[U]nder the 2011 budget, every hour of every day, the federal government spends $188 million it doesn’t have, $130 million of which is “borrowed” from itself.
A little more on the utterly ignored number one threat to the Canadian economy.
[U]nder the 2011 budget, every hour of every day, the federal government spends $188 million it doesn’t have, $130 million of which is “borrowed” from itself.
A little more on the utterly ignored number one threat to the Canadian economy.
It seems to me that what Mr.Steyn is saying is akin to what CaptainCapitalism has been saying since at least 2008.
I must admit that if Aaron had as big an audience as Mark Steyn back then; maybe we would not be in this situation…
The US is in the situation they are in for precisely the same reason Canada may potentially be Tuesday morning.
A complicit and compliant media helped install a far left radical into power by shielding him from any public scrutiny into his political history or his past.
You might as well call Obama Black Layton so similar are these two men are ideologically.
Do you fret as much when the GOP spends like a drunken sailor?
Like with Reagan and every GOP president since? Just in the interest of consistency.
Geithner is right; it is ridiculous to presume that the US will never pay off its debts. It will do so in currency that is so heavily devalued as to be worth nothing. That such a policy is fiscally insane never crosses his mind it would seem.
A moment of real crisis will come when China breaks the fixed exchange rate between the yuan and the dollar. It will do so not because of foreign pressure but simply that the US dollar has become too dangerous to hold.
It’s a virtually unprecedented crisis in human history where all the reserve currencies start collapsing in value all at once, the US dollar because of domestic overspending, and the Euro because of sovereign debt problems. When Spain’s currency collapsed in the 17th century it didn’t much matter because the English and Dutch economies were much larger and stronger. The only comparable situation I can think of was when Rome devalued the denarius in the 1st and 3rd centuries. The result was economic ruin and partial reversion to barter until it was restored.
Dear Gray posted at 11:25 a.m., I think the tenor of the articles is that the media is complicit with this – the media were far more engaged and strident about George W. Bush’s Iraq/Afganistan (sp?) adventures precisely because of the related costs. I strongly believe that governments should be run like households, if you don’t have it, don’t spend it. My parents rec’d their first credit card in 1975. They taught my siblings and I to only spend on credit as much which you could pay off every month. Never, ever, go into debt with the credit card companies. Same thing with countries, avoid at all costs going into debt with countries who do not like you. It never works out well.
I’d say the threat is not so much ignored as it is concealed. The 2010 US elections demonstrated that “the people” have little difficulty recognizing and understanding the problem when they’re actually informed with the facts.
Gray @ 11:25
Your comment indicates you do not understand the American federal government. Presidents may only request money from Congress. The House of Representatives must initiate spending and the Senate must concur with the spending. Often the Congress authorizes spending for which there was not a Presidential request. Frequently the Congress denies a President’s spending request. The same situation exists for taxation and borrowing.
Yes, RR did request tax cuts and he did request massive increases in military approriations BUT the Congress added BILLIONS of additional spending on agricultural subsidies, education and social welfare programs for which there was not a presidential request. Granted RR did sign off on the requests but often he faced a veto override if he did not sign off. Bill Clinton was the first president who had a line item veto ie he could veto one item in a bill but leave the remainder of the bill intact.
Canada’s situation is different. A Minister may request money from Parliament for a program but the House cannot initiate spending without the Minister’s request (except for the wrinlke of statutory approriations e.g. CPP, EI) When Iggy, Jacko and Gilles wail about the Harper deficits they are being very misleading. Harper’s Conservatives did not have enough Commons votes to approriate the money which caused the deficits. Some Liberals, NDP or Bloc MPs HAD to vote (or at lease abstain from voting) for the spending.
The Bambi administration in the US has achieved two things which structurally are nearly impossible: a higher unemployment rate, and a weaker dollar.
By “structurally” I am referring primarily to the fact that the US is our largest and indeed very large customer.
Bambi actually deserves a second Nobel prize, in economics, for demonstrating how to produce such wonders.
I wonder how the MSM will spin the inevitable shortages we will soon experience? A bit of that iceberg is currently visible in the Pharma industry. A declining USD does make exporting exotic products such as baking soda a tad riskier.
Norm at 11:54, good comment,
All three opposition parties, the Liberals, New Democratic Party (NDP) and Bloc Quebecois said they would not support the economic statement introduced by Finance Minister Jim Flaherty because it contained no stimulus package…
At least in China they knew who was responsible for our recent deficit spending
Unfortunately, since our southern bro has a lingering cold, Canucks will get pneumonia. Vote for PM Harper, as he might be able to advise his southern friend to put his credit card in the freezer. And will keep us out of carbon tax and scam as long as possible, unlike Bob Rae, Min of Foreign Affairs, or Libby Davies (cough).
gray, many are concerned about GOP compromising sound fiscal policy. See Tea Party for details. From your name I assume you’re American, so you may benefit from joining their efforts.
The US Government is leviathan. It didn’t get that way overnight nor exclusively under the current pathologically deceitful President. In fact, budgets are the responsibility of the lower House in Congress. Bush’s last two years saw spending skyrocket under a Democrat controlled House. He could have vetoed but as long as they supported “his” war, he left them more or less alone. Bush was no conservative.
All net growth in US GDP since 1998 has come from the public sector because by then the watermelon-led anti-industrial revolution (through regulatory behemoths) had stalled primary industrial growth (particularly in energy) while the country has evolved into a more (low wage) service-based economy (net consumers of public spending).
If the US can be saved, all levels of government must deregulate and downsize in the extreme. Real economic growth can service and reduce the debt, leviathan and its pimping political class cannot.
Anyone who thinks that all of the current functions, roles and agencies of the state are legitimate is nothing more than another paving stone in the road to serfdom.
Who owns the federal reserve?
@ Norm
Thanks for the Schoolhouse Rocks explanation of the US Budget process. While you do make some reference to RR’s role in that, you don’t give his leadership of the process due weight. I understand you would prefer to blame the Dem Congress at the time but then what apology do you offer for Dubya and his GOP controlled congress?
Also since we are criticising profligate governments I suggest it would be reasonable to praise the fiscally disciplined ones.
I therefore await the the thread’s unequivocal endorsement of Jean Chretien.
Then again maybe I won’t wait up.
Gray:
“I therefore await the the thread’s unequivocal endorsement of Jean Chretien.”
It wasn’t so much Chretien as it was Paul Martin and it wasn’t done without severe prodding. The Wall Street Journal had just published an article comparing the Cdn. dollar to the Mexican Peso suggesting Canada was heading towards third world country status. The Cdn. dollar was falling as was Canada’s credit rating. That said, credit to the government at the time for tackling the problem head on – with the help I might add of various provinces who also kept their budgets under control.
BTW – good article here on the Canadian situation:
http://tinyurl.com/2dfbeke
Also since we are criticising profligate governments I suggest it would be reasonable to praise the fiscally disciplined ones.
I therefore await the the thread’s unequivocal endorsement of Jean Chretien.
Yes, there were “surpluses” under the Liberals.
How there can be a surplus and a national debt at the same time I don’t quite understand.
Shouldn’t all that “surplus” taxation have gone to pay down the debt?
Where is the discipline in overtaxing the Canadian people and not paying off the debt?
Explain that to me please.
Paul Martin could have never ‘balanced the budget’ if he had not been forced to listen to the Reform party.
He would never have balanced the budget without increases to EI, (and its huge paper surplus), CPP, and the existence of the GST.
Plus reductions in transfer payments to the provinces.
“I therefore await the the thread’s unequivocal endorsement of Jean Chretien.”
I remember activists screaming that these federal cuts would hurt eventually and cost the liberals a lot of votes. Well, years passed, it was inevitable for Harris to make cuts – and the very same people screamed about Harris, said not a word about the federal government.
As for the excess spending of previous American administrations, I won’t justify excesses by either party. However, when the credit cards have a lot of room left one tends to have a different attitude, particularly in the face of nonstop advocacy by people like you. Now the situation has changed.
Gray, you are not nearly as clever as you think you are. Do you think that posters here have not thought about your rather obvious points?
Posted by: Norm at May 1, 2011 11:54 AM
Good post, norm. Pity that Gray is unable to understand your “schoolhouse rocks” explanation. He suffers the leftard issue of selective amnesia, choosing not to remember that the dems held the house/senate and forced the spending increases during reagan’s watch. Ahh, well. Typical.
As for chretien, he benefited enormously from mulroney’s free trade and hated GST, enough from the last one to break a liberal election promise. A liberal, lying: imagine that.
Our taxes rose precipitously under the financial stewardship of paul martin, who showed a “surplus” by raising taxes and downloading to the provinces. Well done, Brainiac.
A layton-led coalition will have us well on the way to developed nation status, within 2 years.
mhb23re
developING nation status, rather
mhb
$188 million an hour huh?. The term ‘euchred’ comes to mind.
http://www.usdebtclock.org/
http://www.debtclock.ca/
Stop complaining about the debt and deficit, and realize that CURRENCY *IS* DEBT. If there were no debt. There would be no currency.
The number one threat to our economy is the fact that we have fiat currency, and not sound money. It is called a debt-pyramid scheme. The currency is created when the government borrows it into existance from the central banking authority. The central banking authority creates it out of thin air. The very nature of the system is that in order to repay the interest on the previous loans you’ve taken, you have to borrow new money into existance as well.
There hasn’t been an honest balanced budget since the gold standard ended in 1971, and this is why.
If they stop creating new currency (by going deeper into debt), there won’t be any new currency to repay the interest on the previous currency that was borrowed into existance.
Tell me how that’s not a ponzi scheme?
This is, “way way back, long ago” we had something called “gold”, and it was money. Now, we pretend the receipts and gold, and we wonder why they’re becomming less and less valuable.
I explain it better here:
http://sgtreport.com/2011/04/whos-ready-for-some-dollar-depreciation/
SJB ~SGTreport.com
@JohnB 1:44
Considering Martin’s performance as PM I’m not prepared to give him the main credit for the debt reduction, his post as Finance Minister notwithstanding. I’d look at any evidence to the contrary though.
@Oz 1:52
It did – 36 billion worth.
@Jema
That seems hardly likely since Chretien had a considerable majority. He didn’t have to listen to anyone . Certainly not Preston Manning.
@ whit seven 3:04
Yes there was lots of screaming about Chretien’s cuts to programme spending and transfer payments, but he brazened it out and Canada is better for it.
Some posters may have considered these points, others clearly have not. See above.
@ Norm 11:54
Do you often thank yourself for your posts?
Anyway I concede that Mulroney’s tax increase helped create part of the condition whereby fiscal sanity could reign. Shame Mulroney squandered his legacy accepting cash from a slimy European arms merchant in a hotel room eh? As for the “liberal lying” no argument there either,
@Oz 1:52
It did – 36 billion worth.
It did?
All of the so-called surplus?
What about the $400 million that the Liberals stole for Adscam?
That sure as cht didn’t go against the national debt, buckwheat.
from wiki
$36 billion in debt was paid down, and taxes were cut by $100 billion (cumulatively) over five years. There were, however, undeniable costs associated with this endeavour. The cuts resulted in fewer government services, most noticeably in the health care sector, as major reductions in federal funding to the provinces meant significant cuts in service delivery. Moreover, the across-the-board cuts affected the operations and achievement of the mandate of most federal departments. Many of the cuts were restored in later years of Chrétien’s period in office.
It should be noted that although there were cuts in service delivery and these departments were unable to fulfill their mandates that their were no layoffs,(gotta keep those civil servants voting Liberal) which means the taxes spent on those departments was wasted.
So, in the end, the vaunted Liberal fiscal displine was nothing more than a shell game to take in gulls like yourself, gray.
Shame Mulroney squandered his legacy accepting cash from a slimy European arms merchant in a hotel room eh?
Shame Chretien squandered his with Adscam.
Well, not a shame. More like “inevitable”, with a corrupt ass like Chretien.
Wonder how long before we’re on a barter system again? The thing I’ll be looking at in the next few weeks is how to put most of my RRSP money into something tangible. Land seems to be the best option because if you can’t sell it you can always live on it and raise sheep or cattle so that solves the food problem. Decline in RRSP value is going to be a major problem for people who were assuming that this was going to be the key to their retirement.
Went to a gun show this weekend and a lot of grumbling heard about high ammo prices. I’m glad I stocked up on 7.62×51 ammo a few years ago as now its $1/round in bulk. Has anyone come up with an index which tracks the decline in value of the US$ as a composite of say ammo prices, drug prices and food prices — things that people use frequently and thus would be a more objective measure than gold prices which are probably currently the result of too many buyers chasing too little gold?
Am also so glad I’ve got 10-20 lb of silver coins stashed away and, with the price of silver now should probably move them out of the garage where they’ve been gathering dust for years.
gray: “I therefore await the the thread’s unequivocal endorsement of Jean Chretien.”
Yes, let us all thank Jean Chretien for driving the value of the Canadian dollar to $0.75 cents US to pay off the towering debt that Trudeau created with his programs.
Let us also thank Chretien for spending two billion dollars on the gun registy, a glorified computer database that could be run on a -laptop-. Beside that rip-off the above mention AdScam looks like a rounding error.
Let us not forget to praise Mulroney for giving us the GST and utterly failing to clean up any of the mess Trudeau created, despite saying he would.
Finally, let us thank all the politicians who held office in this country since WWII for giving us a combined tax rate that approaches 50% of the average income. Oh, and incidentally driving away virtually all the manufacturing jobs in Canada.
Thanks, boys. Awesome. Want to see a whole lot more of the same, just vote Coalition tomorrow.
Me, I think I have enough to be thankful for, I’m voting for the ONLY party we have which isn’t hell bent on increasing taxes and spending.
Gray
When did I thank myself for my post?
Chretian was FORCED to cut spending when the money markets put a gun to his head.
Finance ministry officials are very skilled at setting the weekly discount rate for T-bills. When a T-Bill issue under his watch failed to be fully subscribed it was a diamond bullet to the forehead. The lenders beleived the discount rate, ie the risk premium, was too low. The government cut spending (largely by slashing transfer payments from 50/50 sharing for health, education and welfare to much lower block grants for any province west of the Ottawa River.
Amazing what happens when reality smacks one in the head?
glasnost, thanks for that China Daily article. I expect that Liberal and NDP trolls on SDA will at any moment now stop blaming PM Harper for the budget deficit.
The Phantom, exactly, although MSM never drags this up and tries to hang the Liberals with this information.
@waterhouse
re Chretien agreed
@Norm
I’d need to see some evidence that he was “forced” to do anything by any outside agency. He had a solid majority and a scattered opposition.
He sure cut spending, you’re not complaining about that are you?
Anyway there is such good news today it seems pointless to beat this to death.
Let us also thank Chretien for spending two billion dollars on the gun registy, a glorified computer database that could be run on a -laptop-”
well phandome, you seem to be at odds with all the police chiefs in the cuntry who cluck and cluck and cluck away about insisting they need the registry.
do you hate cops so much you would have them shot to death by an unregistered firearm. like for instance maybe a scope rifle from 3,000 yards. ya, that’d be neat to see on youtube from the built-in recording device.