Bush's Fiscal Success

[Dinner]

Oil is a net positive for Canada and is vital to places like Alberta but as a percentage of the total Canadian economy it is likely quite small.

[MrFun]

Originally posted by DanS


Correction: I'm not a conservative.

You're such a liar.

[Flubber]

Originally posted by 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.

Probably the reason I said

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

If the CAPP numbers are right and there are 365,000 direct jobs, it may be beaten by a few industries but it is "dwarfed" by none of then. Round that down to 300,000 and approximate our pop at 30 million and we roughly have 1 in 100 Canadians working in the industry. The only way any category "dwarfs" that is if you start saying things like " manufacturing". Heck "Services " employs 3/4 of Canadians according to the government of Canada but I am sure that the CAPP stats counts the oil tanker truck as oil industry too as well as the "manufacturing" of well heads casings, production of drilling fluids etc etc.

[Flubber]

Originally posted by Oerdin
Oil is a net positive for Canada and is vital to places like Alberta but as a percentage of the total Canadian economy it is likely quite small.

hmmmm

Canada
Here are some key facts about Canada’s upstream oil and natural gas industry:

Canada is the third-largest producer of natural gas and the ninth-largest producer of crude oil in the world.

The upstream sector is the largest single private sector investor in Canada.

In 2004, the oil and gas industry contributed an estimated $18 billion to government revenues in the form of royalty payments, bonus payments and income taxes.

Our crude oil and natural gas trade surplus contributed 56 per cent of Canada’s merchandise trade balance in 2004.

We produce 22% of North America’s crude oil and natural

http://www.capp.ca/default.asp?V_DOC_ID=603

The 2005 numbers cite 27 Billion in government revenuesa and investment of 40 Billion-- Thats over 1300 for every Canadian.

Is that small ? Perhaps -- what is required to be considered big ??

[Kontiki]

Originally posted by Flubber
If the CAPP numbers are right and there are 365,000 direct jobs, it may be beaten by a few industries but it is "dwarfed" by none of then.

No, dwarfed by many.

http://www.statcan.ca/english/freepub/13-010-XIE/2006001/tables/table09.htm

The aggregation for the energy sector is about $65.8 billion worth of our GDP. Compare to it to say Industrial Production at $254.6 billion, or Manufacturing at $184.9 billion. At total of $1.3 trillion, the energy sector represents 5% of the Canadian economy.

Or just consider the revenue numbers you brought up. $27 billion in government out of about $200 billion in total revenues.

Or if you want to go by employment numbers:

http://www40.statcan.ca/l01/cst01/labor10a.htm

Forestry, fishing, mining, oil and gas - 307,500
Construction - 1,023,200
Manufacturing - 2,215,300
Professional, scientific and technical services - 1,046,500
Health care and social assistance - 1,728,000
Finance, insurance, real estate and leasing - 994,200

[Kontiki]

The bottom line is that while the oil and gas industry is significant, it simply doesn't comprise a large enough portion of the Canadian economy to shield us from a US economic downturn. The economic engine of Canada - by leaps and bounds - is the Windsor-Montreal corridor, and it's very closely tied to the US.

[chequita guevara]

Originally posted by MichaeltheGreat


Whatever happened to that vision of a model of democracy for the Mideast, and a friendly, pro-American base for US influence and power projection?

That would be communist controled Kurdistan.

[chequita guevara]

Originally posted by DanS


Correction: I'm not a conservative.

You're a reactionary.

[RGBVideo]

I believe DanS has already shown enough calm pragmatism in OTF to prove that he isn't an ideologue of any sort. He's just a smart guy who values Apolyton as a community, gets his $$$ from stocks and likes to cheer the guy who gave him a tax cut on dividends.

[Flubber]

Originally posted by Kontiki


No, dwarfed by many.

I don't want to go into all the semantics because -- lets take "construction"-- There are 10s of thousands of people working construction in Alberta . Many are directly building oilsands projects , or office towers for oil companies etc etc -- BUt I guess thats not oil and gas

There are thousands of accountants and lawyers that work exclusively oil but I guess they are "services"

You are doing exactly the thing I asked you not to do -- I acknowledged that oil and gas industry canot beat "manufacturing" -- particular when you call building an oil rig--- manufacturing and not oil and gas .

Maybe its all nomenclature but when I think of the impact of an inductry like oil and gas, or auto or agriculture, I also consider all the necessary construction and manufacturing that does not occurr at all absent that base industry

[Flubber]

Originally posted by Kontiki
The bottom line is that while the oil and gas industry is significant, it simply doesn't comprise a large enough portion of the Canadian economy to shield us from a US economic downturn.

I never argued that it did -- alone-- Canada's is never immune to negative impacts from a US downturn. What I did and do argue is that a temporary US downturn would likely not slow the Canadian oil and gas development one little bit. Prices and demand would have to drop catastrophically to do that.

Thjis fuels the 90,000 people or so that move to Alberta every year ( saw that in newspaper reports-- don't have a source) and things like the record numbers of housing starts that of course is the construction industry and has NOTHING to do with oil, and gas

Canada's best protection against downturn is to be so far into surplus and to have so low unemployment that you simply weather the downturns and move on.

Originally posted by Kontiki
The economic engine of Canada - by leaps and bounds - is the Windsor-Montreal corridor, and it's very closely tied to the US.

I never denied and will not deny that the central Canada area has both a much larger population and a much larger economy than Alberta . Obvious fact. . . Things that hurt there will hurt the country as a whole.

But the engine? Arguably yes but the engine is what drives things ( not necessaarily the biggest piece of the car ) and right now much of the economic activity in Canada is being driven by Alberta's seeming insatiable demand for more and more and more workers. Its actually remarkeable to see so many unfilled jobs. The only bigger problem is finding enough places for them all to live.

The latest is the schoolbus companies can't fill positions so they are altering routes and school start times to compensate. Adc that to restaurants reducing hours and Tim Hortons advertising for workers on the radio as realities here.

[Vanguard]

Originally posted by Kidicious


You need to study some Public Finance.

Thanks for the advice. I'll get right on that!

But in the meantime, you'll have to be a little more specific. What exactly do you think is incorrect?

Do you think that Bonds are not a special class of money? Or do you think that increasing the supply of this type of money does not automatically increase the GDP statistic? Or is it that you believe that we can indefinitely continue to increase our real debt without consequences?

And naturally, if you have some other specific criticism, by all means make it.

[Kidlicious]

Originally posted by Vanguard
But in the meantime, you'll have to be a little more specific. What exactly do you think is incorrect?

It's incorrect to say that a deficit will create growth of the same size in the economy. That depends on the condition of the economy. It probably would be more or less.

Do you think that Bonds are not a special class of money?

No, they are special.

Or do you think that increasing the supply of this type of money does not automatically increase the GDP statistic?

It does not automatically increase GDP, although it should unless all of it crowds out other economic activity which would be a unique situation.

Or is it that you believe that we can indefinitely continue to increase our real debt without consequences?

I don't think the debt will be a big problem unless there is some really big changes in the way the economy works, and I usually try not to predict when those things will occur. It's usually safer to assume that the economy will continue to work the way that it does.

[Vanguard]

Originally posted by Kidicious
.....Bonds are a special class of money....

No, they are special.

Let's examine this.

What is money? Money consists of elaborately decorated pieces of paper printed by a government and exchanged by them for other money, based on the promise that those pieces of paper will be exchanged at some future date for (roughly) equal value.

Now what are bonds? Well, let's see. Bonds are elaborately decorated pieces of paper printed by a government and exchanged by them for money, based on the promise that those pieces of paper will be exchanged at some future date for (roughly) equal value. Oh..... and the government also pays a small amount of interest.

Now, the interest does make a difference. But fundamentally bonds and money are the same thing. All that the interest does is make bonds slightly more resistant to inflation than greenbacks. So when the US increases its debt, what it is really doing is printing money, money that does not, however, cause much inflation at this time.

What bonds do is push the threat of inflation into the future. When the future eventually arrives, you stand to get all the inflation you would have gotten over the previous twenty years, plus interest.

Of course, we have central banks in modern economies, and the threat of hyperinflation need not become a reality. By proper control of interest rates, the Fed could choose to turn it into a depression instead. Decisions, decisions.

I don't think the debt will be a big problem unless there is some really big changes in the way the economy works, and I usually try not to predict when those things will occur. It's usually safer to assume that the economy will continue to work the way that it does.

Lol. So far, so good! Wave to me as you pass the tenth floor.

[Kidlicious]

Originally posted by Vanguard
What bonds do is push the threat of inflation into the future. When the future eventually arrives, you stand to get all the inflation you would have gotten over the previous twenty years, plus interest.

Usually when bonds mature they are financed by new issues and no more liquidity is added into the economy and there is no inflationary effect. The exception to this is where there is a change in the level of foreign investment into the country.

There is a law that restricts printing money to pay off debt to 5% of GDP. I'm not saying that they would never go over that limit, but the only time that they would is when they would not be able to issue new debt.