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Making Canada Relevant Again- The Economic Super-Thread

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squealiox said:
the world's currency markets are driven by ideology? that's a new one on me ...

The Europeans are pushing it really hard, but no-one else can figure out why they should hold Euros instead of Dollars: ironically, the Eurozone imports more oil than the US (tell that to Greenpeace) but the countries that export it have no interest in holding two currencies (except Chavez, who seems determined to sink Venezuela's economy into irrelevance, anyway).

The reporting of world markets (& events) is heavily driven by ideology.
 
You mentioned  --- Canada's high concentration of media, banking and financial services in Toronto certainly makes it an attractive target, particularly since these are the engines of the so called "knowledge" economy.

I Add - Advertising Pirates in Montreal

 
>and who are the dark forces behind this sinister plot?

The people who negotiate these agreements are not stupid.  They can do the arithmetic.  The actual lack of benefit is easy to show - and has been shown - as can be shown where the economic impacts will be felt.  It's not some dark and sinister plot; governments and organizations are constantly jockeying for advantage.

If our goal is to reduce emissions, let's spend money to reduce emissions here in Canada.  Decide what's important to us, set our own targets, and spend our own money on ourselves.  If the Russians aren't polluting "their share" yet, good for them.  Let them worry about growing to fill their share, and we'll worry about reducing ours instead of just ignoring it by shovelling dollars overseas.
 
Brad Sallows said:
The people who negotiate these agreements are not stupid.   They can do the arithmetic.   The actual lack of benefit is easy to show - and has been shown - as can be shown where the economic impacts will be felt.   It's not some dark and sinister plot; governments and organizations are constantly jockeying for advantage.

If our goal is to reduce emissions, let's spend money to reduce emissions here in Canada.   Decide what's important to us, set our own targets, and spend our own money on ourselves.   If the Russians aren't polluting "their share" yet, good for them.   Let them worry about growing to fill their share, and we'll worry about reducing ours instead of just ignoring it by shovelling dollars overseas.
do you really believe japan, europe and canada all decided to get together and sabotage their most important export market? with the blessing of the clinton administration at the time? that the most of the world's climate scientists are engaged in some giant hoax?

actually a lot of the examples of so-called "economic warfare" i see on this thread look more like "doing business" from where i'm standing. currency manipulation? foreign ownership? outsourcing? that's competitive markets for you. people get hurt. life sucks.

even kyoto contains a few sound market principles -- emissions trading -- that might just make it worth the effort.

the real economic warfare that should be worrying us would be physical terrorist attacks on vulnerable infrastructure, like refineries or ports, for example. or industrial sabotage.
 
squealiox said:
that the most of the world's climate scientists are engaged in some giant hoax?

Two of the world's leading scientific journals have come under fire from researchers for refusing to publish papers which challenge fashionable wisdom over global warming.

A British authority on natural catastrophes who disputed whether climatologists really agree that the Earth is getting warmer because of human activity, says his work was rejected by the American publication, Science, on the flimsiest of grounds.

A separate team of climate scientists, which was regularly used by Science and the journal Nature to review papers on the progress of global warming, said it was dropped after attempting to publish its own research which raised doubts over the issue.

The controversy follows the publication by Science in December of a paper which claimed to have demonstrated complete agreement among climate experts, not only that global warming is a genuine phenomenon, but also that mankind is to blame.

The author of the research, Dr Naomi Oreskes, of the University of California, analysed almost 1,000 papers on the subject published since the early 1990s, and concluded that 75 per cent of them either explicitly or implicitly backed the consensus view, while none directly dissented from it.

Dr Oreskes's study is now routinely cited by those demanding action on climate change, including the Royal Society and Prof Sir David King, the Government's chief scientific adviser.

However, her unequivocal conclusions immediately raised suspicions among other academics, who knew of many papers that dissented from the pro-global warming line.

They included Dr Benny Peiser, a senior lecturer in the science faculty at Liverpool John Moores University, who decided to conduct his own analysis of the same set of 1,000 documents - and concluded that only one third backed the consensus view, while only one per cent did so explicitly.

Dr Peiser submitted his findings to Science in January, and was asked to edit his paper for publication - but has now been told that his results have been rejected
on the grounds that the points he make had been "widely dispersed on the internet".

Dr Peiser insists that he has kept his findings strictly confidential. "It is simply not true that they have appeared elsewhere already," he said.

A spokesman for Science said Dr Peiser's research had been rejected "for a variety of reasons", adding: "The information in the letter was not perceived to be novel."

Dr Peiser rejected this: "As the results from my analysis refuted the original claims, I believe Science has a duty to publish them."

Dr Peiser is not the only academic to have had work turned down which criticises the findings of Dr Oreskes's study. Prof Dennis Bray, of the GKSS National Research Centre in Geesthacht, Germany, submitted results from an international study showing that fewer than one in 10 climate scientists believed that climate change is principally caused by human activity.

As with Dr Peiser's study, Science refused to publish his rebuttal
. Prof Bray told The Telegraph: "They said it didn't fit with what they were intending to publish."

Prof Roy Spencer, at the University of Alabama, a leading authority on satellite measurements of global temperatures, told The Telegraph: "It's pretty clear that the editorial board of Science is more interested in promoting papers that are pro-global warming. It's the news value that is most important."

He said that after his own team produced research casting doubt on man-made global warming, they were no longer sent papers by Nature and Science for review - despite being acknowledged as world leaders in the field.

As a result, says Prof Spencer, flawed research is finding its way into the leading journals, while attempts to get rebuttals published fail. "Other scientists have had the same experience", he said. "The journals have a small set of reviewers who are pro-global warming."

Concern about bias within climate research has spread to the Intergovernmental Panel on Climate Change, whose findings are widely cited by those calling for drastic action on global warming.

In January, Dr Chris Landsea, an expert on hurricanes with the United States National Oceanographic and Atmospheric Administration, resigned from the IPCC, claiming that it was "motivated by pre-conceived agendas" and was "scientifically unsound".

A spokesman for Science denied any bias against sceptics of man-made global warming. "You will find in our letters that there is a wide range of opinion," she said. "We certainly seek to cover dissenting views."

Dr Philip Campbell, the editor-in-chief of Nature, said that the journal was always happy to publish papers that go against perceived wisdom, as long as they are of acceptable scientific quality.

"The idea that we would conspire to suppress science that undermines the idea of anthropogenic climate change is both false and utterly naive about what makes journals thrive," he said.

Dr Peiser said the stifling of dissent and preoccupation with doomsday scenarios is bringing climate research into disrepute. "There is a fear that any doubt will be used by politicians to avoid action," he said. "But if political considerations dictate what gets published, it's all over for science."
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/05/01/wglob01.xml&sSheet=/news/2005/05/01/ixworld.html

Kyoto is about economics, not environment.
 
What is sound about trading emissions?  We, who produce emissions, hand over a lump of money to a country that does not, because it has not the industry to do so.  This reduces overall emissions in Canada by zero.  This invests, toward reduction of emissions in Canada, zero.  This reduces emissions, in the recipient country, by zero.  Unless the recipient nation is extremely enlightened, it invests toward reduction of emissions in the recipient nation, zero.  Assuming the payments are not absorbed by a corrupt leadership, in all likelihood they end up invested in enterprises which produce _more_ emissions.

Sounds like a real winner to me.  Not an ounce of international welfare (or economic warfare if you prefer) in that, oh no.
 
Did anyone see the issue Maclean's in I believe March, which talked about the USA economic situation. All I will say is scary, the USA debt and budget deficits are massive . If their economy fails, it won't just damage Canada but probably destroy our nation  It is time to diverse our trading partners
 
Just a couple of sites. Nothing doom saying or anything, but a counter point.

http://www.brookings.edu/views/articles/20041201orszaggale.htm

http://www.brillig.com/debt_clock/

http://news.bbc.co.uk/2/hi/business/3430565.stm

That last one is a look at it from outside the States, which is always a breath of fresh air.

Nothing alarmist.
 
This seems to have been side tracked a bit.

The ideas of the "normal way of doing business" are correct, people do make trades on the currency and bond markets. What makes "economic warfare" possible is manipulating normal economic activity in such a manner as to cause negative consequences to the "enemy" party.

During the late 1980s and early 1990s, a huge amount of government debt (Federal and Provincial) was denominated in USD, since the Canadian market could not absorb that amount of government borrowing. An unfriendly power could assemble these bonds into its own portfolio, and dump them at an inopportune time (for us), triggering a currency or interest rate crisis in Canada. Although there is also a negative cost for the unfriendly power (spending billions or hundreds of billions of dollars for no return), it may accomplish a goal of destabilizing Canada, paralizing the government or at least drawing the attention of Canada (and presumabley the United States as well) away from something else, without resorting to armed conflict.
 
The US numbers are huge, but that's because their econonmy is huge ... articles (and people) that talk about raw size are scare-mongering (or don't know what they are talking about) ... if the US's debt burden was anything like, say, Canada's, I would start to get concerned (Debt/GDP: USA - 62.4%; Canada - 77%).
 
September 16, 1992: billionaire philanthropist George Soros wipes-out many British pensioners' life savings ...
 
a_majoor said:
This seems to have been side tracked a bit.

The ideas of the "normal way of doing business" are correct, people do make trades on the currency and bond markets. What makes "economic warfare" possible is manipulating normal economic activity in such a manner as to cause negative consequences to the "enemy" party.

During the late 1980s and early 1990s, a huge amount of government debt (Federal and Provincial) was denominated in USD......

I think you have found the enemy and he is us :o - and the elected economic terrorists that run this country.

We have a way to take them out and it comes on average - every 4 years.

But we don't - not because we don;t vote against the current party - but that there are sufficient willing idiots - (a term from mid 30s propaganda studies) - to vote them back in - time after time.
 
Brad Sallows said:
What is sound about trading emissions?   We, who produce emissions, hand over a lump of money to a country that does not, because it has not the industry to do so.   This reduces overall emissions in Canada by zero.   This invests, toward reduction of emissions in Canada, zero.   This reduces emissions, in the recipient country, by zero.   Unless the recipient nation is extremely enlightened, it invests toward reduction of emissions in the recipient nation, zero.   Assuming the payments are not absorbed by a corrupt leadership, in all likelihood they end up invested in enterprises which produce _more_ emissions.

Sounds like a real winner to me.   Not an ounce of international welfare (or economic warfare if you prefer) in that, oh no.

under kyoto, countries don't "hand over" anything. COMPANIES buy and sell emission credits. this gives them an incentive to lower emissions. The main point of contention (and the US's stated reason for dropping out of the treaty) is disagreement over how to initially divvy up a finite number of credits among countries.

The goal appears to be the creation of an international market in what has thus far been a public good (ie clean air) that was previously not assigned an economic value. There are many successful examples of national markets for public goods (such as acid rain emission credits in the US) within countries.

a sophisticated commodities-type market in emissions is by far the best solution to the problem. but markets have to be brought into existence before they can do their work.
 
squealiox said:
under kyoto, countries don't "hand over" anything. COMPANIES buy and sell emission credits. this gives them an incentive to lower emissions. The main point of contention (and the US's stated reason for dropping out of the treaty) is disagreement over how to initially divvy up a finite number of credits among countries.
Yes, and rather than spending on research (and means) on ways to reduce pollution it is instead paid as an economic rent: it reduces profit, not pollution.  This is underscored by the fact that the notion that global warming is caused by human activity is very debateable.

The goal appears to be the creation of an international market in what has thus far been a public good (ie clean air) that was previously not assigned an economic value.
The goal is to transfer wealth from more developed countries to less-developed countries under the aupicies of some international authority without any trade.  A secondary goal is to try to force some countries (particularly the US) to accede to 'internatonal institutions' (i.e., european socialists).

There are many successful examples of national markets for public goods (such as acid rain emission credits in the US) within countries.

a sophisticated commodities-type market in emissions is by far the best solution to the problem. but markets have to be brought into existence before they can do their work.
It depends on what the goal is ...
 
If you think the raw numbers are scary and wonder why the US is less concerned, just look at the raw numbers of US economic growth, averaging @ 3.8% per quarter (and by editing out imports and govvernment spending, the core rate of growth is almost 5%). Compound interest means the absolute size of the US economy will increase even faster than ever (and of course each period includes the culmulative growth of the periods before.) Consider also:

http://www.nationalreview.com/comment/mcquillan200505040802.asp
If each state reduced its taxes, rules, and regulations to the level of Kansas â ” the most economically free state in the nation according to the U.S. Economic Freedom Index â ” personal incomes would rise an average of $1,161 a year, or 4.42 percent. If that were invested in the stock market over a 40-year working life at the historic return, a typical working American would have an additional $268,000 in his or her pocket at retirement. And since he or she is unlikely to spend that money all at once, there could be some remaining for heirs.

So IF we were willing to throw off the shackles of socialism, then Canadians could  achieve their goals with their own resources.
 
48Highlander said:
The majority of Germans initialy supported Hitler, but they still ended up "doomed".  

Comparing Canada to Hitler's doomed Germany seems somewhat extreme. Most Cdns seem happy with the evolving state of democratic socialism. I'm sure in their their collective mind, they don't see Canada as doomed. That was the point I was trying to make = nothing else.   
 
If clean air is an economic good, then all we need to do is levy something analogous to stumpage fees on pollutants (whether air, water, or otherwise borne).  Encouraging rent-seeking won't discourage pollution as readily.
 
I_am_John_Galt said:
The US numbers are huge, but that's because their econonmy is huge ... articles (and people) that talk about raw size are scare-mongering (or don't know what they are talking about) ... if the US's debt burden was anything like, say, Canada's, I would start to get concerned (Debt/GDP: USA - 62.4%; Canada - 77%).
Methinks then you should be concerned. Your figures are out of date by about 15 years. As of now, the Canadian national debt stands at just under CDN$500 Billion, for a total of roughly 40% of GDP. Compare this to the United States, now, where federal debt alone stands at US$7.7 TRILLION(!), to comprise roughly 75% of GDP. Not only that, but they have estimated their next  budget deficit at US$424 Billion, and this does not include emergency spending, military expenditures and the cost of the President's Social Service reforms, which are expected to cost the US $800 Billion dollars (over the next number of years). The one good thing for the US is that their government pays a (far) lower interest rate on  their debt, so their debt will expand slower.
 
Zartan said:
Methinks then you should be concerned. Your figures are out of date by about 15 years. As of now, the Canadian national debt stands at just under CDN$500 Billion, for a total of roughly 40% of GDP. Compare this to the United States, now, where federal debt alone stands at US$7.7 TRILLION(!), to comprise roughly 75% of GDP. Not only that, but they have estimated their next  budget deficit at US$424 Billion, and this does not include emergency spending, military expenditures and the cost of the President's Social Service reforms, which are expected to cost the US $800 Billion dollars (over the next number of years). The one good thing for the US is that their government pays a (far) lower interest rate on  their debt, so their debt will expand slower.

Zartan, the tax cuts are having their effect (even if the Washington Post is loath to admit any good news about the Bush administration):

washingtonpost.com
Tax Receipts Exceed Treasury Predictions
Early Surge Lowers Deficit Projections

By Jonathan Weisman
Washington Post Staff Writer
Thursday, May 5, 2005; E01

After three years of rising federal budget deficits, a surge of April tax receipts brought unexpected good news to fiscal policymakers -- the tide of government red ink appears to be receding.

The Treasury Department this week reported there would be a $54 billion swing from projected deficit to surplus in the April-to-June quarter, after an unanticipated gush of tax payments poured into the Treasury before the April 15 deadline. That prompted private forecasters to lower their deficit projections for the fiscal year that ends in September.

Budget analysts inside and outside the government said the positive turn is likely to be short-lived. Indeed, after a four-year absence, the Treasury Department announced yesterday it is considering reissuing its 30-year Treasury bond to help finance long-term government debt, jolting the bond markets and pushing down the price of existing 30-year securities.

But in the short term, many forecasters said the budget deficit appears to have crested.

"I think it has turned the corner," said David Wyss, chief economist at Standard & Poor's, the credit rating agency. "My guess is 2004 will have been the worst year."

For that fiscal year, the government recorded a $412 billion deficit, the largest ever in nominal dollar terms, although not as large as some of the deficits of the 1980s when measured against the size of the economy. The 2004 mark was up from 2003's $378 billion deficit, which topped 2002's $158 billion deficit.

In January, Bush administration officials projected that the streak would continue, with a deficit of $427 billion for the fiscal year that ends Sept. 30. But that estimate was widely regarded as inflated and many forecasters believed the total would be more like $400 billion.

April, however, turned out to be a far better month than anticipated. Taxpayers were confronted with unexpected tax bills, many from capital gains and the alternative minimum tax, a parallel income tax system designed to hit the rich but that is increasingly pinching the middle class. The Treasury announced this week that it will repay $42 billion in federal debt in the third April-to-June quarter, instead of borrowing $12 billion.

Wall Street analysts reduced their deficit forecasts this week, from around $400 billion to around $370 billion. In nominal dollar terms, that would still be the third-highest deficit on record. Even measured against the size of the economy, "it's still a high number," said Brian Bethune, director of financial economics at Global Insight Inc., a Massachusetts forecasting firm. "It needs to come down."

One factor should help in the short term: Seven months into the fiscal year, Congress is only now passing the $82 billion emergency war spending bill for fiscal 2005, which means that much of the money will be spent in 2006. That should reduce the 2005 deficit while bringing down war costs next year. Wyss said the deficit should continue to fall in 2006 and 2007.

"A month ago, I would have told you the budget numbers were on track for $400 billion. To get an adjustment this quickly would suggest a huge surprise," said Edward F. McKelvey, an economist and federal budget analyst at Goldman Sachs & Co.

Few economists say the U.S. government is out of the woods. One of the reasons for the turnaround, the alternative minimum tax, should be reduced or eliminated before it starts impinging on economic growth, Bethune said.

Also, by next year, costs from the new prescription drug benefit should start rolling in. By the end of the decade, pressure from the retiring baby boom generation will start pushing Medicare, Medicaid and Social Security costs up significantly.

Treasury officials have long resisted reissuing 30-year bonds, in part, because "nobody wanted to admit the deficits were permanent," said Wyss, the Standard & Poor's economist.

Treasury officials disputed that notion during a meeting with reporters yesterday.

"The deficit has nothing to do with it," said Timothy S. Bitsberger, assistant Treasury secretary for financial markets. "In fact, we think the deficits are coming down."

Wall Street wasn't buying it. "If you weren't borrowing this much, you wouldn't be doing it," Wyss said. "No question."

After four years of rising budget surpluses, the Treasury announced in October 2001 that it would no longer issue the 30-year bond. The decision was intended to lower the cost of government borrowing, since bonds that mature in more than 10 years, known as long bonds, typically offer higher interest rates to attract buyers willing to accept the added risk of such long maturation periods.

With a 2001 forecast of surpluses totaling $5.6 trillion over 10 years, Treasury officials figured they could focus on reducing debt, not adding to it. And eliminating the 30-year bond would push buyers to the 10-year Treasury bond. Since 30-year mortgages are closely tied to the 10-year bond, the added demand for that bond would drive down mortgage rates and help the economy.

But forecasted surpluses turned into huge, forecasted deficits. Since President Bush entered office, the total federal debt -- including debt to the public and debt owed the Social Security system -- has risen from $5.7 trillion to $7.8 trillion. Long-term interest rates should begin rising in the near term, so the government should lock in interest rates on 30-year bonds soon, Wyss said, before the cost of federal borrowing begins to rise.

Moreover, aging populations around the world have forced governments -- especially in Europe -- to shore up pension funds by requiring that they invest in long bonds. Washington is considering similar changes for its private pension systems. That has sent demand for long bonds skyrocketing, said Neal M. Soss, chief economist at Credit Suisse First Boston LLC.

Bush's proposal to convert part of Social Security to individual investment accounts would also add considerable demand for 30-year bonds if it were to pass, Soss said. A decision on whether to issue 30-year bonds will be announced Aug. 3, Bitsberger said.
© 2005 The Washington Post Company

Mike Harris also raked in record tax revenues after the Ontario tax cuts, but unfortunately didn't cut spending by any appreciable amount. The structural problems of an aging population will continue no matter what government is in office either in Canada or the United States, so freeing the economy to generate more wealth (rather than feeding it to Liberal Friendly companies) is what is needed to support the aging populations in the long term.
 
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