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Liberal Minority Government 2019 - ????

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OldSolduer said:
That would mean telling (pick your favourite social programs) the piggy bank is bare. JT and his den of ne’er do wells aren’t good at saying “no” to those they like.
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The better question is which party would say the piggy bank is bare?

Even the CPC, if elected, says they would run deficits for a decade.
 
Yes debt is still debt. And yes, some times investors don't want to buy anymore. But even in the 1990's, when Federal debt servicing was at almost 50% of total tax revenues, and Eric Malling was doing his darnedest to scare us about a "debt-wall" on W5, the Canadian bonds were rated at AAA+ by rating agencies and with no indication that they were even planning on reviewing them - so the GoC had no trouble then whatsoever at selling them. Now, I oversimplified earlier to make a point, but the PBO is basically right on: At this time, with what is planned and the current forecasts, we are nowhere even remotely near any debt problem.

Now, that doesn't mean I like government spending - and those who know where I stand on fiscal responsibility know damn well that I do not like any uncalled for spending aimed at just giving goodies to groups/sub-groups left, right and centre, just to get vote (and that I hate Liberal profligacy). For me, there has to be a good reason to spend and it has to be on programs that can demonstrate that they are better off being run by government rather than the private sector.

All I am saying is, if even the PBO says that we are doing fine on debt at this point, perhaps harping on the national debt is not the best electoral strategy against the Trudeau government. Uselessly calling an election just because he doesn't like answering to Parliament, and by breaking the fixed date election at that to do so, that's a good point. Pointing out that we still have no clue how his government has been spending the multi-billions of dollars they have added to the budget, connecting that to the WE scandal, and extrapolating that it might be the real reason he wants a majority - as Parliament is currently trying to delve into all this and his members block and filibuster to death any attempt at getting info: That's a good one. Pointing out all the extra social welfare programs he is pulling out of his sleeve, never explaining where he will find the financing, and pointing out that he had no mandate from the people to do this: That's a good one to go on. There are many more, but the debt is not one such issue at this time to hang your election on for the opposition parties.
 
Oldgateboatdriver said:
Yes debt is still debt. And yes, some times investors don't want to buy anymore. But even in the 1990's, when Federal debt servicing was at almost 50% of total tax revenues, and Eric Malling was doing his darnedest to scare us about a "debt-wall" on W5, the Canadian bonds were rated at AAA+ by rating agencies and with no indication that they were even planning on reviewing them - so the GoC had no trouble then whatsoever at selling them. Now, I oversimplified earlier to make a point, but the PBO is basically right on: At this time, with what is planned and the current forecasts, we are nowhere even remotely near any debt problem.
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Correct.
Oldgateboatdriver said:
Now, that doesn't mean I like government spending - and those who know where I stand on fiscal responsibility know damn well that I do not like any uncalled for spending aimed at just giving goodies to groups/sub-groups left, right and centre, just to get vote (and that I hate Liberal profligacy). For me, there has to be a good reason to spend and it has to be on programs that can demonstrate that they are better off being run by government rather than the private sector.

All I am saying is, if even the PBO says that we are doing fine on debt at this point, perhaps harping on the national debt is not the best electoral strategy against the Trudeau government. Uselessly calling an election just because he doesn't like answering to Parliament, and by breaking the fixed date election at that to do so, that's a good point. Pointing out that we still have no clue how his government has been spending the multi-billions of dollars they have added to the budget, connecting that to the WE scandal, and extrapolating that it might be the real reason he wants a majority - as Parliament is currently trying to delve into all this and his members block and filibuster to death any attempt at getting info: That's a good one. Pointing out all the extra social welfare programs he is pulling out of his sleeve, never explaining where he will find the financing, and pointing out that he had no mandate from the people to do this: That's a good one to go on. There are many more, but the debt is not one such issue at this time to hang your election on for the opposition parties.
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Better than trying to trash the LPC would be provide a good platform of what they would do instead.

Its very easy to bash the government in power, but I think Canadians want a clear picture of what the alternative is before they toss those currently steering the ship.

Blame the left and their policies, but one cannot dispute that they have a lot of them, new ones, and they pretty clearly articulate them.

The right, IMHO, is far too focused on what they think the left is doing wrong and not focused enough on what they would do instead.
 
Oldgateboatdriver said:
Yes debt is still debt. And yes, some times investors don't want to buy anymore. But even in the 1990's, when Federal debt servicing was at almost 50% of total tax revenues, and Eric Malling was doing his darnedest to scare us about a "debt-wall" on W5, the Canadian bonds were rated at AAA+ by rating agencies and with no indication that they were even planning on reviewing them - so the GoC had no trouble then whatsoever at selling them. Now, I oversimplified earlier to make a point, but the PBO is basically right on: At this time, with what is planned and the current forecasts, we are nowhere even remotely near any debt problem.

Now, that doesn't mean I like government spending - and those who know where I stand on fiscal responsibility know damn well that I do not like any uncalled for spending aimed at just giving goodies to groups/sub-groups left, right and centre, just to get vote (and that I hate Liberal profligacy). For me, there has to be a good reason to spend and it has to be on programs that can demonstrate that they are better off being run by government rather than the private sector.

All I am saying is, if even the PBO says that we are doing fine on debt at this point, perhaps harping on the national debt is not the best electoral strategy against the Trudeau government. Uselessly calling an election just because he doesn't like answering to Parliament, and by breaking the fixed date election at that to do so, that's a good point. Pointing out that we still have no clue how his government has been spending the multi-billions of dollars they have added to the budget, connecting that to the WE scandal, and extrapolating that it might be the real reason he wants a majority - as Parliament is currently trying to delve into all this and his members block and filibuster to death any attempt at getting info: That's a good one. Pointing out all the extra social welfare programs he is pulling out of his sleeve, never explaining where he will find the financing, and pointing out that he had no mandate from the people to do this: That's a good one to go on. There are many more, but the debt is not one such issue at this time to hang your election on for the opposition parties.
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Not trying to pick a fight, and you have made several good points about understanding fiscal policies and their long term implications.

I am an anti-debt guy, especially when I have one vote in 338 ridings, and governments, of all stripes( I will concede that Chretien/Martin in the early nineties did well) consistently outdo themselves to buy votes. It is my, and your earnings, both current, and future, that they throw around. That pisses me off.
 
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I should add that, I have no real problem with governments floating bonds to build stuff: ports, railways, ships, power plants, airports, etc.

Where the trouble begins (and where we are heading) is when the bonds are being floated to pay for social programming, pensions and wages. That is where the spiral begins…
 
The funny part here is where everyone is looking at federal debt levels and not paying near enough attention at provincial levels.
 
Oldgateboatdriver said:
First of all, it's important to understand that Government borrowing is not like you or I going to the bank to get a loan (which, BTW is what China is doing to get control of Asian/African countries: China comes over and offers them a loan - to build an infrastructure that is useful to them and to China - with terms that give ownership of the infrastructure to China in case of default - then China barely uses it at the beginning so it becomes unsustainable, the Asian/African country defaults and China becomes the owner - at which time it uses it fully to its own benefit).

Government borrow by issuing bonds. At its most basic, a bond is a document that basically states "I, GoC, will pay (say) C$1,000,000 to the bearer of this bond in ten years". Then the government goes on the market with, say, a thousand of these bonds as an issue. Well, the investors (not lenders - investors) make their calculation and bid on the bonds, say at 60% of the value (which is a nominal 4% annual yield - not interest - yield). So the Government has raised 600 million dollars to finance its operations, in return for paying $1B in ten years. In the year that the government pays back the billion, the whole billion is accounted for in what is known as "debt servicing" in the national accounts (again, not interest payment but debt servicing). While some bonds, to make them easier to sell, include a small nominal interest payment each year (mostly the ones sold to the public in general such as Canada saving bonds) and therefore these interests are also included in the national accounts as debt servicing for this year, they form a very small part of the whole.

That's why you cannot equate debt servicing amount every year with interest payments nor can you calculate directly the effect of annual deficit on the national debt. That is also why government (particularly the Bank of Canada) is often active in the bond market to "buy back" government debt (i.e. bonds). Here is how it works: Say that today, the government can sell bonds for a nominal 2%, meaning they can sell a ten year $1Mil. bond at $800,000, but that five years ago, they had to sell for a nominal 5% (i.e. they sold it then for $500,000). The old bond still has five years to run, but it's been traded on the market many times for investors to cash in the accrued value of getting near the term. At five year, it is probably trading at around $750,000. So the government (or BoC) issues the new bond at nominal 2%, gets $800k, buys back on the open market the five year old bond for $750k (which becomes voided since the issuer has now recovered it), pockets $50k, wipes out $1B from its debt load in five years but takes on $1B of debt load in ten years. However, because of inflation and economic growth in the meantime, that $1B in ten years is actually less of a debt load than the $1B in five years they just wiped out.

All this to say that, regardless of the fact that politician in the opposition parties (it always the ones in the opposition ) at the time always try to play the easy populist card of comparing sovereign debt with "mom-and-pop dealing with the big bad banker", sovereign debt does not repeat not work the same way at all.
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So why did New Zealand have to default on their loans a few decades ago?
 
Altair said:
They never defaulted on their debt.
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True. Here is what happened and it should have served as an alarm to all those governments who like to spend.
No, New Zealand was a basket case economically due to years of mishandling of the economy by various goverments - with the final nails hammered in the in the economic coffin by the National Government under Prime Minister Robert Muldoon (1975 - 1984).

Things were dire in 1984, the economic ‘cookie jar’ was empty. To stop a run on the New Zealand Dollar the NZ Reserve Bank even had to shut down Foreign exchange dealing of the NZ dollar. This kind of thing is probably where the ‘bankruptcy’ idea came from.

Luckily the incoming labour government had a certain Roger Douglas as Finance Minister, curiously, for a Labour minister he was ‘far right’ economically. He immediately set about floating the currency and bringing in a raft of measures which helped in the short and long term to stabilise the economy and set New Zealand on an upward economic path.

The years of Rogernomics however are remembered for being brutal as NZ’s economy was thrown open to the world and things got much worse for Kiwis before it got better - it is however hard to see how the social impact could have been eased without making New Zealand’s economic adjustment period longer. The answer is from a web site called quora and the author is a New Zealander named Brian. From what I have read and remember it is a reasonably accurate summation. New Zealand was a basket case
 
YZT580 said:
True. Here is what happened and it should have served as an alarm to all those governments who like to spend.
No, New Zealand was a basket case economically due to years of mishandling of the economy by various goverments - with the final nails hammered in the in the economic coffin by the National Government under Prime Minister Robert Muldoon (1975 - 1984).

Things were dire in 1984, the economic ‘cookie jar’ was empty. To stop a run on the New Zealand Dollar the NZ Reserve Bank even had to shut down Foreign exchange dealing of the NZ dollar. This kind of thing is probably where the ‘bankruptcy’ idea came from.

Luckily the incoming labour government had a certain Roger Douglas as Finance Minister, curiously, for a Labour minister he was ‘far right’ economically. He immediately set about floating the currency and bringing in a raft of measures which helped in the short and long term to stabilise the economy and set New Zealand on an upward economic path.

The years of Rogernomics however are remembered for being brutal as NZ’s economy was thrown open to the world and things got much worse for Kiwis before it got better - it is however hard to see how the social impact could have been eased without making New Zealand’s economic adjustment period longer. The answer is from a web site called quora and the author is a New Zealander named Brian. From what I have read and remember it is a reasonably accurate summation. New Zealand was a basket case
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Austerity is a pain, true.

Canada went through the same thing in the 90s, did we not? We may need to do so again, but that is life.
 
YZT580 said:
True. Here is what happened and it should have served as an alarm to all those governments who like to spend.
No, New Zealand was a basket case economically due to years of mishandling of the economy by various goverments - with the final nails hammered in the in the economic coffin by the National Government under Prime Minister Robert Muldoon (1975 - 1984).

Things were dire in 1984, the economic ‘cookie jar’ was empty. To stop a run on the New Zealand Dollar the NZ Reserve Bank even had to shut down Foreign exchange dealing of the NZ dollar. This kind of thing is probably where the ‘bankruptcy’ idea came from.

Luckily the incoming labour government had a certain Roger Douglas as Finance Minister, curiously, for a Labour minister he was ‘far right’ economically. He immediately set about floating the currency and bringing in a raft of measures which helped in the short and long term to stabilise the economy and set New Zealand on an upward economic path.

The years of Rogernomics however are remembered for being brutal as NZ’s economy was thrown open to the world and things got much worse for Kiwis before it got better - it is however hard to see how the social impact could have been eased without making New Zealand’s economic adjustment period longer. The answer is from a web site called quora and the author is a New Zealander named Brian. From what I have read and remember it is a reasonably accurate summation. New Zealand was a basket case
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FYI... a damned near run thing:

"In the early 1980s, global events and New Zealand’s government response drove the country towards economic collapse. Debt, inflation, and unemployment grew. To address the crisis, several legislative reforms in the style of New Public Management were passed between the mid-1980s and early 1990s. The currency was floated, price and income controls were relaxed, state-owned enterprises such as the national airline were corporatized, government accounting was scrutinized, and outputs rather than inputs were monitored in government departments. These reforms transformed New Zealand into a country that holds transparency and accountability in high regard. The economy recovered, and the population flourished and gained better access to a wider range of goods and services. This chapter analyses the reasons and the circumstances that led to the success of New Zealand’s economic reforms. The authors also discuss what economic vulnerabilities remain for New Zealand and consider the extent to which the New Zealand model offers lessons for other countries."

oxford.universitypressscholarship.com

New Zealand’s Economic Turnaround

In the early 1980s, global events and New Zealand’s government response drove the country towards economic collapse. Debt, inflation, and unemployment grew. To address the crisis, several legislative reforms in the style of New Public Management were passed between the mid-1980s and early 1990s...
oxford.universitypressscholarship.com oxford.universitypressscholarship.com
 
On the plus side, Trudeau and the Govermnent are looking after debt, so we don’t have to…
 
At least he's finally spending money in Canada, instead of in every shithole country out there. Every dollar he sends off shore is gone forever, never to return. Now, if we could just see the contracts and accounting or even a list as to where he donated it all and what was actually done with it. Millions in Canadian taxpayer money up in smoke like it never existed and he'll never be held accountable. It has all the earmarks of money laundering, but he would never do that, right?
 
Based on everything I’ve seen the last few years, I didn’t think we were supposed to worry about debt and deficits anymore. Everyone seems to have jettisoned fiscal probity.
 
ANOTHER bribe - The GoC and Manitoba have made an announcement that child care will cost $10 a day or less in Manitoba by 2026 under terms of some kind of agreement.

Over promise and never deliver should be the LPCs motto.
 
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