Admiral Beez
Superstar
Do we even care about deficits anymore? Has Trudeau ever explained how and why he broke his commitment to 2019 balanced budget?
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PM Justin Trudeau's Canada
- Thread starter King of Kensington
- Start date
Admiral Beez
Superstar
Did you take on more debt? Debt terrifies me, so during the low rate periods I’ve worked hard to pay off everything.More deficit spending:
Liberal deficit soars to $27B demolishing projections, with another $35B in surprise red ink on the way
A weaker balance sheet comes amid ongoing worries over a trade dispute between the U.S. and Chinanationalpost.com
SunriseChampion
Senior Member
I'm sure, if asked, he'd give the same bullshit type of response he has when asked about why he lied about electoral reform. So, in other words: there's not point in hearing it from him.
They say it's for investments in society. I haven't really noticed anything being invested. Where are the major housing works that have been talked about? The massive transit projects?
Where is the money going? I think they may have done one of those blah blah, here's a tiny inconsequential amount of money for every little pet project we can think of.....you know, instead of actually nation-building monstrosities that might actually make an impact.
I mean, they've put money in the AIIB...so, you know, they're deffo investing in China's continued prosperity. There's that at least.
Northern Light
Superstar
Do we even care about deficits anymore? Has Trudeau ever explained how and why he broke his commitment to 2019 balanced budget?
I'm not unconcerned by the deficits, its a worry, particularly in times of growth, albeit modest growth.
But I find far more worrisome and offensive the penchant of this government to miss its targets, again and again with surprise expenses in-year.
Almost every year they've met or exceeded revenue projections........
Yet deficits that should have been 'x' or even 'x-5' ....approaching balance, suddenly surge back to and beyond their original projections.
One has two options, as I see it.
The Minister's projections are incompetent; or there is a wilful political decision to overspend and to not permit a return to balance.
I'm not sure which is more disturbing.
But I'll start with suggesting that the case for removing the current Finance Minister is all but iron clad.
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I'm also concerned at how little we seem to get back as a nation for the over spend.....
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Admiral Beez
Superstar
When I look at this chart and think back to the low debt 1970s, I wonder what parts of the greatly expanded federal government since that period are necessary today? Healthcare has grown in cost, but that's a provincial matter. What's happened in the federal government? Where are we spending more than we did in the early 1970s?
picard102
Senior Member
CHST is a Federal responsibility in the billions. In Ontario it covers nearly a quarter of the health care budget.
Inflation, population growth, increased social conscious.
Admiral Beez
Superstar
I believe that that chart is adjusted for inflation, but I'll dig to confirm.
What is increased social conscious? I'm all for spending to help our fellow Canadians, but only if we have the money. If the programs are essential, we should increase revenue to cover them, which means higher taxes or cuts elsewhere.
Admiral Beez
Superstar
Here's inflation adjusted dollars, clearly showing that neither Liberals or Conservatives care about the debt. And why should they I suppose, it doesn't seem to matter? What the heck happened in the 1980s though? We've had recessions before, but somehow we doubled the debt in a ten year span.
Northern Light
Superstar
Charts worth a look-see;
From theglobaleconomy.com
From Wikipedia:
And from ratehub.ca
This reveals much.
Have a look at those 1980s interest rates.
Worth adding, that until 1974 most government borrowing was done from the Bank of Canada at interest rates that were effectively zero.
Post, '74, the government shifted to borrowing on the open market and paying interest.
From theglobaleconomy.com
From Wikipedia:
And from ratehub.ca
This reveals much.
Have a look at those 1980s interest rates.
Worth adding, that until 1974 most government borrowing was done from the Bank of Canada at interest rates that were effectively zero.
Post, '74, the government shifted to borrowing on the open market and paying interest.
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Admiral Beez
Superstar
@Northern Light Interesting info. What I'd like to see is federal government spending as a percentage of revenue. How much would revenue need to increase per household to balance?
SunriseChampion
Senior Member
SunriseChampion
Senior Member
Nice charts, lads!
Question, as I'm too young to even guess: What the hell was Mulroney doing? How many cash-stuffed envelopes were actually going around?
I'd also like to ask again what it is we're getting for all this loot?
Question, as I'm too young to even guess: What the hell was Mulroney doing? How many cash-stuffed envelopes were actually going around?
I'd also like to ask again what it is we're getting for all this loot?
Northern Light
Superstar
Last bit first.
Based on the last full federal budget, total projected revenues for the 2020-2021 fiscal year 338B of which 285 will come from taxes.
The projected deficit is slightly over 10% of that sum, so we could reasonably assume that we would need a global tax hike of about 11% to bring the budget to balance next year.
Without diving into the details of elasticity of certain forms of tax addressing smaller forms of taxation; if we equally applied that hike to the three major areas (HST, Personal Income Tax and Corporate Income tax)
The following would be true:
You would raise the lowest tax bracket from 15% to 17%, then the 2nd bracket from 20.5% to 23% and then the 26% bracket to 29% etc.
Obviously there are other ways to raise PIT revenues such as eliminating or reducing any number of deductions, and that would be my preference, I'm just applying a generic model.
HST would rise from 5% (federal) to 6%
Corporate Rates for large businesses would rise from 15% to 17%.
As for spending, see this graph:
Note that interest on the debt is nearly the same number as the deficit itself.
Program expenses currently represent 329B against 339B of total revenue (rounded)
* note that the projected deficit is now higher; this is both a function of the big tax cut proposal (raising the basic amount) as well as a one-time charge for pension benefit liabilities due to low interest rates.
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Videodrome
Senior Member
The CPC will continue to be in opposition if they stick to unpopular positions.
SunriseChampion
Senior Member
^Yup, of course they'd sack a decent politico. Scott Reid is a reasonable person and probably a good guy. (I watch a fair amount of CPAC and am an empath...I can suss it out over the air).
You just can't be a good politico in Ottawa. Ask Jody Wilson-Raybould.....you get sacked for doing your job well!
You just can't be a good politico in Ottawa. Ask Jody Wilson-Raybould.....you get sacked for doing your job well!