Comment 72419

By A Smith (anonymous) | Posted December 20, 2011 at 15:12:36 in reply to Comment 72406

>> So your suggestion is that we increase debt, in the face of a credit downgrade, which will likely result in further downgrades and raise our interest rates,

This is from the Bank of Canada Act (http://laws.justice.gc.ca/eng/acts/B-2/page-6.html)

18. The Bank may

(c) buy and sell securities issued or guaranteed by Canada or any province;

In effect, Ontario and Canada could run up as much debt as they wanted, knowing full well they would always have a buyer for their debt.

As a result, Ontario/Canada could in theory scrap the HST altogether and still fund spending at whatever level they wanted to. The extra funds would come from the Bank of Canada, not through taxation.

Unfortunately, Minister Flaherty is currently expecting the impossible. Have consumers pay down our household debt, yet keep spending high to create jobs.

How are we supposed to do both when we have a current account deficit (more money leaving Canada than coming back).

If he would scrap the HST, that would put $28.38 billion back into our pockets. We could use half for debt repayment and half for new purchases, thus creating the need for more workers.


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