Canadian Election

[iNow]

8 minutes ago, Raider5678 said:

This is true. However at some point it becomes impossible to borrow more.

And they’re no where even remotely close to that point today. 

1 hour ago, MigL said:

Even if we don't pay off the debt ( ie never borrow again ), our Provincial Government pays 8.3 % of all tax revenue to nameless banks ( who are making Billions of dollars profits every year ).

This appears mistaken. Debts of countries (public debts) are not owed to banks, but instead to holders of treasuries, securities, bonds, and the like. It’s basically money you owe yourselves... not banks, profit driven or otherwise. 

1 hour ago, MigL said:

How do you think Greece got in such a mess ?

By not having their own currency.

1 hour ago, MigL said:

The solution from some political parties is not to 'tighten their belts' but to borrow even more, thereby making the situation even worse, with higher interest rates and larger interest payments.

The funny thing here is the evidence is not on your side. Perhaps paradoxically, but the type of austerity you seem to advocate is actually what makes things worse time after time and after time again. Further spending in the right places is far more helpful (as is acknowledging it as an investment instead of a pure cost). Strange, but true. 

[Raider5678]

8 minutes ago, iNow said:

And they’re no where even remotely close to that point today. 

 

The point where it becomes impossible to borrow more, is light years after the point where it becomes foolish to borrow more.

[iNow]

Just now, Raider5678 said:

 

The point where it becomes impossible to borrow more, is light years after the point where it becomes foolish to borrow more.

This seems only to further support my position. Was that your intent?

32 minutes ago, Raider5678 said:

A better way to describe it is to think of it in terms of investments.

Agreed

33 minutes ago, Raider5678 said:

You can't perpetually borrow money.

Heck, think of it at a personal level.

No. I will do no such thing. It’s idiotic to compare national budgets to family budgets. I cannot print money or set trade deals or write regulations or levy taxes. Those all matter in critical ways when having discussions like this. The comparison you’re asking me to make suggests a fundamental misunderstanding of macro economies. 

[Raider5678]

32 minutes ago, iNow said:

No. I will do no such thing. It’s idiotic to compare national budgets to family budgets. I cannot print money or set trade deals or write regulations or levy taxes. Those all matter in critical ways when having discussions like this. The comparison you’re asking me to make suggests a fundamental misunderstanding of macro economies. 

It's idiotic to compare them on every level. It's not idiotic to compare them on some levels. I was simply asking you to compare them on the premise of borrowing money in different circumstances.

I feel I've provided an adequate argument why borrowing money for perpetual payments is bad. I also feel that this applies to both family budgets and national budgets. If you have a reason to believe otherwise, then I'm all ears. Saying you're not going to compare them because they're different isn't a logical argument in my opinion.

[iNow]

14 minutes ago, Raider5678 said:

I was simply asking you to compare them on the premise of borrowing money in different circumstances.

No. I won’t be comparing government debt to household debt. Households can’t print money, levy taxes, or negotiate treaties and trade pacts. 
 

15 minutes ago, Raider5678 said:

I feel I've provided an adequate argument why borrowing money for perpetual payments is bad

Sorry. I never bothered with that part of your argument because I never suggested otherwise. 
 

16 minutes ago, Raider5678 said:

Saying you're not going to compare them because they're different isn't a logical argument in my opinion.

Duly noted. Thanks for sharing. 

2 hours ago, MigL said:

sorry INow, I remain a fiscal Conservative, but feel free to try and convince me otherwise

Just so we’re clear, I enjoy our exchanges. I think you’re intelligent and kind. Those traits matter to me. I just also think you happen to be misguided here. 
 

By comparison, my child recently told me I couldn’t dangle me feet off the edge of their bed. It seems there was a monster underneath and we would only be safe if we stayed above the mattress. I kindly kept dangling my feet knowing the monster they feared wasn’t there. 
 

Here, in much the same way, in context of this discussion about Canadian finances, I’m simply reminding you there’s no monster there below... even though your fears are understandable, they’re manufactured and imagined... that dangling of feet right now by you Canucks is perfectly okay and not to be feared in the least. 
 

Go ahead. Invest. Make Canada great again. It’s not fake news. It happens all the time.

[zapatos]

2 hours ago, iNow said:

This appears mistaken. Debts of countries (public debts) are not owed to banks, but instead to holders of treasuries, securities, bonds, and the like. It’s basically money you owe yourselves... not banks, profit driven or otherwise. 

While as far as I can tell this is generally correct, I don't think it is accurate to say that there is NO debt held by banks. Unless of course I am missing something here (which is always quite possible).

Quote

Public Debt. The public holds the rest of the national debt of $16.1 trillion. Foreign governments and investors hold 30% of it. Individuals, banks, and investors hold 15%. The Federal Reserve holds 12%. Mutual fundshold 9%. State and local governments own 5% The rest is held by pension funds, insurance companies, and Savings Bonds.

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124

[iNow]

Banks are welcome to own government treasury bonds and often include them as components within their portfolio, but the implication from my friend was that they owned the note. Investment banks can also own stock in specific companies, but that doesn’t somehow mean the companies are in debt to the banks. They’re just shareholders, and it’s basically the same when it comes to treasury bonds. The suggestion was akin to the Canadian government having taken out a mortgage with institutions like Wells Fargo, and that was not an accurate representation. 

FWIW, I tend to be far more lenient with loose language and rough economic approximations when it’s not simultaneously being used as justification to change the way we govern and tend to tens of millions of families. 

Edited October 23, 2019 by iNow

[MigL]

You can look at it any way you want INow, but ( again using the Ontario 2019-20 budget numbers because I'm familiar with them ) that 8.2 % of Government revenue that has to be paid to service the debt, is NOT available for program spending. IOW it will not grow the economy or provide services.

IOW it is equivalent to a 'cut' of 13.1 Bill dollars which could otherwise ( if there was no debt ) be used for program spending.

It's simple addition and subtraction.
( by the way, I also enjoy our head-butting, as you've never made it personal )

[John Cuthber]

2 hours ago, MigL said:

You can look at it any way you want INow, but ( again using the Ontario 2019-20 budget numbers because I'm familiar with them ) that 8.2 % of Government revenue that has to be paid to service the debt, is NOT available for program spending. IOW it will not grow the economy or provide services.

IOW it is equivalent to a 'cut' of 13.1 Bill dollars which could otherwise ( if there was no debt ) be used for program spending.

It's simple addition and subtraction.
( by the way, I also enjoy our head-butting, as you've never made it personal )

Just curious- it's not my field.

I presume that much of the debt  which that 8.2% of revenue is being paid on , is historical debt.

Is it plausible that the money was borrowed in order to build and run hospitals, schools roads etc?

If so, is it possible that the money saved/ earned by the state (depending how you look at it) by having a health better educated workforce with better infrastructure is more than 8.2%  of revenue?

 

If so, is it possible -even likely- that, had the previous governments borrowed more, and built, for example, better roads, they would now have more money today?

 

That's kind of the point of most borrowing- you can invest it.

Once you consider the notion of investment, it stops being simple addition and subtraction.

[iNow]

John's post harmonizes with the response I was going to share. Looking at the 8% in isolation is a mistake. I quite agree we'd all rather not have to pay the interest, that we'd prefer to allocate our funds to future investments, but it's myopic to frame the conversation just on that point since the 8% is being charged on past investments, past investments that have both current and future returns.

If, for example, borrowing was done in 2010 and invested on a project that averages 30% annual returns, then the 8% is well worth it and we're still better off. Not paying that 8% would equally mean not having that 30% annual return. On net, it's a win, and only appears otherwise when the debt is viewed mistakenly in isolation.

That said, we all agree no debt and no interest tends to be a good thing, but so too are the things we invest in when borrowing. The ledger here is immense and complex (and often not transparent to outside onlookers), which is why reasonable people so easily disagree.

Regardless, I feel that I may have accidentally yanked your thread off-topic toward macroeconomics instead of Canadian politics. Not intentional. Mea culpa, and thanks again for the friendly exchange  Cheers!

[dimreepr]

1 hour ago, iNow said:

Regardless, I feel that I may have accidentally yanked your thread off-topic toward macroeconomics instead of Canadian politics. Not intentional. Mea culpa, and thanks again for the friendly exchange  Cheers!

The two are so precisely interrelated that, I don't think you could.

Edited October 23, 2019 by dimreepr

[MigL]

So we all agree with Raider's assertion that there is good debt and bad debt.
And bad debt is to be avoided, while good debt can provide economic stimulus.

What about when a party ( just to bring this back to the Canadian election ) promotes a platform for the next several years relies on borrowing just to run the government as the Liberals have? Who knows how much larger it will be with the BQ and NDP making demands of them.
To be fair the Conservatives also projected deficits for 4 yrs, but a balanced budget on the fifth, and we have 4 yr terms so they may not be in power in the 5th yr. ( good way to cover your ass, isn't it ? )

And these are favorable economic times.
What happens if a recession doe hit us next year ( as has been predicted by some ) ?

My understanding ( I'm not an economist either John ) was that economic stimulus, through deficit spending, is provided in bad economic times, while good economic times allow for balanced budgets and re-payment.
Doing otherwise seems foolish to me.

And what you call your currency has little to do with its value/amount, INow.
Greece was simply spending more than it could afford.
They maxed out their credit card, and the lenders imposed a re-payment plan on them.
( just like household budgets, isn't it ? )

[dimreepr]

23 minutes ago, MigL said:

So we all agree with Raider's assertion that there is good debt and bad debt.

What is bad debt in this context?

[iNow]

A subjective arbitrary label subject to reasonable disagreement. 

35 minutes ago, MigL said:

And what you call your currency has little to do with its value/amount, INow.
Greece was simply spending more than it could afford.
They maxed out their credit card, and the lenders imposed a re-payment plan on them.

Had they their own currency, they could’ve inflated/deflated it to reduce the real value of the debt.
 

Maybe Greece spent stupidly. That’s open to interpretation, but they only suffered because they were locked into the Euro and couldn’t use their own central bank to achieve better terms on their debt.

Canada doesn’t have that problem. Canada does have its own currency, so I question the relevance of Greece here. as best I can tell, it’s doing little more than serving as a bogeyman for those worried about debt (in which case Venezuela is the better example anyway).... and as mentioned before...

There is no monster under Canada’s economic bed no matter how forcefully folks continue to assert otherwise. 

[dimreepr]

5 minutes ago, iNow said:

A subjective arbitrary label subject to reasonable disagreement. 

I guess that depends on what food is available.

Sorry, now I'm yanking the thread off topic...

[MigL]

The 'monster under the bed', INow, is J Trudeau's need to retain power.

To ensure his government doesn't fall, he will partner with the Conservatives to build pipelines for Alberta oil and northern BC gas to the coast, where surprisingly, the Conservatives won seats through the proposed corridor.
( sorry Rangerx )

And to ensure BQ support/confidence for his Government, he will pander unashamedly to Quebec, their intolerant Bill C21 ( no religious symbols in workplaces ) , give the crooks at SNC-Lavelin  a 'get out of jail free card' ( their stock is already jumping ), and re-negotiate the North American free trade agreement to protect Quebec dairy farmers with unfair protectionist and price fixing rules ( who knows what the rest of the markets will lose to D Trump ).
( sorry rest of Canada )

PS  I don't get it Dim.

Edited October 23, 2019 by MigL

[rangerx]

18 minutes ago, MigL said:

The 'monster under the bed', INow, is J Trudeau's need to retain power.

To ensure his government doesn't fall, he will partner with the Conservatives to build pipelines for Alberta oil and northern BC gas to the coast, where surprisingly, the Conservatives won seats through the proposed corridor.
( sorry Rangerx )

No need to apologize. You're fine with the removal of our constitutional rights and leaving citizens holding the bag for the pollution it causes.

Thank you for clearing that up.

[iNow]

21 minutes ago, MigL said:

The 'monster under the bed', INow, is J Trudeau's need to retain power

That must be another one, then. I meant the big bad bogeyman of debt. 

[zapatos]

2 minutes ago, rangerx said:

No need to apologize. You're fine with the removal of our constitutional rights and leaving citizens holding the bag for the pollution it causes.

I would have thought that the courts would not have allowed the removal of Constitutional Rights. Interesting country.

[rangerx]

Just now, zapatos said:

I would have thought that the courts would not have allowed the removal of Constitutional Rights. Interesting country.

Indeed. The last conservative PM saw to that. It affected my class action, directly.

https://www.newsweek.com/new-treaty-allows-china-sue-canada-change-its-laws-270751

[MigL]

I say it's a 'monster under the bed' and you stretch that to mean

13 minutes ago, rangerx said:

You're fine with the removal of our constitutional rights

Ther's no winning with you, is there, Rangerx ?

I only went 'sideways' into the debt problem, INow, because it was an election issue, as J Trudeau seemed to be running against D Ford, judging by how often he mentioned his name and the 'massive' cuts he's done to Ontario social services.

They don't Zap.
The only thing that can nullify our constitution is the 'Not-withstanding Clause', which only Quebec seems to use.
Edit: Treaties however are a different matter.

Edited October 23, 2019 by MigL

[zapatos]

5 minutes ago, rangerx said:

Indeed. The last conservative PM saw to that. It affected my class action, directly.

https://www.newsweek.com/new-treaty-allows-china-sue-canada-change-its-laws-270751

Wow! I'm sure there are many implications and interpretations that I'm not aware of with this treaty, but regardless, that is astounding.

[rangerx]

1 minute ago, MigL said:

Ther's no winning with you, is there, Rangerx ?

Is that all you got?

Not much of a rebuttal. Oh wait, you don't have one.

You're perfectly fine with monkeying around with the constitution if it suits you, but scream from the rooftops when it doesn't,

Just now, zapatos said:

Wow! I'm sure there are many implications and interpretations that I'm not aware of with this treaty, but regardless, that is astounding.

It is astounding. At the very height of it, really.

[MigL]

3 minutes ago, rangerx said:

Is that all you got?

If you read carefully ( I know that's asking a lot ), I implied that its a bad thing, hence 'monster under the bed'.
If you'd rather pick fights, don't worry, I've got much more.

[rangerx]

8 minutes ago, MigL said:

If you read carefully ( I know that's asking a lot ), I implied that its a bad thing, hence 'monster under the bed'.
If you'd rather pick fights, don't worry, I've got much more.

From what I read, you're cock sure the pipeline will be built. There's a thing called the Supreme Court of Canada that says otherwise.

Unless you know something I don't, what's been done to change their position?

edit: no less to appease conservatives who voted the current cycle

Edited October 23, 2019 by rangerx