Deficit, deficits, deficits

RYAN By Guest Blogger Ryan Lewenza

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To deficit hawks like myself, the accumulating red ink on the Federal government balance sheet is giving me cause for concern and is contributing to my ongoing heartburn. Based on a recent Nanos survey I appear to be in the small minority that actually cares about these rising deficits and their potential impacts down the road. According to this survey just 3.5% of Canadians polled see our rising debt and deficits as the most “important issue of national concern”, while 21.7% of those polled believe the environment is their top concern followed by jobs and the economy at 18.2%. Basically, Canadians just don’t care about debt these days whether it’s accumulated by households or our government. This concerns me.

A bit of history first.

Our last major debt scare was in the 1980s and 1990s. After years of deficits under Trudeau and Mulroney our Federal debt was so high that 30 cents on every tax dollar went to paying the interest on the debt. Then Chretien and our great finance minister Martin saved the day by making the tough decisions to finally rein in our out-of-control deficits and debt.

They did this in part by cutting spending. Government or “program spending” as a percentage of GDP declined from 16% in the early 1980s to 12% by the early 2000s. Harper kept spending in check until the financial crisis when many countries dramatically increased government spending to help combat the worst economic downturn since the Great Depression. Now spending is back in vogue with program spending hitting 14.6% of GDP last year, and is set to keep rising.

Government Spending Is Back on the Rise

Source: Department of Finance Canada, Turner Investments

Justin Trudeau and the Federal Liberals significantly increased spending on social programs during their first term and are doubling down on spending commitments in their current campaign platform. T2 calls them “investments” and they include things like higher OAS payments, more student grants, an expansion of the first-time homebuyers plan and so much more.

In total, these new proposals would add an additional $32 billion to our deficits. Based on these new spending measures, sorry “investments”, Canada will rack up an additional $100 billion in deficits over the next 4 years. Even worse it’s estimated that Canada will not return to a balanced budget until 2040!

Government Deficits for Years to Come

Source: Bloomberg, Parliamentary Budget Officer, Turner Investments

When Trudeau initially announced these new spending measures and this new direction for the government, l was initially supportive of the deficits, but specifically for infrastructure spending as it is badly needed and adds to long-term productivity gains. But these proposals are more focused on social programs, which are near impossible to cancel (what politician has ever successfully campaigned on cutting programs and spending?) and are reoccurring.

This is the point. Once you start down this road it is very hard to reverse course and take the corrective action needed. In fact, spending just begets more spending, as evidenced by T2’s Oprah-like platform where he’s basically saying “you get car, you get a car, you get car”. In my opinion, he’s more concerned with buying votes today than the future consequences of all this spending and deficits. And this is coming from someone who has generally been a Liberal for most of my life. These days not so much.

The reasons why I’m so concerned about these deficits are: 1) I’m familiar with the history of our past debt problems, 2) once you start down this road it’s very difficult change course, and 3) our current deficits don’t even include major long-term demographic trends that will only add to our spending requirements. Here I’m talking about the huge future costs of our aging population.

According to Stats Canada, the number of Canadians over the age of 65 is expected to double by 2036. This will put a huge financial strain on healthcare costs and our pension programs, which will end up crowding out spending on other programs.

Canada’s Demographic Projections

Source: Stats Canada

The counterarguments to all of this is that our Federal debt-to-GDP ratio remains low at just 33% (the US stands at over 100% for comparison) and that interest rates are at record lows so it’s cheap to finance all this debt. But this leaves out the fact that our provinces are also pickled in debt (our provinces have another $700 billion in debt on top of the $670 billion outstanding at the Federal level) and interest rates are unlikely to stay at these record-low levels ad infinitum.

Think about this. On our current $670 billion in Federal debt the weighted average interest rate of this debt is currently 2%. Given these record-low interest rates, interest expense on the debt consumes 7% of our overall yearly budget. If interest rates were to double from here to just 4% (prior to the financial crisis the GoC 10-year yield rarely traded below this level) our debt charges would double to over $40 billion per year, representing 14% of overall program expenses! To fund this the government would have to raise taxes further (our highest marginal tax rate is already high at 53%), or cut spending to other programs. Either option sucks in my opinion.

Garth likes to say “today’s deficits are tomorrow’s taxes”, and I couldn’t agree more! Our government is playing a dangerous game of spending like drunken sailors today and giving little thought or consideration to the potential consequences in the future, and I guess why would they, since it will be someone else’s problem by then. Unless we (our government) wake up today and realize we have to live within our means and manage our government finances, just like we do at home with our family budget, we’ll end up in the same mess we were in during the 1990s.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

124 comments ↓

#1 Great Post on 10.12.19 at 10:01 am

Fully agree, Ryan. And keep up the excellent writing!

#2 Incubus on 10.12.19 at 10:11 am

“According to this survey just 3.5% of Canadians polled see our rising debt and deficits as the most “important issue of national concern””

These people will vote Maxime Bernier.

I will

#3 one big joke on 10.12.19 at 10:11 am

my suggestion to you would be to get a couple of different passports. give yourself some options. buy some physical gold and diamonds. open a few accounts overseas, and stop worrying about silly things like debt.

the problem with politicians, is they are worried about getting voted in over and over. they aren’t interested in doing the right thing for the country. if they do, they won’t get voted in…

#4 crowdedelevatorfartz on 10.12.19 at 10:34 am

“Todays deficits are tomorrow’s taxes”

Excellent article Ryan.

Is any of this sinking in to todays voters?

Highly doubtful.
Live for today, kick the deficit tax can down the road.

Millennial voters need only look at their cat food eating Boomer elders to realize Trudeau’s “spend spend spend the budget will balance itself….”
Economic voodoo by a swami in brownface.

Purple Pumpkins would make more sense…

#5 JSS on 10.12.19 at 11:01 am

Ryan: “what politician has ever successfully campaigned on cutting programs and spending?”

There was.

His name was Ralph Klein and he went on to win three consecutive elections in Alberta.

#6 crowdedelevatorfartz on 10.12.19 at 11:10 am

Since we’re discussing the long term fiscal ramifications of another Liberal “win” ( if you can call a short term minority govt a win).

After reading Dolce Vita’s comments about Statscan employment numbers it got me to wondering.

Polls…..

Has ANYONE out there actually answered a phone pollster without immediately hanging up?
Apparently with the advent of cellphones and caller ID ( or more importantly….LACK of ID) fewer and fewer people are picking up a call due to incessant sales robo spam calls.
Pollsters have found participation has fallen from roughly 70% of calls in the year 2000 to 6% today.

How can we put any faith in polling numbers with response rates like THAT?

Unless , of course, you’re Millennial Surrealist and believe it’s all fiscal rainbows and unicorns after a Liberal minority coalition govt forms power……

#7 G on 10.12.19 at 11:14 am

I voted last night so I wouldn’t miss it.
I had just gotten home from out of town and I might be out of town again.

You can vote early until Monday Oct 14th or wait until the Oct. 21st.
To find out where to go and vote based on where you live. https://www.elections.ca/home.aspx

I asked if there were many people that came in to vote (on Fri) and was told there were long lines earlier in the day. I know it’s just one polling station.
When I was there it was ~8:30pm and I just walked straight in with no line at all and only saw a few other voters at that time.

Might anyone now the statistics of what a large early votes might indicate for the sitting government?
I was just wondering. Thanks in advance.

#2 I also noted in the English Leader debate that the Max guy from the PPC party was the only one that said he would balance the budget in two years and then lower taxes for everyone without cutting services and briefly how he would do it.

I don’t actually know very much about Max or the PPC. So I looked at there web site to find out more about them. And without the bias mass media filter involved!

See for yourself. And all Parties for that mater.
https://www.peoplespartyofcanada.ca/platform

I’m not saying how I voted for, but that T2 line “the budget will balance itself” told me a lot! But he does have a nice looking collection of socks, and not just one jet plane but two jet planes. Or was that faces, I’m not so sure anymore?

IMO if you don’t bother to vote you don’t get to complain about the outcome.

#8 Manitoba Whale on 10.12.19 at 11:22 am

Amen.

#9 cmj on 10.12.19 at 11:25 am

excellent article, Ryan. “What’s in it for me” contributes to the growing deficit. Frustrating election when leaders of each party are trying to buy our votes. We eventually pay in the end

#10 The Debt on 10.12.19 at 11:51 am

I too am very concerned about the debt, and the spending spree that may put our country in a corner with no way out. The rush on the free trade agreement is also out of character. There is a simple clause in there that has never been addressed or spoken about, and it must be altered for the betterment of our country. This involves British Columbia and parts of Alberta, and believe the hypothetical of having no choice about being put into a corner had been all planned to surrender our greatest asset in exchange for debt obligations to the globalists.

#11 PeterfromCalgary on 10.12.19 at 11:57 am

It is expensive to distract voters from SNC-Lavalin, Aga Khan vacation, Mark Norman persecution and blackface.

#12 Yukon Elvis on 10.12.19 at 11:57 am

So true about debt and deficits and higher taxes and dwindling services. But at least we can console ourselves knowing that housing demand and prices will remain strong:

More than 40 per cent of Hongkongers want to emigrate amid ongoing protests, survey finds:
According to Chinese University survey, 42.3 per cent of respondents want to move abroad permanently, compared with 34 per cent in December last year
Most people want to move to Canada, Australia or Taiwan citing factors such as ‘political disputes’ and ‘lack of democracy’
Of those who were asked, 23% of respondents said they’ve already started emergency plans to leave. Some of those plans include getting out of housing leases, selling their homes and cars, and packing up their possessions, ahead of a move to a foreign city.

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3032390/more-40-cent-hongkongers-want-emigrate-amid

#13 Russ on 10.12.19 at 12:08 pm

Ryan wrote:
Our government is playing a dangerous game of spending like drunken sailors today and giving little thought…
================================

Ryan, my friend.

Please stop perpetrating this discriminatory practice of comparing the spending habits of governments to those of drunken sailors!

To wit, we spend our own money and it is only the cash on hand (albeit, perhaps the whole paycheck).

We do not waste other people’s money as a politician is want to do.

We spend our money on rum, women and song. It is the little bit left over that we waste.

Cheers, R

#14 Anna on 10.12.19 at 12:20 pm

#7 G
I had some good chuckles reading your post.

I too voted early Friday morning and there were about 5 people voting with me at 11am. It looked like an efficiently revolving system of people constantly streaming in and out, so not a big line, which is what I love about early voting.

#15 Mike in Airdrie on 10.12.19 at 12:33 pm

Excellent blog. For what it’s worth I care about deficits and will be voting accordingly.

#16 Sask to AB on 10.12.19 at 12:39 pm

Outstanding post!

#17 Tony on 10.12.19 at 12:42 pm

Martin, like President Clinton killed the dividend by expanding the money supply. Normally this shows up as inflation. Concurrent to increasing money they hid the massive inflation by changing the way inflation was calculated.

The money was still there, as was the inflation. It manifested in other places. For example the dot com con.

This is basic and like almost every current analysis of the short lived surpluses, you imagine that it was the result of enlightened management by Liberals. The cuts were illusionary. As soon as money supply was tightened the deficits returned. This came about when credit was unleashed in addition to melting printing presses.

This debt will result in the debasement of the $C and the expansion of the reserve currency.

We are bankrupt. When the fat cat boomers die, there is no one interested in working hard and building things. In fact the new labour force doesn’t much like dirty hands. It likes to sit around and exchange groovy ideas about how things should be while ignoring things that are.

As a financial guy, you would do well to actually talk to us geezers who do things and hear how it is that we can’t hire people who can do what is needed.

I do business here, the US and Europe. I know a lot of people in business. From Microsoft execs, to consultants, to chemical companies, to aerospace, to light and heavy manufacturing I hear the same thing. People won’t work in a reliable and effective way. I automate, my mandate is that I will spend up to 500 grand to replace a line worker. Great businesses I know of who had 1,000 people, are down to 40. Not because they can’t sell their products, but because the staff levels they need to build their products now, versus what they really need are too expensive to maintain.

#18 IHCTD9 on 10.12.19 at 12:45 pm

The debt/deficit trend is scary, maybe it’s time to make a list of requirements for future living in Canada:

1. Get married, dual incomes required.

2. One spouse must work in a unionized public sector position.

3. Get conventional skills, house and car maintenance, appliance repair, more. You’ll need them to avoid taxes and control your cost of living. They will also strengthen your marriage.

4. Get unconventional knowledge and build your skills. Alternative energy strategies, off the beaten path heating and cooling, old world shaft power and transportation tech. Conventional energy will continue be a punching bag for taxation and climate based taxation. Create an exit door for yourself.

5. Watch the loonie, and always be prepared to bail when debt servicing overpowers the governments’ ability to raise revenues.

Whatever you do, avoid ending up in a big city, alone, living in a condo, and working in the private sector with no pension. That’ll be financial death row.

#19 Phylis on 10.12.19 at 12:51 pm

Millennials, let’s do the responsible thing and think about our children. We don’t need to hurt them when we are voting. They will already be smoking dope, it won’t make them smarter. We need to make good decisions for them now and not for ourselves.

#20 nelfor on 10.12.19 at 12:53 pm

When the Canadian currency passes through 70 to the US dollar Mr T (if he is PM) will be on his knees. Rising rates will send him back to the Rethink Tank.

#21 Cto on 10.12.19 at 12:56 pm

A year out from now , governments will be screaming negative interest rates like Trump already is!
Isn’t more debt and deficit a win-win situation in a negative interest rate environment and governments will make the central banks drop interest rates into the negatives cuz they can do anything….
As for savings,
They will literally confiscate people’s money through taxes on such savings Vehicles as tfsas and rrsps maybe house capital gains as well but when the majority have houses, it might not be so palatable.

#22 tccontrarian on 10.12.19 at 1:02 pm

“Based on a recent Nanos survey… just 3.5% of Canadians polled see our rising debt and deficits as the most “important issue of national concern”,

while 21.7% of those polled believe the environment is their top concern

followed by jobs and the economy at 18.2%. ”

– – – –

And yet, all these people are allowed to cast a vote! I’m not at all optimistic for our future.

These numbers indicate to me that:
– 3.5% of Canadians are financially literate.
– 21.7% suffer from the Greta Thunberg effect: a childlike view of the world who are easily manipulated through fear
– 18.2% are actually able to put things in perspective

The debt isn’t a problem – until it is. So many are going to find out soon enough.

tcc

#23 DON on 10.12.19 at 1:04 pm

Unless we (our government) wake up today and realize we have to live within our means and manage our government finances, just like we do at home with our family budget, we’ll end up in the same mess we were in during the 1990*************

I hope a lot more of us are doing this at home, but somewhat given our current household debt…we may be few.

Great Breakdown. The 80s and 90s felt like a slow grind.

#24 Dogman01 on 10.12.19 at 1:10 pm

My neighbor and I were outside our 20 year old paid off yet small houses, changing our tires to winter and discussing Calgary.
New houses’ up the road “starting in the $790’s!”. Very few good jobs in Calgary. Lots of competition for any semblance of middle class work.
We are “goats staring at lightening” no clue how this could work or what is going on.

Not that I understand it but Modern Monetary Theory. Just print and borrow our way out of it?

“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”
— Marcus Tullius Cicero, 55 BC

#25 DON on 10.12.19 at 1:11 pm

#18 IHCTD9 on 10.12.19 at 12:45 pm

The debt/deficit trend is scary, maybe it’s time to make a list of requirements for future living in Canada:….

**************
Yup…learn how to ‘do it yourself’ as much as possible when it makes sense.

#26 Damifino on 10.12.19 at 1:17 pm

It’s not that we get the government we deserve. It’s more accurate to say we get the government we are.

It’s a disturbing reality for the relatively few who stay within their means while sharing an economy with the financially reckless.

Here’s what I find puzzling: The older people get, the more they seem to worry about the accumulation of debt. In any logical world, it should be the opposite.

But then, logic and money do make poor bedfellows.

#27 Shawn Allen on 10.12.19 at 1:21 pm

Misinterpretation of Jobs Data and Seasonal Adjustments on Jobs and Retail data

#80 Dolce Vita on 10.11.19 at 9:56 pm responded to me:
#59 Shawn Allen

Never put your faith in a methodology of calculation you do not understand NOR know how the calculations are made (“Seasonally Adjusted” = Unadjusted “churned” thru ARIMA a Stats program used by StatCan with no published data as to how its Algorithm functions).

Thus, the actual or raw data (Unadjusted) is the more believable.

Occam’s Razor.

As evidence (and my personal favorite) here is Retail Trade Unadjusted vs. Seasonally Adjusted for the past 5 years (which line is easiest to explain?):

https://i.imgur.com/EUu9kFG.png

To wit, in the above farcical World of StatCan Seasonally Adjusted Retail Trade, there are virtually no seasonal differences when it comes to:

1. Back to School purchases.
2. Christmas purchases.
3. January claw back in spending due to X-Mas excesses.
4. Canadians emerging from hibernation in Spring to garden, get married and pay for Summer vacations.
5. Valentine’s Day cheapskates (could not resist).

*******************************
Thank you for the response. You clearly are passionate and have good knowledge and have done good work on these matters. But you do seem to be a conspiracy theory believer at times.

You are right that I am no expert in statistics. In fact I had to take and passed basically Stats 101 three times (engineering, MBA and CFA). The first time I more or less just memorized formulas. By the third time I had a pretty good actual understanding but that was a while ago.

I don’t trust Stats Can blindly and I have on more than a couple occasions phoned them to discuss interpretations and suggest changes. But I am willing to believe that the are doing their jobs as honestly as any other group of workers.

Of course the seasonal adjustment of retail (and jobs) data largely smooths out the Christmas and other seasonal variations.

That is exactly what it is meant to do. It’s fine to look at raw data but but what good would reporting a huge surge of jobs in November do without noting that it is just the Christmas rush?

I think it is almost irresponsible of the press and Stats Can to report that Canada created say 54,000 jobs without saying every time that it is just an estimate (not a count) with a big standard error and yes seasonally adjusted.

I always look more to year over year which largely (but not fully) removes the seasonal adjustment.

You cannot deny that the Canadian economy has created a lot of jobs in the past year. And, unemployment is very low. I came of age circa 1980 with double digit unemployment rates for Canada and high teens in the Atlantic provinces so I have some perspective on just how wonderfully low a 5.5% unemployment rate is.

#28 Shawn Allen on 10.12.19 at 1:32 pm

Government Program Spending DOWN since 1980?

The first chart shows a huge drop in government program spending as a percent of GDP. Albeit, with a recent increase to 14.5% versus peak of over 20%.

Wow! Does that ever not fit with the narrative and almost universal belief that government spending as a percent of the economy only ever goes up.

I agree government debt may become a problem. But that graph is a shocker! Thanks for that!

#29 MF on 10.12.19 at 1:36 pm

#101 crowdedelevatorfartz on 10.12.19

Once decent poster reduced to responding to trolls and generalizing and entire generation of millions.

Your complaining is embarrassing. Your posts becoming irrelevant.

MF

#30 baloney Sandwitch on 10.12.19 at 1:39 pm

Would helpful if you had compared the Conservative platform with the Liberals instead of just slamming the latter.

#31 Fit To Govern? on 10.12.19 at 1:42 pm

This was indicated in Scheer’s initially debate attack, in regards to removing T2’s masks. Recently, this was more focused in a video presentation that T2 was no longer fit to govern Canada. Trump now knows that he has been had, and Russia, India, China, and Japan know he’s a fake too. This means he has to go, and splitting the vote for minor parties could be fatal. We have had enough of sunny ways, so vote accordingly in the election – PC is the only way whether you like it or not!

#32 crowdedelevatorfartz on 10.12.19 at 1:46 pm

@#29 MF
Well, you read it and responded…..
WIN!

#33 Shawn on 10.12.19 at 2:03 pm

Greater deficits tend to coincide with a lower for longer $CAD.

#34 conan on 10.12.19 at 2:12 pm

The Liberals tabled C 57, and it received Royal ascent last February. It is the sustainability act, and it applies to all departments named in schedule one of the financial administration act. Meaning, almost every department.

In a nutshell it forces the sitting government to think long term.

Going forward, it does not matter who is in power, they have to start thinking in this manner.

To me, it all makes sense. Also, it explains the deficits over the next several years, as we convert over to the new model, whatever that might be…

We live in interesting times.

#35 Ryan Lewenza on 10.12.19 at 2:13 pm

baloney Sandwich “Would helpful if you had compared the Conservative platform with the Liberals instead of just slamming the latter.”

I agree that the Cons are also campaigning on increased spending but it’s nowhere close to the Libs and they are the only party (of the big 3) that are even talking about balancing the budget in the coming years. If you don’t like the message of this blog post, which is based on hard facts and data, then ask your party to change their focus and direction. I’m just trying to highlight what will come from all these deficits down the road. But most people/politicians don’t care because they only think about the here and now. – Ryan L

#36 Stan Brooks on 10.12.19 at 2:20 pm

Let’s stop comparing apples and oranges.

Canada’s public debt is 90 % of GDP.
https://tradingeconomics.com/canada/government-debt-to-gdp

Canada private debt to GDP:
https://tradingeconomics.com/canada/private-debt-to-gdp
266.5 % in 2018

US private debt to GDP:
https://tradingeconomics.com/united-states/private-debt-to-gdp
197 %.

In total our debt is at least 60 % of GDP higher than US
Plus they have the global reserve currency, it is normal to have deficits and debt, how otherwise would the rest of the world get the USD?

I am tired and sick of these lies about further room to grow debt and reference to the federal debt as ‘the debt’.

Even Greece has lower total debt as % of GDP than Canada. End they recently emitted negative nominal short term bonds!

Our debt levels are un-payable and will require zero or negative interest rates combined with horrific inflation, higher taxes, destruction of savers and retirees for decades.

To get there of course it requires extraordinary lack of prudence and responsibility in both regulators, lenders, the public combined with outright lies and deception by statistics, politicians, special interest groups. And of course junk monetary policies by the central bank.

I would not lend a single penny to any of the parasites even at 6 % +.

Cheers.

#37 oh bouy on 10.12.19 at 2:33 pm

@#29 MF on 10.12.19 at 1:36 pm
#101 crowdedelevatorfartz on 10.12.19

Once decent poster reduced to responding to trolls and generalizing and entire generation of millions.

Your complaining is embarrassing. Your posts becoming irrelevant.

MF
///////////////////////////

pot meet kettle LOL.

Beautiful day out there folks.
Lifes good.

#38 In Defence on 10.12.19 at 2:44 pm

Ryan made an excellent posting that cannot be denied, so lets look at what a minority government would bring us all. We have Mad Max; the Dancing Man; and May Day running to govern Canada. I just saw the latest poll, and one of them is rising fast, and this means they will hold in parliament the balance of power.

#39 Dave on 10.12.19 at 2:47 pm

I’ve been reading about the debt on this blog for years.

What is the magic debt number that is too much debt for Canada?

#40 Axehead on 10.12.19 at 2:48 pm

The problem with debt is you have to pay it back. Or, start a war.

This blog timely Ryan, especially with the Federal Election on, as it asks us to vote with our Nation’s best interest at the forefront.

#41 crazyfox on 10.12.19 at 3:01 pm

The problem with the “anyone but liberal” theme is the only other party capable of governing is the Cons. Harper added 20 billion a year in his tenure and Scheer claims to go to balance in 5 years but through cuts to government spending operations. Harper said he’d take us to balance the same way, through cuts to government services but he couldn’t do it. What make’s Scheer’s claims so special?

There won’t be much change between the parties concerning federal deb, lets not lot kid ourselves. The rich will be less taxed and the carbon tax will be gone but infrastructure spending will be chopped. There will be no movement against climate change but instead we will be governed by Republican talking points. 25% cuts to foreign aid for example, this isn’t just bleeding heart policy here, it opens access to foreign markets. Do I have to spell it out?

We have over 600 mining corps doing business outside of Canada for a reason. (lots of foreign oil & gas development too) We have the premiere world stock exchange with miners for a reason and it didn’t come by being cheap and poor manning foreign aid. The so called Conservative “money party” is supposed to know that. Same goes for immigration numbers, they’re supposed to know the financial benefits to that too and why is it that I can’t find their costed platform on their website, I have to find it on Liberal twitter feeds, the election is 9 days away. Don’t they have any common sense at all?

Boom and bust housing bubble regs, governing Canada through Republican talking points, hitching a ride with a Trump train going down in flames, does that sound like a party ready to govern to you? Sounds more like a shit show waiting in the wings. There’s been no doubt growing pains we’ve had to endure with T2 but I look at the alternative and cringe. Sure, Canadians deserve better but it can be worse. It can always be worse and worse is what we’ll get if we aren’t smart.

#42 Erick on 10.12.19 at 3:02 pm

Thanks Ryan for making this crystal clear

The same who don’t care about the increasing deficits and debt right now will come whining about the consequences in 10 or 15 years from now

#43 Stan Brooks on 10.12.19 at 3:09 pm

The fact that broken governments need cheaper rates does not imply that private debt junkies are entitled to that too.

Bottom line: it is not possible for savers and retirees as well as prudent taxpayers to pick up the bill for broken debtors – public and private, house-owners, banks etc.

The ‘system’ is going to break one way or another, most likely with the currency giving up first.

Deficits quoted here are understated, we are going to experience at least 30-40 billions in federal deficit yearly, maybe even more, 120 billions + a year further growth in total debt (private + public) in the next 20-30 years.

#44 Alberta Ed on 10.12.19 at 3:09 pm

“Socialist governments traditionally do make a financial mess. They always run out of other people’s money.” Margaret Thatcher

#45 Millennial Realist on 10.12.19 at 3:10 pm

Paleo Boomers become irrelevant in:

10 Days and Counting………..

#46 Ryan Lewenza on 10.12.19 at 3:12 pm

Dave “I’ve been reading about the debt on this blog for years. What is the magic debt number that is too much debt for Canada?”

That’s hard to say but in Reinhart and Rogoffs book This Time it’s Different, based on their long term historical analysis of sovereign debt they have found that 90% of GDP and above tends to be the line when things go bad. We’re there now when you include provinces. Personally I think we’re still some years away but it’s inevitable that we’ll run into problems if left unchecked. – Ryan L

#47 crazyfox on 10.12.19 at 3:17 pm

Btw Ryan, I like your points on intergovernmental debt loads, I’ve been making the same points myself. Fed/prov/municipal debt loads are what what we have to look at when assessing currency and bond risks, no question. When we look long term and picture a higher rate scenario, you are absolutely right but not just with public debt, but consumer debt as well and what I see with Conservative proposed housing regs going back to 30 year nothing down in this low rate environment scares me. We spent a decade trying to undo juiced housing regs and are still technically in a bubble. What’s being proposed here isn’t just reckless, ballooning public debt in a worst case government bailout scenario, after all we’ve learned, its unethical.

Scheer inviting the U.S. to install missiles as another example, this means permanent U.S. military bases on Canadian soil. There’s some calls I didn’t like from T2 but at least I knew which nation he stood for. With Scheer… I get the impression he’d govern Canada as though it was just another U.S. state and as a Republican at that. That choice all things considered, is about as popular as Herpes to me, its a hard pass.

#48 Edward Bear on 10.12.19 at 3:17 pm

#24 Dogman01

The Cicero ‘quote’ is not 2000 years old but actually a fictional line from the 1965 Taylor Caldwell novel Pillar of Iron. Check Snopes.

#49 Yukon Elvis on 10.12.19 at 3:24 pm

I voted in advance today. Drove past a few advance polling stations in Kelowna just for the helluvit. I was surprised, more advance voters than i would have predicted. At my polling station and the ones I drove past were mostly oldsters like myself. Not many young ones. Inside my polling station were about fifty people, only one of which I guess was under fifty. I don’t know what it means if anything, just an observation.

#50 eg on 10.12.19 at 3:32 pm

It’s amusing to see all of this deficit/debt chicken-hawkery in both the article and the comments. I’ve got news for all of you: no Federal party within orbit of election is going to run anything but deficits for the foreseeable future.
And well they should. In an open economy with a floating currency, the Federal government should run deficits sufficient to offset the demand destruction associated with the private sector propensity to save among households and businesses in order to support full employment, and only moreso if there is a trade deficit. See Wynn Godley’s work on the sectoral balance analysis.

#51 Tannhäuser Gatekeeper on 10.12.19 at 3:45 pm

So the government says hey, how about lending me $100 today and I’ll pay you back $98 next year and we’re even?

And bond investors are like, hell no that’s the stupidest thing we’ve ever heard of!

So the government says OK, how about I pay you the $98 back in ten years instead?

And bond investors are like, OK, now you’re talking. Here, take our money.

And I look at this and I say this is the stupidest thing I’ve ever seen. Why would you give them $100 in exchange for $98 ten years from now? Are you cracked?

And bond investors are like, no silly, we’re not waiting ten years to get $98. We’re going to sell the bond to someone else next year for $101!

And this truly is one of the stupidest things I’ve ever heard, but, crazy though it may be, it’s working so far, and bond investors are all “is this a great party or what?”

Some of them moan about deficits and stuff, but they keep buying the bonds. Every time a noob walks into the office, they’re like 60/40 is the magic formula handed down to us by our forefathers, and we must all buy bonds. If you’re uncomfortable lending $100 to get a guaranteed $98, you can lend $100 to a corporation that loses money crafting bespoke dumpsters-on-fire-as-a-service, and (maybe) get back $105!

So here’s my question: On what date does the number of boomers who are selling bonds every month to pay for cat food and Depends become larger than the number of younger (or richer) people who are still buying bonds every month, by running a household surplus? Does anyone have a model? Or even a decent guess?

#52 Linda on 10.12.19 at 4:06 pm

Ryan, I agree that deficits/debt are important. Problem is, they aren’t ‘newsworthy’ at this point in time. The environment is – everyone wants to be the poster child/champion & have selfies taken.

Possible silver linings to the currently gloomy outlook. First, campaign promises do not necessarily translate into reality. Second, the aging demographic may translate into long term low interest rates – Japan being an example of what occurs. Third, if people are living longer they presumably have more time to pay off all that debt. This presumes they actually intend to do so, because as long as their feet aren’t held to the repayment fire you know it won’t be a priority. But, Banks. They require payback & are not politicians who are seeking re-election. Plus they have to answer to investors, so you know they will pursue debtors.

Hopefully we will return to fiscal responsibility before too long. Happy Thanksgiving!

#53 Yuus bin Haad on 10.12.19 at 4:07 pm

Let’s all follow Ryan back to the center! (We are all thinking along centrist lines, are we not?)

#54 Stan Brooks on 10.12.19 at 4:07 pm

#46 Ryan Lewenza on 10.12.19 at 3:12 pm
Dave “I’ve been reading about the debt on this blog for years. What is the magic debt number that is too much debt for Canada?”

That’s hard to say but in Reinhart and Rogoffs book This Time it’s Different, based on their long term historical analysis of sovereign debt they have found that 90% of GDP and above tends to be the line when things go bad. We’re there now when you include provinces. Personally I think we’re still some years away but it’s inevitable that we’ll run into problems if left unchecked. – Ryan L

We need to look at the private debt as well, it is not researched in details in their book/Reinhart and Rogoffs, I actually read it.

The time to address the debt was before 2005, combined with the shutdown of the CHMC ‘insurance’.

—————————————-

#51 Tannhäuser Gatekeeper on 10.12.19 at 3:45 pm

It is very simple:

That -2 % ‘return’ on government debt in your example could be better than -3 % return on deposit with NIRP unwinding.

Combine that with severe tax increases..

Inflationary depression, it is already here.

#55 Bezengy on 10.12.19 at 4:17 pm

Ban the word “billion”, politicians should be forced to use million, like in “that will cost thirty three thousand million dollars” Maybe that might sink in to the 97%
_______________________

And I agree totally Ryan, it’s easy to increase spending, but extremely difficult to cut costs. Martin did it by slashing payments to the provinces, and he did it with the opposition agreeing to cuts. He might have been a liberal, but his policies were pure blue. Harper and Flaherty did it with a “shear” commitment to a balanced budget, and with an opposition and media fiercely against him, a tougher job for sure. I’d say he did it with a lot more compassion than the Liberals.

#56 Stan Brooks on 10.12.19 at 4:17 pm

#50 eg on 10.12.19 at 3:32 pm
It’s amusing to see all of this deficit/debt chicken-hawkery in both the article and the comments. I’ve got news for all of you: no Federal party within orbit of election is going to run anything but deficits for the foreseeable future.
And well they should. In an open economy with a floating currency, the Federal government should run deficits sufficient to offset the demand destruction associated with the private sector propensity to save among households and businesses in order to support full employment, and only moreso if there is a trade deficit. See Wynn Godley’s work on the sectoral balance analysis.

Which part of: THERE IS NO SAVINGS did you not understand?

https://tradingeconomics.com/canada/personal-savings

click on max icon.

Savings rate down from 15, 10, 5, % in the 90-es to 1-1.5 %!

There is no savings glut, it is one big giant lie.

People are broke with 266 % of GDP in private debt. Who sponsors that debt when savings are down to non-existent?

Cuckoo, cuckoo…

Financially illiterate brain-frozen, inept, complaint and ignorant populace.

#57 Flop... on 10.12.19 at 4:32 pm

Where I live is 6 kilometres from downtown.

New paid parking just came into effect from 9am til 10 pm.

There are no more grapes on the vine…

M45BC

#58 Flop... on 10.12.19 at 5:05 pm

After voting in a federal election for the first time yesterday, I thought it was prudent today to go the doctor and get all the relevant shots to protect myself.

You know, with every party reaching deep down and throwing all sorts of shrapnel at me…

M45BC

#59 Ken M. on 10.12.19 at 5:18 pm

Its the boomers…again.

#60 BillyBob on 10.12.19 at 5:40 pm

#26 Damifino on 10.12.19 at 1:17 pm

Here’s what I find puzzling: The older people get, the more they seem to worry about the accumulation of debt. In any logical world, it should be the opposite.

But then, logic and money do make poor bedfellows.

====================================================

Respectfully, there is a certain logic to the older being more concerned about debt than the younger.

The young think the future will never come – and then it does.
The elders have more life experience (whether that translates into wisdom is an entirely different discussion.)
The young have more time to recover from their mistakes – and to pay down their debts. The elders realize that they don’t have unlimited years.

Unfortunately we live in an age where this has been taken to extremes, and now there is no longer even an expectation that debts can or will be repaid.

And so the young will be enslaved by debt. The bizarre part is they way they actually embrace it. But then, they also embrace being surveilled and tracked, so it all fits I suppose.

+++++++++++++++++++++++++++++++++++++++++++++++

#37 oh bouy on 10.12.19 at 2:33 pm
@#29 MF on 10.12.19 at 1:36 pm
#101 crowdedelevatorfartz on 10.12.19

Once decent poster reduced to responding to trolls and generalizing and entire generation of millions.

Your complaining is embarrassing. Your posts becoming irrelevant.

MF
///////////////////////////

pot meet kettle LOL.

Beautiful day out there folks.
Lifes good.

================================================

Exactly.

MF doesn’t seem able to grasp the irony of complaining about complainers, nor the hypocrisy of criticizing generalizations when he himself does exactly the same thing.

It is fortunate he seems to have a high tolerance for self-embarrassment. :-)

#61 acdel on 10.12.19 at 6:01 pm

Great Blog today Ryan!

Hopefully sanity prevails and kicks T2 out of office….

#62 Penny Henny on 10.12.19 at 6:06 pm

#28 Shawn Allen on 10.12.19 at 1:32 pm
Government Program Spending DOWN since 1980?

The first chart shows a huge drop in government program spending as a percent of GDP. Albeit, with a recent increase to 14.5% versus peak of over 20%.
////////

Shawn please also take in consideration how much more was spent on servicing the debt in the 90’s.

#63 Don Guillermo on 10.12.19 at 6:18 pm

I agree that the Cons are also campaigning on increased spending but it’s nowhere close to the Libs and they are the only party (of the big 3) that are even talking about balancing the budget in the coming years. If you don’t like the message of this blog post, which is based on hard facts and data, then ask your party to change their focus and direction. I’m just trying to highlight what will come from all these deficits down the road. But most people/politicians don’t care because they only think about the here and now. – Ryan L

*******************************************

Well said Ryan. I wish all Canadians thought this responsibly instead of only what’s in it for me.

#64 crowdedelevatorfartz on 10.12.19 at 6:26 pm

@#45 Mewling Surrealist
National debt and taxes becoming very relevant in 10 years.

#65 Sean on 10.12.19 at 6:44 pm

The CCB has lifted many out of poverty. Welfare aimed at children is widely accepted as the most effective way to increase equality of opportunity, leading to long term economic health.

The biggest spending issue and the least effective at improving welfare is something that no politician is willing to touch because of the high percentage of voters in the 60+ demographic. OAS payments aren’t being paid to people who don’t need them. The clawback cutoff levels need to be reduced significantly, which would lead to a huge decrease in spending.

#66 akashic records on 10.12.19 at 6:47 pm

Government run ponzi. It would crash without the steady import of new tax slaves.

#67 Joshua on 10.12.19 at 6:58 pm

Ryan, great post. I’m a healthcare professional that digs the idea of universal pharmacare and dental to make healthcare in this country truly complete.

Lets say if we managed to pry the industry away from the big insurance companies and the private sector what are the chances this can be actually paid for without more deficits or higher taxes?

Hope you and yours enjoy some turkey this weekend. Keep up the great work!

#68 Alberta Nomad on 10.12.19 at 7:06 pm

In theory, the federal government can create infinite money, and taxes are collected to destroy money, thus combating inflation. Devaluation of the Canadian Dollar relative to other currencies and runaway inflation are the main dangers of excessive government spending.

In relation to housing, most loans are created from new money (loaned to the lender by the central bank) and Bank of Canada interest rates are a method of destroying money at a controlled rate. The lender keeps some of the interest for their profit, while the portion paid to the central bank is destroyed. The economy grows overall from the increased cash in circulation.

If this system of money birth and death is properly managed, inflation stays relatively flat. In many areas of our economy inflation has been very stable and low. The glaring exception has been the unrestrained increase in the cost of putting a roof over our heads. Interest rates for housing have been too low — not enough money is being destroyed — thus runaway inflation has occurred in real estate relative to the rest of the economy.

Interest rates have stayed low to spur economic growth, and for many business loans, provincial and municipal budgets that may have been a good decision. But allowing housing loans to be lent out at the same rate as government and business loans has been a catastrophe for affordability. We are so far down the rabbit hole now I do not see how housing prices can come down without several generations of stagnent prices or hemorrhaging the economy for a few years and watching millions go bankrupt.

The complexities of Mr. Market and government policies may be too much for us mere mortals to comprehend. We have collectively screwed up — but we should strive to find some solutions to this crisis of affordability. The current political policies being proposed make me ill. Housing inflation will continue.

If my income had tripled like the price of my former Calgary house did, affordability would not have changed. But my income before inflation has been relatively unchanged for 20 years. Accounting for inflation — not including housing — I earn 22% less now than I did 20 years ago. Buying again is now unthinkable. My early housing purchase crushed my ability to save during the most ideal stage of my life to make savings. If I had continued renting — and had a financially literate mentor — I would now have a retirement worthy balanced and diversified portfolio.

Unfortunately Alberta is in a rut and my family must now endure the housing insanity afflicting the rest of Canada. Moved from Alberta to the Yukon for work and our housing expenses doubled for an inferior rental, though our incomes are subsidized by the northern living allowance. Buying remains unthinkable.

Currently in year three of having a B & D portfolio. Will remain liquid and unanchored to any particular real estate market. Travel taught me how to live cheap. This blog and similar blogs taught me how to save. Only 17 years behind schedule to save for retirement…at least I have been debt free since 2012!

#69 kothar on 10.12.19 at 7:07 pm

All the people don’t care. The country has taken on endless amounts of debt. As long as it can be serviced somehow it does not matter to them. So until some day of reckoning comes onward it goes. Canada does not deserve AAA rating with our combined debt loads at all levels. But this just plays to the various parties that throw caution to the wind.

#70 The Message on 10.12.19 at 7:10 pm

This was called the Final Warning, and assume this relates by association to 2020. Compare this to today, and the answer was a simple one.
https://www.youtube.com/watch?v=JXm5hklbBsA

#71 Stone on 10.12.19 at 7:20 pm

#45 Millennial Realist on 10.12.19 at 3:10 pm
Paleo Boomers become irrelevant in:

10 Days and Counting………..

———

Keep on thinking that way. Bravo! It won’t change reality though. You will still be screwed. Who do you think packs an MPs office to complain? Millennials? Think again. It’s the seniors who have lots of time on their hands vs the millennials who can’t take off from work and need to live off their mounting credit card bills desperately living beyond their means.

Puuuulease! Lol

#72 Stone on 10.12.19 at 7:34 pm

#49 Yukon Elvis on 10.12.19 at 3:24 pm
I voted in advance today. Drove past a few advance polling stations in Kelowna just for the helluvit. I was surprised, more advance voters than i would have predicted. At my polling station and the ones I drove past were mostly oldsters like myself. Not many young ones. Inside my polling station were about fifty people, only one of which I guess was under fifty. I don’t know what it means if anything, just an observation.

———

It’s means continuing increases of benefits for seniors and more teeth gnashing for millennials. Enjoy!

#73 Dolce Vita on 10.12.19 at 7:39 pm

Well said. You are NOT ALONE in your concern.

Deficits/Surpluses under Cdn. PM’s since Pearson, 1963 to 2015 Harper:

https://i.imgur.com/DKsgqED.jpg

Why I remain an Old School Chrétien Liberal. Harper his and Martin’s beneficiary.

As for Justin, well almost a chip off the old block when it comes to spending (Daddy’s -$32.4 Billion in 1984 would be a whopping -$72.9 Billion in 2019).

———————————-

And yes, those of us old enough to recall, remember well that those deficits were paid off with money out of our pocketbooks.

If a recession hits Canada now, the Federal cupboard will be bare. It will then take a decade to bail out Federal finances – just like it took Chrétien.

#74 tccontrarian on 10.12.19 at 7:56 pm

Hey Ryan,

Off topic…

Since you’re allegedly one of the main ‘brains’ behind Turner Investments (at least that’s how I understand the arrangement), which of the following indeces is more relevant in your decision-making:
-SP500
-Russell 2000
-Dow Jones
-TSX60

Perhaps a ranking of importance?

Just wondering.

tcc

#75 acdel on 10.12.19 at 8:11 pm

Interesting article; any of us that reside in Western Canada have known and fought this for as long that I lived here. It’s comical; but for once I am cheering for the Bloc to take away as many votes away from the Libs as they can; we will deal with the rest in the future!

https://nationalpost.com/news/politics/election-2019/the-blocs-war-on-alberta-why-quebec-separatist-party-is-specifically-targeting-the-western-province?video_autoplay=true#comments-area

#76 Dolce Vita on 10.12.19 at 8:18 pm

#27 Shawn Allen

All I seek is the truth from StatCan.

They are TOP SHELF when it comes to publishing ALL of the data (well, provided you know where to find it and have a working knowledge of what is possible with Pivot Tables and slicing, dicing Database Cubes – not for the faint of heart).

I just wish they would publish their statistical methodology online so that we Plebeians can try to understand why they do what they do – crucial when they are reporting on KEY INDICATORS as to the health of the Canadian economy (investors need to know the truth).

Everyone maligns the RE industry, yet, they provide the algorithms and statistical methods used to arrive at their numbers…

———————————-
Teranet & National Bank of Canada HPI, click on “Download our Full Methodology” near the bottom of the page:

https://housepriceindex.ca/about/our-methodology/
———————————-

As does CREA, click on “MLS® HPI Methodology PDF” under “Resources”:

https://www.crea.ca/housing-market-stats/mls-home-price-index/resources/
———————————-

As does REBGV and its MLS® HPI, click on “Learn More” at the bottom of the page:

https://www.rebgv.org/news-archive/mls-home-price-index-methodology.html
———————————-

TREB references the CREA document above…

And the list goes on.
———————————-

IS IT TOO MUCH TO ASK OF STATCAN to do the same for their “Seasonally Adjusted” statistical calculation methodologies?

All that I have found at StatCan about it is this:

“Issues related to analysis and interpretation” – where and I quote StatCan:

“Which estimate—seasonally adjusted or raw—is “correct”? Both estimates are correct, as both derive from legitimate statistical processes”.

https://www.statcan.gc.ca/eng/dai/btd/sad-faq/sec2
———————————-

Here a lot of hullabaloo but no algorithm’s, “Seasonally adjusted data – Frequently asked questions”:

https://www150.statcan.gc.ca/n1/dai-quo/btd-add/btd-add-eng.htm
———————————-

And here you are told they use ARIMA (Autoregressive Integrated Moving Average) and that’s about it (from a link at the bottom of the above page):

https://www150.statcan.gc.ca/n1/pub/12-539-x/2009001/seasonal-saisonnal-eng.htm

…well, there it is then on calculation transparency.

REALTORS = 4
STATCAN = 1/2

#77 Nonplused on 10.12.19 at 8:32 pm

First of all, Mulroney made the policy changes that led to the reduced deficits Chretien enjoyed. A big ship like that don’t turn on a dime. Chretien made every effort to increase deficits again. It would be like saying Trump’s deficits are all his fault and that there wasn’t a structural deficit in place when he got there. That was the problem Mulroney faced. He had to undo years of bad policy.

In terms of what the deficits mean, well they don’t really mean anything more than when you buy a TV on a credit card. It’s the accumulation of debt and interest commitments that matters. But it is clear as a society we see no need and have no desire to pay it off. “Short term pain for long term gain” is not a natural human instinct. Instead, the human instinct, so eloquently summed up in Proverbs, is “eat, drink, and be merry, for tomorrow you may die”.

So now that we know that the 50% of us that are below average intelligence, and probably the 90% of us that are below high intelligence, will always prioritize short term pleasures over long term success, let’s see what we can do about the deficit:

The answer is nothing. The 90% will always vote for more today and care not for tomorrow. Even Christ suggested that was the proper thing to do. “Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.”

So here is what we have. Deficits are a natural phenomena. Even grassing animals eat too much and have to move on unless the rancher carefully plans for such things. We are hard wired to eat too much today rather than putting the leftovers in the fridge for tomorrow. We didn’t used to have fridges. (Incidentally, we are also hardwired to think we have a right to eat the leftovers the hunter couldn’t before it went bad. That’s where socialism comes from. But now we have fridges so socialism doesn’t really work anymore, it is now not the eating of leftovers but theft.
Yes, socialism is theft. Communism is theft and murder. There is plenty of history.)

But none of that matters because money isn’t real. It’s just numbers on a piece of paper. It is an accounting system to describe who owes what to whom. The government’s pieces of paper, cash, is the most preferred because it is at least backed by the government. But governments almost always spend more than they can take in through taxes, so they print extra pieces of paper with numbers on them. This causes, and is the sole cause, of inflation. General inflation that is. The natural state of economics is deflation as technology makes goods and services cheaper. But this isn’t what we get. We get inflation because the government has to issue more currency every year to pay its bills. It calls this “borrowing”, but the bonds are just a cash alternative. A way of hovering up existing cash with a promise to pay back even more tomorrow. Which will never happen. The debts will be inflated away.

Imagine you had a brother who asks to borrow $200 this week because he’s a little short, but he will pay you back next week. But next week comes and he can’t pay you back just yet, but needs another $300. But he swears he’s good for the money. For how long do you let this go on?

So what do the 10% do to protect themselves from the drip, drip, drip of inflation? Buy assets that go up in value as the value of money slowly erodes towards zero, but never quite getting there. Real estate (of good quality), farms, good enterprises that have price elasticity, gold, fine art, classic cars. As inflation makes your dollar worth less, the prices of these sorts of things automatically adjust upwards. Don’t hold very much in cash because it’s worth 2% less every year, and that is their stated intention and target.

#78 Entrepreneur on 10.12.19 at 8:40 pm

I think heartburn is on the increase in a controlled debt/house environment. I would say a big road block coming up.

The Justin Two Jets says it all about T2, himself, period.

I would have liked to hear more from Mad Max, MM. I feel if the was the leader he would think what is good for our country, Canada. But has to acquire inner instinct on climate change.

But to me and on the news we only have so many years left, close. Besides not wanting to leave debt with lots of taxes I(we) want a clean/renewable environment to leave for our youth, calm the planet down.

Good blog, Ryan and with honesty.

#79 Dolce Vita on 10.12.19 at 8:46 pm

‘Outta here after this.

You know that this from StatCan (prior post):

“Which estimate—seasonally adjusted or raw—is “correct”? Both estimates are correct, as both derive from legitimate statistical processes”.

https://www.statcan.gc.ca/eng/dai/btd/sad-faq/sec2

—————————-

Which is UTTER HOGWASH when yesterday’s September Canadian Job Numbers (Labour Force Survey) were:

Seasonally Adjusted = +53,700, jobs created
Unadjusted (raw) = -69,100, jobs lost

Why I would like to know what the heck ARIMA does and how is “churns” -69.1 into +53.7?

That is a difference of 122,800.

—————————-

More frightening, is that GDP is calculated using “Seasonally Adjusted” methods ONLY and July’s was:

-0.1%

Using their data and not 0% (they go their knickers in a twist with their “Total (All Industries)” calculations). I Tweeted to StatCan about their Math mistake, of course, no answer.

SO, you know that -0.1% was probably worse, based on heuristical observations to date with Retail Trade and the Labour Force Survey as examples (GDP has no Unadjusted or Raw data to peruse at StatCan).

#80 Tannhäuser Gatekeeper on 10.12.19 at 9:08 pm

When I was younger I read quite a few economics books. Economists tent to present a lot of things as facts when they’re really only theories. I guess I should have been less credulous, but so it goes.

I do remember one theory that was too much even for my gullible self though. “Ricardian Equivalence” is still in textbooks today:

A change in government budgets may impact private saving. Imagine that people watch government budgets and adjust their savings accordingly. For example, whenever the government runs a budget deficit, people might reason: “Well, a higher budget deficit means that I’m just going to owe more taxes in the future to pay off all that government borrowing, so I’ll start saving now.” If the government runs budget surpluses, people might reason: “With these budget surpluses (or lower budget deficits), interest rates are falling, so that saving is less attractive. Moreover, with a budget surplus the country will be able to afford a tax cut sometime in the future. I won’t bother saving as much now.”

This is what happens when economists spend too much time talking to each other and too little talking to actual people.

I now know that nobody knows anything. If I’d (heck, ANYONE) had said thirty years ago that Japan would run huge budget deficits for decades, resulting in a 238% debt to GDP number, and the bank of Japan would just print yen and buy back all the bonds, and the country and currency would be just fine with people still willing to hold yen bonds paying negative interest, it would’ve been treated as the ravings of a fool. Ditto if I’d said Argentina would float a 100 year bond and people would line up to buy it.

If I’d said the Republicans would complain about deficits when out of office, but then run even bigger ones once they’d seized the levers of power, people might’ve believed that though. Some things never change.

#81 Mark on 10.12.19 at 9:10 pm

No such thing as too much Canadian debt.
Government will just roll it into a fancy ETF like USA bundled mortgage back security crap and make it all disappear….. for a later decade.
Sweet.
It’s called creative accounting.

#82 acdel on 10.12.19 at 9:31 pm

Great comments this evening, some I disagree with but the majority I do agree with; Ryan pushed a few buttons; good!

Happy Thanks Giving blog dawgs!

#83 A Dollar is a Dollar is a Dollar on 10.12.19 at 9:38 pm

The historical link between conservative governments and deficits has been too hard too ignore for decades. Cutting taxes for the wealthy and finding quaint ways to value some dollars more than others has been their game for far too long.

Taxing all financial gains and transactions equally will be simple, easily understood, and will solve all of this mess.

Some, though, will continue to try to spin the PR and game the system to create an illusion of prosperity while screwing the bottom 90%.

#84 Mark B on 10.12.19 at 9:47 pm

Ryan, that 90% number was the result of a spreadsheet error and the subject of a lot of media attention.

https://retractionwatch.com/2013/04/18/influential-reinhart-rogoff-economics-paper-suffers-database-error/

#85 Stan Brooks on 10.12.19 at 9:58 pm

#27 Shawn Allen on 10.12.19 at 1:21 pm

The problem is not with the jobs, it is with what the pay is.
In the 80-es despite those job numbers you ate real food, not GMO crap and houses were much more affordable when the interest rates were normal and much higher than now.
Pensions were much better and they could be lived on.

Look at the structure of those current jobs – minimum wage in the private sector and better paid only government jobs.

Keep in mind, the statistics counts ‘the jobs’, not how many work 2 jobs to make end meets.

And that job numbers that you quoted is based on a very different methodology from the 80-es. We only currently count ‘active job seekers’. It is ‘statistical adjustment’ (i.e. lie) not to measure real unemployment and participation rates but call something else, a made up measure ‘unemployment’.

https://www.macleans.ca/economy/the-unemployment-rate-is-meaningless-and-we-should-scrap-it/

https://www.counterpunch.org/2015/03/20/why-the-real-unemployment-is-double-the-official-unemployment-rate/

Verbatim:

Statistics Canada’s closest measure toward counting full unemployment is its R8 statistic, but the R8 counts people in part-time work, including those wanting full-time work, as “full-time equivalents,” thus underestimating the number of under-employed by hundreds of thousands, according to an analysis by The Globe and Mail. There are further hundreds of thousands not counted because they do not meet the criteria for “looking for work.” Thus The Globe and Mail analysis estimates Canada’s real unemployment rate for 2012 was 14.2 percent rather than the official 7.2 percent. Thus Canada’s true current unemployment rate today is likely about 14 percent.

It is the same for inflation v.s CPI

https://globalnews.ca/news/3478535/why-is-canadas-inflation-rate-so-low-when-life-is-so-expensive/


Discussing why its measure of home prices for new homes in Vancouver and Toronto shows such little change over the past decade or so, StatsCan said that the index excludes condos and “for quality adjustment purposes” tends to focus on buildings in areas far from urban centres where price appreciation might be lower.

It is one giant lie that impacts all ‘inflation’CPI related payments i.e. CPP, OAS etc.

And you, the supposedly intelligent CFA fall for those lies, imagine what is in the head of the average person.

Use some creative measures, adjustable on demand and put misleading labels on it. ‘Inflation’ and ‘Unemployment’ is low, there is no ‘risk’ (redefine what risk is by dumping it to the taxpayer) in ‘CHMC’ loans, debt (the federal, not the total, of course) is low, housing (at 1.5 mil for a shack, 800 k for a glass condo) is suddenly ‘affordable’….

You can’t make an economy with lies. And when the whole thing collapses you call it a ‘black swan’ pretending it came out of nowhere.

#86 crossbordershopper on 10.12.19 at 10:33 pm

poor people dont care about deficits, debt or anything. all you hard working people can fret over this stuff. poor people dont care they dont pay todays taxes or tomorrow taxes.
ratio’s, graphs, charts, history, bla bla bla. grow some weed and share with friends for favours and its legal.
go to florida for most of the winter on your cdn governement cheque till day you die.
i see lots people in florida every january february.
idk working in canada is for suckers. you make money the government will steal it from you, might as well work less for less , less stress.

#87 Steven Rowlandson on 10.12.19 at 10:33 pm

Bad news Ryan but Canadians on the receiving end of government largess and social programs don’t give a hoot in hell about debts and deficits. They were taxed and they were promised goodies from the treasury and they expect to collect. Fiscal responsibility for real has little or no respect in Canada and it does not get politicians elected as a general rule. Paul Martin’s leadership was the exception. The AVRO Arrow project was killed in part due to the political need to fund social programs. In Canada bad morals and fiscal policy works and if the opposite is instituted it gets tossed out within the next couple elections. Then again we are near the end of the Holocene inter-glacial and when the next major glaciation sets in all of this will be academic as there will be no Canada to pay bondholders and Canadians don’t think government debt is their personal debt. Canadians if any will be refugees in the southern United States or Mexico. Canada has a shelf life.

#88 Keith on 10.12.19 at 10:48 pm

Canadians are in terrible financial shape, on average. Not the people on this blog. Debt to income is 170%. So the will of the people is not even to balance the budget, let alone look at an aging population with increasing health care and senior benefits costs.

It’s popular to ignore the impact of the deficit, even the Conservatives are practicing their own brand of checkbook campaigning. I’d love for them to increase program spending, cut taxes substantially and balance the budget in five years, but I doubt it would play out that way. Even without the next recession which would throw a gigantic spanner into the works.

The will of the people is to run deficits until the situation is so bad that there is no alternative but to take action. (1995, Chretien Liberals). That is the way of human nature. A real leader would stand up and tell the awful truth. The only ones that do, have no chance of being elected.

#89 acdel on 10.13.19 at 12:22 am

Not sure about this recent drama Garth; you were in politics in your six ab days; if the security threat was really that high; would not the the whole thing just be cancelled?? After all; security is more important then making an appearance in a bullet proof vest and bald guys behind him looking very serious. What’s your take on this?

https://www.cbc.ca/news/politics/trudeau-bulletproof-vest-security-threat-campaign-rally-1.5319730

#90 acdel on 10.13.19 at 12:54 am

Auto correct is a killer for me; six pack abs Garth and a serious biased cbc public funded so called canadian news org that posts stories about libs forwarding news to libs about a security scare, but hey , Rosemary will protect them; pass me the popcorn this just gets better and better. :) Boo!

#91 Ponzius Pilatus on 10.13.19 at 1:04 am

#101 crowdedelevatorfartz on 10.12.19

Once decent poster reduced to responding to trolls and generalizing and entire generation of millions.

Your complaining is embarrassing. Your posts becoming irrelevant.

MF
————-
Gotta agree.
Kinda sad.

#92 Ponzius Pilatus on 10.13.19 at 1:13 am

Dolce is back.
Scroll by his comments as fast as I can.

#93 crazyfox on 10.13.19 at 1:19 am

#35 Ryan Lewenza on 10.12.19 at 2:13 pm

Any leader can talk about balancing the budget. Bernier claims he can do it in 2 years. Do you believe him? Why would we, there’s no plan put forward on how to do it.
Talk is cheap. If you think Scheer/Cons have a costed platform on their website, think again:

https://www.pbo-dpb.gc.ca/en/epc-estimates

Everything is piecemeal. Nothing is complete. It’s segmented and incomplete. It’s all cherry picked data with nothing laid out plain or complete and that should worry us because the devil is in the details and we are 9 days away from a general election.

How often have you seen people believe what they want to believe in life, facts be damned? You must see this with investors all the time, people that have no idea what they are doing or saying, or can’t smell BS when their noses are buried in it? Well, I smell it. I see it with the reasons put forth on what most believe, so much of it is just noise and if there isn’t enough of us out there looking for the truth or revealing it, we live the illusions and fantasies of others until reality hits home and it always does.

It’s called karma. Y’know, everyone gets what they deserve and we have to respect the free will of others to screw up. Live with the dangers, and damage and losses even when it directly spills over into our own lives. It’s a part of life. If I, for example, live in a big city and have a government that supports low EPA standards for gas driven cars and doesn’t support EV’s, I have to live with the fact that the air pollution will shorten my life and the only choice I have is leave and at some point there will be no place to run or take my kids.

We have a large minority who don’t believe in human caused climate change as an example. They are fine with what their political party tells them to believe and if the majority can’t get their act together in democratic nations with awareness, communication, solutions, tech or whatever else it takes, whether our actions or inactions make a difference in the larger picture, we will have to live with the judgment of our works. That too, is karma. School of easy lessons or hard knocks, I’m ok with either, they both serve a purpose but what I see coming is hard knocks. Just humor me and take 30 secs of your life, do a search for Dave Borlace on facebook and look at at the Sept 25th GIF and you’ll see why for yourself… or maybe not. We believe what we want to believe.

#94 Nonplused on 10.13.19 at 2:05 am

#80 Tannhäuser Gatekeeper

“A change in government budgets may impact private saving. Imagine that people watch government budgets and adjust their savings accordingly. For example, whenever the government runs a budget deficit, people might reason: “Well, a higher budget deficit means that I’m just going to owe more taxes in the future to pay off all that government borrowing, so I’ll start saving now.”

What in the heck are you smoking???? When people see higher taxes coming they convert all possible cash to physical assets even if it is a stupid boat they use 10 days a year. Nobody saves to pay taxes. Instead when taxes are coming they do everything they can think of to get rid of their money. You are an absolute idiot if you don’t. Nobody saves money to pay off future government taxes. Only a really stupid socialist would assume they do. People manage only their own finances, not that of the country.

I save not one penny for future taxes. If the tax rate is going to go up, I buy things that can’t be taxed, even if I don’t need them, like motorcycles. I suppose one day they will try a “wealth tax” on motorcycles, but I will declare it isn’t worth anything and if they want to come get it go ahead. They won’t be able to seize all the motorcycles for supposed arrears and then also sell them to the people who couldn’t afford them in the first place. This applies to all property. You can’t seize it all and then sell it, because the people who don’t own it can’t afford it. No new money can be generated this way.

New money can only be produced by running the printing press. Seizing assets just makes them worth less. When that starts, and they come for your house, which they already are, gold will be the only way out.

#95 Smoking Man on 10.13.19 at 2:34 am

Wasted in lost Vegas again…

On the wife’s tab this time… she is a great forex student..

She booked 4 rooms for my tax farm palls.

400 to 1 margin Mastered.

I’m a genius…… I really am…

Fk Communism..

#96 Craig Patrone on 10.13.19 at 7:57 am

All this hyping up Chretien and Martin Liberals cutting the debt and deficits is they were just lucky that interest rates were down from 9% to 10% to 5% to 6% is a short few years.

The federal debt at that time is at least $500-$525 billion so they saved at least $150 billion over the 12 or so years they were in power. That is the main reason they could even get a dent in cutting the Canada national debt in the 1990’s and early 2000’s.

They did not make real tough choices as they saved most their money in annual interest due to the bond market lowering rates. It had really little to do with them.

#97 Reality is stark on 10.13.19 at 8:15 am

Socialism is great until you run out of other people’s money.
Don’t sign up if you think they want you because you are the one to finance all of their dreams.
Let them pay their own way. They claim to be independent so show me the money.

#98 Millennial Realist on 10.13.19 at 8:20 am

Paleo Boomers become irrelevant in:

9 Days and Counting………..

#99 Ryan Lewenza on 10.13.19 at 9:04 am

Craig Patrone “All this hyping up Chretien and Martin Liberals cutting the debt and deficits is they were just lucky that interest rates were down from 9% to 10% to 5% to 6% is a short few years.

The federal debt at that time is at least $500-$525 billion so they saved at least $150 billion over the 12 or so years they were in power. That is the main reason they could even get a dent in cutting the Canada national debt in the 1990’s and early 2000’s.

They did not make real tough choices as they saved most their money in annual interest due to the bond market lowering rates. It had really little to do with them.”

Program spending is completely separate from debt interest charges. Those two numbers add up to government spending. By separating those two numbers I show clearly that they did cut spending. Yes lower rates helped them as they helped every country in the world with global rates declining. But you are factually incorrect to say their spending cuts did not have a material impact on reigning in the deficits, which was my main point. – Ryan L

#100 Steve on 10.13.19 at 9:44 am

Lucky, interest rates most likely will not be going anywhere. So servicing cost should remain low.
The real issue is spending. Why is the government giving old people who make over 77k anything? That is madness. The same applies to child benefit, people should be made aware of the income levels of people getting money.

#101 Dharma Bum on 10.13.19 at 10:00 am

Shameful.

Oh well. People figure it’ll be someone else’s problem down the road, so why should they give a rat’s arse.

Trudeau must go.

Step 1.

#102 crowdedelevatorfartz on 10.13.19 at 10:03 am

@ Ponzie Plot

When you come up with an original idea.
Let us know.

#103 crowdedelevatorfartz on 10.13.19 at 10:10 am

@ Mewling Surrealist
Your ability to subtract is impressive.
I noticed you started the “count down” a few days ago..
Alas that’s the problem.
If only you could grasp the ramifications of the national Debt all would be well…….but the numbers are incomprehensible because its greater than your fingers and toes.

Yoo Hoo!
MF!
Nothing to say?

#104 Chico on 10.13.19 at 10:11 am

I haven’t ever gone to a political rally or been a part of any party in almost 54 years of living. I went to my first this weekend in large part because of what Garth has taught me over the last 10 years.

I saw a sign entering our small community saying “join the common sense revolution,” and decided to do some research. I found a video with Dave Rubin and Maxime Bernier in Hamilton and they spoke about free speech. I’ve heard Dave Rubin talk about tolerance and free speech in America and he laughed about the protestors in Hamilton calling him a Nazi. :)

I went to see Mr. Bernier in Halifax and put thier sign on my lawn. He was concise, has a plan and isn’t pandering to “buy” votes. He explained in less than 10 minutes how to balance the budget and referenced Jean Chretian doing it in 2 years from 95-97.

For the first time in my life and don’t feel like I need to pick the “least worst” canidate.

My friend who is a junkie for politics gave me more background about how he wanted to rebuild the PC party after they lost and now what the party is left with is a really wishy washy dude at the top.

I am pleasantly suprised to say that I’m really looking forward to voting!

P.S. – My family and I were vacationing in our lovely province of Nova Scotia when we found ourselves in Lunenberg checking out the sites. I made a point of dropping by Garth’s office to say hi and thank him for his many years of service to people like me who read this blog.
*He’s much more handsome and sauve in person than most of you could imagine! :)

#105 Stonewar on 10.13.19 at 10:18 am

#99 Ryan Lewenza on 10.13.19 at 9:04 am
Craig Patrone “All this hyping up Chretien and Martin Liberals cutting the debt and deficits is they were just lucky that interest rates were down from 9% to 10% to 5% to 6% is a short few years.

The federal debt at that time is at least $500-$525 billion so they saved at least $150 billion over the 12 or so years they were in power. That is the main reason they could even get a dent in cutting the Canada national debt in the 1990’s and early 2000’s.

They did not make real tough choices as they saved most their money in annual interest due to the bond market lowering rates. It had really little to do with them.”

Program spending is completely separate from debt interest charges. Those two numbers add up to government spending. By separating those two numbers I show clearly that they did cut spending. Yes lower rates helped them as they helped every country in the world with global rates declining. But you are factually incorrect to say their spending cuts did not have a material impact on reigning in the deficits, which was my main point. – Ryan L

———

Let’s get you over that 100 post hump. Here’s to 100.

#106 Stonewar on 10.13.19 at 10:19 am

#100 Stonewar on 10.13.19 at 10:18 am
#99 Ryan Lewenza on 10.13.19 at 9:04 am
Craig Patrone “All this hyping up Chretien and Martin Liberals cutting the debt and deficits is they were just lucky that interest rates were down from 9% to 10% to 5% to 6% is a short few years.

The federal debt at that time is at least $500-$525 billion so they saved at least $150 billion over the 12 or so years they were in power. That is the main reason they could even get a dent in cutting the Canada national debt in the 1990’s and early 2000’s.

They did not make real tough choices as they saved most their money in annual interest due to the bond market lowering rates. It had really little to do with them.”

Program spending is completely separate from debt interest charges. Those two numbers add up to government spending. By separating those two numbers I show clearly that they did cut spending. Yes lower rates helped them as they helped every country in the world with global rates declining. But you are factually incorrect to say their spending cuts did not have a material impact on reigning in the deficits, which was my main point. – Ryan L

———

Let’s get you over that 100 post hump. Here’s to 100.

———

And here’s a pat on the back to me to getting you over 100. Happy Thanksgiving. =)

#107 Sideshow Rob on 10.13.19 at 10:20 am

Not sure what is going on. I posted twice yesterday. Both seem to have gone to the cyber black hole. what’s up?

No record of your posts. – Garth

#108 Ryan Lewenza on 10.13.19 at 10:29 am

tccontrarian “Hey Ryan,

Off topic…

Since you’re allegedly one of the main ‘brains’ behind Turner Investments (at least that’s how I understand the arrangement), which of the following indeces is more relevant in your decision-making:
-SP500
-Russell 2000
-Dow Jones
-TSX60”

The SP500. It covers the largest 500 US stocks, has a long track record, and is the main US benchmark index. The Dow has too few stocks. The TSX is more driven by the US economy and is too concentrated in resources and financials. – Ryan L

#109 MF on 10.13.19 at 10:37 am

#91 Ponzius Pilatus on 10.13.19 at 1:04 am

Gotta agree.
Kinda sad.

-Yeah. His comments used to be pretty informative and interesing. I enjoyed reading them. Lots of good humour sprinkled among historical, current and real world insight about a variety of topics.

Now?

The receiving end of one of the best troll jobs I’ve seen. MR sets the trap, he falls right into it with his response that doesn’t do anything but embarass him. Text book.

MF

#110 crowdedelevatorfartz on 10.13.19 at 11:12 am

MF. Ponzie. Mewler.

My fans abound…..

Speaking of original ideas (of which I have yet to read from my 3 amigos)…..

338.com has some interesting stats.

The top 3 median incomes in Canada?
#1 Ft. Mac riding
#2 Calgary riding
#3 Edmonton riding.

The lowest median income in Canada?
Bourassa riding in Quebec city.

Who says Oil is dead? Long live poutine!

Coffee’s ready, gotta go.

#111 crowdedelevatorfartz on 10.13.19 at 11:25 am

Imagine if you will……
this actor was saying “Mewler? Mewler? ”

https://www.youtube.com/watch?v=NP0mQeLWCCo

#112 Darren Blake on 10.13.19 at 11:35 am

I remember the health cuts from the Federal Liberals Chretien, Martin in the 1990’s. I believe they cut health transfer to the provinces by billions. It was a 40% cut compared to Progressive conservative Mulroney’s 25% cut prior to health transfer to the provinces.

I think the point Craig Patrone is pointing out that the dramatic drop in interest rates 30% to 40% in a few years was the main contributor to falling debt and deficits. What I am thinking that what if interest rates on the national debt actually went up to 12%, 13%, 14%+ like in the prior years in the 1980’s. This would make it almost impossible for any government to cut their out and we would be in a much worse place with not a almost $700 billion Canada national debt today but be at $300 billion+ higher at $1 trillion at the very least.

Look at even interest rates today, if it were not for 2% to 3% interest rates in recent years and today, all world governments would be in real big trouble and everyone with any rational brain would know it.

Interest rates are the main driver of accumulated deficits that become government debt totals over the years. Program spending like here in Ontario under Ontario McGuinty Wynee Liberals for 15 years doubled the Ontario government debt and they could never do it with ease if they had to pay 7% to 10% interest rates.

#113 How dare they! on 10.13.19 at 12:16 pm

#110 crowdedelevatorfartz on 10.13.19 at 11:12 am

MF. Ponzie. Mewler.

My fans abound…..

Speaking of original ideas (of which I have yet to read from my 3 amigos)…..

338.com has some interesting stats.

The top 3 median incomes in Canada?
#1 Ft. Mac riding
#2 Calgary riding
#3 Edmonton riding.

The lowest median income in Canada?
Bourassa riding in Quebec city.

Who says Oil is dead? Long live poutine!

Coffee’s ready, gotta go.

Greta is coming to lecture us……….. Arnie got her a tesla….

#114 Westcdn on 10.13.19 at 12:20 pm

I am not a social creature yet I have learned a lot from a few. Big Jim was an influence. He was the straw boss on the rigging crew that I worked from a summer as I fledged out. When I sat down on a stump to get my wind back he took to sitting beside me to tell stories. I appreciated that but when the cables showed that he called in he would tell me to get my sorry ass back down there. Al was his son. I hated it when my tree would snag. I quickly learned the first tree was usually the one to snag but the others on the crew didn’t share their position. I remember looking at Jim to make sure it was choked the way he wanted though he and Al were close to one mind – good times as they treated me as a son and brother.

#115 AGuyInVancouver on 10.13.19 at 1:12 pm

#35 Ryan Lewenza on 10.12.19 at 2:13 pm
baloney Sandwich “Would helpful if you had compared the Conservative platform with the Liberals instead of just slamming the latter.”

I agree that the Cons are also campaigning on increased spending but it’s nowhere close to the Libs and they are the only party (of the big 3) that are even talking about balancing the budget in the coming years. If you don’t like the message of this blog post, which is based on hard facts and data, then ask your party to change their focus and direction. I’m just trying to highlight what will come from all these deficits down the road. But most people/politicians don’t care because they only think about the here and now. – Ryan L
_ _ _
Why should Canadians and Canada care when almost every other developed country is doing the same in this era of low rates? Acting like a skinflint will just put us at a disadvantage compared to those countries.

#116 Frank Costas on 10.13.19 at 1:28 pm

Happy Thanksgiving everyone but I do feel for Alberta and it’s residents that are getting the short end of the stick with this Trudeau #2 government national energy program in a a little twist.

This whole blocking of energy projects and this green energy, green agenda is a total attack on Alberta and Canadians finances and standard of living. It is a total farce.

Alberta’s last 4 years of the NDP did just make a bad situation a disaster. Just like here on Ontario, NDP will be a one term that will never return in power.

#117 Almost A Boomer on 10.13.19 at 2:05 pm

I agree 100 per cent with what you have written. Government or individuals, it is impossible to live beyond your means for ever. If you are older than 35 or 40 you should know that spending at this rate is a fools game that cannot be won and will result in reduced services and higher taxes for everyone. As a result, the future for many Canadians will be worse not better.

#118 crowdedelevatorfartz on 10.13.19 at 2:11 pm

@#115 AGuyinVan
“Acting like a skinflint will just put us at a disadvantage compared to those countries.”
+++++

Greece?, Japan?, Italy?

Massive Debt and deficit.
No thanks.
When the economy goes through a prolonged downturn and interest rates rise.
You dont want to be owing billions you cant pay unless you fall back on “plan B” and tax the crap out of your citizens…..

Kinda like Japan right now?
Massive debt, negative interest rates, sputtering economy , and only one way for the govt to “pay the bills”…….

https://www.reuters.com/article/us-japan-economy-tax-consumption/japan-proceeds-with-twice-delayed-sales-tax-hike-as-growth-sputters-idUSKBN1WG2JJ

Coming to a Canadian Govt in a decade or less…..

#119 West Coast Gal on 10.13.19 at 2:48 pm

I totally agree, Ryan. I remember well this time in history and how much each $ went to interest payments on our national debt. Grateful for Paul Martin in turning things around. Too bad our current leaders are not thinking more long term instead of just trying to say what they need to, to get elected.

#120 jess on 10.13.19 at 3:05 pm

QE-Infinity ?

Fed’s Powell Admits a Bigger Bailout for Wall Street Is Coming; Fed’s Balance Sheet Ballooned by $176 Billion Since September

https://wallstreetonparade.com/2019/10/feds-powell-admits-a-bigger-bailout-for-wall-street-is-coming-feds-balance-sheet-ballooned-by-176-billion-since-september-11/

Federal Reserve Board Governor Lael Brainard strongly opposed the rule changes and released a detailed statement which noted the following:

“The LCR [Liquidity Coverage Ratio] was designed as a baseline requirement appropriate for all large banking firms that is already tailored to bank size and business model, and the compliance burden is relatively low. Although S.2155 does not require us to weaken this critical post-crisis safeguard for large banks, for domestic banks in the $250 to $700 billion size range, who account for $1.5 trillion in assets overall, today’s rule will reduce the LCR requirement by 15 percent or $34 billion. For domestic banks in the $100 to $250 billion size range, who account for $1.9 trillion in assets overall, today’s rule would eliminate entirely their current modified LCR requirement, a reduction of the LCR requirement by $167 billion.”

https://www.federalreserve.gov/newsevents/pressreleases/brainard-statement-20191010.htm

https://www.economicshelp.org/blog/5366/economics/austerity-pros-and-cons/

STATEMENT: Fed’s Big Bank Deregulation Needlessly Puts the Economy at Risk

Date: October 10, 2019

https://www.americanprogress.org/press/statement/2019/10/10/475635/statement-feds-big-bank-deregulation-needlessly-puts-economy-risk/

#121 yvrmc on 10.13.19 at 3:50 pm

Can you define Paleo Boomer for me ?

#122 Steven Rowlandson on 10.13.19 at 6:09 pm

You people are not ready for the kind of government needed to clean up the disgusting mess made of this country’s finances,morals and law codes. It does not matter how you vote. You won’t get good and responsible government. It is illegal in Canada.
If any of you survive what is coming at least try to learn from the errors of the past.

#123 Chris Roche on 10.14.19 at 9:31 am

Paul Martin was in the right place at the right time. If it were not for fast dropping interest rates and had decided to cut more because the tens of billions of extra interest in a higher to high interest rate environment would of destroyed their attempt to being fiscally responsible which having future surpluses.

Knowing Liberals, they would of raised the G.S.T. by at least another 5% points to 12% at that time which would brought in $35 billion a year in new tax revenue with healthcare cuts on top of that. This is why a local then MP John Cannis Liberal under Chretien boasted many times for lower interest rates in Canada and tried to get credit for that. They have no power of interest rate levels. It is purely economic and the central banks domain.

#124 Frank N Beans on 10.14.19 at 9:48 pm

Just a bitter Ontario provincial bureaucrats speaking here, but a colleague of mine jumped ship after Ford was voted in and found himself a cushiony job with the Feds in downtown Ottawa. He’s been to three fully paid conferences in Europe since he started last year. Since the hiring and spending freeze in the OPS, we don’t even have a budget to attend/present at LOCAL conferences.
I’d say it’s time to rope in the unrealistically cushiony perks of the Fed bureaucrats. Watching their unchecked privilege is making me nauseous.