A family relative joked about this. Your thoughts on this question. Not sure if I’ll be alive for either of these events. The federal government just tabled a new federal budget…no timeline in place to balance the budget. What do you think and why?
What will come first: a balanced budget from any Canadian government or the Toronto Maple leafs winning the Stanley cup?
- Thread starter Harveyspector
- Start date
As long as your overall debt grows slower than the economy, yes you can run deficits in perpetuity. Because math.
Not saying it is a good idea, nice to keep some power dry incase well, zombies. A good rule of thumb is at the very least, run a surplus of half gdp growth [say real not nominal] and run a deficit of GDP decline [again real] One can fiddle with those numbers but in the longer term your debts shouldn't grow. If you do have a large debt because well... zombies then you can run larger surpluses until you pay it off.
A large debt just displaces spending on other shit. Fuck even the NDP health care guru Tommy Douglas spoke out against running large public debt [not for the right reasons but still]
It's not a left or a right thing, it's a responsibility thing, shouldn't be spending what you can't cover in taxes over a business cycle and likewise you should not be cutting taxes if you can't afford your shit. A pox on both sides.
1. because math ??
do you mean like the math in compounding interest?
or math in changes to the cost of borrowing -higher rates to combat the inflation excessive borrowing / money printing creates (sound familiar ?)
2. borrowing requires a lender(s)
a) lenders first demand higher rates of return to lend to serial borrowers
Canada at high risk of losing its AAA credit rating: report
The federal government’s irresponsible fiscal discipline may lead to Canada losing its AAA credit rating, especially when comparing its economic policies to those of other top-rated countries.
tnc.news
b) lenders do not lend to perpetual deficit running govt, because of the heightened risk of not getting their money back
if your friend with a spending problem drops by and asks you to loan him an incremental $10,000 every Jan 1 for a decade straight ++++ , but just manages to pay you $300 / year per $10K in interest at what point do you say no more ?
at his funeral ?
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you are correct about it being a responsibility thing
but there is a world of difference between federal left and right with respect to responsibility
Jesus fucking Lemmy, you are going to double down on this1. because math ??
do you mean like the math in compounding interest?
or math in changes to the cost of borrowing -higher rates to combat the inflation excessive borrowing / money printing creates (sound familiar ?)
2. borrowing requires a lender(s)
a) lenders first demand higher rates of return to lend to serial borrowers
.Canada at high risk of losing its AAA credit rating: report
The federal government’s irresponsible fiscal discipline may lead to Canada losing its AAA credit rating, especially when comparing its economic policies to those of other top-rated countries.
b) lenders do not lend to perpetual deficit running govt, because of the heightened risk of not getting their money back
if your friend with a spending problem drops by and asks you to loan him an incremental $10,000 every Jan 1 for a decade straight ++++ , but just manages to pay you $300 / year per $10K in interest at what point do you say no more ?
at his funeral ?
You owe a billion dollars and your income is a billion dollars
Your income grows by a billion dollars, and every year you borrow half a billion dollars
in 10 years your debt is 1.5 billion, but your income is 2 billion, you are in a better position and you are more credit worthy than before and you should face even lower interest rates by a bit which forms a virtuous circle.
This can be done forever. It's only if the deficits increase your debt by a higher percentage than your economy grows [in nominal terms] that you get in trouble.
I am not a fan of debt or deficits in good times, and TrueDooh is a fucking cunt for wrecking the anti deficit consensus a few elections back but if you don't understand the importance of Dept to GDP ratio, either you need to stop being involved in the discourse because you are out of your element or you are just so consumed with political cultism that you don't think anymore in which case... point still stands.
But hey don't let facts and math get in the way of your two minutes of hate.
I am sure you believe that.
There isn't much of a difference in terms of being responsible between spending like a drunken sailor and not raising taxes enough to cover it, vs putting in tax cuts like a drunken sailor and not cutting spending to compensate. The right if you ignore the talking points are pretty bad for that. The three parties tend to move in step on that regard with only minor deviations in a sector that takes 40% of the economy. A lot of cultists like to go sex nuts and retard strong over this thing or that thing, but in the grand scheme it's more of the same.
absolutely
Government Debt in Canada increased to 1173.01 CAD Billion in 2023 from 1139.98 CAD Billion in 2022.
govt income does not grow at a constant pace
does anemic economic growth mean anything to you?
does the word recession mean anything to you?
better position? wrong again
debt servicing costs more than doubled in 3 years
debt servicing costs is expected to cost the federal treasury $60.7 billion in 2028-29
govt income does not grow at a constant pace
does anemic economic growth mean anything to you?
does the word recession mean anything to you?
thanks to changes on capital gains taxes (inclusion rate =2/3) govt taxes 2/3 of asset appreciation at the top marginal rate while taking zero risk
you can kiss new investment in Canada goodbye
investors can get a better deal elsewhere
taxation has a real world upper limit
bond investors are going to start demanding a higher rate of return for lending to a serial deficit generator
there are two components to a ratio
in a recession the debt goes up and the gdp goes down
your academic fallacy assumes constant positive economic growth
it also ignores rising debt borrowing costs and the need for investment to drive economic growth
but hey, do not let facts, math and reality get in the way of your academic fallacy
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I am sure you believe that
but lets look at reality
the CPC will axe the evil carbon tax (which is theoretically govt revenue neutral -wrong)
and they will reverse the unbelievably stupid changes to the capital gains tax, which will actual increase govt revenue via greater investment
other than that there wont be room for the CPC to reduce taxes,
They will inherit the growing debt service costs
they will have a debt monster to tackle (which requires surpluses) and will have to down size govt which is really expensive
for Christ sakes it took the GST to pay down one Trudeaus irresponsible debt
will GST . V2 be required to pay down the second Trudeaus monstrous irresponsible debt ?
there will not be any serious tax cuts for many years to come - perhaps for a generation
spending like a drunken sailor has ensured that
there is a difference between being irresponsible and being pragmatic
i had Trudeau pegged as an irresponsible fool back in 2015
I predicted he would spend like a drunken sailor on shore leave
I predict he would also increase taxation
it has played out as predicted
what I did not foresee how corrupt he has been
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How long has the US and Canada been running deficits?
When exactly is the day when the bad shit happens?
You're still pushing the Thatcher/Reagan 'austerity' model of economics which has failed every single time its been applied.
That's the very definition of insanity.
No wonder your movement is as popular as this.
this needs a correction
the inclusion rate is not the tax rate
2/3 of the asset appreciation will be taxed at the investors marginal tax rate , which for example in Ont is 53% for individuals making these multi-million dollar investments required for economic growth
similarly corporations will be taxed on the 2/3 at their marginal rate
the change is unbelievably stupid and will still kill investment in Canada
a bit humbling to admit a mistake, however lets be accurate.
i detest intentional attempts to mislead others
damn, that's the second mistake this year and its only April
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and how will your std of living be affected by perpetual deficits ?
ask a Greek or someone from Argentina?
maybe ask a Venezuelan how to prepare pet meat for dinner ?
Poddle poutine for lunch , with buggie wings as an appetizer?
how does $20 for a loaf of bread or $30 for a bag of milk sound to you/ your family?
there will be a deficit / debt reckoning long before 2100
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How many decades have you been yelling that deficits and debts are not sustainable now?
Do you have a doomsday date yet?
you will have 3 options in the next election
what are odds the liberals will balance the budget within the next mandate? Zero
what are odds the NDP will balance the budget within the next mandate? Zero - make that absolute zero, all molecular motion would have to stop in order for the NDP to stop spending other peoples money
what are odds the CPC will balance the budget within the next mandate? slim, given the greatly expanded size of govt and the monstrous size of the debt burden but they will head in the right direction
what are odds the CPC will balance the budget within the next decade? tough to tell , but the odds are not zero
btw it will be painful & that is just to get to balance , after that reducing the monstrous debt will need to be tackled
