The Canadian Federal Election will probably be October 14th

[Flubber]

Also I have seen some people trying to make hay out of the idea that Harper is misgoverning us into a deficit. I have several comments around that

1. Its called the business cycle people!!-- periods of expansion and contraction of the economy-- With no major policy changes a government should probably plan to have small to moderate surpluses in the good times and small deficits in the bad ones-- does anyone contest that the US and world economies are in a bad place right now ??

2. people assume that a surplus is a good thing-- I don't necessarily agree. Years and years of big surpluses mean that the government --through taxation -- was extracting more from the economy that was necessary to provide the services they provided (Whether the level of services was appropriate and whether it was good value for the tax dollar spent is open to question whatever the fiscal bottom line)

3. So a deficit for a short period to me is not that alarming at all. What would be alarming is a knee-jerk increase in taxation or reduction in services in response. I would hope that both are determined with a much longer view in mind than the next year or two ( although I have frequently doubted it --- under governments of every stripe).

4. Long term or continuing deficits and my tune would change.

Personally I don't see Harper as being any more responsble for any impending red ink than her was for the surpluses in previous years. He has an impact but much of it is determined by macroeconomic factors over which he has little control.

I would just like some political leader to get up and say -- " I am happy that our budget is balanced "-- Its not a bad thing-- honest

[Ben Kenobi]

I'd agree with you except for the fact that spending has increase 8 percent every year, far outpacing inflation. The conservatives were warned about making hay while the sun shines, and because they spent so much, they are having difficulties now.

I agree with you about taxation, but the conservatives are responsible for 8 percent increases in spending. Had they not increased spending at all and they still were in a deficit, they would have a case that the reason they are in the red is because of economic factors outside of their control. As it is, if they had held spending to below inflation levels, there wouldn't be a problem now.

[Asher]

The only problem with that argument is the simple fact is that the government is not in the red. Minor quibble to an otherwise excellently researched post, King Ben.

http://www.reuters.com/article/marketsNews/idUSOTW00013220080915

Canada on track for another budget surplus-Harper

OTTAWA, Sept 15 (Reuters) - Canada is not at risk of falling into a federal budget deficit despite a sharper than expected economic slowdown, Prime Minister Stephen Harper said on Monday.

Harper told reporters that revenues have continued to climb, allowing the government to remain on track so far in the 2008-09 fiscal year to post a 12th consecutive budget surplus.

Ottawa expects a surplus this fiscal year of C$2.3 billion ($2.1 billion).

($1=$1.07 Canadian) (Reporting by David Ljunggren; Writing by Louise Egan; Editing by Peter Galloway)

[Ben Kenobi]

The only problem with that argument is the simple fact is that the government is not in the red.

Where did I say that the government was in the red? You need to read my post again.

I said the government was having difficulties.

I also said that in the hypothetical situation if the government was in the red and they had not increased spending, then they could blame economic conditions for their plight.

Minor quibble to an otherwise excellently researched post, King Ben.

Perhaps a liberal arts degree would improve your comprehension.

[notyoueither]

Didn't you?

Had they not increased spending at all and they still were in a deficit, they would have a case that the reason they are in the red is because of economic factors outside of their control. As it is, if they had held spending to below inflation levels, there wouldn't be a problem now.

What problem other than the one that the Liberal campaign planners want us to think there is?

Incidentally, good campaigning by the Liberals. This issue capitalises on unease in Ontario and could well be used to stem the tide of momentum carrying them down.

[Ninot]

A conservative called my house the other day. I was uncooperative to her questions. If they want my vote, they have to come to my door, not just this telemarketing ****!

[Victor Galis]

Originally posted by Ninot
A conservative called my house the other day. I was uncooperative to her questions. If they want my vote, they have to come to my door, not just this telemarketing ****!

Just vote for Marc Garneau imo.

[Ben Kenobi]

That was discussing the hypothetical situation where they were in deficit and they hadn't spent a penny over inflation. Then they could claim that economic factors were responsible for their deficit.

As it is, all I said is that they were having trouble making ends meet, which is evidence enough.

The surplus is only about 2 billion compared with much larger ones under the Liberals.

What problem other than the one that the Liberal campaign planners want us to think there is?

The problem is the same one that was anticipated a year ago with the high spending under the conservatives.

Incidentally, good campaigning by the Liberals. This issue capitalises on unease in Ontario and could well be used to stem the tide of momentum carrying them down.

Who says Dion believes deficits are a bad thing?

[notyoueither]

Originally posted by Ben Kenobi
That was discussing the hypothetical situation where they were in deficit and they hadn't spent a penny over inflation. Then they could claim that economic factors were responsible for their deficit.

As it is, all I said is that they were having trouble making ends meet, which is evidence enough.

The surplus is only about 2 billion compared with much larger ones under the Liberals.

See Flubber's post above.

Why should the government run continual, larger than should be expected surpluses? At what point do Canadians demand their money back? It is our cash, isn't it?

The problem is the same one that was anticipated a year ago with the high spending under the conservatives.

What problem is it when the government will likely still be in surplus, even after the meltdowns in financial markets?

Again, what problem? Other than the one Dion desperately hopes that people accept exists?

A problem, I might add, that was created in a minority parliament that the Liberals did more than their fair share to prolong. A minority parliament that lasted longer than any other had before, and one that came to an end at the request of the PM, and not the direct actions of the opposition when they voted on budgets.

Again, what problem?

[Asher]

Originally posted by Victor Galis


Just vote for Marc Garneau imo.

Marc is a cute name -- is he cute?

[Flubber]

Originally posted by Ben Kenobi
I'd agree with you except for the fact that spending has increase 8 percent every year, far outpacing inflation. The conservatives were warned about making hay while the sun shines, and because they spent so much, they are having difficulties now.

Ben fair comment but I re-iterate mine

Whether the level of services was appropriate and whether it was good value for the tax dollar spent is open to question whatever the fiscal bottom line


An 8% increase ? The assessment of this should be the same regardless of the fiscal situation in a given year. That level of increase can be wasteful even though we enjoy a huge surplus and it could be good even necessary spending in a year of deficit (bad economic year requires more federal fundsetc etc)

To me there are two separate questions-- There are far more more than two but two will do for now for this post

1. Is it necessarily bad to have a government deficit? My answer is no- although I do not want continuing of massive dificits.

2. Is the level of government spending and program provision at an appropriate level? THat is largely an ideological question sicne some would say that the federal government is involved in far too much while others might say far too little. I suspect a majority would be in the middle-- generally ok with the level of government spending while bemoaning the waste or perceived idiocy of certain specific programs on one hand and calling for government funds for other programs on the other hand.

[Kidlicious]

Originally posted by Ben Kenobi
The surplus is only about 2 billion compared with much larger ones under the Liberals.

Are you saying you think a bigger surplus is better than a smaller one?

[Flubber]

I saw a Stephen Harper commercial last night. He looked friendly and "nice" in his sweater and he said all sorts of comforting things about putting criminals in jail. I liked him

I saw a Jack Layton commercial last night. He also seemed like a "nice" guy that really does want to "fight for me".

I heard on the news that Elizabeth May is saying stuff about protecting our environment. I like that.

I saw a Stefan Dion commercial last night. He told me that he wants to take money away from me and give it to other people and somehow this is green. He confused me.

I guess I will have to watch the debate but frankly a 5 way debate doesn't sound like much at all of a debate to me

[Ben Kenobi]

Why should the government run continual, larger than should be expected surpluses? At what point do Canadians demand their money back? It is our cash, isn't it?

All else considered equal, a larger surplus is better then a smaller one. Much better. If taxation and spending doesn't change, a larger surplus is way better then a smaller one.

I would rather see lower taxes and a lower surplus rather then higher taxes and a higher surplus though.

On the contrary, having unchanged taxation levels higher spending and a lower surplus is worse then unchanged taxation, lower spending a higher surplus.

What problem is it when the government will likely still be in surplus, even after the meltdowns in financial markets?

Yes, it's a big problem! If they cut taxes and gave us our money back that would be better, but that's not the case. They've eliminated the surplus through spending. Rather then getting your money back, Harper is spending it for you.

A problem, I might add, that was created in a minority parliament that the Liberals did more than their fair share to prolong. A minority parliament that lasted longer than any other had before, and one that came to an end at the request of the PM, and not the direct actions of the opposition when they voted on budgets.

Just because the Liberals would be worse, doesn't excuse the conservatives for profligacy.

Again, what problem?

A surplus can be applied to debt repayment to lower the overall taxation levels of Canadians. Spending the surplus does nothing to improve our overall fiscal situation.

[Ben Kenobi]

An 8% increase ? The assessment of this should be the same regardless of the fiscal situation in a given year.

I agree. I don't see the justification for an 8 percent increase in the size of the government when inflation only went up 3 or 4 percent. WRT to your recession expectations, times were good. If you don't need to spend to get out of a recession, then it's important to save up what you can so that when the economy sours you have a better position then you would be otherwise.

1. Is it necessarily bad to have a government deficit? My answer is no- although I do not want continuing of massive dificits.

War and recession would be good examples of cases where a deficit would be warranted. Neither of which applies to the 8 percent increase in government spending at a boom time.

2. Is the level of government spending and program provision at an appropriate level? THat is largely an ideological question sicne some would say that the federal government is involved in far too much while others might say far too little. I suspect a majority would be in the middle-- generally ok with the level of government spending while bemoaning the waste or perceived idiocy of certain specific programs on one hand and calling for government funds for other programs on the other hand.

I'd like to see a weaker federal government, rather then a stronger one, and unlike the BQ a weaker provincial government. Our system at present is unsustainable and we will have to face very difficult choices over the next 20 years.