I'm not a big fan of Yaffe's talents as an analyist and this column doesn't persuade me to a different opinion.
The LP had huge "surpluses" because they kept taxes higher than they need be. Cutting trasnfers was a way of reducing spending by putting the political harm in someone else's lap.
The CP has methodically reduced taxes and increased transfers to the provinces to provide funding for areas of provincial funding where they haven't enough taxation capacity to fund them. The next step will be a negotiation with the provinices to reduce fed tax rates so as to allow the provinces to increase theirs and thus make them directly responsible for both the spending and the taxing done in areas of their juristiction. This BTW, is a large reason why the CP is so popular in QUE.
As for running into a deficit - the CP has taken a page out of Ron Reagan's book. Lower tax rates will at some point put the govt into a position of a revenue shortfall. The govt then has to either increase taxes - always unpopular - or decrease spending - sometimes popular, sometimes not. Under the CP it will be latter that is performed and over time the country will have a smaller government.
PS - A year or so ago many commentators accused the CP of huge increases in spending. that is not the case. What they did was increase transfers to the provinces - not increase federal government spending to any radical degree.
She missed the news this week that the Budget Surplus forecast was way up. That is a SURPLUS . . you know, the opposite of a deficit. Babs needs a dictionary.
She missed a discussion about cutting wasteful spending in Ottawa - any fool could cut at least $5 billion in useless travel and dumb programs that not a single non-public servant would even notice.
Let's not forget Chretien Martin take the credit for eliminating the deficit, but fail to credit the GST as the tax windfall that provided the $$, failing to mention the huge downloading to provinces and the massive cuts to DND.
Self-Praise is False Praise.
There is a bit of a disconnect between opposition calls to do something about the economy, in general, and the manufacturing sector, in particular, and their fixation about the federal budget.
In practise, if you spend money (i.e., through tax cuts, transfers or subsidies) to help the economy, your budget balance will deteriorate. Raising taxes (or not cutting them) to keep the budget in balance would be completely counterproductive.
For the most part, Canada's fiscal health is the best it has been for decades. If the economy were to temporarily go into the dumpster, a small deficit (say $2-5 billion) would be completely manageable. Unless Harper goes on a total spending binge à la Pierre Trudeau (a highly unlikely scenario), let's not get too fixated about a possible modest budget deficit.
Had Chretien/Martin slash taxes the way this current government did,maybe Ontario would not be heading to have not status right now.
A slight deficit is not the end of the world if it's stimulates private sector investment and job creation in the long run...The coffers would replentish themselves eventually. One thing people forget is that energy cost is taxed at a percentage of it's selling price and not a flat taxe/amount. This means right now that Ottawa is collecting more revenue from gasoline.
Tulk is right on about shifting taxation capabilities towards provinces which is actually the true Harper hdden agenda". Sending accountability closer to everybody's home will gradually reduce the size of government at all levels. The Libs are absolutely furious that Harper demolished their own hidden agenda/strategy which consists of overtaxation and regional vote buying schemes + using Quebec as a level of discord to manipulate turmoil and uncertainty to their advantage and only raison d'etre: To be in power/Reward their friends.
Had Adscam or the fractured right wing parties reuniting not occured and the Liberals still in power, I would be fearful that democracy was a thing of the past for Canada. Witness the stacked Liberal biased institutions we have to clean up. Elections Canada is only one of them.
I'm getting a little tired of MSM hacks and Liberal politicians using the terms 'balanced budget' and 'surplus' interchangeably.
A balanced budget is just that: a budget that is neither surplus nor deficit.
A surplus budget is one where somebody has miscalculated expenditures/revenues.
It's prudent for a government fiscal manager to run a budget with a slight surplus, but in the end, a truly balanced budget is what we're aiming for.
Is that such a difficult concept?
I tend to agree with grind a grit and would add that the last week in BC there has been increased outrage about the "club Fed prison system" and 2nd degree murders being housed there...able to walk away a second time seems beyond rediculous...
this is a direct result of Liberal Laws and Liberal appointed judges over the last 35 years or more... not to mention their charter of rights and freedoms...please note, in it's own title the absence of responsibilites...
Easy to find savings or defer expenses so as to avoid a deficit until the economy gets past this tight spot.
Here's a $2.2 billion example:
Biofuels, let Layton have his way to re-think this, only spend the $500 million the gov't earmarked for Cellulose ethanol.
Running surpluses is rather easy when your tax rates are too high and unfair.
Posted at 2008-05-01 10:30:44 [PermaLink]defering money's happens all the time...Like when the Liberals and their various "Red Book" promises..."axe da tax", "We are going to fix health care"....great plans guy's... Who'd have thought by defering it for Harper to clean up with increased transfers to the provinces, reduced tax's, cuting useless "feel good" and "PR" programs and by delivering an actually balanced budget with minimal deficit spending that was your real plan...that way Harper can face your biased MSM on it in the news and later at the polls because he spent the money, not Liberals...
After all, if the Liberals ever get back to power they can always cut transfers again, military spending, raise the GST and put it all back in the Liberal surplus/overflow/AdScam/Slush fund/Cayman Island Vacation get away coffers...
Wake the %^$^% up Canada!!!
I think you could choose a more knowledgeable economic commentator than B.Yaffe - perhaps Ronald McDonald? 1. P.M. Harper (correctly in my view) is reverting to the BNA economic model of Federalism, as opposed to the centralized Lib./left vision. 2. Ontario (a major eco performer in Canada) with McGuinty imposed tax increases and has dramatically increased public servants but limited private sector jobs.
Posted at 2008-05-01 10:40:59 [PermaLink]It was bad enough that we heard "42-billion dollar deficit" for the last 13 years of Liberal rule, but now our own side is saying it??? Don't believe that Liberal nonsense.
Let's remember too that Mulroney was left with a 100 billion dollar deficit and turned it around into an operating surplus, despite what others say.
This is rubbish.