2021 federal budget and the CAF

[Altair]

I doubt they would. A large-scale crisis is simply beyond affordability, and a small one would set expectations.

The gov did just spend 300+ Billion on this one crisis.

I think we may need to adjust expectations on what is beyond affordability.

 

[MilEME09]

The gov did just spend 300+ Billion on this one crisis.

I think we may need to adjust expectations on what is beyond affordability.

Everything? Cause we are beyond broke right now. I can't get a debt consolidation loan from the bank that I owe the debt to because it would increase my debt ratio to 48%, but the government can rack up 1.5 trillion of our GDP no problem. Doesn't seem right to me, I have to live within my means so why shouldn't our government?

 

[Altair]

Everything? Cause we are beyond broke right now. I can't get a debt consolidation loan from the bank that I owe the debt to because it would increase my debt ratio to 48%, but the government can rack up 1.5 trillion of our GDP no problem. Doesn't seem right to me, I have to live within my means so why shouldn't our government?

Because nobody else in the G7 is?

Germany (85), USA (108), the UK (111.5),France (118), Italy (160), Japan, (240).

 

[SeaKingTacco]

Because nobody else in the G7 is?

Germany (85), USA (108), the UK (111.5),France (118), Italy (160), Japan, (240).

The “all your friends jumped off a bridge, so you should, too” analogy?

Mark my words: very, very bad things are going to happen with all of this money supply creation out of thin air.

 

[SeaKingTacco]

Because nobody else in the G7 is?

Germany (85), USA (108), the UK (111.5),France (118), Italy (160), Japan, (240).

And, just another thread ago, you went out of your way to say that, in no way we should we compare ourselves to the UK and USA in vaccine delivery, because we are a mere middle power. Presumably Canada not being the world’s defacto reserve currency (the USD) or the banking power of London means we cannot write ourselves the same cheques.

So which is it: do we run with the G7 big kids, or not?

 

[Altair]

The “all your friends jumped off a bridge, so you should, too” analogy?

Mark my words: very, very bad things are going to happen with all of this money supply creation out of thin air.

In Canada or globally?

 

[Altair]

And, just another thread ago, you went out of your way to say that, in no way we should we compare ourselves to the UK and USA in vaccine delivery, because we are a mere middle power. Presumably Canada not being the world’s defacto reserve currency (the USD) or the banking power of London means we cannot write ourselves the same cheques.

Good point on the USD. Even the pound. But then you have currency like the Yen, and that starts to fall apart.

So which is it: do we run with the G7 big kids, or not?

In fiscal policy? Yeah, I would imagine we would. Unlike vaccines, we have the ability to print money out of thin air just like the big kids.

As for whether this will disproportionately effect Canada, I remain unconvinced. Most countries are running punishing deficits, Canada being no different.

 

[Weinie]

As for whether this will disproportionately effect Canada, I remain unconvinced. Most countries are running punishing deficits, Canada being no different.

But the question remains, should we?

Canadians boosted savings during COVID, and now they’re ready to spend

There seems to be some significant liquidity out there, that the current government appears to have disregarded.

Why would we print money out of thin air, when Canadians seem to be rolling in it, and will spend?

 

[SeaKingTacco]

Good point on the USD. Even the pound. But then you have currency like the Yen, and that starts to fall apart.

In fiscal policy? Yeah, I would imagine we would. Unlike vaccines, we have the ability to print money out of thin air just like the big kids.

As for whether this will disproportionately effect Canada, I remain unconvinced. Most countries are running punishing deficits, Canada being no different.

This Liberal Government seems to want to have European style social safety netting, but with US levels of taxation. That is not going to work for very long. Eventually, either inflation will become a problem or servicing the debt will be a problem. Especially since Canada is a particular laggard at productivity improvements.

there is a third way out of it and that is to massively increase immigration to pay for this. Young immigrants tend to be very hardworking and productive.

 

[SeaKingTacco]

Good point on the USD. Even the pound. But then you have currency like the Yen, and that starts to fall apart.

In fiscal policy? Yeah, I would imagine we would. Unlike vaccines, we have the ability to print money out of thin air just like the big kids.

As for whether this will disproportionately effect Canada, I remain unconvinced. Most countries are running punishing deficits, Canada being no different.

The Yen seems to be a special case, made possible by Japan’s remarkable productivity.

 

[Altair]

But the question remains, should we?

Its a decent question. But ask those out of work if they need supports and I'm sure they say yes.

Canadians boosted savings during COVID, and now they’re ready to spend

There seems to be some significant liquidity out there, that the current government appears to have disregarded.

Why would we print money out of thin air, when Canadians seem to be rolling in it, and will spend?

Its a weird economy.

I hear daily that small businesses and large business cannot afford to keep running, that small business owners have used up all their savings, meanwhile the laid off workers are banking those unemployment checks.

I suppose the notion that you can never use too much water putting out a fire is the working theory right now. The best news we can have is that once the economy is open again, all those savings get poured into the economy, leading to a period of higher than normal growth that is sustainable for a few years and leads to the debt to GDP shrinking simply due to the GDP growing at a faster pace than the debt.

 

[Altair]

The Yen seems to be a special case, made possible by Japan’s remarkable productivity.

Still, one would think that the Yen, not being a special currency by any stretch, and crippling 240% debt to GDP would have lead to some sort of economic crisis in Japan. But Japan just muddles along. Not great, but no great collapse.

Meanwhile, Canadian debt levels are sitting a around 100% of GDP. Federally, around 50 percent. And yes, I know there is but one taxpayer, but at the federal level, 50% debt to GDP is manageable. If there is any level of government we as Canadians should be worrying about its the provincial. The feds will always get better rates than the provinces, so the provinces are the ones most vulnerable to any rise in interest rates.

 

[YZT580]

This Liberal Government seems to want to have European style social safety netting, but with US levels of taxation. That is not going to work for very long. Eventually, either inflation will become a problem or servicing the debt will be a problem. Especially since Canada is a particular laggard at productivity improvements.

there is a third way out of it and that is to massively increase immigration to pay for this. Young immigrants tend to be very hardworking and productive.

but they don't spend. They save and sponsor family members (particularly parents) into the country. Admirably so but they are not a net contributor as a group since they are only occupying a position number. As long as there is a significant unemployment rate, we don't need immigrants as much as we need good paying positions.

 

[SeaKingTacco]

but they don't spend. They save and sponsor family members (particularly parents) into the country. Admirably so but they are not a net contributor as a group since they are only occupying a position number. As long as there is a significant unemployment rate, we don't need immigrants as much as we need good paying positions.

See, I don’t think parts of what you say are true. Immigrants may well save to sponsor family members, but the ones I see in my daily travels are working bloody hard doing the kinds of jobs most people born in Canada will no longer do.

 

[SeaKingTacco]

Still, one would think that the Yen, not being a special currency by any stretch, and crippling 240% debt to GDP would have lead to some sort of economic crisis in Japan. But Japan just muddles along. Not great, but no great collapse.

Meanwhile, Canadian debt levels are sitting a around 100% of GDP. Federally, around 50 percent. And yes, I know there is but one taxpayer, but at the federal level, 50% debt to GDP is manageable. If there is any level of government we as Canadians should be worrying about its the provincial. The feds will always get better rates than the provinces, so the provinces are the ones most vulnerable to any rise in interest rates.

And you raise a fair point: the Federal government can get away with high debt for a fair bit longer than the Provinces. But, several provinces (Nfld , Man and probably NB spring immediately to mind) are close to the wall on defaulting and requiring federal bailouts on their debt.

At the end of the day, there is only one taxpayer for all three levels of government in Canada.

 

[Altair]

And you raise a fair point: the Federal government can get away with high debt for a fair bit longer than the Provinces. But, several provinces (Nfld , Man and probably NB spring immediately to mind) are close to the wall on defaulting and requiring federal bailouts on their debt.

At the end of the day, there is only one taxpayer for all three levels of government in Canada.

Thankfully municipalities cannot go into debt. So the taxpayers are spared bailouts on at least one level.

As for the provinces, pray it just be the small ones. Canada can "afford" to bail out NL MB and NB, but if its Ontario or Quebec or BC who need saving we are in for a world of hurt.

BC is fine, Quebec doesn't look too bad, and with equalization can probably make it back to balance, but Ontario was trending in the wrong direction before the pandemic and could be sitting at well over 50 percent in the next few years.

 

[YZT580]

See, I don’t think parts of what you say are true. Immigrants may well save to sponsor family members, but the ones I see in my daily travels are working bloody hard doing the kinds of jobs most people born in Canada will no longer do.

So maybe we need a Walter Raleigh type approach to jobs: no work, no food. We need to teach our children that there is nothing wrong with a physical labour: it is not to be shamed nor its participants ridiculed. That is one of the reasons that your recruitment and retention is down. RESPECT. There are jobs available so the hand-outs stop now or are at least diminished. I certainly was not discrediting their work ethics at all. It was what they do with their disposable income. There are myriad stories in the news of multi-family apartments to prove that point and I see the farm workers coming in to my neighbourhood every spring.

 

[SeaKingTacco]

So maybe we need a Walter Raleigh type approach to jobs: no work, no food. We need to teach our children that there is nothing wrong with a physical labour: it is not to be shamed nor its participants ridiculed. That is one of the reasons that your recruitment and retention is down. RESPECT. There are jobs available so the hand-outs stop now or are at least diminished. I certainly was not discrediting their work ethics at all. It was what they do with their disposable income. There are myriad stories in the news of multi-family apartments to prove that point and I see the farm workers coming in to my neighbourhood every spring.

I am actually of the opinion that if the farm labour is important enough to import farm workers from Mexico and Central America, it is important enough to offer them citizenship after a season or two of doing the work.

 

[MilEME09]

I am actually of the opinion that if the farm labour is important enough to import farm workers from Mexico and Central America, it is important enough to offer them citizenship after a season or two of doing the work.

Could go the way of offering summer employment to students in the field, and academic credits.

 

[SupersonicMax]

Academic credits for manual labour???