Raise the Hammer

>> Debt charges have been down because interest rates have been so low, not because foreign debt holdings are higher.

I was just being a smart ass, I don't actually believe that there is a correlation between interest rates and where a debt holder resides. Both Canadians and foreigners expect to be paid.

>> I guess I'm just recalling the inflationary issues of the early-80s

Government spending in the eighties averaged 10.48%/year. That's what caused inflation. Fast growing salaries, transfer payments, all made people rich on paper, but most of that "wealth" just fed to higher prices, without really creating more stuff.

In contrast, the nineties saw government spending rise at only 3.48%/year. In that decade, the average price of a Canadian house actually remained at about $150k the whole decade (no inflation). In the eighties, they increased by 8.72%/year.

>> I do not believe you can "mint" your way out of fiscal straightjackets. Debt does matter.

There is no fiscal constraints on a nation that issues its own currency, which Canada does. The only issue is debasement of the currency.

However, if you look at Japan, their debt/GDP has grown from 68%, to over 200% since 1990. In contrast, Canada's has gone from 75% to 84% (includes provinces). Yet, in this time, the value of the yen has increased from 123 Yen/1 CDN dollar, to 81 Yen/CDN dollar. Rising deficits/debt have not hurt the value of the yen at all.

>> Surely there is a balance to aim for, but I think our government is far from achieving it

The balance should be a job for every Canadian that is healthy enough to work.

Material wealth does not come from money, it comes from work and productivity. Therefore, with unemployment at 7.4% nationally and 7.9% provincially, our focus on a non-issue (running out of paper money) is forcing many people unnecessarily into poverty.

I hear people talking about wanting to find a job, but can't. That is maddening. These people want to help themselves and their families, do not want to collect welfare, but because there is not enough buying and selling in the economy, their efforts are simply not needed by businesses.

Businesses don't hire because they want to be nice, they only hire workers if they are forced to increase their output (explains Fed Ex temporary hires around X-Mas).

That being said, the only way to increase buying and selling is to make consumers more confident. If consumers think they will lose their job, odds are they will slow their spending, thus businesses will not hire more workers.

In contrast, if the HST were cut sharply, people would be able to buy more stuff and create more activity in stores. Because of this, businesses would be forced to hire, paying salaries to people that would have otherwise sat at home collecting welfare.

Inflation comes from incomes that rise too quickly, not from public deficits. Wealth comes from production. Production comes from jobs. Jobs come from unit sales.

The real goal of the economy should be stimulating consumers to buy things they want/need, not the deficit. The deficit is a complete non-issue for Canada, regardless of what the "so-called" experts say.