excellent analysis! This could make things very interesting. [img]smile.gif" border="0[/img]

ceti ceti's picture

Holy crap, they are just like Republicans in their fiscal profligacy.

Jason J. W. Lis...

Any MSM pick-up?

This is damning for the Cons.

However, it puts the other parties in a difficult predicament, as a $20B operating deficit for Fiscal Year 2009 would foreclose some policy options for 2009-10 and beyond.

Ending the Afghan mission sooner than 2011 might save $250M a month, and killing subsidies to the tar sands might recoup $1.2B a year. I would guess there is another $2-3B a year in other relatively ineffective subsidies to big business, and maybe $1-2B a year in cost savings by streamlining programs and delivering existing programs more efficiently. That makes for $7-9B in possible savings.

Uncle John

In case we hadn't noticed, we are in an economic shitstorm worldwide.

With deflation of stock prices and the credit supply, any government would have to prime the pump.

Deficit is inevitable. Flaherty already mentioned $20 billion to keep the credit system afloat in this country, so perhaps that is the $20 billion we are talking about.

Cutting government expenditures during a time like this could trigger a much worse depression.

Canada has a great credit rating! Let's use it!

Doug

We probably aren't actually in deficit this year, but that's only going to be because of the $4 billion sale of wireless spectrum earlier in the year. Next year, however....

DrConway

This would be a great time for Jack Layton to hoist the fiscal responsibility people on their own petard and say if the budget must be balanced, then the NDP will raise taxes. On people making more than $250,000 a year. FDR did this in the 1930s. That's why the US [url=http://www.truthandpolitics.org/top-rates.php]highest marginal tax rate[/url] was raised to such high levels in the 1930s and 1940s.

If anyone here on babble dares tell me they know 3290503284302 people making $250k a year I'm going to laugh and ask which Conservative shill paid you to say that.

[ 09 October 2008: Message edited by: DrConway ]

Jason J. W. Lis...

Actually the $20B of liquidity would be provided by the Bank of Canada, not the Federal Government.

According to Mike's analysis, the Harper government appears to be running a negative cash flow year to date, when they should be running a positive cash flow year to date (with more positive months than negative months).

This is the first time in ten years the Federal Government has run a negative cash flow year to date (6 months in the fiscal year, 9 months into the calendar year). Harper/Flaherty are almost certainly cooking the books.

The savings opportunities that I identified should be just as palatable to an NDP stalwart as a Liberal stalwart. [img]smile.gif" border="0[/img]

thorin_bane

quote:


Originally posted by Doug:
[b]We probably aren't actually in deficit this year, but that's only going to be because of the $4 billion sale of wireless spectrum earlier in the year. Next year, however....[/b]

I think we are already in the gutter, but the spectrum is making it look good for july, wait till the august numbers come out 1 week after the election. Odds are september and october are going to look really interesting that's foresure. As we only have 2.9 so far this year in surplus I expect that to be wiped out in august alone.

Parkdale High Park

Since the NDP plan on spending about 40 billion more than the Conservatives, are you sure it is a good idea to trumpet the fact that Canada is in deficit and, if enacted, Layton's plans would put Canada much deeper in deficit?

remind remind's picture

quote:


Originally posted by Parkdale High Park:
[b]Since the NDP plan on spending about 40 billion more than the Conservatives, are you sure it is a good idea to trumpet the fact that Canada is in deficit and, if enacted, Layton's plans would put Canada much deeper in deficit?[/b]

No actually they are not, they are planning on spending the 40 billion Harper is planning on giving the corporations as tax cuts. As well, as saving several billion by pulling our military out of Afghanistan.

JimWaterloo

How come no one is picking up on this? I have tried to spread the word.

Doug

quote:


Originally posted by Parkdale High Park:
[b]Since the NDP plan on spending about 40 billion more than the Conservatives, are you sure it is a good idea to trumpet the fact that Canada is in deficit and, if enacted, Layton's plans would put Canada much deeper in deficit?[/b]

Only as a result of canceling some planned tax cuts. There is also a commitment to no deficit so that makes that spending conditional on the revenue coming in to pay for it.

1springgarden

quote:


Originally posted by JimWaterloo:
[b]How come no one is picking up on this? I have tried to spread the word.[/b]

Yeah, there was [url=http://www.theglobeandmail.com/servlet/story/RTGAM.20081008.wflaherty100... article [/url]in the Globe and Mail where Flaherty said "No deficits on his watch" and the comments from readers accusing him of lying were just brutal. I was sure the Cons were going to be accused by the other parties of mismanaging the country back into deficit through tax cuts and war spending, but neither Layton nor Dion have managed to make the "lost the surplus" case stick to Harper.

Canadians should not have to endure program cuts to pay for militarism, corporate tax cuts and the "grey shift" of cutting 2 cents of tax off every litre of diesel fuel. Because that appears to be the coming Conservative agenda as presented this campaign.

JimWaterloo

Did anyone check the numbers from his source?

Michael Watkins

The numbers are correct.

I did some further checking; 10 billion of the 20.3 was "planned" as of the prior year - it represents a shifting of borrowing from three large crown corporations directly to the Finance department, essentially moving the debt from a crown corp to the federal government. Reason given: saves interest costs due to lower Federal rate, adding up to some number of millions. Accepting that at face value, this 10B is something of a wash.

The rest of it is real and still represents an unusually high amount of borrowing for the first four months of the fiscal year - the most in this decade but not by as much as a margin over 2005.

One media outlet picked it up... barely - the Tyee.

In conjunction with my primary thesis - Harper is actively working on stripping the federal government of its primary tool of power - taxation and spending - running a deficit fits right like a glove, because once he "announces" the deficit, he can then announce a combo of cuts, and a law that makes the cuts, well, law. I bet he couples the cuts with a tax cut too. I.e. every dollar of cut made by the Federal government will be coupled with 25 cents (or 1 dollar or whatever) in tax cuts to Canadians. He'll find an improbable way to sell it.

DrConway

The feds should do what the BC Liberals kept from the NDP - the trick of using "taxpayer-supported debt" to lower the perceived deficit.

Oh, snarky, you say? Why yes. [img]tongue.gif" border="0[/img]

2 ponies

Okay, accumulating new debt doesn't mean you have a deficit unless it's operating debt used to cover an excess of expenditures over revenue. If the debt is used on capital expenditures it's not an operating expenditure. E.g. when someone mortgages a home we don't say that they are in a deficit position unless the value of the home they have mortgaged is less than the amount of debt owed on the home; this is a capital deficit. If you owe $100 on your home but it's only worth $90, you have negative equity of ($10) and ergo a capital deficit, not an operating deficit. The bank would call this a negative net worth – but that doesn't mean that you can't cover all of your annual expenditures with your annual income (an operating deficit); an operating deficit is when expenses exceed revenues.

If you owe $90 on your home and it's assessed value is $100 – you have $10 in capital equity. You have debt, but you're not in an operating deficit position. If you have to borrow money to make the mortgage payment – well that's a problem.

Selling spectrum shouldn't be treated as a revenue; it's a gain because what was sold is a capital asset. If it's been categorized as an operating revenue than that's erroneous – but someone should post a link indicating the proof. The cash from the sale will show up on a cash flow statement under investing activities, that doesn't mean the government is including the funds as operative revenue.

The financial source/requirement figures are essentially a cash flow statement – which combines operating cash, investing cash and financing cash. E.g. if you receive cash from selling capital assets it still shows up in the cash flow statement (under investing activities), if you receive cash from issuing t-bills then it shows up as a source of cash as well (under financing activities). Conversely, purchasing capital assets will show up as a use of cash (under investing activities) and paying off t-bills will show up as a use of cash.

Revenues and expenses are not the same as source/requirement figures. They are not. The so-called 20 billion dollar operating deficit is not an operating deficit – it means that the feds used $20 billion more cash then they've received so far. That is not an operating deficit. It's the same as using your savings from last year this year. Let's say you have $100 in savings from last year and your income this year is $50. If you spend $50 on living expenses and entertainment this year, you break even. If you use $25 of your $100 savings from last year, you have used total cash of $75 ($50 current year income plus $25 savings). Now your use of cash exceeds current year cash but that is not an operating deficit and it's not the same thing as using your credit card to spend an extra $25 on eating out and entertainment; in which case your operating deficit would be ($25).

If you want to buy a car for $25 in the same year and you take out a loan for $10 and pay $15 cash for the car if will affect your cash flow this way:

Use of cash: ($25) new car purchased (investing activity)
Source of cash: $10 loan (financing activity)
Change to cash balance: ($15) – your cash balance decreases by $15.

That is not an operating deficit even if you dip into your savings for the $15 cash used in the purchase.

Another example using a household: If I am expecting an annual income of $120 broken up over 12 periods, I will receive $10 per period. I need access to that money now and typically have an annual surplus of $10 (which I put into a savings account) – so in a typical year I have $120 in income, $110 in expenditures and $10 in savings/$10 surplus. I've maintained this budget for 10 years, so I have $100 in the bank which is the same as $100 in equity and a $100 “cumulative operating surplus.”

This year I decide that I want some of my money sooner to take advantage of a sale that ends next week. So I borrow the money short term via a short-term demand loan (note payable) for $10 with $1 (10%) interest; this interest rate is lower than the interest I'm generating in my savings, so it makes more sense to borrow the money. This sale is on goods & services I normally purchase any how that I normally pay $15 for in a year. So by borrowing money now, I can save $4 even after paying interest – I will pay $10 for the goods plus $1 interest versus $15 normally. This is not a deficit just because I borrowed the money.

It will be a deficit if I lose my job in month 11 and make say $20 less than I anticipated. Now I've only earned $100 but spent $111 – my usual annual expenses plus $1 in interest expense. So I've overspent by $11 for the year and have an operating deficit of ($11). I also “erode” my equity by $11 and instead of $100 in equity (savings), I now have $89 in total equity because I had an operating deficit.

This is not semantics, it's accounting and it's perfectly legitimate; this isn't Enron & WorldCom part 2. The NDP, the Liberals & the Greens would all do the same thing. And Harper was probably nervous because he's not an accountant and can't explain the difference between accruals, operating expenditures, capital investments, how sources and uses of cash are classified versus how balance sheets are presented, etc. How are you supposed to explain this in like 30 seconds to anyone who isn't very familiar with accounting?

None of this means that we won't go into deficit this year; I'm just contesting that we already are. And I'm not disputing that Harper has plans to cut spending (even though he announced something around $8.5 billion in pork barrel spending before the election according to the Canadian Taxpayers Federation); he probably does plan to make cuts to areas he loathes like the arts, social spending, etc – I'm not disputing that.

Sorry folks, but you are waving around a red herring with this operating deficit discussion and that's why the Liberals or NDP haven't jumped on it.

janfromthebruce

quote:


Originally posted by Michael Watkins:
[b]The numbers are correct.

I did some further checking; 10 billion of the 20.3 was "planned" as of the prior year - it represents a shifting of borrowing from three large crown corporations directly to the Finance department, essentially moving the debt from a crown corp to the federal government. Reason given: saves interest costs due to lower Federal rate, adding up to some number of millions. Accepting that at face value, this 10B is something of a wash.

The rest of it is real and still represents an unusually high amount of borrowing for the first four months of the fiscal year - the most in this decade but not by as much as a margin over 2005.

One media outlet picked it up... barely - the Tyee.

In conjunction with my primary thesis - Harper is actively working on stripping the federal government of its primary tool of power - taxation and spending - running a deficit fits right like a glove, because once he "announces" the deficit, he can then announce a combo of cuts, and a law that makes the cuts, well, law. I bet he couples the cuts with a tax cut too. I.e. every dollar of cut made by the Federal government will be coupled with 25 cents (or 1 dollar or whatever) in tax cuts to Canadians. He'll find an improbable way to sell it.[/b]


Gee Mike, that sounds like the Chretien/Martin years? Don't you remember when the progressive libs came to power in 1993, on a very progressive mandate, continued the cuts to provinces, huge cuts to social programs, changed UI to EI and ensured that most folks couldn't collect but kept that money coming in as their slush fund. Oh, my, those libs, how could they act so right-wing. How could they cut women's programs and secretariate to shut them up? I just don't know.
Mike, what do you think about all that?

DrConway

Another thing. The government is basically run on the cash basis of accounting because a lot of what the government does is on a year by year basis with not much in the way of long-term asset buildup or drawdown.

Consider health care and education as an example; you can't realistically do those on an accrual basis with any kind of accuracy. How do you capitalize the human capital built up by healthy citizens and well-educated ones, to boot? You can't, and the government doesn't even try. It just books the expense for any given year in that year and calls it a day.

This is heretical to the "run-it-like-a-business" school, but I believe the government should continue to run on the cash basis of accounting because of the inherent lack of a good method for accrual. How do you accrue the cost of a working law enforcement system, most of which is an operating expense (payroll)? Or national defence, most of whose assets are specific to the military and do not find ready civilian use ("hardened" computers are basically novelties to the civilian sector, for example, except in restricted cases like power plants or other mission-critical places where an EMP or the presence of radioactivity must be guarded against)?

All the above having been said I love how Harper is now reluctantly admitting to the need for deficit when he and his self-righteous gang of total assholes were caterwauling and screaming about the SLASH THE DEFICIT SLASH EVERYTHING NOW thing back in the 1990s when they didn't give a good goddamn about the damage it would do to Canadian society to hack through social safety net spending.

Oh no, they were full of the macho can-do damn-the-consequences attitude. Never mind that the impact is disproportionately felt on [i]women[/i] when the social safety net frays. But then some men have always been willing to disregard the needs of women when convenient.

enemy_of_capital

honestly I see no reason for a deficit. we should balance the budget with a few choice nationalizations of major industry and the banks. followed by a crippling tax on the super rich (the few 2 trillionaires and 19 billionaires who actually reside in Canadas borders).

2 ponies

I’m not adverse to putting a higher tax on the super rich, but they’ll just move their assets elsewhere and change their residency. Plenty of billionaires have moved their assets & residency from one country to another in order to avoid paying tax. If they are really calculating about it, they don’t even have to move – they can just hire a suit who knows how to legally set up various blind trusts, postal boxes in tax havens and minimize taxes payable! And there are no trillionaires in Canada – how can you honestly say such a thing given that our national GDP is only about $1.25 trillion dollars? There are no trillionaires any where in the world or in recorded history, even after adjusting for inflation! Even if you go on the basis of the largest companies on the planet – there aren’t any with assets of one trillion dollars – Exxon-Mobil is the largest with somewhere in the nieghbourhood of $400 billion. The largest sovereign-wealth fund hasn’t even hit one trillion dollars yet – it’s held by the Abu Dabai Emirate of the UAE and it’s around $800 billion! My point is, there are some pretty strange notions around here with regards to how assets are valued, money is recorded, wealth is recorded, what money is, etc.

I don’t disagree with the general premise of this thread; I don’t think Canada should run deficits – if Harper hadn’t made so many tax cuts, there would be more revenue. I do not agree with MW’s analysis of the so-called deficit reported by federal Finance in the first quarter of the year; it’s not a deficit, the feds have had a decrease in the amount of cash on hand in the first quarter, which is not a deficit. The federal government moved to an accrual basis of accounting somewhere around 2002 if I recall correctly. There is no reason why governments can’t & shouldn’t use accrual accounting. It’s not just for business – the point of accruals is to adhere to matching principles: E.g. if you have expenses that are used to generate revenue, you record it around the same time that the revenue is generated. If I use my car to deliver pizzas, the depreciation expense, fuel expense & maintenance expense associated with those deliveries is journalized against the revenue I receive in the same period. That’s accrual accounting. Accounting on a cash basis makes no sense if you have debts to pay, mortgages, receivables, etc. It can be done, but it’s a pretty poor way to account for revenues, expenditures, asset acquisitions, gains, losses, etc if you’re dealing with more than somewhere around $50,000 in gross revenues per year and if you have debts on the books.

And you can account for human capital – it’s called goodwill. It’s hard to value though – that’s why accountants stay away from it because no one has come up with an objective means to value human capital. Even intellectual capital is difficult to value; assets such as trade marks, patents, etc. The value of intellectual capital is typically based on a sale; e.g. if you sell a patent to another company or individual, you can set it’s value on the books as the price you paid for it and then amortize it over the remaining life. How do you objectively value human capital? Plenty of people will associate such a concept with putting a value on human life – which irritates most people. The moment you start valuing something subjectively like the value of healthy, well-educated citizens, you’re basically speculating. And how is that any different than speculating in the capital markets, or real estate markets? The value of human capital (such as the mentioned health & education) is indirectly valued in a lot of ways; what’s the GDP of the country, what’s the per-capital GDP of the country, how much does the economy grow year after year, etc. Another possible method is to ask “How much did we spend on education and is there identifiable correlation between those expenditures and our economic growth?” You could do the same with health: “How much did we spend on healthcare and was there an improvement in overall health?” Again though, it’s pretty subjective and without a standard to use there’s not much point in doing it.

To stay on the point of the thread – the federal Finance department’s figures reported for April to June of 08/09 do not show an operating deficit. Do I think we’ll go into an operating deficit? I think there’s a much better than 50% chance. Do I think we could have avoided deficits? Yes.

Mojoroad1

Not being anywhere near an economist, I would have to say that 2 Ponies analysis is quite good. However where I disagree with him is what numbers are being withheld...for instance the "real" cost of the war, and whatever else they did to cook the books. The Finance minister has proven quite adept at this over the years....

just my 2 cents.

Tommy_Paine

quote:


I’m not adverse to putting a higher tax on the super rich, but they’ll just move their assets elsewhere and change their residency. Plenty of billionaires have moved their assets & residency from one country to another in order to avoid paying tax.

Well, let them go-- after they pay the leaving town tax.

This kind of helplessness really sells this country short. There is money to be made in Canada, on our terms. If some don't like those terms, others will.

No one is irreplaceable in this economy, particularly the rich. They in fact are probably the most replaceable element.

And, if we continue on this road of reducing corporate tax to nothing, what will the next demand be?

Prima noctae?

enemy_of_capital

quote:


honestly I see no reason for a deficit. we should balance the budget with a few choice nationalizations of major industry and the banks. followed by a crippling tax on the super rich (the few 2 trillionaires and 19 billionaires who actually reside in Canadas borders).

to clarify I wasnt trying to make my numbers in the brackets sound factual mor toung and cheeky I havent the slightes how many millionaires/trilionaires or bazillionaires there are. apologies if it rubbed anyone the wrong way. [img]tongue.gif" border="0[/img]

JimWaterloo

The federal government ran a $1.7-billion deficit in August, leaving it with an overall surplus for April to August of $1.2 billion, the Finance Department said Friday. Looks like you were right. The media chose not to pick up on this.

thorin_bane

I think they did include the spectrum, because they ran a deficit every month since march except july when they had the spectrum sale. And Flaherty still says we won't run a deficit this year, but hey the cons said they might next year. Must be nice to have the media just leave you alone when you LIE to the public during an election(hence why it was called before the august report could come out) then they let you go on and on as fiscally responsible despite that being proven false time and time again. It's OK they are cons they are allowed to run a deficit because they won't raise taxes, they will just destroy the safety net, every more in need during these times. So given we lost half the surplus in august only 8 months in, does ANYONE not lying think we will not run a deficit this year.

Oh BTW chrysler will lay off 25% of their white collar workforce. So much fun in windsor these days with already 10% unemployment, now they are actually worried because *gasp* managers are losing their jobs. No shit assholes, we the working slobs have been telling you the economy is in crisis for over a year down here, but hey it wasn't effecting them so they didn't put up a stink. Unless shareholders start to take the same kind of shitkicking they also won't care. Instead they will reward chrysler because they layed people off. It's a sick world. I actually am waiting to see people start jumping becaue of the stock meltdown as nothing they have done including corporate socialism has staunched the flow. It's like capitalism is a person who lost their arm in a thresher and yet thinks a couple of asprin and trying to pull the arm out with the other free hand will solve the problem.

NorthReport

Screw it, target the one percenters, and return a sembleance of fairness in Canada's taxation system.

 

It is time for the NDP to aim its guns squarely on the blossoming Canadian deficit.

 

 

Federal deficit hits $5 billion in June
Annual deficit on track to hit $50 billion

 

 

http://www.cbc.ca/money/story/2009/08/21/federal-deficit.html

Fidel

Canada is a kind of lebensraumesque preserve of natural wealth for corporate America to raid at will. We export untaxed wealth and fossil fuels. What we need to do is export old fossil fools in the two old line parties and become a country that saves money, and invests in Canadians and the future.

NorthReport

What, and upset Canada's one percenters.

Fidel

I think Canada must one of the most efficient stoogeocracies in the world. It was made legit in 2006 with just 22% of registered voter support for the bleu's and somewhere less than that for their running mates and supporting cast of stooges in the Liberal Party. We are gradually reducing ourselves to making nothing for export except what comes out of the ground and can be processed in the US and creating jobs there or wherever in the world US corporations and subsidiaries operate in low wage zones. Like the 1980's and 90's, Canadians are being setup again with enormous national debt loads which will provide the basis for shovelling more money to private banks so they can, in turn, continue to finance the foreign takeovers of valuable corporations and Canadian assets. With NAFTA the one percenters thought Canada would become a glorious 51st US state. Instead the country has become a Northern Puerto Rico with absentee corporate landlords and maybe a few polar bears.

Stephen Gordon

So what if the federal government is running a defict? We're in a recession. That's what happens.

Fidel

[url=http://www.comer.org/2004/2004b/connie.htm]Connie Fogal said:[/url]

Quote:
In 1975 our own Bank of Canada held about 22% of Canada's debt. By 1991 it held only 8% of our debt. By 2000, only 5%. Borrowing at market rates ranging from 6% to 18% (in the 80s) rather than at about 1% from our Bank of Canada.

 When the Liberals replaced the Conservatives in government in 1993, the debt was $408 billion. By the year 2000, the debt was $585 billion. By year 2004, the Liberals reduced the debt to $510 billion. To effect this reduction, the Liberals viciously slashed social program spending, and created surpluses which they applied against the debt. They starved the people to feed the banks.

It's like the head of a household saying some of us are going to quit our jobs, and we'll pay the bills with our debit and credit cards to prop up the banks and their business while everything else goes to seed. We can't afford the old line parties anymore. The banks are in control in the US, and they are here, too, with banksters instructing Count Iggy and the Liberals on when and when not to play the election game.

NorthReport

Stephen Gordon wrote:

So what if the federal government is running a defict? We're in a recession. That's what happens.

Hi Stephen,

You use these terms like they have some important significance.

Don't you think you had better have a chat with the Governor of the Bank of Canada though who said the resession was over. 

I suppose where the confusion lies is that recession, unemployment, deficit, surplus, employment, growth, etc. in your world seen to have some significance.

In my world these are just buzz words used to manipulate the little guy. They are meaningless.

Since Reagan, and probably before, the little guy has been so badly hosed, and the gap between the rich and the poor has grown to obscene proportions.

Wake me up whenever addressing that issue becomes a prioirty for a Conservative or Liberal government. 

Fidel

Recessions are a time when compound interest works magic for banks and the creditor class. The debt driven monetary system is a modern form of slavery.

NorthReport

You got it Fidel. For a moment there I thought they might have fooled ya.   :) 

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