Bush's Fiscal Success

[Q Classic]

Originally posted by Sava
Wow. Put down the Kool-Aid man.

Why should he put the Kool-Aid down at all? Sounds like it's some ****in' major killer awesominess ****.

I want some too.

(Not that I particularly disagree or agree with the number. Really, it's just tl;dr for me at the moment.)

[Vanguard]

All the Administration and Congress have done in this "fiscal success" is to take 30% of Federal spending off budget and claim that they have reduced the deficit. In reality, the deficit is up.

I see no reason why lying shamelessly about the budget numbers should be regarded as worthy of praise.

[RGBVideo]

I see no reason why lying shamelessly about the budget numbers should be regarded as worthy of praise.

Bribes make conservatives loyal -Boris Godunov

DanS is a cheerleader, not a discussor.

[MrFun]

Originally posted by DanS

As for the tax cuts, I think they made a lot of sense and they should have been done several years ealier by Clinton.

The upper-class do not need any tax cuts.

[Dinner]

Originally posted by VJ

Bribes make conservatives loyal -Boris Godunov

DanS is a cheerleader, not a discussor.

QFT.

[Vanguard]

Err, sorry, 30% of Federal spending, not 3%. Corrected in previous post.

[Kidlicious]

Originally posted by Flubber


Unlikely that Canada will follow the US economy. While a US slump hurts us , it would require slumps in a couple of major markets for our commodities before Canada really starts to hurt. Even then, it would take a major crash to slow oilsands development . . . a recession of a year or two would be unlikely to slow it at all unless the long-term forecasted oil price crashes as well.

You don't think a economic crash in the US would cause the price of oil to crash?

[Kidlicious]

Originally posted by St Leo
[q] Originally posted by DanS
Bernanke should have made a major hike in the interest rates to prevent a hard landing for your economy, but he's playing electoral politics for the Republicans and decided to actually sit on his thumbs instead of raising it by even a measily quarter of a percent. So, bon voyage. One hopes Canada does not follow your death spiral.

nothing causes hard landings like big hikes in interest rates when the economy is barely holding on.

[Kidlicious]

Originally posted by Vanguard
Simply borrowing 5% of its economic output per year results in the US increasing its GDP number by (give or take) 5%. Since US debt is deemed to be extremely secure, when it borrows, it does not take money out of the economy, it simply creates it.

So when the US borrows money, the GDP figure goes up, regardless of what else is happening in the actual economy. It doesn't matter if if manufacturing is collapsing and the trade deficit is out of control. So long as you can continue to increase your real debt, everything looks good. Just like it did at Enron.

But once we can no longer increase our debt as a fraction of GDP, everything will instantly look very bad indeed.

You need to study some Public Finance.

[Flubber]

Originally posted by Kidicious


You don't think a economic crash in the US would cause the price of oil to crash?

Short term-- of course but my point is that much of Canadian oil development is oilsands which has much longer time windows-- a one or two year US crash would not slow those developments at all unless and until the long term ( say 20 year) average price for oil went down a LOT. Kid we have covered this before-- in doing projects, the price today doesn't matter at all-- what is of concern is the price when production starts and the average price for the 20-30 years thereafer.

As I understand it, most oilsands need oil prices between $30-$45 in order to be developed. Since prices are at 70+. again we have a lot of breathing room there.


So a year to three of a typical US recession matters not much at all. Actually a little bit of a slowing might be good so that infrastructure can catch up. The Alberta economy has frankly been a little too hot and a year or two of slowdowns might let the builders catch up with the population.

THats the benefits of surpluses-- If we hit a downturn, its not so bad

[Kidlicious]

Flubber,

I don't think the development of oil production makes your economy immune to economic contraction. How many jobs are we talking about compared to the entire economy?

[Flubber]

Originally posted by Kidicious
Flubber,

I don't think the development of oil production makes your economy immune to economic contraction. How many jobs are we talking about compared to the entire economy?

Immune?? never--- but don't assume we are locked as closely with the US as we once were. Canada has seen pretty consistent growth and federal surpluses for the last 5 years. Those were not all boom years for the US IIRC.

But the oil portion of the economy gets badly hurt ONLY if the downturn is enough to CRASH oil prices. While royalties, profits and taxes all drop if oil went down 20 bucks a barrell that is still a very profitable level and I don't think activity slows at all since I don't believe anyone is carrying super-high prices in their decision making projections for long term projects. A world downturn in the short run may even help some of these projects since lower prices on steel, concrete and labour will reduce the massive upfront capital costs . .

The pain from a US downturn would mainly be felt in central Canada where the industrial base is more tiesd to the US market.


Canada always feels SOME pain when the US has a downturn. ITs impossible not to have this happen as you are our largest market. But starting as we are with a large surplus, we are probably in decent position to weather such storms .


Oh and factors somewhat extrameous to general economic performance can have a big impact. If the US has a cold winter natural gas prices will jump and Canada will rake in Billions more even in a fairly bad US recession. Mild winter and Canadian petroleum industry does poorly on natural gas even if the US booms. ( Home heating is such a huge factor that it overshadows modest changes in industrial uses). Natural gas prices are currently relatively modest and this element is often lost since people focus more on the more visible oil price. If oil prices dropped 10 bucks but natural gas got even close to its 3 year high, it would be a very very very good year in the petroleum patch

[Flubber]

oh and I don't know how they calculate their numbers but the Canadian Association of Petroelum Producers estimates

Direct and Indirect Employment 365,000
Total Employment Impact 500,000.

Again I don't know how they calculated these numbers but they do not surprise me. Maybe I am biased since I live in Calgary but when you regularly see projects looking for literally thousands of tradesmen and 60,000 people living in the oilsands town of Fort MacMurray and thousands more transported back and forth, the massive impact is obvious.


So a world CRASH is crushing but recessions or minor busts for a country or two should be business as usual

[Kontiki]

Flubber, you can be guilty of taking too myopic a view of the Canadian economy. Alberta has a different structure than much of the rest of the country, and as large as the oil production is, remember that it is utterly dwarfed by Ontario and Quebec manufacturing and services, which are very much connected to the US.

[DanS]

Originally posted by VJ

Bribes make conservatives loyal -Boris Godunov

DanS is a cheerleader, not a discussor.

Correction: I'm not a conservative.