Hopeless

Not a chance, of course. In the summer of 1993 it was a slam-dunk that Kim Campbell would win the PC leadership contest and become Canada’s first female prime minister. Contender Jean Charest tried to unseat her from that throne. He failed.

Then there was pathetic me. Not a chance of winning, but I went through the entire, months-long, coast-to-coast process just to make a point. We were turning into a nation of debt slaves. Something must happen. Politicians had to care.

At the time the federal deficit was a withering $39 billion. Brian Mulroney had just brought in the massively unpopular GST, then walked out the door leaving voters to eviscerate his party, and Kim. (Of course, Jean Chretien kept the tax, blamed the Tories, and reduced the deficit to zero because of it.)

My contribution? I hauled a giant Debt Clock into the arena where the convention was being held, then gave a speech dissing my colleagues, Trudeau (the old one) and the party for being a bunch of grasshoppers. Naturally I lost. Big. As expected.

Well today the national debt is $700 billion. After climbing out of a massive deficit hold in 2008-9 thanks to the financial crisis, we’re back into deficits. On Monday Bill Morneau fessed up to a shortfall of $27 billion this year (seven billion more than stated in the election), which will be larger next year. This is even before new promised spending takes place.

But here’s the thing: nobody cares. Yet again.

In fact today politics has so changed that those seeking office brag about how much more they will spend and how much less they will tax. It’s as if we’re a clutch of morons believing money just appears when required. Why shouldn’t we have free education, health care, drugs and retirement plans, or a guaranteed annual income, money for having children and affordable housing? And a tax cut?

An idea called MMT – Modern Monetary Theory – is all the rage on the US political left. It’s been embraced and promoted by rebel Congresswoman AOC as well as heavyweight Dems such as Bernie Sanders and Elizabeth Warren. It says, simply, deficits are harmless, healthy and promote economic growth and expansion especially when interest rates and inflation are low. Governments can just print money, distribute it fairly and – voila – people will spend more and create prosperity. Sort of like that debt jubilee described here a few days ago. Money for nothin’, and the cheques are free.

So long as economic growth outpaces bond yields, the argument goes, governments can stay in the red, keep rolling over the growing debt and society will get richer. Obviously this is the new Trudeau/Morneau mantra. Our federal leaders have given no date for the budget to be balanced, refuse to answer that question, ignore the critics asking for a deadline and assume that you – the voter – couldn’t give a damn.

This is a departure. Harper got deep into deficit, but crawled out. So did Chretien and Martin. Even Mulroney and Mike Wilson were obsessed with balancing the books. But now, as we roll into 2020, crickets. More spending Fewer people paying tax. Don’t bother your pretty little head with the details.

Okay, so what can go wrong? How can the country behave in a way that would cause misery, penury, bankruptcy and serious spousal grief if it was you?

Well, it probably can’t. And MMT is dangerous, since its viability is based on unique conditions.

For example, if interest rates swell – even modestly – the cost of servicing a massive pile of debt goes up fast, eats into government revenues, creating a death spiral. Politicians can’t refinance maturing debt at rock-bottom levels, gutting budgets as debt payments crowd out social spending. The economy is whacked.

MMT contains endless risk. Growing debt levels mean the bond market demands bigger premiums, so governments pay more. If politicians just fire up the printing press to increase the money supply, inflation takes off, popping yields more. Annual deficits and growing debt ultimately fuel rates, making that debt unsustainable. Taxes inevitably shoot higher. That’s why deficit financing has been used historically only as a tool to boost a weak economy or get through a crisis, such as the GFC in 2008-9. When things recover, governments dial back and strive to have revenues cover expenses, or build up a cushion for the next bad patch.

But that was then. This is now. The economy’s fine (says Bill) yet the red ink augments. Deficits are tools no longer. They’re structural. Normal. Routine. During the federal election campaign, did you hear any leaders arguing for less, or promise to balance the books, to restore balance for the benefit of your kids and their spawn?

Nah. It was all about who could buy the most ballots. And that guy won.

Hopeless.

 

157 comments ↓

#1 Flop... on 12.17.19 at 4:26 pm

Welcome to Greaterfool, your one-stop shop for street sweeping updates.

They swept the other side of the street today.

A few people got towed, 100 bucks a pop, plus the inconvenience of having to go and get your car back.

$60 if you pay within 14 days, for being parked out the front of your own residence at the wrong time.

They then snared a few people later on when they come around for another sweep, pun intended, and then towed some more who had parked there in the meantime thinking the coast was clear.

The coast wasn’t clear but the gutter was emptied.

So was someone’s wallet…

M45BC

#2 Niagara Region on 12.17.19 at 4:34 pm

Today NPR broadcast a fascinating report on what has happened to millions of American homes since the 2008 housing crash. This interview features the prize-winning journalist Aaron Glantz, author of the book “Homewreckers.” Here’s a link to the interview entitled “Tenants Left in a State of Precarity as Mysterious Shell Companies Buy Millions of Homes”: https://www.wnycstudios.org/podcasts/takeaway/segments/mysterious-shell-companies-own-millions-homes-leaving-tenants-state-precarity

#3 FreeBird on 12.17.19 at 4:37 pm

“Every election is a sort of advance auction in stolen goods.” H.L. Mencken

#4 Shawn Allen on 12.17.19 at 4:40 pm

The 1993 Conservative Race

I remember rooting for Cape Breton native Flora MacDonald in earlier race(s), but I think she had given up running by 1993.

#5 TurnerNation on 12.17.19 at 4:41 pm

What a strange and backwards era.
They had only the Black & White photography.
Or was it G&M’s.

#6 unbalanced on 12.17.19 at 4:44 pm

Rates may go up, but not swell. And if it does the government will just be like USA. Quantitative easing 4 or 5 or 6 or yadayada!

#7 JSS on 12.17.19 at 4:46 pm

If you ignore it, it’s not there.
If you don’t know anything about it, it’s not there either.

#8 Kurt on 12.17.19 at 4:47 pm

Much to my embarrassment, I had to read the column twice to understand the significance of the dog photo. Well done, Garth!

#9 MF on 12.17.19 at 4:53 pm

Pretty pathetic.

To be fair most Canadians voted conservative, the only party even talking about the debt.

MF

#10 S.Bby on 12.17.19 at 4:57 pm

The voters don’t care about government debt and deficits the same as they don’t care about their own debt. Just like many people never plan to actually pay off their mortgages; debt is just a fact of life now. It’s all a symptom of a decade of low interest rates and a me-first consumer mentality.

#11 Alessio on 12.17.19 at 4:57 pm

Garth, now you’ve really confused me. You’ve been highlighting over and over that no recession is in the cards as job growth is strong, economy resistant etc… and now headwinds like trade have turned into tailwinds.

Today’s article about $700B debt sounds super scary that we’re all pooched in this country. And I agree that debt sounds super scary!

So are we or are we not headed for a likely pooched recession? #perplexed

#12 Barry on 12.17.19 at 5:06 pm

The GST was one of the only good policies the PC’s had.
It should be raised to 12% to check people from buying more garbage, and help reduce government debt.
Do we really need more stuff?

A provincial sales tax would help solve Alberta’s woes as well.

#13 Yukon Elvis on 12.17.19 at 5:08 pm

It was all about who could buy the most ballots. And that guy won.
…………………….

And so it shall be again. Until we blow up. But that day is a loooong ways off.

#14 nobody special on 12.17.19 at 5:10 pm

Trump believes in massive deficits
Trump is most definitely not a socialist
Therefore balanced budgets are socialist

QED

#15 Mike on 12.17.19 at 5:12 pm

MMT is dead in the water. The US Fed has had to pump billions into the market to keep rates artificially low at the behest of the EU whose banks are teetering.

2020 will be an interesting ride. The EU will begin to wither in Q1 with monetary shock, pushing Canadian banking stocks et all lower. Markets will swoon, interest rates notch up and everyone panic to cover their losses.

Then the buying begins….

#16 dramatic guy on 12.17.19 at 5:23 pm

Its time to accept that Canadian culture is in decline and now has very little to offer. Our “culture” is dictated by American TV and advertisers especially in southern Ontario.

#17 Stan Brooks on 12.17.19 at 5:31 pm

The inflation is already here:

Most Canadians believe food prices increasing faster than income: survey

https://ca.finance.yahoo.com/news/most-canadians-believe-food-prices-increasing-faster-than-income-164646157.html


Our federal leaders have given no date for the budget to be balanced, refuse to answer that question, ignore the critics asking for a deadline and assume that you – the voter – couldn’t give a damn.

The average voter is dumber than chicken shit.

Okay, so what can go wrong? How can the country behave in a way that would cause misery, penury, bankruptcy and serious spousal grief if it was you?

Because it can.

Cheers,

#18 Juve101 on 12.17.19 at 5:32 pm

Garth, would you mind recapping your advice to those of us not mired in debt, leading a balanced responsible life, how to best defend against the inevitable storm?

#19 Nothing Surprises on 12.17.19 at 5:37 pm

This puts our Canadian situation in perspective!

TAX – The U.S.A. REALITY.
What, Me Pay Taxes?
Two things in life are certain: death and holiday flight delays. If you thought we were going to say taxes…do we have some stats for you.

According to the left-leaning Institute on Taxation and Economy Policy (ITEP), 379 of America’s biggest companies paid an average federal tax rate of about 11% last year, roughly half the official 21% rate established by President Trump’s 2017 tax cut.

91 corporations in the Fortune 500 paid no federal taxes last year despite earning a combined $101 billion. Their average federal tax rate was -5.9%, so…a tax refund.
How that happens: Investing in good accountants. And utilizing deductions, tax breaks, and other loopholes to lower their effective rates. Last year’s 11% rate is the lowest since ITEP started tracking in 1984.

Big picture: Had the 379 profitable members of the Fortune 500 paid a 21% rate on their profits, the government would have netted an additional $73.9 billion in revenue.
Right now, D.C. is staring down a $984 billion federal deficit.

What does that have to do with Canada? – Garth

#20 Linda on 12.17.19 at 5:41 pm

Actually Mad Max & the PPC platform mentioned things like balancing the budget & cutting expenditures. The PPC platform pre-election was incomplete & of course, Max lost his seat. I didn’t check to see if any PPC candidate was elected.

Despite endless press castigating Max & the PPC as racist right wing nutters out to end the free world as we know it, the PPC platform read like an old time Conservative platform, back in the day when the Liberal & PC platforms actually differed from one another. I’m all for adopting good ideas but when one can’t tell the difference seems to me the voter loses out insofar as actual choice is concerned. Now our choices from a financial perspective seem to be the bad & the ugly, the good having been cut from the script. Nope, don’t buy that the shiny present up front is going to hide that lump of debt concrete block at the bottom of the stocking.

#21 HH on 12.17.19 at 5:44 pm

It isn’t that I don’t care. I do. I just don’t have any power to change it. And out here in the west our votes have no teeth. Ontario and Quebec have all the clout. I am so disillusioned I may not vote federally again.

#22 Edith McNair on 12.17.19 at 5:48 pm

Garth, Time to load up on Preferreds to protect us from this hubris?

#23 Adrian on 12.17.19 at 5:49 pm

#9 MF on 12.17.19 at 4:53 pm

34% voted Conservative in 2019, the rest . . . didn’t.

#24 Flop... on 12.17.19 at 5:49 pm

#16 dramatic guy on 12.17.19 at 5:23 pm
Its time to accept that Canadian culture is in decline and now has very little to offer. Our “culture” is dictated by American TV and advertisers especially in southern Ontario.

/////////////////

That’s as good a Segway as I’m gonna get on this one, so I’m gonna go for it.

I checked out the chart, had to push Shawn Allen out of the way to stop him ogling the Birkshire Hathaway logo, and I guess the one that jumped out at me was…

Pepsi spends more on advertising than Coke.

Don’t worry MF.

I meant Coca-Cola…

M45BC

” Charting the U.S. Top 50 Advertising Spenders.
The holidays are right around the corner, which means consumers are being subjected to endless commercials and ad campaigns pushing for that last-minute gift purchase. Advertising is big money not only in the U.S., but also around the world. Just how much money is spent on advertising? That’s the subject of our new visualization, which breaks down the world’s top companies by ad spend.

Among the top 50 advertisers alone, 38 are headquartered in the U.S.

Forty-one companies spent more than $1 billion on advertising in 2017.

Ad spending for the top 200 companies increased by 1.1% from 2016 to 2017, the slowest growth since the Recession.

According to AdAge research, Geico, a subsidiary of Berkshire Hathaway, is the most advertised brand, with $1.4 billion in measured media ad spending.

Top 10 Advertisers by 2017 Ad Spend

1. Comcast Corp: $5.7 billion – Telecommunication
2. Procter & Gamble Co.: $4.4 billion – Household products
3. AT&T: $3.5 billion – Telecommunications
4. Amazon: $3.4 billion – Internet Services and Retailing
5. General Motors Co.: $3.2 billion – Motor Vehicles
6. Verizon Communications: $2.6 billion – Telecommunications
7. Ford Motor Co.: $2.5 billion – Motor Vehicles
8. Charter Communications: $2.4 billion – Telecommunications
9. Alphabet (Google): $2.4 billion – Internet Services and Retailing
10. Samsung Electronics Co.: $2.4 billion – Electronics

https://howmuch.net/articles/worlds-top-50-biggest-advertising-spenders

#25 Niagara Region on 12.17.19 at 5:52 pm

91 of the Fortune 500 companies paid no US federal taxes in 2018, including Amazon, Starbucks, and FedEx. For more details, follow the link:
https://www.cnbc.com/2019/12/16/these-91-fortune-500-companies-didnt-pay-federal-taxes-in-2018.html

#26 Doug t on 12.17.19 at 5:58 pm

It’s the new world mentality – gone are the days of frugality and the concept of “living within your means” – now its all about SPEND SPEND SPEND – politicians are merely reflecting the social norm of today’s citizens – gimme gimme gimme and BUY ALL THE THINGS – the controls that use to exist and that helped keep people in check from over extending themselves are gone and it is so out of control. It’s a disgusting thing to witness the excessive spending and lack of restraints so prevalent in society today – we are doomed

#27 Smartalox on 12.17.19 at 6:03 pm

@Niagara Region #2,

Interesting info on the shell companies (in the names of Trump-centric cronies even!) buying up great tracts of small homes for ‘cash’ in the wake of the great financial crash. I had read a similar story in the Atlantic that implicated Jared Kushner (also a trup crony) in similar ventures in the Mid-Atlantic region in the US.

I have a friend who lives in LA, in a rented house in a neighbourhood where the majority of the houses are owned by a Hollywood star.

So what to make of all this? First, the rules for buying residential real estate have to tighten up.

The absence of background checks and legal balances (beneficial ownership registry, civic limits) that are being exploited in these sorts of cases date from a time when the prevailing sentiment was ‘own more than one house? Why would anybody would ever do such a thing?’ and kept that way so that people who think a “degree in Home Economics” is the only pre-requisite for a Real Estate License could afford to make a living.

Next, the beneficial ownership registry, like the BC government has been advocating (and that our host has been pooh-pooh’ing). It used to be that this function was accomplished by registration of the title, but again, this dates from a time when one’s name was though to be a barometer of one’s integrity, and “why would someone want to obscure that, anyway?”

Third, and of greater concern from that story, was the implication that these ‘land barons’ were raising rents to unsustainable levels, and allowing community standards to fall. These symptoms can be addressed by legislating rent controls, and enforcing community standards, particularly at the municipal level.

Also taxation to make holding properties vacant less palatable (again, a policy in conflict with the preferences of our humble host).

On the plus side, these large corporate purchases of property offer up some opportunities. For example: a city might issue a ‘special levy’ to the owner of a few city blocks of houses, to pay the cost of replacing old water pipes. Tenants still vote, corporations don’t.

#28 Alex on 12.17.19 at 6:03 pm

” It says, simply, deficits are harmless, healthy and promote economic growth and expansion especially when interest rates and inflation are low. Governments can just print money, distribute it fairly and – voila – people will spend more and create prosperity. […] So long as economic growth outpaces bond yields, the argument goes, governments can stay in the red, keep rolling over the growing debt and society will get richer.”

I know you enjoy a pretty light, jocular tone so I’m expecting a lot of hyperbole, but this doesn’t strike me as a good summary of MMT.

My understanding is that the descriptive portion (which is increasingly accepted as factual by economists) says that federal governments create money; that their deficit is the private sector’s surplus profits; that federal governments can afford to buy anything for sale in their currency without a need to borrow; and that taxes serve to provide incentives to work, to control inflation, and to remedy inequality. In this view, a large debt just means that there is an exactly equal amount of private sector profits & savings.

A balanced budget just means that there can be no additional public sector profits. Which might be fine, but it can also act as a huge break on the economy. What is not an issue is debt servicing costs, since dollars qua dollars can always be “created” at the stroke of a key. Provided inflation is under control, there is no problem caused by a budget deficit.

There are also some prescriptive measures like the job guarantee which are more heavily contested.

#29 Love this Blog on 12.17.19 at 6:05 pm

Thank you for what you do Garth.
A true Canadian- wish people would listen

#30 Alex on 12.17.19 at 6:08 pm

To add: the article seems to be under the misimpression that government borrows first, or that taxes and borrowing fund government. It’s the opposite: the government first spends and then taxes. And while it may issue bonds, it does not need to. It can also “borrow” from the Bank of Canada so all interest gets “paid” back to itself. If institutions didn’t buy our bonds at whatever rates we set, the Bank of Canada can buy them.

Your analysis of death spirals and borrowing costs are something that affect provincial governments, but not the federal government which is the sole issuer of currency.

A government which did that would soon preside over a currency with no market value and thus have stolen its citizens’ wealth. – Garth

#31 baloney Sandwitch on 12.17.19 at 6:10 pm

It’s a cycle. The end will come. I think it’s called the minsky moment.

#32 yvr_lurker on 12.17.19 at 6:11 pm

well frankly there is nothing I can do about this debt issue. No need to get agitated and jump up and down. I am just a little man trying to make a living and looking after my family. In about 7–8 years from now, I will be out of the workforce and I will have enough saved to live on just fine. At some basic level, I don’t care too much what goes on in Ottawa. I don’t think that anybody is going to put the highest marginal rate up to 60% (which would affect me) and our finances our simple that we don’t benefit from any of the loopholes that exist for those hiding $$$ through bogus coroporate structures (doctors and entrepreneurs etc…).
There is not much we can all do about it anyway. Just look after your health in a proactive way (which is critical) and keep your blood-pressure in check. Walk the dog more to chill…

#33 tccontrarian on 12.17.19 at 6:16 pm

Excellent post Garth, including the picture (are you making fun of Hispanics? They can’t say ‘cheap’ properly).

Given all the fundamentals you listed above, I thought you’d finish with:

“buy some gold, now”. They do call it ‘the fear trade’, after all. And your post is all about why we should be fearful (‘hopeless’ is close enough).

tcc

#34 Bernard Couteau on 12.17.19 at 6:18 pm

#5: according to the EXIF data of the photo, the original was full-color. Perhaps it was saved in monochrome to hide someone’s pimples or pale complexion?

#35 Yabba dabbs doo on 12.17.19 at 6:18 pm

Former Fed Chair Alan Greenspan issued his latest warning Tuesday about the fiscal situation in the U.S., saying that larger budget deficits ultimately will cause inflation.

And with an impeached president…

“It’s Deja Vu all over again” as Yogi Berra says.

#36 Dutchy on 12.17.19 at 6:20 pm

9 MF on 12.17.19 at 4:53 pm

#9 MF Pretty pathetic.

“To be fair most Canadians voted conservative, the only party even talking about the debt.”

Actually only about 1 in 3 people voted for the Cons.

#37 Debtslavecreator on 12.17.19 at 6:24 pm

The deficits are a scam on all Canadians under 50
Including the billions borrowed to top up multi millionaire public serpents pension
These criminals will not stop until the inevitable bond / currency markets loss of confidence comes and that’s soon

Then once that moment comes it’s lights out amigos

Bye bye RRSP / TFSA and other “ investments” because thanks for your diligent savings friends it’s your duty to chip in and share in the pain
So so obvious where this is going

Argentina / Russia , and increasingly possibly an Iceland scenario coming our way within 18-24 months

The voters and borrowers are to blame

At a system level the BofC and CMHC and your friendly govts are to blame

Let’s not confuse a historic junk debt bubble with genuine and sustainable wealth

#38 Whaaaaaat ..... on 12.17.19 at 6:28 pm

Garth, could you expand a bit further on the impact of this extreme debt level? Some examples of how it could affect individuals makes it personal – and maybe some traction could develop. Once it is personal and has potential to hurt ones self, it becomes relevant, and disapproval begins to develop. Many people seem to have an attitude that if it does not harm them – so what ….

#39 Camille on 12.17.19 at 6:32 pm

All the upmost respect to you for having participated in the leadership race. I was not aware that you had, but that is so good. So Chapeau.
You also seem to clue in to deficits and things lately, in your posts. And they’re free and enjoyable. But I bought your books, so there ya go.
I suggest those that have not don’t care. Those that do care a lot less than they did, and can’t smell the coffee.
Most importantly, think about the currency, and the relationship between the Federal Reserve and the government, monetizing and corralling debt. Does it exist after its on the Feds balance sheet?

#40 Ahhh .... on 12.17.19 at 6:37 pm

the old border collie. I knew one that actually climbed trees to chase squirrels. Had a heck of a time getting down though.

#41 BlogDog123 on 12.17.19 at 6:38 pm

What Me Worry?

It’s just a big number I can’t really understand when you keep adding zeroes.

How about a balanced budget amendment. The politicians and the Ottawa bureaucrats have their pay/incentives tied to deficits. If they go over a threshold their pay, party financing or office budget goes in the opposite direction.

#42 ronh on 12.17.19 at 6:39 pm

Re: the picture

That dog is usually employed to herd sheep.
He doesn’t work cheap.

#43 AGuyInVancouver on 12.17.19 at 6:41 pm

#9 MF on 12.17.19 at 4:53 pm
Pretty pathetic.

To be fair most Canadians voted conservative, the only party even talking about the debt.

MF
_ _ _
To be even more fair, 64% of Canadians who voted cast their ballots for parties who didn’t care at all about increasing the deficit or total debt.

#44 gfd on 12.17.19 at 6:43 pm

Only 700 Billion? Isn’t it more like 1.2 trillion with 90% debt to GDP? At least IMF quotes these numbers.

#45 Alex on 12.17.19 at 6:46 pm

“A government which did that would soon preside over a currency with no market value and thus have stolen its citizens’ wealth. – Garth”

What wealth would be stolen? Canadian dollars didn’t exist prior to the government spending them, so let’s leave that. Maybe some sort of national productivity wealth? If the wealth of a country is measured in what goods and services are produced & consumed, then as long as the federal government refuses to issue dollars to buy surplus labour (which it can do at no cost), we are losing opportunities and national productivity. If there’s a theft, that would be it.

Issuing bonds are, if anything, a way of providing interest income to bond holders. That hardly seems like stealing wealth. Remember that the money didn’t exist prior to the government issuing it, so spending does not impoverishes us.

Inflation would be the only fear as it would erode the value of savings. And MMT analysis goes pretty deep into that as well. No reason to expect inflation just because there’s a large debt – just look at Japan and the constant cries that it’s going to implode.

#46 gfd on 12.17.19 at 6:51 pm

BUSINESS
12/17/2019 15:22 EST
Canada’s Mortgage Market Headed For Historic Slump, Fitch Predicts

Prices are too high, and then there’s that stress test…

#47 Bob Dog on 12.17.19 at 6:55 pm

Are you trying to tell people the Canadian government is run by criminals and idiots?

#48 crowdedelevatorfartz on 12.17.19 at 7:00 pm

@#1 Floppie ( Congrats on 1st Place!)
“A few people got towed, 100 bucks a pop, plus the inconvenience of having to go and get your car back.
$60 if you pay within 14 days, for being parked out the front of your own residence at the wrong time.’
++++

Get ready for Jan 1st.

City of Van is doubling the parking fines…… I guess the roll back on the 8.2% property tax and paying for broken chandeliers…. had to come from some where….

The people scream when taxes go up more than the cost of living but scofflaws gotta pay……

The govt always gets its pound of flesh…..

#49 Sail away on 12.17.19 at 7:06 pm

If you show MMT to the masses
Don’t be surprised when it passes
With bags of free money
Edibles, buds and pot honey
The mills will be tomorrow’s asses

#50 Ok Boomer! Ok Fed! on 12.17.19 at 7:07 pm

DELETED. Plagiarism is not cool. – Garth

#51 MF on 12.17.19 at 7:09 pm

23 Adrian on 12.17.19 at

Cons still got the popular vote. More than any other single party.

MF

#52 The Limited Sage on 12.17.19 at 7:09 pm

Better question, what impact will all this spending have on the Loonie?

#53 SoggyShorts on 12.17.19 at 7:17 pm

#45 Alex on 12.17.19 at 6:46 pm
“A government which did that would soon preside over a currency with no market value and thus have stolen its citizens’ wealth. – Garth”

What wealth would be stolen?
******************
Canada doesn’t exist in a vacuum. If our government prints money that money becomes worth less, meaning imports go up in price. Those of us who have X dollars saved for the future purchasing of things would then effectively have less.
That’s the theft.

#54 Sail away on 12.17.19 at 7:18 pm

#42 ronh on 12.17.19 at 6:39 pm

That dog is usually employed to herd sheep.
He doesn’t work cheap.

————————————–

When working for sheep, will his wages be steep?
How steep is too steep for wages of sheep?

————————————–

A schoolteacher moved to the country and gave the kids a story problem:

She said, “if you have 9 sheep in one field and one jumps the fence to the other field, how many sheep are left?”
Johnny said, “none”
Teacher said, “you obviously don’t understand math”
Johnny said, “maybe not… but I understand sheep”

#55 crowdedelevatorfartz on 12.17.19 at 7:21 pm

Hmmmm.
Unsustainable govt employee pensions…..facing cuts?

https://www.reuters.com/article/us-france-protests-pensions-pmi/french-pm-we-wont-back-down-over-pension-reform-idUSKBN1YL1MG

Coming soon to a city, province and country near you…..

#56 cotycoyote on 12.17.19 at 7:23 pm

Hey, Garth. Long-time lurker here, you dont hear it enough so i wanted to pop by and tell you what a valuable, and reliable service you are providing. I’m sure I’m speaking for all of the other Lurkers when i say that i can’t thank you enough for your dedication to this blog, and your dedication to responsible financial decisions. Keep on fighting the good fight.

#57 crowdedelevatorfartz on 12.17.19 at 7:25 pm

Hmmm

When the Globe and Mail throws this headline out there you have to wonder if the worm has turned…

https://www.theglobeandmail.com/investing/globe-advisor/advisor-news/article-is-residential-real-estate-still-a-great-investment/

But the FOMO crowd dont read the Globe ….so Realtors can breath again.

#58 leebow on 12.17.19 at 7:29 pm

May be the RE valuations were correct all along

#59 Timmy on 12.17.19 at 7:31 pm

What’s disturbing is the Globe cited lack of pipelines as the reason we’re in deficit. This is such a small part of the national economy. First of all, we don’t know if people will buy the oil even if it gets to tide, second, lack of productivity, innovation, large companies in Canada are the main reasons for the deficit and these weren’t even mentioned. The Oil Industry is doing a great PR job….Just ask them about the 100 billion dollar abandoned wells liability that happened on the Con’s watch.

#60 Sail away on 12.17.19 at 7:32 pm

Eks, the advice is in my last post. Understand the sheep and the world is yours. Cryptic, yes… but free, so no complaining.

#61 Nonplused on 12.17.19 at 7:36 pm

Before swinging by greater Fool today I came across the following articles (you don’t have to read them, my summary will be enough):

https://www.unz.com/sbpdl/its-official-diversity-means-just-fewer-white-people-wall-street-journal-demands-national-hockey-league-nhl-increase-non-white-players-or-die/

And this one:

http://www.yourdestinationnow.com/2019/12/nerf-criticized-for-selling-assault.html

And this one:

http://www.stationgossip.com/2019/12/trans-activists-target-olympic-cyclist.html

So, now you know why the media is called “fake”. It is fake. They are manufacturing everything.

Article 1 says that the NHL should have more people of color whether they can skate or not.

Article 2 says Nerf guns cause school shootings.

Article 3 says women are not allowed to have an opinion about whether they should be forced to compete in sports against people who are biologically XY based on “identity”.

I appreciate the content of Garth’s post today completely because I don’t believe in magic. MMT is just money printing. But we live in a world where people are actually blaming school shootings on Nerf guns. I have a son and he and his friends love Nerf guns. But I have never seen them enact a scenario where they were shooting unarmed non-participants. They shoot at each other. And then what are we going to do about air soft, paint ball, and video games? What about water pistols? It is getting out of hand.

So it is no surprise that the deficit situation is escaping the attention of the 50% of the population that is below average IQ. They are busy writing letters to Hasbro demanding they place a limit on the number of darts a Nerf gun can hold.

Here is an interesting idea that I have come to over the last while, maybe slowly building over years. Your cerebral cortex has two halves, left and right (ok that’s common knowledge). The right half cannot do speech, that function is located in the left half (that is accepted scientific fact). So the part of the brain you consider your consciousness is the left half of your brain. What if there are 2 of you in there and you only communicate when you are dreaming? The idea is not outlandish, when dealing with brain damaged people they have discovered the odd case where one half of the brain believes in God and the other half is an atheist. Which half goes to heaven?

And of course there is that third part of your brain closer to the bottom that handles motor function. Ever wonder why you don’t have to think about how to walk? Well, part of your brain is thinking quite a lot about it, but it is not the part you consider to be your soul.

Maybe this is where the “holy trinity” came from. I don’t know but it seems a stretch.

Anyway, so the brain has 2 halves, and it seems society does to. The left half like to plant trees. The right half just picks fruit. The left half plans ahead and saves some seed for next season. The right half is hungry right now and thinks not for tomorrow. Maybe society is the same way. Maybe only half of us are dominated by the left side of the brain, and the others are right-dominated.

The funny thing about this is of course that our brains are cross-wired. the left brain controls the right body and the right brain controls the left body. But they work together like 2 people dancing. So politically left and right are backwards to the brain.

This might also explain why sometimes people do things they can’t explain. It wasn’t the left half, it was the right half, for reasons of its own that it can’t explain. Why did you buy that sports car you can’t afford? Well, the right side of your brain wants more babes. Meanwhile the left side is left blabbering about horsepower and handling.

If this theory has any validity, it explains why we can as a population be both for fiscal responsibility and for reckless consumption. There are 2 different brains at work. One is grappling with modern technology, the other is still sitting in a tree eating a mango.

The right-brained people out there that don’t have any money, really don’t care about debt. All they have is a mango tree. They know they won’t ever actually have to pay it back. So for them, debt truly doesn’t matter. Meanwhile if you are a left-brained person you’d better plan ahead. The one thing a right-brained person knows how to do is fight for food. Just watch some videos of apes. Your death does not matter to them in the slightest.

(And remember that right vs left brain in biology is opposite how we describe politics. The brain, for some reason, is cross-wired.)

#62 Relativity on 12.17.19 at 7:39 pm

It seems to me that it is all relative to other countries. Luxembourg leads with $7M US per capita vs. Canada at $52K US and the USA at $58K US (2017 numbers). So as long as we are not in the front of the sheeple, we can all hope to see the cliff before we too arrive and fall over.

I honestly believe the same theory holds for housing. As long as Vancouver has high numbers, all other provinces convince themselves that their housing can also get there. Even if no one can afford them. Toronto is quickly approaching the same sheeple cliff Vancouver did without knowing that many sheep have already gone over the edge and lost hundreds of thousands on the West Coast.

#63 Robert Ash on 12.17.19 at 7:40 pm

This new Mandate to print money/borrow excessively, is a direct effect of the GFC. The event happened almost 12 years ago now.. The Younger Canadians, and Americans, that lived through that are now voting age…A significant percentage. They saw the Printing of money as the panacea. So it is OK, and this is a function of all Generational Thinking, as shocks, to our Lives have real implications… So print baby print… and of course it is a Dangerous policy which common sense suggests won’t work out too well…
A government which did that would soon preside over a currency with no market value and thus have stolen its citizens’ wealth. – Garth
Garth sums, up what is happening, to the Domestic Money supply, which is to reduce the value of Currency, and any savings, of the Older Citizens, and redistribute this money in the form of controlled programs, and it exemplfies “Father Knows Best”… ulitmately the Nirvana of any Political Force… It won’t end well, since those affected will find a way to preserve thier wealth, but the biggest knock on effect, is Folks, with the actual money, will resist spending, and remain defensive. The continuous Low Interest rate policy, is the artificial tool, really taking the Natural balance out of Economics today. Market Financial forces as well.There are certainly winners and losers in this scenario, and the Policy makers, love to direct the traffic, and hold the power…..

#64 Armpit on 12.17.19 at 7:47 pm

“Money for nothin’, and the cheques are free.”

I dunno, Garth… just paid $70.18 for a box (100) blank cheques!

#65 Jules on 12.17.19 at 7:49 pm

Long term problems with continued growth of passive investing?

I’ve been a DIY investor, with somewhat of a couch potato ETF portfolio. I’ve been reading a lot of articles discussing a passive investing “bubble” with the continued massive inflows into Index ETFs. Most articles tend to discount the notion of a passive “bubble”. Perhaps I’m wasting my time reading but someone in the financial industry mentioned to me his criticisms of Index ETFs, echoing the calls of some prominent investors. I guess in the extreme case of every one just buying an index fund, the market would not function; however, that extreme case is presumably not a credible scenario? So excluding that, are there credible concerns about the rapid growth of passive investing relative to active management, with respect to market efficiency, price discovery and all those other fancy terms I have recently learned?

Mutual fund assets vastly outweigh ETFs. Worry about them. – Garth

#66 Run away inflation or depression? on 12.17.19 at 7:56 pm

The large increases in debt in individuals, businessess, and governments can result in either run away inflation or a severe recession (depression). The question is, which one is going to happen? I can’t figure out from this blog which way Garth is leaning, and it’s important since the two require very different investment strategies to be prepared for. Trying to stay in the middle is like standing in the middle of a two lane road … you get hit from both directions.

#67 Brian Ripley on 12.17.19 at 7:56 pm

Taxation…

Here’s my broken record that I wish would get more airtime: http://www.chpc.biz/history-readings/apt

The Automated Payment Transaction Tax
By capitalizing on financial data processing technology, it is possible to create a tax code for the 21st century that is astonishingly easy for all citizens to understand and administer because it eliminates the need to file tax or information returns.

Will the coders, script writers and algorithm makers please take this up and transform our 19th century tax institutions.

#68 Don Guillermo on 12.17.19 at 8:01 pm

6 Dutchy on 12.17.19 at 6:20 pm
9 MF on 12.17.19 at 4:53 pm
#9 MF Pretty pathetic.
“To be fair most Canadians voted conservative, the only party even talking about the debt.”
Actually only about 1 in 3 people voted for the Cons.
*******************************************
Thank-you Dutchy. That’s the point I was trying to make yesterday. It’s like banging your head against the wall.

#69 Charity on 12.17.19 at 8:11 pm

Adrien and Duchy
Take Quebec out of the vote and the cons had 5.6 million votes of 13.2 million voters for 42% of voters, take Ontario out they had 3.6 million of 6.5 million for 55% of voters. So is the world centered in those two provinces or the rest of Canada?

https://enr.elections.ca/Provinces.aspx?lang=e

#70 Steven Rowlandson on 12.17.19 at 8:16 pm

“Growing debt levels mean the bond market demands bigger premiums, so governments pay more. If politicians just fire up the printing press to increase the money supply, inflation takes off, popping yields more. Annual deficits and growing debt ultimately fuel rates, making that debt unsustainable.”

If we had functioning markets that are not manipulated there would be feed back mechanisms that would punish super debtors including official currency printers and compel them to curtail their borrowing and spending and also to force debt repayment from tax revenues or income. Keynesian monetary policies have a fluid stability providing that debt gets paid down
regularly and never builds up. Otherwise it does not survive democratic or marxist politics which are inherently irresponsible.

#71 Nonplused on 12.17.19 at 8:21 pm

#64 Armpit

https://www.google.com/search?q=money+for+nothing+lyrics&rlz=1C1RUCY_enCA719CA719&oq=money+for+&aqs=chrome.2.0j69i57j0l5j69i60.4133j0j7&sourceid=chrome&ie=UTF-8

“chicks” are free, not cheques. The song is describing how when you make it big the groupies come running.

#72 the Jaguar on 12.17.19 at 8:24 pm

Our gem Garth aside, I have yet to see any of the named ‘potential candidates’ for the Conservative Leadership present as ‘viable’, including the bleached blonde hugging Scheer goodbye as captured by national media. An interim leader makes sense. The party cannot afford any hasty mistakes. Don’t like the dog photo today with the sign hung on his nose for human amusement. Border collies are famous for their service to their human caretakers and friends. Smart, industrious and loving. Like the people of Scotland.

#73 joblo on 12.17.19 at 8:24 pm

middle class defined? ah ya know.

https://www.huffingtonpost.ca/entry/justin-trudeau-middle-class_ca_5df92734e4b03aed50f7085f

#74 Nonplused on 12.17.19 at 8:26 pm

#67 Brian Ripley

Big fan of your stuff, but we are already at or beyond maximum taxation. We have income tax to tax the rich, and the HST to tax the poor, and a pole tax on property owners. No further taxes are needed just adjustments to those three, if they really think they can squeeze anymore toothpaste out of the empty tube.

#75 Flop... on 12.17.19 at 8:33 pm

Crowdie, I see they might be adding a new Canada Line station in Richmond.

It looks like the condo developers lobbying paid off.

A little bit of lobbying, a little bit of a donation, and voila.

Since they are bleeding us dry, I have another infrastructure project that I think they should consider.

What are your thoughts about running the Canada Line all the way to Tsawwassen Ferry Terminal?

It could serve South Richmond, help get people into the city from Delta and Ladner, then pass by Tsawwassen Mills mall on the way to the ferry terminal.

Passengers could fly into Yvr airport, catch the skytrain south, and then sail across to Vancouver island without hardly stepping outside.

It would be most economically efficient to do the Massey Tunnel section at the same time as the new tunnel gets installed.

That means they will do it a few years later, accidentally punch a hole in the new tunnel, and then send the bill to Mr Crowdie and Mr Flop…

M45BC

#76 Grunt on 12.17.19 at 8:43 pm

2008: GM Canada gets a 9.5 billion bailout from Ottawa & Queens Park. 2019: Paltry 300 jobs left in Oshawa. Once the bustling home of 23,000 autoworkers.

As for the 700 we could sell the prairies to Washington. Say, nothing new there. Gorbachev sold the DDR to Kohl to keep the lights on.

My suspicion is soon-to-be environmental levies on non-renewables. Greta’s getting us there.

#77 WUL on 12.17.19 at 8:50 pm

Here in the Kvetchville region of this pathetic blog, people might mind the words of Zac Brown Band in “Let It Go”:

“You keep your heart above your head and your eyes wide open

So this world can’t find a way to leave you cold

And know you’re not the only ship out on the ocean

Save your strength for things that you can change

Forgive the ones you can’t

You gotta let it go”

It was a beautiful winter day today in Fort Mac. Life is good.

Happy Solstice,

WUL

#78 Millennial Realist on 12.17.19 at 8:52 pm

Ah yes, the 1993 leadership campaign and election.

When the Boomer Cons showed how outrageously bigoted and out of touch most of them were.

Trying to shame Chretien for having a disability.

Despicable.

https://www.cbc.ca/archives/the-attack-ad-that-backfired-badly-in-1993-1.5291777

https://en.wikipedia.org/wiki/1993_Chr%C3%A9tien_attack_ad

And the appalling John Tory, Conservative strategist,a soulless political weasel if there ever was one, thought this was okay. Just like he thought Rogers ‘negative option billing’ was okay when he was in charge there. No wonder he is leading Toronto nowhere today and sucking up to Ford.

And our host, Garth?

He was a rare Boomer Con then. He stood up to this outrage to try to get Tory to cancel the ad. A man with a moral backbone. (That would be his Con political downfall.)

But no luck. Tory said no. Just like he was shafted later by Harper, Garth showed that Cons with integrity and morality are not welcome in the movement. Just look at Washington today.

This is not a MSU, Mr. Turner. Just pointing out that the Boomer Con movement is so Paleo, and has been that way for far too long. It needs to be trashed, regardless of this debt talk, since history shows that Cons will only make the debt worse, giving treats to the 1% at the expense of everyone else and the planet.

#79 conan on 12.17.19 at 8:56 pm

Harper got deep into deficit, but crawled out- Garth

I think he fudged his way out myself. I seem to remember they fired/laid off/ treated like crap all the pay and benefit employees/consultants. They had this idea that the Phoenix System did not need any information input to operate correctly. The software could compute and cross reference thousands of pages of benefit and pay rules for Federal Civil Servants.
I think Tony Clement booked the salary savings for years in the future and applied that number to the budget, thereby creating a slight surplus. In reality, all they did was create Phoenix fiasco.

#80 april on 12.17.19 at 9:11 pm

#45- Ross kay, Howestreet.com – today
Home prices did not go up “1 dollar” in November. Real estate industry misleading the public as usual.

#81 april on 12.17.19 at 9:13 pm

correction: #46 not # 45.

#82 Ray on 12.17.19 at 9:16 pm

#9 MF :
I remember a scene on the “The Odd Couple ” when Oscar says to Felix Unger “. Do you know how long it took me to realise “FU” meant Felix Unger?

#83 Sam on 12.17.19 at 9:23 pm

Garth, the US is running a trillion deficit with 3.9% UE

How does this end well ?

#84 PetertheSeparatistfromCalgary on 12.17.19 at 9:23 pm

Time for Alberta to get out. We can’t afford to stay part of this irresponsible country anymore.

Trudeau land can dig itself into a hole without Alberta.

#85 Mr Canada on 12.17.19 at 9:29 pm

This stuff use to bother me, the adage today is you cannot worry about stuff you cannot control. Lots of people are now of the view its not their problem because gov’t will solve all issues and thousands of new people are coming from other countries where not much was “free” and think this is the best thing going – like: you are going to pay me $5k tax free a year for having just a kid? Education is free, Healthcare free, and soon drugs too…let’s vote for that guy….

#86 Jack on 12.17.19 at 9:36 pm

#38 Whaaaaaat ….. on 12.17.19 at 6:28 pm
Garth, could you expand a bit further on the impact of this extreme debt level? Some examples of how it could affect individuals makes it personal – and maybe some traction could develop. Once it is personal and has potential to hurt ones self, it becomes relevant, and disapproval begins to develop. Many people seem to have an attitude that if it does not harm them – so what …

Debt and printing money devalues currency and causes inflation. This impacts the buying power of individuals – even those that have been frugal, saved, and lived within their means. Don’t listen to the government’s inflation numbers … they’re manipulated and much lower than actual.

#87 crowdedelevatorfartz on 12.17.19 at 9:42 pm

@#75 Floppie
Skytrain to Tsawwassen Ferry terminal…”
++++

The Taxi cartel would withhold their political contributions to bothe the NDP and the Liberals….wont happen.

Speaking of Liberals….
Christy Clark is being considered as a possible federal Conservative Leadership candidate?

Do the Cons want to lose the next election even worse than Scheer?
Or is this a Conservative plot to make Rona Ambrose appear even more intelligent than she actually is?

Christy Clark as PM…..may God have mercy on us all….

#88 Sandy Thames on 12.17.19 at 9:51 pm

It is called crowing out effect and learned in basic economics in my first semester college courses 20 years ago.

Basically, what happens is as the government or governments keep borrowing and going into deeper debt and deficits it crowds out private businesses and jobs which in turn because of higher borrowing costs, interest rates, spending and the more interest and debt governments accumulate it forces higher taxes and interest rates which in turn destroys more private sector businesses and jobs which lowers tax revenue for governments and higher deficits, higher debt, higher tax rates but less money governments have and so on and so on.

It is a vicious circle of economic ruin and fiscal insanity with a big financial, economic mess that gets worse, much worse and it all is game over when it reaches a Venezuela type scenario.

#89 AGuyInVancouver on 12.17.19 at 9:51 pm

#69 Charity on 12.17.19 at 8:11 pm
Adrien and Duchy
Take Quebec out of the vote and the cons had 5.6 million votes of 13.2 million voters for 42% of voters, take Ontario out they had 3.6 million of 6.5 million for 55% of voters. So is the world centered in those two provinces or the rest of Canada?

https://enr.elections.ca/Provinces.aspx?lang=e
_ _ _
What a stupid comment.

Why not just kick Alberta out so we don’t have to be subjected to the non-stop whinging?

#90 Bernard Couteau on 12.17.19 at 9:59 pm

“Money for nothin’, and the cheques are free.”

The lyrics say “chicks”, as in young girls. You really only have money in mind, hey mate?

When you have to explain a joke it’s not amusing anymore. But thanks. – Garth

#91 Ustabe on 12.17.19 at 10:00 pm

Watching this blog veer from a real estate/investment blog into a rumour positing political blog makes me wonder why all you fine, upstanding Conservative alphas are beseeching Garth to enter politics.

I mean is that the self made, taciturn actions of a real man Conservative? Begging someone else to do your heavy lifting?

Where is the Con version of Corky Evans? Who among us will rise to the occasion and wrest the party away from the social cons and place the party on a path to greatness?

And who among us will simply continue to post well thought out and robust economic theories simply for self aggrandizement. Better still keep the nattering, running feuds ongoing, just like the playground in elementary school.

I know, I know…keep doing the same old, same old over and over…this time it will be different.

#92 Sail Away on 12.17.19 at 10:02 pm

It’s funny that Millenial Realist turns out to love, respect and admire Boomers after all.

Welcome, Grasshopper- it’s warm in the embrace of the dragon!

#93 Mississauga Mel on 12.17.19 at 10:12 pm

#128 NotLegalAdvice on 12.17.19 at 3:38 pm

I’m ok with a get together in Toronto. I work there. I propose something after xmas and before New Year’s. Any other blog dogs interested? The more the merrier.

#94 MF on 12.17.19 at 10:14 pm

#63 Robert Ash on 12.17.19 at 7:40 pm

Bingo. That’s the crux of the problem.

Central bank policy post 2008 is the reason for all the continued debt. Personal debt, government debt. It’s no generation or any one government’s fault to be honest.

We’ve even heard Garth mention it here. We can borrow money at an interest rate below the level of inflation. Everyone is leveraging up as a result.

It’s one big failed social experiment.

#74 Nonplused on 12.17.19 at 8:26 pm

Except for the capital gains exemption. Turf it. Now. No need for it. It’s created a monster.

MF

#95 JM Keynes on 12.17.19 at 10:17 pm

“That’s why deficit financing has been used historically only as a tool to boost a weak economy or get through a crisis, such as the GFC in 2008-9. When things recover, governments dial back and strive to have revenues cover expenses, or build up a cushion for the next bad patch.”

That was indeed the intent when I introduced this concept at the Bretton Woods Conference. Seems the politicians forgot about scaling back on the spending when times were good. Another example of a great idea being distorted by the followers of that idea…

#96 Doug in London on 12.17.19 at 10:26 pm

An idea called MMT – Modern Monetary Theory – is all the rage on the US political left.
—————————————————————–
If this MMT is of the left, then why is the supposedly right leaning Trump Administration embracing it with the big deficits they’re running?

#97 Dutchy on 12.17.19 at 10:34 pm

#68 Don Guillermo on 12.17.19 at 8:01 pm and
#69 Charity on 12.17.19 at 8:11 pm

The point I was trying to make is that the majority of posters here represent a conservative minority position. So with our current Majority rule they will likely remain behind the “egg-ball” for the foreseeable future in my humble opinion.
(Ask Greta….., and of course our Democracy appears a bit fragile if you belief some of the comments here)

#98 Bob Jones on 12.17.19 at 10:38 pm

“During the federal election campaign, did you hear any leaders arguing for less, or promise to balance the books, to restore balance for the benefit of your kids and their spawn?”

Ya I actually did, his name is Maxime Bernier. It’s funny that every blog post you write lines up perfectly with his platform yet you kept refusing to endorse him. He is the only honest leader and I see a lot of you in him…

#99 David Paquette on 12.17.19 at 11:02 pm

Cry me a river. I had to struggle for every inch. They were worth it. I learned to believe in myself. There is no easy answer except for luck and I will fight against it if it runs against me. Fortunately, I have discipline and it has paid. I have been wrong many a time and survived – choose your partners well.

#100 Ponzius Pilatus on 12.17.19 at 11:34 pm

#129 crowdedelevatorfartz on 12.17.19 at 4:22 pm
@#115 Ponzie penny pincher
“I worked 30 years for a bank.”
+++++

Laid off eh?
————————-
Huge severance.
I took them to the cleaners.
They declared bankruptcy soon after.
Don’t mess with me.

#101 Shirl Clarts on 12.17.19 at 11:35 pm

#68 Don Guillermo on 12.17.19 at 8:01 pm
6 Dutchy on 12.17.19 at 6:20 pm
9 MF on 12.17.19 at 4:53 pm
#9 MF Pretty pathetic.
“To be fair most Canadians voted conservative, the only party even talking about the debt.”
Actually only about 1 in 3 people voted for the Cons.
*******************************************
Thank-you Dutchy. That’s the point I was trying to make yesterday. It’s like banging your head against the wall.

^^^^^^^^^^^^^^^

Actually, only 1 in 3 voted Liberal. What’s your point?

The Cons beat every other party in terms of votes and netting more seats, even with a weak and uncharismatic leader.

Do you guys read the blog part of this blog, or just the comments? Sounds like you are whining about the 2015 election.

#102 DON on 12.18.19 at 12:51 am

#47 Bob Dog on 12.17.19 at 6:55 pm

Are you trying to tell people the Canadian government is run by criminals and idiots?
***************

Isn’t that just common knowledge?

#103 crazyfox on 12.18.19 at 12:53 am

(Of course, Jean Chretien kept the tax, blamed the Tories, and reduced the deficit to zero because of it.) – Garth

I’m sorry Garth, can’t let that one slide.

https://en.wikipedia.org/wiki/Goods_and_services_tax_(Canada)

“The purpose of the national sales tax (GST) was to replace the 13.5% Manufacturers’ Sales Tax (MST) that the federal government imposed at the wholesale level on manufactured goods. Manufacturers were concerned that the tax hurt their international competitiveness. The GST also replaced the Federal Telecommunications Tax of 11%.

Although the GST was promoted as revenue-neutral in relation to the MST, a large proportion of the Canadian population disapproved of the tax. The other parties in Parliament also attacked the idea as did three Progressive Conservative Members of Parliament, David Kilgour, Pat Nowlan, and Alex Kindy, who ended up leaving the Progressive Conservative caucus as a result.” – link

Why did these MP’s leave? Because, all things being equal, this policy favored manufacturers down East relative to the rest of us Canada wide taxpayers. Was this a wise thing to do? Maybe so (at least in getting rid of the MST and TT) regardless of the rest of Canada not liking it but we are left asking ourselves, why is Brian Mulroney spinning the GST tax as revenue neutral (at the time) only to have former MP’s nearly 30 years later tell us the GST wiped out a near $40 billion dollar deficit?

If, say, a 5% GST produces 11.7% of today’s government revenue, what would 1.4x that number be in a 91′ 7% GST taxed economy? ($516.7 billion GDP) Y’know, 16.8% of federal budget revenues with GST @ 7% on total government revenues of $ 105.8 billion? $17.5 billion? And that’s not counting the cost of running the GST tax federally and privately, or making up for the retired 13.5% manufacturer’s sales tax or 11.5% retired telecommunications tax.

Was the GST a revenue neutral tax, not designed to generate significant new federal tax revenue but to bolster manufacturing in Eastern Canada through the end of the MST and TT?

I mean, perhaps tremendous tax increases to personal, corporate and capital gains in the Chretien/Martin years made the difference. Or, perhaps the federal squeeze on money doled out to the provinces did it. Or, maybe the super commodity cycle did it. Or, all three. But the GST? By itself?

Not so much.

I have a novel plan to reach federal balance. Of course, no one will like it and I thought about it for all of 2 minutes. Freeze program spending for just one year (13 billion saved). Roll back spending to the provinces another 13 billion annually. See? Crisis (or so called) solved. Of course, the ruling party that tried that would likely win few seats in the next election… well… maybe in the first year of a 4 year majority term, they could get away with it. Maybe.

https://www.fin.gc.ca/afr-rfa/2019/report-rapport-eng.asp#_Toc17893653

Perhaps our problem is not with Canada but with the debt loving U.S. and their blatant fiscal problem:

http://worldpopulationreview.com/countries/countries-by-national-debt/

The U.S. is the 8th most indebted nation in the world right now. We are presently near 90% but the U.S. debt to GDP is 106.7%, presumably to climb 5 to 6.5% higher officially in the spring of 2020. After all, they have a 20 trillion dollar economy partly funded by whopping trillion dollar plus deficits thanks to Trump. Last I checked, Trump wasn’t part of the left but practices MMT just the same so where does the voter go?

Who do Canadians need to worry about more, us crazy Canuck lovers of debt… or the one’s we owe… left, right, Dem/Rep, whatever, they both lost their middle, our owners of our debt bonds that are currently spending a whopping 5 to 6.5% of their GDP, wait for it…. ANNUALLY? That’s looney tune bat shit crazy right there, ya feel me Garth? If that keeps up, for the same reasons you so well state (MMT), it will not end well.

The GST was never intended to be revenue neutral in the years following its roll-out as a replace for the MST. Of course it was marketed as being benign precisely for the reasons articulated in this post. Most people are financial illiterates and cannot understand the long-term destructive results of deficit financing. Chretien got it. The GST stayed. Maybe you should chat with people involved in the design and implementation of the tax (I was) instead of bowing to Wiki (it wasn’t). – Garth

#104 fishman on 12.18.19 at 1:18 am

I met MMT spring 71, ECON 101,UBC. The prof said that government deficits didn’t matter because we owe the money to ourselves. I couldn’t comprehend that concept then & I still can’t. Unfortunately I’ve been proven wrong so far. I suppose its a true theory till its not. When that inevitably happens there will be a broad nationwide concentration of the mind. The primary motivation: pain avoidance.

#105 Heading into the Abyss on 12.18.19 at 1:38 am

“Annual deficits and growing debt ultimately fuel rates, making that debt unsustainable. Taxes inevitably shoot higher.”
——-
This doesn’t seem to bode well for a saver. Government cuts, unemployment, more taxes, more inflation means my retirement savings will be eroded.

How do I mitigate this?

#106 Smoking Man on 12.18.19 at 2:37 am

Hopeless

I’m hocked on Tic Tock……

#107 RWZM on 12.18.19 at 3:00 am

I don’t know man.

It seems like rates stay at zero, housing goes up forever, debt goes up forever, and you get rewarded for borrowing and it doesn’t really matter.

Forget the details: how exactly am I supposed to believe that they won’t rig everything so it works out like it’s “supposed” to? They can do whatever they want. There’s no external force imposing economic justice on the people who control the economy.

I’m not even kidding, although I’d love to be told I’m wrong. If there are consequences to all this stuff, I suspect either I’ll (A) be dead when they happen (B) I’ll be alive but they will somehow happen to me instead of everyone who borrowed. This has already been my experience, overall.

#108 Truth never dies. on 12.18.19 at 3:48 am

BANNED

#109 Mantraman on 12.18.19 at 4:40 am

What happened to the true dope for brains mantra: “The budget will balance itself” ?

#110 Jeff on 12.18.19 at 5:37 am

Garth,
I was a university delegate at that convention in ’93. My favourite part was the “I Like Garth” and “Party on Garth” campaign buttons.

Did you keep any of those treasures?

#111 Bezengy on 12.18.19 at 6:16 am

Chretien….With a stroke of my pen I will cancel the GST. Biggest lie I’ve ever witnessed in politics. I was still shaking my head when I got the news that I had to send my income tax form to Shawinigan instead of Sudbury. We were told it had something to do with security.
————-
I’ve spent 35 years arguing with people the deficit needs to be dealt with. Haven’t convinced a single person except maybe the wife. Nobody cares. It truly is hopeless.
————-
I watched Morneau yesterday. No plan. He’s lost. “Our approach will be fiscal responsibility” Sure it is Bill. I think we’ll be seeing 50 billion deficits before too long based on their silly election promises. Btw…speaking of election promises has anyone heard of how we can apply for the free camping trip with the grandkids?

#112 Stan Brook's Psychiatrist on 12.18.19 at 6:53 am

#91 Ustabe on 12.17.19 at 10:00 pm

“I know, I know…keep doing the same old, same old over and over…this time it will be different.”

That’s what got poor Stanley into the psychiatric ward. Kept thinking it wasn’t the definition of insanity….

#113 Nothing Surprises on 12.18.19 at 7:17 am

#19 Nothing Surprises

What does that have to do with Canada? – Garth
……………………………………………………………………………..

Well, I suppose it has nothing to do with Canada.

Why would anything happening financially in the States have anything to do with us??

All our large corporations, and their are few, except for our generous banks, pay every cent of tax demanded, even the foreign owned entities. They are the models of good citizenship. SNC Lavalin is a good example.
As Trump would say ” the perfect corporations”.

Of course publicly-traded and audited corporations pay what they owe. There is full disclosure. – Garth

#114 Sail Away on 12.18.19 at 7:49 am

#100 Ponzius Pilatus on 12.17.19 at 11:34 pm
#129 crowdedelevatorfartz on 12.17.19 at 4:22 pm
@#115 Ponzie penny pincher
“I worked 30 years for a bank.”
+++++

Laid off eh?
————————-
Huge severance.
I took them to the cleaners.
They declared bankruptcy soon after.
Don’t mess with me.

————————

There ya go. Take the bastards down. That’ll teach them to give YOU a job for 30 years.

#115 crowdedelevatorfartz on 12.18.19 at 8:12 am

@#114 Sail Away

Worked for a bank for 30 years and it went bankrupt after he left.
Not sure I’d want that on the CV.

Obviously not a Canadian bank.
Only Trust companies seem to go belly up in Canuckda.

#116 Remembrancer on 12.18.19 at 8:13 am

#106 Smoking Man on 12.18.19 at 2:37 am
Hopeless

I’m hocked on Tic Tock……
——————————————–
Hooked – good use of words, the brain chemicals triggered are similar… Social media ist das opium des volkes…

What old Karl didn’t count on is actual opioids like fentanyl being used along with social media echo chambers reinforcing whatever mindset you want to have or fall into… Not to defend him, but the intent of the metaphor was that its a symptom of hopelessness, not the cause…

#117 crowdedelevatorfartz on 12.18.19 at 8:29 am

Vancouver City Clowncil approves a 7% property tax hike as opposed to the 8.2% they originally proposed.

I’m sure home owners and businesses are ecstatic at the 1.2% “reduction”

Bait and Switch comes to mind.

That’s just the beginning.
User fees and fines going uppa uppa uppa Jan 1st…

Hopefully the voters remember former political scientist, former NDP MP in Burnaby and now Mayor Jason Kennedy….in the next election.
A political gadfly if there ever was one…
I’m sure he’s preparing his acceptance speech as “Premier” on his way to the ultimate goal …..Ottawa in 12 years time.

Perhaps he can get some advice from Christy Clark on how to fly too close to the Sun without getting burned…….

#118 Remembrancer on 12.18.19 at 8:31 am

#114 Sail Away on 12.18.19 at 7:49 am
There ya go. Take the bastards down. That’ll teach them to give YOU a job for 30 years.
——————————
Assuming this is the real you, your business isn’t a planation or similar enforced servitude arrangement banned in most of the world, as has been suggested by some here based on comments and retorts, you really should spend some time on self-reflection…

Yes, every morning you chose to open the doors and conduct business / offer employment. Likewise every morning your employees chose to come to your work and use their skills and energy to support themselves, their families and you and your family. There are obligations, laws and social norms governing this arrangement on both sides, but there is nothing that says it will be permanent arrangement in most cases…

(or you can put nets around the company site dorm above the 2nd floor, that’s a strategy too)

#119 Dharma Bum on 12.18.19 at 8:38 am

#16 dramatic guy

Our “culture” is dictated by American TV and advertisers especially in southern Ontario.
——————————————————————–

That has been the case forever.

Canada has zero culture of its own.

Canada is “multicultural”.

Multicultural means having everybody else’s culture but one’s own.

Canada is just a vast holding tank for disconnected people, not a culturally linked and identifiable country.

https://www.macleans.ca/opinion/canada-is-not-a-country/

Thank goodness for American movies and television shows, Coca-Cola, Baseball, NASCAR, BBQ, The Tonight Show, the NFL, Levi’s, McDonald’s, The Wild West, Broadway, Monument Valley, Florida Beaches, March Madness, Nashville, Jazz, New Orleans, Blues, The Smithsonian.

Oh well, we got hockey, eh? Well, what’s left of it anyway.

#120 Q2 Class No. 6131 on 12.18.19 at 8:45 am

Garth –

The fact that the likes of AOC, Tin Lizzie and Moscow Bernie have embraced Modern Monetary Theory tells you all you need to know about its intellectually fraudulent nature. I could also say the same thing about the left and its wholehearted embrace of the climate hoax. But I won’t.

#121 crowdedelevatorfartz on 12.18.19 at 9:33 am

@#119 Dharma Bum
“Canada is just a vast holding tank for disconnected people, not a culturally linked and identifiable country.”
++++

A friend was living in Quebec during the Referendum in the mid 1990’s.
He was arguing with some Seperatist neighbours about why Quebec should NOT leave.
One of the Seperatists declared.
“We are a distinct society!”
He laughed and said, “Distinct? You’re wearing a cowboy hat and you just told me the Montreal Olympic stadium sold out for a Monster Truck Rally………”

Crickets…….

#122 maxx on 12.18.19 at 9:34 am

MMT…..monumental monetary tragedy. A very old egg re-laid by cloud-shoveling, theorizing eggheads. This “theory” has been around for donkey’s years.

Many who receive this government largesse will: pay off debt, save it, leverage another round of consumer debt or like us, save a good whack of it and spend the balance on travel, purchased from suppliers outside of Canada, usually in the US.

There is no theory in the universe in which taking on obscene amounts of future tax revenue today will “improve” the economy. None.

Same old economic crap, new label. Finance types are trying to plug holes in the destabilizing social submarine.

#123 Damifino on 12.18.19 at 9:39 am

#98 Bob Jones

He is the only honest leader and I see a lot of you in him…
——————————-

The part you don’t see is the xenophobia that sent Max and his PPC to oblivion.

#124 Sail Away on 12.18.19 at 9:53 am

#118 Remembrancer on 12.18.19 at 8:31 am
#114 Sail Away on 12.18.19 at 7:49 am
There ya go. Take the bastards down. That’ll teach them to give YOU a job for 30 years.
——————————
Assuming this is the real you, your business isn’t a planation or similar enforced servitude arrangement banned in most of the world, as has been suggested by some here based on comments and retorts, you really should spend some time on self-reflection…

———————————-

Coming clean here. My business sctually IS a plantation. We’ve been growing cotton in northeast Yukon for

#125 Blog Bunny on 12.18.19 at 10:12 am

”Canada has zero culture of its own.”

What about hockey, maple syrup, grizzly bears and log cabins ? Hey, we also have a national sport called snow shovelling. The season is about to start.

#126 Quintelian on 12.18.19 at 10:18 am

“An idea called MMT – Modern Monetary Theory – is all the rage on the US political left”

It has been working in Canada for many years, and it was introduced by Jim Flaherty, but it was cleverly disguised and relabeled. Basically, you give every home owner a money printing press, and call it a Home Equity Line of Credit.

I don’t want to embellish it with tedious explanations of the details, but you start with a 40 year mortgage, to inflate the housing bubble, you keep real interest rates below zero, and the rest is history.

#127 Flop... on 12.18.19 at 10:38 am

crowdedelevatorfartz on 12.17.19 at 9:42 pm
@#75 Floppie

Speaking of Liberals….
Christy Clark is being considered as a possible federal Conservative Leadership candidate?

Do the Cons want to lose the next election even worse than Scheer?
Or is this a Conservative plot to make Rona Ambrose appear even more intelligent than she actually is?

Christy Clark as PM…..may God have mercy on us all….

////////////////

Trackie talks about tanking the country as soon as possible so we can come to our senses and have a reset.

4 years of Christy, after 8 years of Justin would get the job done.

I would be living on green bananas by then…

M45BC

#128 Flop... on 12.18.19 at 10:38 am

crowdedelevatorfartz on 12.17.19 at 9:42 pm
@#75 Floppie

Speaking of Liberals….
Christy Clark is being considered as a possible federal Conservative Leadership candidate?

Do the Cons want to lose the next election even worse than Scheer?
Or is this a Conservative plot to make Rona Ambrose appear even more intelligent than she actually is?

Christy Clark as PM…..may God have mercy on us all….

////////////////

Trackie talks about tanking the country as soon as possible so we can come to our senses and have a reset.

4 years of Christy, after 8 years of Justin would get the job done.

I would be living on green bananas by then…

M45BC

#129 MF on 12.18.19 at 10:53 am

#119 Dharma Bum on 12.18.19 at 8:38

Disagree. There is definitely a Canadian culture. Sort of a laid back quiet confidence. You’d have to talk to other human beings so see it though. That’s why most commenters here are blind to it’s existence.

MF

#130 Gregory on 12.18.19 at 10:56 am

https://business.financialpost.com/personal-finance/baby-boomers-have-made-a-fortune-on-real-estate-here-are-three-reasons-to-consider-cashing-out-now

Looks like it times to tell my parents to cash out before MSM recognize the sensible idea and everyone does it at the same time.

#131 TurnerNation on 12.18.19 at 11:23 am

Keep paying those taxes our UN government is shovelling overseas.
Taxes pay for transit you know!! Keep repeating this.


https://www.cbc.ca/news/canada/london/ontario-high-speed-rail-toronto-kitchener-london-windsor-1.5397934

Ontario’s dream of a bullet train may have died a quiet death

Ontario cancels Hamilton LRT in chaotic … – CBC.ca

https://www.cbc.ca › canada › hamilton › hamilton-lrt-cancelled-1.5397519

2 days ago – Ontario cancelled $1 billion in funding for Hamilton’s LRT system on Monday, killing it amid a chaotic afternoon that included a hastily cancelled

#132 whiplash on 12.18.19 at 11:27 am

One only has to look at recent history and in this case the province of Saskatchewan. Early 1993 the province came very close to defaulting on it’s debt payments of $15 billion and was on the brink of declaring bankruptcy.

What took place were a lot of secret behind the scenes meetings with the Mulroney government, which stepped in with emergency financial assistance and meetings with financial institutions for back up financing.

No other option but to cut spending, 52 rural hospitals were closed, universal prescription drug program scrapped, children’s dental plan scrapped, funding to hospital, university’s and local governments slashed and increases on the tax side.

Deficit financing works only for so long until the bankers in New York start calling the shots and budgets are brought down useing a chainsaw rather than a scapel.

#133 Sail away on 12.18.19 at 11:38 am

Ponzie, I know some good things come from Austria, like my beautiful 1947 side by side built by master Johannes Hambrusch of Ferlach, the town created from the gun-making guild.

Carrying this gun actually makes me a better person. It’s like being in a beautiful ballet with the dogs and birds, although admittedly, the birds probably don’t see it the same.

#134 Sail away on 12.18.19 at 11:41 am

I always considered work to also be a beautiful ballet between the clients, me and the employees. Is it possible the employees don’t see it the same?

That just blew my mind.

#135 Sail away on 12.18.19 at 11:49 am

#118 Remembrancer on 12.18.19 at 8:31 am
#114 Sail Away on 12.18.19 at 7:49 am

There ya go. Take the bastards down. That’ll teach them to give YOU a job for 30 years.
——————————
Assuming this is the real you

———————

Yes, it’s the real me. Try navigating high school with a name like ‘Sail’ and you’ll understand.

#136 Lorne on 12.18.19 at 11:52 am

#117 crowdedelevatorfartz on 12.18.19 at 8:29 am

That’s just the beginning.
User fees and fines going uppa uppa uppa Jan 1st…

Hopefully the voters remember former political scientist, former NDP MP in Burnaby and now Mayor Jason Kennedy….in the next election.
…………
Must have Alberta on your mind….Jason Kenney is not responsible for everything! I think you mean Kennedy Stewart!

#137 Sam on 12.18.19 at 11:54 am

Garth> An idea called MMT – Modern Monetary Theory – is all the rage on the US political left

Apparently the creator of MMT, Warren Mosler, convinced Donald Rumsfeld during the Bush years that deficits don’t matter, and that was one of the reasons Bush pushed the health care bill at the time and …

and did it against a lot of howling Republicans.

It’s not just a left thing at all. Both sides are doing it, a couple of people are admitting to it explicitly.

#138 Sam on 12.18.19 at 12:02 pm

I can see how you would get the idea it’s mostly left because they get the most press

And some of the famous MMT’ers are left – Stephanie Kelton was Bernie’s economic advisor in the last election.

So yeah, it looks superficially like a left thing but if you look at Trump’s tax cuts, it really looks like MMT has reached deep into both parties.

#139 YVR Expat on 12.18.19 at 12:36 pm

MMT is coming..whether you like it or not:

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

“But How Will We Pay for It? Making Public Money Work for Us” – Oct. 15, 2018″

https://youtu.be/WS9nP-BKa3M

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

“How Modern Monetary Theory (MMT) Actually Works (w/ Warren Mosler) – Real Vision”

https://youtu.be/W97s3zbFKvc

#140 Mattl on 12.18.19 at 12:41 pm

#129 MF on 12.18.19 at 10:53 am
#119 Dharma Bum on 12.18.19 at 8:38

Disagree. There is definitely a Canadian culture. Sort of a laid back quiet confidence. You’d have to talk to other human beings so see it though. That’s why most commenters here are blind to it’s existence.

MF

—————————————————————–

Of course there is Canadian culture, it’s just not homogeneous. As if rural Quebec, the Maritimes, Vancouver Island don’t have unique cultural components. There are ties that bind – sport being one – but the beauty of Canada is how diverse culturally we are.

#141 Shawn Allen on 12.18.19 at 12:42 pm

Latest Mortgage Default Statistics

Were out last week December 10th – although these are for August. (Huge delay is common with this data).

90 day delinquencies in Ontario remain at slightly less than 1 in a 1000 mortgages. Amazing.

Basically no changes in this data.

Alberta 90 day delinquencies had edged up are now stable at just one in 200 mortgages.

I know this is a lagging indicator… but just how lagged is it?

How does it work for the longer term unemployed? Use whatever funds available to pay the mortgage and then head to the food bank?

Logically though as house prices have not fallen much people can sell the house as opposed to default.

My suspicion is the banks are granting mortgage relief / delay in order to avoid loans going into the 90 day delinquent status. You are not delinquent if the bank agrees to let you pay later. I must alert that Big Short guy Steve Eisman. But he likely already is aware.

#142 Shawn Allen on 12.18.19 at 12:43 pm

Mortgage delinquencies link

https://cba.ca/mortgages-in-arrears

#143 oh bouy on 12.18.19 at 1:05 pm

@#129 MF on 12.18.19 at 10:53 am
#119 Dharma Bum on 12.18.19 at 8:38

Disagree. There is definitely a Canadian culture. Sort of a laid back quiet confidence. You’d have to talk to other human beings so see it though. That’s why most commenters here are blind to it’s existence.

MF
________________________

it’s like an old folks home on here.
lots of misremembering and pining for the good ole’ days.

#144 Tylder Durden on 12.18.19 at 1:37 pm

Hey Garth,

Are we able to contribute above our remaining RRSP limit and just not claim it this year, but claim it in future years once your room has increased? You wouldnt get the tax refund this year but at least the growth in the meantime would be tax free.

Yes. But within your available room. – Garth

#145 bob on 12.18.19 at 1:58 pm

Garth, I care.
I’ve been a lifelong Liberal Voter until Trudeau ran. Imagine, me voting for Harper and then Sheer.
Oh wait, I’m sure you can imagine it too.

#146 James on 12.18.19 at 2:00 pm

#129 MF on 12.18.19 at 10:53 am

#119 Dharma Bum on 12.18.19 at 8:38

Disagree. There is definitely a Canadian culture. Sort of a laid back quiet confidence. You’d have to talk to other human beings so see it though. That’s why most commenters here are blind to it’s existence.

MF
__________________________________________
Culture, we have a boatload of Canadian culture, this proves it. Just go to the LetterKenny TV series and yes there is actually was a town called LetterKenny, Ontario!

https://www.youtube.com/watch?v=raeE8Amt8s8

#147 Sail away on 12.18.19 at 2:02 pm

Ok, my 2019 end of year buys are done. Those who have my spreadsheet will recognize some of these:

1. Bombardier preferred, Series 3- yielding over 9%. Never will the gov’t let this fail.
2. More Suncor, because Buffett
3. More CNR, because if 3,200 strikers can shut down a country’s resource movement, that’s my kind of business
4. The GEO group. 12% div/for-profit prisons. People are killing to get in, and good government contracts. Don’t worry about the class-action suit.

SNC was on the list, but shot up 18% today before my buy… dang…

#148 Overheardyou on 12.18.19 at 2:18 pm

So, it’s different this time?

#149 Boris Corbyn on 12.18.19 at 2:19 pm

“Money for nothin’, and the cheques are free.”

I want my MTV. The original one, with, music, and video. And chicks for free (can I say that in 2019?)

Thanks for the blog, looking forward to some business structuring advice in early 2020. Please? I promise I’ll be good and not eat croissants again :)

#150 JM Keynes on 12.18.19 at 2:53 pm

“An idea called MMT – Modern Monetary Theory – is all the rage on the US political left…”

A duck by any other name is still a duck. Or as the wise author of Ecclesiastes said, “there is nothing new under the sun.” Sorry but this is just Keynesianism under a different name. Modern Monetary Theory, yah right. It has been around since the Bretton Woods Conference in the 1940s. There is nothing in MMT that wasn’t in the ideas of Keynes….Btw, what has become known as Keynesianism, is a distortion of Keynes’ original ideas and Captain Garth has pointed that out.

#151 Thedood on 12.18.19 at 3:11 pm

#1 Flop… on 12.17.19 at 4:26 pm

….$60 if you pay within 14 days, for being parked out the front of your own residence at the wrong time……
_______________________________

Park on your front lawn……ticket avoided.

#152 ts on 12.18.19 at 3:21 pm

#107 RWZM

Not to worry, justice will be done. It will come when one least expects it – like a tsunami and it will impact a lot of people drowning in debt, especially overextended homeowners. Be prepared and follow Garth’s advice regarding a balanced portfolio.

#153 Just snootin' on 12.18.19 at 3:28 pm

#125 Blog Bunny on 12.18.19 at 10:12 am
”Canada has zero culture of its own.”

What about hockey, maple syrup, grizzly bears and log cabins ? Hey, we also have a national sport called snow shovelling. The season is about to start.

….

Canadians will always be bonded by the weather and a general distrust of politicians, but we are diverse and more retrospective than other cultures. Enlightened. We only riot after overtime. We never needed a first amendment because we self censor in order to be accommodating. We grumble. A second amendment isn’t necessary because there are too few to care. We reside in polite apathy.

Where Canadians show their stuff is during disaster. In one instance during the 2017 wildfire season, 50,000 people were evacuated in the middle of the night without death or injury. We don’t make a lot of international news because we are less likely to screw up. We wince when politicians draw attention to us.

If you look carefully, you can see signs that American culture is being Canadianized. Subtlely, slowly. You can see obvious pain currently, but underneath a level headed consciousness is growing and undermining the lust for empire.

#154 JacqueShellacque on 12.18.19 at 3:29 pm

Chin up, Garth. You weren’t nearly as boring as Patrick Boyer.

#155 crazyfox on 12.18.19 at 7:16 pm

#103 crazyfox on 12.18.19 at 12:53 am

The GST was never intended to be revenue neutral in the years following its roll-out as a replace for the MST. Of course it was marketed as being benign precisely for the reasons articulated in this post. Most people are financial illiterates and cannot understand the long-term destructive results of deficit financing. Chretien got it. The GST stayed. Maybe you should chat with people involved in the design and implementation of the tax (I was) instead of bowing to Wiki (it wasn’t). – Garth

There’s less of us from the old guard to chat with these days. Michael Wilson left us this year. Speaking of Mike, I read a 1988-89 Budget brief where he promised to slay the deficit in 3 years. Well…

Truth be told, if it wasn’t for a big pickup in trade and economic growth that only the world can provide, it might not have worked out so well for Chretien either. Without economic growth… ?

Whatever our political brand or flavor, us Canucks would do well to remind ourselves that we are all (except for Scheer ok, flip a coin :) on team Canada, lest we forget! Sometimes it spirals out of control with our best efforts and it gets so bad the next lot can’t make any promises. (there may only be small comfort in that) If we can trust these Fraser Institute charts just this one time on page 14 and 15:

https://www.fraserinstitute.org/sites/default/files/federal-fiscal-history-canada-1867-2017.pdf

What we’ll see is that interest rates hammered Mulroney governments to a cross in the 80’s and 90’s and really began with T1’s last term. Future governments outside of Chretien’s early on didn’t have to deal with this kind of crazy and how do we deal with that other than radical tax increases which we can see on page 15 of the link with federal governments taxing 18% of our economy? (a better chart might tease out the peak)

Last year’s federal tax revenue from GDP was 14.9% of our economy meaning we’ve got room to go up 3% in case of emergency, break glass. 3% doesn’t sound like a lot but with a 1.73 trillion (U.S.) dollar economy, its $52 billion U.S. (or $68 billion Canadian ball park) in headroom if we had to go to fed taxed 18% of GDP again. Lots of pain there, but doable because we’ve seen the template, we’ve done it before. One would have to look at the provinces to see if they could take that kind of bite out of the economy to confirm but to hazard a guess, we likely have the margins and there’s near term comfort in that. Plus, we haven’t considered yummy cuts!

But what worries me, what truly keeps me juiced in terms of risk creep, is U.S. fiscal instability timed with very real environmental damage from climate change, especially 2025 and beyond. I see paths that take us there, that only get worse going forward. If we are looking for triggers to hyperinflation, there they are. Years away, yes. Decades… no. That’s what I see.

#156 AACI Homedog on 12.18.19 at 11:59 pm

It’s not likely on a separate title to sell. Just sayin…

#157 Westcdn on 12.19.19 at 1:37 am

I like the salt of the earth- farmers, loggers, miners, car part makers… Nothing like fresh.