economics question

[Yoga Face]

trudeau says he will run deficits for three years to pay for infrastructure spending

is this wise or not

it seems to me he is building more GNP that will make the economy more efficient IE public transit, reducing traffic so goods can get delivered, people get to work, etc which will result in more taxes to pay back the costs

it is like a manufacturer expanding, but better

if economy goes under manufacturer does not get investment back and may go under but better infrastructure will eventually always result in an economic boost

it seems like a no brainer

fuck, it can be paid for by taxing dope and the sex trade

think of all the people that get out of jail and less police resources etc

 

[Big Sleazy]

Building infrastructure is a good thing. How you pay for it is another. Canada used to have a public Bank, called the Bank of Canada. We used to create the money/currency at little to zero interest. Thus we got the infrastructure and we were able to pay for it and we never went into debt. But Justin's Father ************ illegally gave our Bank of Canada to a private entity called the BIS ( Bank of International Settlements ) in 1974. Since then we have been in debt. Our standard of living has decreased. And we pay more and more taxes.

So building infrastructure is a good thing. But how we currently pay for it is a bad thing. As instead of creating the money. We borrow the money at interest and this = DEBT.

And the kicker is... the BIS doesn't actually have any money. This is Economics 101 and everybody needs to understand it.

 

[OddSox]

Sure, higher taxes, bigger spending and deficit financing has done Ontario a whole lot of good...

 

[Garrett]

it seems to me he is building more GNP that will make the economy more efficient IE public transit, reducing traffic so goods can get delivered, people get to work, etc which will result in more taxes to pay back the costs

He is not building GNP and efficiency comes down to what he is building. Based on recent history, odds are we will spend billions and not make our roads any more efficient. We will not get a world class metro. People in the construction industry and the unions employed by the government will see benefits for a short term.

it is like a manufacturer expanding, but better
if economy goes under manufacturer does not get investment back and may go under but better infrastructure will eventually always result in an economic boost
it seems like a no brainer

It is only better as they can borrow and tax to compensate, at levels no corporation can maintain.
However, at some point it costs more to borrow and you spiral down.

Beyond that, all infrastructure has maintenance and depreciation costs that must be managed.
Once that hits, you can then be prevented from making improvements and what you have built has become a liability.

fuck, it can be paid for by taxing dope and the sex trade
think of all the people that get out of jail and less police resources etc

Dope and the sex trade will not pay for it.
They plan to increase taxes on industry and the top 10% of earners.
Oddly enough, those are the people that may simply leave because they can get a better deal elsewhere.

Canada has a pretty significant brain drain and this will accelerate it. Also, future generations will have to pay for it, after the boondoggle is all done.

As the Ontario Liberals have shown, people do not care too much about economic reality as long as they get free stuff and someone else pays for it.
The group of "someone else" is getting smaller by the day.

You really need to be smart to make this work. For now, it has simply been a promise to get elected, and it works (the Ontario Liberals are a good example, and the same team was behind Trudeau).
I am taking moves to protect myself, but I would be scared as shit if I were 22 and entering the market.

 

[bluecolt]

He is not building GNP and efficiency comes down to what he is building. Based on recent history, odds are we will spend billions and not make our roads any more efficient. We will not get a world class metro. People in the construction industry and the unions employed by the government will see benefits for a short term.



It is only better as they can borrow and tax to compensate, at levels no corporation can maintain.
However, at some point it costs more to borrow and you spiral down.

Beyond that, all infrastructure has maintenance and depreciation costs that must be managed.
Once that hits, you can then be prevented from making improvements and what you have built has become a liability.



Dope and the sex trade will not pay for it.
They plan to increase taxes on industry and the top 10% of earners.
Oddly enough, those are the people that may simply leave because they can get a better deal elsewhere.

Canada has a pretty significant brain drain and this will accelerate it. Also, future generations will have to pay for it, after the boondoggle is all done.

As the Ontario Liberals have shown, people do not care too much about economic reality as long as they get free stuff and someone else pays for it.
The group of "someone else" is getting smaller by the day.

You really need to be smart to make this work. For now, it has simply been a promise to get elected, and it works (the Ontario Liberals are a good example, and the same team was behind Trudeau).
I am taking moves to protect myself, but I would be scared as shit if I were 22 and entering the market.

A very reasoned approach to this question, Garrett. Government expenditures for "infrastructure" really never reach roads, sewers, transit or water mains. For the most part, these amounts are usually used by politicians to mollify and buy votes, see the hockey arenas in Quebec City and Winnipeg. Also, government expenditures are not cost-effective, because there is no effective cost containment to government overruns, ripoffs and payoffs. For this reason, government infrastructure projects produce nothing but payoffs to cronies and hangers-on.

 

[fuji]

The only correct answer is it depends what he builds. If he builds genuinely useful stuff that benefits the economy then it is a good thing. If he builds boondoggles that cost a fortune and have little value then not so much.

 

[Polaris]

trudeau says he will run deficits for three years to pay for infrastructure spending

is this wise or not

Going forward, I suspect Trudeau's government will have to do 2 things, and that is spend heavily, and keep interest rates at 0% (thereabouts).

Ironically, Harper would have done the same. Harper did not do a bad job with government finances. That he should be given credit for. I still don't like Harper, but he gets full respect for that.

Whether spending this money is wise or not, depends on what you believe is the reason for the slow growth (outside of the oil industry), as Canada is only forecast to grow at 1% or less, like most of Europe.

There seems to be two theories here about what will happen next.

The Business Cycle theory, some people believe this is just a harsh recession, and things will come back, so no need to do anything too drastic.

The other theory is the Japan experience. An aging population, put pressure downwards on the growth rate, and was deflationary. Question: Is most of Europe's population aging? What's their growth rate and do they have price deflation? We know the answer to that.

Canada can be facing the same deflationary pressures and low growth from it own aging baby boomer population.

Does not matter who the government is, as long as they do not screw up and do the wrong thing, like Kathlyenne Wynne. Otherwise, is a wrong move is made, we will wind up like Japan or Greece.

 

[FAST]

The only correct answer is it depends what he builds. If he builds genuinely useful stuff that benefits the economy then it is a good thing. If he builds boondoggles that cost a fortune and have little value then not so much.

Maybe another unused airport in Quebec,....or maybe Newfoundland,...that would fit with the parties history,...quite well.

Or maybe some wind mills were the wind doesn't blow,...???

FAST

 

[jcpro]

Lately, there's this myth going around that the infrastructure spending can stimulate economy, create jobs and add value to municipalities. Having worked on few of these projects, I can say that they are overpriced, many are unnecessary or poorly chosen and they create no jobs or very few short term opportunities. In return for high deficit. What governments should concentrate on is creating conditions for growth across the whole economy and not only 2 or 3 major concrete and rebar players. That, of course, require real economic knowledge. Building a bridge or replacing a sewer is not an investment, it's a necessary expense. Low payroll taxes and competitive energy prices(for example), on the other hand, are significant investments in the future of the whole economy. Don't get me wrong, I loved working on the PanAm projects and we made a killing, but that's just a flash in the pan-a quick in and out on a taxpayer dime- a nothing when compared to the private sector financed projects.

 

[fuji]

A low payroll tax is also a flash in the pan. In fact it enables employers to spend less on wages.

 

[Polaris]

A low payroll tax is also a flash in the pan. In fact it enables employers to spend less on wages.

There is nothing wrong with that.

Suppose we import labour from Vietnam, construction workers to build John Tory's Smart Track.

Obviously the savings in labour costs would enable the TTC to keep fares low. In addition, the money saved, that would be put into a fund, a maintenance fund to repair TTC equipment in the future.

Then you have to consider how many people actually use the TTC on a daily basis.

Considering that, clearly it is in the greater good for the people of Toronto to have Tory's Smart Track built with the lowest cost possible.

For the greater good. For the future. For society.

Disclaimer: I don't think that thing will ever get built, this is the monkeys at city hall we talking about. Yeah mon!

:eyebrows: :frusty: :Eek:

 

[FAST]

Lately, there's this myth going around that the infrastructure spending can stimulate economy, create jobs and add value to municipalities. Having worked on few of these projects, I can say that they are overpriced, many are unnecessary or poorly chosen and they create no jobs or very few short term opportunities. In return for high deficit. What governments should concentrate on is creating conditions for growth across the whole economy and not only 2 or 3 major concrete and rebar players. That, of course, require real economic knowledge. Building a bridge or replacing a sewer is not an investment, it's a necessary expense. Low payroll taxes and competitive energy prices(for example), on the other hand, are significant investments in the future of the whole economy. Don't get me wrong, I loved working on the PanAm projects and we made a killing, but that's just a flash in the pan-a quick in and out on a taxpayer dime- a nothing when compared to the private sector financed projects.

Read this post people,...

Infrastructure spending will do NOTHING in the long term,...except increase the debt,....which is why he has already stated that he will increase the dept,...for the long term,...!!!

FAST

 

[SkyRider]

Suppose we import labour from Vietnam, construction workers to build John Tory's Smart Track.

This would be socially unacceptable, unCanadian and unChristian and would upset the labor unions as much as Uber upsets the taxi drivers. There will be social unrest and violence.

(The days of using cheap imported labor died with the Canadian Pacific Railway.)