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By Guest Blogger Ryan Lewenza
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Here we go again. The US government has hit its debt ceiling limit, which is the legal limit of national debt that the government can accrue. Once this level is breached the US Congress needs to vote to increase the debt limit so as to avoid defaulting on the debt. Since 1960, the US Congress has voted to increase the limit 78 different times so this increase will make it lucky 79.
The issue is that with the Republicans taking back the House and a hard-right faction of the Republican Party – the House Freedom Caucus – gaining incredible control in the party (there’s roughly 30 of them which is meaningful given the Republicans narrow majority), they’re setting up for a fight and may use the debt ceiling as leverage to force the Democrats to agree to major spending cuts, something the Dems have been very reluctant to do. So, in the coming months we’re going to see a political version of Gunfight at the O.K. Corral, with big implications for the US economy and markets.
Today I’m going to review how the US got into this predicament, how I believe US politicians should deal with the out-of-control deficits and debt, and my take on how this may play out in the coming months.
The US Treasury officially breached its debt limit of $31.4 trillion last Thursday, forcing the US Treasury to start taking ‘extraordinary measures’. Essentially, the Treasury is just re-arranging deck chairs by delaying certain payments and buying time. This includes things like redeeming certain investments and suspending new investments into different government funds.
By implementing these measures the US government is able to kick the can down the road for a bit, which based on comments from the Treasury will get them till June. At this point, Congress has to act, which if the Republicans play hard ball like they did in 2011 and 2013, we could see some fireworks again. Cooler heads will ultimately prevail in the end but nothing surprises me these days coming out of Washington.
U.S. Government Debt at a Jaw-Dropping $31 Trillion
Source: Bloomberg, Turner Investments
But let’s back up and review how we got here.
There’s often a misconception that the debt is largely due to overspending (partially true) on government programs by the Democrats and that Republicans are much more fiscally prudent and deficit focused. That data does not support this.
Doing a simple analysis by adding up the deficits and contributions to the debt under the different presidents shows that it’s about a wash. More recently, under years of Republican presidents (Bush and Trump) the debt rose by $12.7 trillion and under Obama and Biden the debt rose $13 trillion.
Think about that for a minute. Since 2002, when Bush took over from Clinton, the US debt has exploded from $6 trillion to $36 trillion or a 6x increase. How did this happen?
The Republicans added to the deficits and debt through their aggressive tax cuts (Bush in 2003 and Trump in 2017), wars (one estimate has the cost of the Iraq and Afghanistan wars at $1.6 trillion) and increased spending, particularly on defense. Last year, for example, the US government spent $800 billion on defense, which is more than the next 9 largest countries combined spending on defense!
Tax cuts are often sold on the premise that they will ‘pay for themselves’, also known as ‘trickle down’ economics. But outside of a quick boost to the economy, this often doesn’t materialize and then the government is left with a lower tax base to fund all the spending.
But Democrats are no better. Biden announced a third Covid stimulus plan of $1.9 trillion (Trump already did two to the tune of $3 trillion) and Obama rolled out an $800 billion package to deal with the fallout from the financial crisis. This is on top of all the other spending and programs they rolled out. I recognize there were some huge disruptive events like the pandemic, which required a large government response, but it was way too much and this trend of higher government spending has been going on for decades.
The chart below calculates the percentage of US government spending as a percentage of the overall US economy and it has been steadily rising. There’s just too much government spending and this chart speaks to that.
US Government Spending as a % of GDP
Source: Trading Economics
We need to be honest. Both parties contributed to this mess and it’s going to require an ‘all hands on deck’ plan to deal with these deficits and surging debt levels. The Democrats don’t want to talk about entitlement reform (e.g. Social Security) and the Republicans refuse to consider tax cuts. Get over it already. If you want to really start dealing with the debt it’s going to require bipartisanship and compromise, rare traits these days in politics.
In my view, it’s going to take addressing all three of the pillars – cutting government spending, entitlement reform and raising taxes – to rein in the deficits and return to a surplus so the US can actually start paying off some of the debt.
Last year the US government spent $6.27 trillion so if they were to cut say 10% across the board that would represent $627 billion of cuts, which is less than half of what the US deficit was in 2022 ($1.37 trillion). Cutting spending will not be enough, which is why I believe the US needs to consider reasonable tax increases as well. Finally, both Social Security and Medicare will need to be reformed as boomers continue to age and these programs are only fully funded for so many years. This is why I believe all options need to be on the table and that the pain will have to be shared.
Back to the looming debt ceiling, as we saw from those depressing votes to elect Kevin McCarthy as Speak of the House, the Republicans have a very narrow majority (could get even narrower if Santos steps down) and given this the Freedom House Caucus is going to try to get their ‘pound of flesh’ and force the Dems to cut spending. While I don’t agree with their tactics I do agree with their current stance (many of them were fine when Trump was spending gobs of money) that addressing the spending and deficits needs to be a priority.
So we’re likely going to see some headlines and potentially some market volatility around the spring as we get closer to the date that the US Treasury runs out of cash. But like the other 78 times they will get a deal done even if in the 11th hour since the alternative (default) is just not an option.
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.
99 comments ↓
Obviously, first on the delay list were the paycheques & expense accounts of all the politicians, right?
Rhetorical!!
I think when the US politicians steal the classified documents, they should store them up in the attic.
That way, when they’re up there reading them, they can check out the backside of debt ceiling at the same time…
M48BC
The debt ceiling is the least of the US dollars problems- Saudi has stopped supporting the petro dollar…. They will try for a transition to CBDC’s but that will fail. ‘What’s in your wallet?'(It better be heavy)
Why do you feel that they have to pay down the debt? Are the bond holders demanding their money back? Did we ever pay back the money used to fund world war 2?
It’s over. Inflation and dissolution like USSR.
Let the blue states STARVE cause the resources are in the red states.
Signed Gavin Newsom
They will have to do better than a 10% cut Ryan:
https://fred.stlouisfed.org/series/A091RC1Q027SBEA
#5 America is done, finished, Kaput on 01.28.23 at 11:18 am
It’s over. Inflation and dissolution like USSR.
Let the blue states STARVE cause the resources are in the red states.
Signed Gavin Newsom
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It’s the opposite. Red States are dependent on the Blue States to function. The only exception is Texas. Most, if not all Red State would be third world countries without agricultural subsidies.
Google how Trump’s trade war hurt the gricultural sector.
Once a budget has been approved by the Congress (House + Senate + President), there is a legal, if not constitutional, requirement for it to be fulfilled: they are asking President Biden to intervene in Congress’s “power of the purse,” which is not what a President is meant to do.
It’s just a political stunt to “publicly show” that they care about “taxpayer’s money management”: Virtue signaling, I think they call it.
Yet, their voters fall for it every time…
Why can’t they just go through the list of hundreds of thousands of Federal USA govt departments and agencies and just get rid of the useless ones.
Canada could do the same. check out the link below, we could do without at least half of them and the majority of the population would not even notice (Except lower taxes of course!)
https://www.canada.ca/en/government/dept.html
Just seems too easy to buy a market dip on debt ceiling default worries… but 78 for 78 so far is a darn good record to bet on. I am ready.
Trickle down = flow up, more accurately.
Tax cuts are/is the only solution to any problem that the republicans ever come up with.
PeePee probably wants to cut our taxes too, right?
The house freedom caucus is much more dangerous than the squad!
Thanks Ryan! This money thing is fun; a game using an invented idea for exchange. A collective, global fiction.
Money, as money, has created nothing on earth. It’s just the medium for exchange. If all concept of money disappeared overnight, nothing tangible would change.
People love concepts. Collective delusions.
Recognize this and exploit it. Get very good at playing the game and accumulating, but always recognize it is just a concept.
And changes are coming since some people have become too good at the game. It’s doubtful the concept can scale much further.
This is dumb – prob the worst analysis i’ve seen on this blog.
Looking at deficit growth strictly under the time when each party is in power is missing a ton of context and ignore time lags.
What happened when Obama took power?? Oh right, that pesky financial crisis that almost destroyed the worlds economy. What should have Obama done? Austerity? By many analyses Obama should have spent more and it would have gotten the world out of that funk that much sooner. Trump? What did he do to explode the debt? Massive unnecessary tax cuts for the wealthy.. hardly a fair comparison. Biden? Oh right, that 1:100 year pandemic. Bush? A war based on lies.
This whole idea that republicans are in any way shape or form better financially than democrats is a lame right wing talking point which is lacking in any objective analysis.
Dems and repubs are hardly any better. Pfft.. Lame.
Bguy1 “ Why do you feel that they have to pay down the debt? Are the bond holders demanding their money back? Did we ever pay back the money used to fund world war 2?”
Because the interest on the debt will become too expensive, especially if interest rates stay high, which will then make it harder to fund programs like Medicare. The $31 trillion will never be paid off, but getting it down to a reasonable debt to GDP ratio will be key. – Ryan L
Pickled Lenin comes to mind..
The US economy needs continued injections of fiat currency to maintain a semblance of “life”….when it has been DOA for decades.
Excellent post Ryan – well balanced analysis.
Governments in many countries, including Canada, see deficit spending as just fine – since most voters don’t seem to care. “Don’t worry folks our government is here to help”. In fact, economists like Paul Krugman encourage it in the US – though in fairness to Paul, I think he has recommended the country make investments (as opposed to spending) in infrastructure and other investments that strengthen the country.
As a potential future post topic, I would be interested in your take on the long term implications of countries like the US and Canada consistently running deficits and piling more and more debt year in year out. Seems to me this is going to continue until something forces governments to change.
Or maybe it’s sustainable? I don’t believe it, but maybe I am wrong.
Where is all this deficit spending (as the new norm) taking us? Will some folks eventually stop buying government bonds – and drive the cost? Will paying interest on the debt eventually crowd out spending on other areas that are important. Will we ever deal with this in our lifetimes? Do we need to?
Negative real interest rates are being used to pay off the debt.
The potential that we are indeed part of a simulation is becoming more believable lately
Thanks for the blog Garth
Thanks for the post Ryan
And thanks for yesterdays post Tatiana!
Canadian Alcohol prices are double Americans because of Taxes
US collects 297 billion in Alcohol taxes both state and federal. Many federal Alcohol taxes have not increased since the 50s
Solution tax tax tax, win win win 300 billion potential win fall and let’s not forget cigarettes. Might even solve our smuggling problem,
To Victor L
Cutting federal programs is not easy.
One big problem is every newly elected government promises new programs. But they fail to cut the old ones.
Did you also know that transfer payments to the provinces is the governments largest expenditure?
Here’s some fun examples of Elected MPs getting involved
One year the program to mail food to the Inuit was identified as not a federal responsibility. But guess what when the politicians got wind of it, oh no we cannot cut that.
How about Trudeau canceling Harpers Tory jets, cost taxpayers 250 million to break the contract, and guess what we are buying now?
In conclusion it’s not Departmental spending its government promises….
Free dental comes to mind.
Now one last for fun
How much LNG contracts did we loose with Germany?
All because of Trudeau bending over to the greens?
But guess what the Americans are taking our LNG and shipping it to Europe at a profit.
And so on and on it goes.
Have a great weekend
Hi Ryan
I believe England made its last payment on WW2 loan from the US in 2006.
Anyway I hear where you’re coming from, some debt is good. But not at our extremes.
Covid was a war of sorts but it created the biggest bank account in Canadian history. Makes you wonder.
I wish I cheated the system, CRA announced they are not going to try and recover the billions owed.
Makes you wonder why we try to be honest citizens.
Cheers
This is nothing that can’t be solved with a couple of trillion dollar coins. They’ll print (or mint) their way out of it.
The debt in the US, from their track record in the past 20 years for both the Republicans and Democrats wicked spending contributions, if they stick with the same formulas, by the year 2043, without adding in inflation, their debt will have climbed to 216 trillion, I pity our grandkids and their kids.
I have no idea at what number the United States would be declared bankrupt, but it most likely would be a far cry below 216 trillion dollars.
Both Real Estate and Financial Markets carry many opinions within the International Financial circle, Opinions are like AO’s everybody has one. For the time being, I will use the 2% rule for ETF purchases, no more than 2% of my portfolio in any one ETF, I suspect the S&P will see a turbulence below 3500 by spring, chasing bubbles is not something that excites me, most often the end of the rainbow products a basket of horse manure without warning. Cautious and steady gets you home, I would much rather leave a few dollars on the table than not have enough left over to buy soap to wash the dishes.
Regardless of your setting, if you do not know something, put your hand up and ask for help, we are only human and at times we miss the smallest and smartest things that could have saved us hundreds and sometimes thousands of dollars and headaches.
I never give or offer anyone financial advice, but consider this a quality tip, even if you do your own investing, stick to a financial advisor for a portion of your investments, you will learn plenty, I did and still do, that alone pays a dividend without established yield.
Quote of the day: The sky is not the limit, your mind is. It is what we think we know that keeps us from learning.
So, given that a debt ceiling showdown is almost inevitable… and given that markets always get jittery as the big date approaches…. and then it all gets sorted out and markets jump back…
Shouldn’t I just sit on cash and wait for the all-but-guaranteed dip?
IMHO…we are all being lured into a trap.
Trudeau and Co. are promising all sorts of added social benefits…ie free dental…$10/day child care….etc. and then to cover the increasing debt will commence with rationing of health care for elderly(MAIDS) and also rape and pillage inheritances and estates.
No free lunch….
..nor breakfast .
…..nor dinner…
Wasn’t it Trump who mused that if the US just defaulted, then they could cancel the debt and refinance at a low rate? LOL!
The remaining Trumpers are dumb enough to force a default if it was all up to them. Thankfully it’s not.
Tax Increases Needed?
In 2018, Trump cut the federal corporate income tax rate from 35% to 21%. A 40% cut.
Approximately NONE of that got passed on as lower prices which proved that there is not a lot of stiff price competition as least not for the S&P 500 companies. It shocked me seemingly that no one (but me) ever even expected the tax cuts to be passed on as lower prices due to competition.
A bit of it did get passed along in higher wages. A lot of minimum wages increased (Walmart, Bank of America and others)
Stock prices soared in 2018, late 2017 because of the higher profits.
So, corporate taxes have a lot of room to be restored to a more fair level in the U.S.
Quintilian “Ryan, whose taxes would you raise, and what programs would you cut?”
Increase taxes both on corporations and individuals. The US corporate tax rate of 21% is too low. It should have been lowered to 23-25% vs 21%. The carried interest tax loophole should be addressed immediately. This allows wealthy private equity investors to pay lower capital gains taxes rather than higher income tax rates. They should also implement the Buffett tax which is a minimum tax rate (15%) that wealthy individuals should pay yearly. On spending defense should be front and centre. $800 billion is way too much in my view. The Feds should review each department and look to trim 5-10%. The government is just too big so something has to give. They should also increase funding/employees at the the IRS to go after tax cheats. Trump has barely paid any taxes in decades. How can a billionaire not pay any taxes?? The tax code needs to be updated and more equitable. When Warren Buffets admin assistant pays a higher tax rate than him then something is wrong. There’s a few ideas off the top of my head. – Ryan L
What is Money?
#13 Sail Away on 01.28.23 at 12:27 pm
Thanks Ryan! This money thing is fun; a game using an invented idea for exchange. A collective, global fiction.
Money, as money, has created nothing on earth. It’s just the medium for exchange. If all concept of money disappeared overnight, nothing tangible would change.
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Partly agree. Money is one of the hardest things to understand. Anyone who thinks it is simple is fooling themselves.
This concept of money as a claim check on REAL goods and services very much facilitates and incents people to create real goods and services.
It allows those with excess assets to lend to those without.
Money (which also facilitates debt) is one of if not THE greatest and most important inventions of humans.
Without money and debt the economy would crawl even though money is indeed just a construct.
Guys would not bust their butts turning glue and woodchips into houses if the reward was just to get fed. And without money there is not much chance they would give the built house to a family in return for porridge everyday for 25 years.
#15 Ryan Lewenza on 01.28.23 at 12:37 pm
Bguy1 “ Why do you feel that they have to pay down the debt? Are the bond holders demanding their money back? Did we ever pay back the money used to fund world war 2?”
Because the interest on the debt will become too expensive, especially if interest rates stay high, which will then make it harder to fund programs like Medicare. The $31 trillion will never be paid off, but getting it down to a reasonable debt to GDP ratio will be key. – Ryan L
So basically the money issuer/controller and the debtor are the same, so the same entity determines the cost of money aka interest that is supposed to be market driven and based on the risk as determined by buyers.
The only way to debt to GDP back at manageable level, considering the level of debt an the deficits is to raise significantly the inflation while suppressing rates to strongly negative real rates for a very long time.
That of course requires lying by central bankers and manipulation of rates much bellow what the market rates would be, along with solid money printing.
The problem is that even with that as witnessed in the last 15 years the debt to GDP keeps increasing…
CBDC will be attempted as last resort.
Despite that any asset class will skyrocket.
The problem is that inflation kills real consumption by the middle class so the scenario outlined above – massive inflation with suppressed rates will literally kill the real economy.
At the end it is highly likely for the standard of living of the average canadian to have declined to 30-35 % from the levels of 1999.
That at best.
Yogism #36: “Business is business are three words that mean business”.
Bank of Canada balance sheet
Remember all the howls when the bank of Canada allegedly printed money to expand its balance sheet and buy government bonds. (They claim the reserves created for the bank are not really money but whatever) Let’s focus on the hate the BoC received.
Now their balance sheet is down by 29% and falling steadily. And no, it’s not becasue of falling bond prices.
Where’s the love? Cue the hate.
https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/
#32 Shawn on 01.28.23 at 2:59 pm
Central bankers are directly responsible for the inflation that we experience currently. Asset inflation of 400 % in 20 years, similar food and services inflation. Around 10 % or more yearly on average.
And it is currently accelerating at a very alarming rate.
We have seen nothing of inflation yet. Nothing.
Pheww….debt ceiling…can’t we just be resolved in the fact that we, our kids, their kids, their children’s kids, their great grandchildren’s kids…ok…tooo lazy to keep going, are going to be paying taxes?
We are stinky humans that created money and inevitably monetary policy. Why is this even a problem? ‘Cause everyone has to prove their worth and get paid? Create more money….more jobs…more spending…distract…create more money!!! what’s the problem? What’s the issue here? Create debt. Is it alive and killing us? No. Create it….progress! We’ll form teams to tackle ALL the problems that may arise – and tax to pay for them.
Ensure, we as a society of duped middle class humans are content and our system continues.(*Og)
Anywho…snuggles have been sparse…I’m looking to change that tonight…wish me luck!!
Og
Federal revenue didn’t fall after the Trump administration tax cuts. Instead, total revenue rose. In fact, after trimming the rates for five of the seven brackets and nearly doubling the standard deduction, the government collected nearly $100 billion more in personal income tax revenue for the year ended Sept. 30, 2018. That was the biggest jump in three years.
The far-left hate tax cuts almost as much as they hate Trump.
Since the socialists have effectively won the war by taking over the entire educational system and the bureaucracy there is no politically viable way to ever cut spending meaningfully.
At least the Republicans attempt it once in a while before getting shut down. Then they cut taxes which is the best of bad alternatives.
Taxes can never be raised enough to pay off the debt which is why the long term answer always has been and always will be to inflate it away.
This present temporary attempt to tamp down inflation is admirable but will not last.
Inflation obviously devastates the poor and those who can’t demand significant wage hikes, so the wealthy asset holders win again, and the wealth gap grows.
Completely the opposite result that the socialists claim they want, but we are used to that.
Luckily even the non-elite can benefit if they know the game, as everyone should by now.
Buy real assets, preferably income producing ones such as real estate or stocks, and hold them as long as possible to ensure maximum gains and minimum taxes.
Even those who start out poor like me can do alright. Might not ever be a Rockefeller, but able to keep ahead of the inflation game and live very well.
Align yourself with the interests of the politicians and the establishment or lose the game.
Up to you.
Ryan, should that 70 year chart be on a log scale to more accurately indicate the rate of change in the debt over time?
It’s the same old problem. It seems most people want more government programs but also want lower taxes. It’s like why perpetual motion machines don’t work, you can’t get more energy out than you put in.
National Bank is first out of the gates, calling for the Bank of Canada to cut rates by 50bp before the end of the year and a further 100bps cut in 2024.
https://twitter.com/SteveSaretsky/status/1619423051078303744
Ryan, should that 70 year chart be on a log scale to more accurately indicate the rate of change in the debt over time? Maybe show it both ways since the regular scale does show the growth but distorts the rate of change?
Oh,
And lets not forget to enure that all DOW investment are secure before a positive decision is reached ’cause that baby is gonna sky rocket…ideally.
Og
Shouldn’t that read: “The Republicans refuse to consider tax >increases<"?
#33 Summertime on 01.28.23 at 3:18 pm
#32 Shawn on 01.28.23 at 2:59 pm
Central bankers are directly responsible for the inflation that we experience currently. Asset inflation of 400 % in 20 years, similar food and services inflation. Around 10 % or more yearly on average.
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So, market forces had nothing to do with the lower long-term interest rates?
Bank of Canada Balance sheet
#38 Quintilian on 01.28.23 at 4:06 pm
#32 Shawn on 01.28.23 at 2:59 pm
Now their balance sheet is down by 29% and falling steadily. And no, it’s not becasue of falling bond prices.
Stop the CRAZY TALK
They just dumped a pile of treasury bills.
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Well, that sounds right. A pile of short-term treasury bills matured?
In any case if buying those treasury bills was money printing then as they mature and get paid off or are sold that is the opposite of money printing? The balance sheet shrinks.
So if you hated the balance sheet bloat, you gotta love the balance sheet shriveling? No?
And in case it is raised as a cause, the balance sheet is not decreasing due to lower capital values of long term bonds. That is being offset by the indemnity agreement line item (see my link above). There is a bit of slippage associated with interest payments to banks exceeding interest earned on government debt but that is minor – very minor compared to the 29% shrivel.
#13 Sail Away
Yup.
Run fast. Run hard. Until the gig is up.
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#28 Ryan Lewenza
On spending defense should be front and centre. $800 billion is way too much in my view.
—-
Nope.
If the war in Ukraine has taught us anything thus far is that Uncle Sam’s long reach is all that stands between free democratic nations and dictatorships. That long reach worldwide or up in space does not come cheap.
Canada is a net beneficiary of Uncle Sam’s military, don’t forget that. 1.42% of GDP in 2020 ($28.2B 2021 est. from GDP)
America: 3.48% ($800.7B 2021)
Other American beneficiaries:
Italy: 1.5% ($31.6B est. from GDP)
Germany: 1.4% ($56B)
France: 1.9% ($56.6B)
UK: 2.1% ($68.4B)
Japan: 2.6% ($54.1B)
South Korea: 2.6% ($50.2B)
etc.
Dictatorships:
Russia: 4.1% ($65.9B)
China: 1.3% ($293.4B)
North Korea: ≈ 26% ($4B)
Yes, yes, in $ terms the US clobbers everyone. Overwhelming strength and global reach incl. space does not come cheap.
I like that and it makes me sleep well at night (Grazie Uncle Sam for having nukes and fighters/bombers etc. 8 km from where I sleep).
U.S. Government Debt at a Jaw-Dropping $31 Trillion chart. Can you say Hypernormalized Vertical Asymptote?
“…everyone knew the system was failing, but no one could imagine an alternative to the status quo, and politicians and citizens alike were resigned to maintaining the pretense of a functioning society.” -an effect that Prof Yurchak (UC-Berkley)termed hypernormalization.
Re: Green graph above
” U.S. Government Debt at a Jaw-Dropping $31 Trillion”
The debt growth , …extrapolated… is at or near pure vertical.
Invest in Weimar $$$ Wheelbarrows !
An investor “Federal revenue didn’t fall after the Trump administration tax cuts. Instead, total revenue rose. In fact, after trimming the rates for five of the seven brackets and nearly doubling the standard deduction, the government collected nearly $100 billion more in personal income tax revenue for the year ended Sept. 30, 2018. That was the biggest jump in three years.
The far-left hate tax cuts almost as much as they hate Trump.“
Like I said, you get a boost. They also lowered the repatriation tax which led multinationals to bring back billions of dollars held overseas which helped to boost their tax revenue (basically a one time event). But what about 2019, 2020 and on and on? It’s only logical that when you cut tax rates that it will lower revenue unless there is a long-term or structural change in the economy where GDP grows at a higher rate than before the tax cut. This didn’t happen with Bush and Trump’s tax cuts. So you get higher deficits. This isn’t rocket science. Your analysis is incomplete. – Ryan L
QE once again.
Devaluing the dollar.
Rinse and repeat.
Move on.
Dolce Vita “Lewenza
On spending defense should be front and centre. $800 billion is way too much in my view.
—-
Nope.
If the war in Ukraine has taught us anything thus far is that Uncle Sam’s long reach is all that stands between free democratic nations and dictatorships. That long reach worldwide or up in space does not come cheap.”
$800 billion/year is going to make you sleep better than $700 billion/year? President Eisenhower correctly warned its citizens of the ‘military-industrial complex’ over 50 years ago. This still rings true today. – Ryan L
Jens “ Shouldn’t that read: “The Republicans refuse to consider tax >increases<"?”
That’s correct. Typo. Thanks for pointing out. – Ryan L
#28 Ryan Lewenza on 01.28.23 at 2:51 pm
Quintilian “Ryan, whose taxes would you raise, and what programs would you cut?”
Increase taxes both on corporations and individuals. The US corporate tax rate of 21% is too low. It should have been lowered to 23-25% vs 21%. The carried interest tax loophole should be addressed immediately. This allows wealthy private equity investors to pay lower capital gains taxes rather than higher income tax rates.
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Ryan,
This is the same old, same old urban leftist thinking that causes the problems in the first place.
The big money goes to looking after people, government being their daddy. This thinking needs to stop or the market will crash in on them one day anyway, but people will squeeze the politicians until the bond market turns off the spigot, think Greece or Argentina.
You can’t have a functioning society the way we have in the past when most of the population draws its sustenance from the government.
The US still has a ways to go. Total government spending (all levels) is about 44% GDP. Many nations are much higher. Areas like Northern Ireland and Scotland are closer to 70%, about where the Soviet Union was. Canada is over 50% now.
This is a problem when more than 50% of the workers have a government job, in a democracy where 51% carries the day. All democracies in history have gone bankrupt for this reason.
The difference this time around is that as an individual you don’t have to go down with the ship. The internet and global travel give immense opportunities for diversification. You can choose to be in the class that ends up as the landowner, not the serf, if you recognize what’s happening and plan accordingly.
Look after your own family and plan your own business accordingly.
You can also choose to live in the real world and not buy into all the leftist fads of the day (global warming, transgenderism, etc.) and be in a business that provides things people actually need, like energy and food.
#44 Shawn on 01.28.23 at 4:38 pm
So, market forces had nothing to do with the lower long-term interest rates?
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If by market forces you mean CBs, sure.
Without CBs rates would have been 6-8 % in the last 2 decades, SFHs would cost 500 k in Vancouver and GTA and people would have twice the standard of living they have today + ability to actually retire.
Economics 101: the higher (government or any) debt, the higher risk for the creditors -> justifies higher interest rates. price of money equals risk for return/real inflation adjusted/not the fake/joke CPI.
The current monetary policy in which higher debt justifies lower rates when that policy is made by the actual debtor is not natural and I know precisely how it will end – very bad.
All those stupidities with ‘transitory inflation’, disinflation, terminal rates etc. spewed by a broken debtor is just that – idiocies and it can not be different when the debtor is the money issuer at the same time masked as ‘independent’ CB while buying government bonds at will in order to ‘diversify’ investment … hysterical laugher ensued here
Ryan … In my view…. entitlement reform
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Ryan you would like that USA have “BLM” revolution ?????
May be it was errata?
May be you want to tell increase entitlement ?
If the tax cuts of 2017 were so terrible for US Tax revenue, then why are tax inflows at record levels in the US? (Yes, they are inflows are very healthy). Cheerleading for the gov’t to take more private wealth I never understood, it is not like you get it.
The US goes bankrupt when they cannot make interest and principal payments on their debt, the interest coverage ratio is changing rapidly, but lets call it 7X right now. An excellent AA+ credit rating.
Would other dependents scream and rend their garments, for sure, but there is too much hyperbole in the air already.
Speaking of ‘Showdowns’…..We interrupt this program……
Does anyone from the Conservative Party of Canada interested in winning the next election read this Blog? If so, can you understand what is at stake? You finally have a glimmer of a flying leap at a rolling donut, yet you seem oblivious to issues that make or break elections.
I refer to ‘Exhibit A’, the photo featured in today’s NP, page A6 which shows both T2 and Pierre P seated on either side of a survivor at the Day of National Holocaust Remembrance event.
T2, calm demeanor with hands folded neatly, attentive expression, elegantly attired ( no wild socks on this occasion). Exuding Laurentian Elite. On the left of the survivor is Pierre P in a ‘man spreading pose’ (you’re not in a hockey arena or on the bus, Pierre), some kind of short ‘car coat’ with visible zipped casual sweater layer beneath, shoes that look orthotic, and the signature ‘down-turned mouth and dour expression’. The lack of ‘warmth’ exceeded only by the severe comb back hair style. For the love of Pete.
I don’t want to be mean, if only because I think those emotions should be saved and savoured for those who truly deserve a dish served cold,(especially if you hail from Oregon), but the point here is that we want people that represent the leadership of our country to appear ‘polished’. One of the many burdens those who choose to represent us in public office must understand is that we wish to see in them the best of ourselves, which means they must be the best they can be…
As a first step, maybe consider a change to the Robert McNamara comb back hair style. Do you have contacts or have you considered a change of eyeglass style? Smile a lot more. Do you know any jokes? Even Harper had the occasional moment of quick wit. Don’t get me wrong… I know what really matters is substance not style, but unfortunately that ship sailed with the arrival of social media.
Also, I forgot to add….do you have a pet? Look what it has done for Taylor Swift! Get a Scottish Fold, Ragdoll, or some mutt that captures the public imagination! Time is of the essence!
#49 R. Lewenza
“it’s only logical that when you lower tax rates you lower revenues … this isn’t rocket science, your analysis is incomplete”
With Trump’s tax cut, Americans got higher growth and higher tax payments with lower tax rates … the Laffer Curve effect … you’ve heard of him, right?
The same thing happened when Democratic President John F. Kennedy cut tax rates in the 1960s and when Republican President Ronald Reagan cut tax rates in the 1980s. Lower rates and more revenues.
One of the most important and successful features of the Trump tax plan was reducing the tax rate on American businesses from 35% — the highest in the world — to 25% while closing special interest loopholes. This brought businesses and jobs back to the United States and helped fuel Trump’s economic boom.
US federal spending under Biden and the Democrats has exploded to more than $6 trillion. Currently, Washington doesn’t have a revenue problem. It has a problem of runaway spending and green-new-deals. Biden and the radical left are deliberately destroying America’s economy and this pathetic blog thinks that’s OK. It’s not …
https://www.theglobeandmail.com/business/commentary/article-canada-federal-debt-inflation-economy/
US debt US$31.4 trillion
Canada debt C$1.2 trillion
US pop. 332M
Canada pop. 38M
Canada desperately needs capable leaders.
Funny about the social security. In the USA one can begin social security ‘early’ – at age 62 – & unreduced social security begins at age 67. Which is the age Harper was aiming for when Canada was planning to increase the age limit for receiving benefits. As for military spending, the most recent amounts I found for annual spending topped 800 billion. Apparently the budget allows for over 1 trillion in defense spending per annum. Maybe the USA could chop that sum in half rather than chop benefits to their elderly. They might still run a deficit half a trillion in spending cuts via a halved defense budget would help whittle that down by a considerable amount.
Rayan… Since 1960, the US Congress has voted to increase the limit 78 different times so this increase will make it lucky 79…..
____________
Don’t panic! Show must go! Nothing happened!
Don’t trust her. She brazenly lies!
https://www.axios.com/2023/01/28/yellen-debt-ceiling-nervous-default-recession
However, this comedy with an increase in the ceiling will entertain us a little.
I place a bet – the debt will be increased 20 minutes before the end of the term at midnight. Maybe even 5 minutes.
I’d rather be dramatic and vote to raise the debt ceiling 30 seconds before midnight.
Jaguar, #57, 58
OneBadJoke from reddit writes:
I am the granddaughter of a Holocaust survivor. In his remembrance I attended the a Holocaust memorial service at the National Holocaust Monument. I had the honour to listen to the speech of a survivor, an Anishinaabe elder, Trudeau, diplomats, and important members of the Jewish community. It was a beautiful memorial with one sole exception.
Poilievre gave an admittedly nice speech but I was furious that he even attended. I am a Jewish person and saw a swastika flag go down my street during the Convoy. The same types of people that he supports. After the event I approached him, said hello to Trudeau, and then told Poilievre that he should be ashamed for showing his face. This was a memorial for the millions upon millions of people who died at the hands of fascism. And he supported the antisemitic, white nationalist, domestic terrorist convoy that terrorized our city. He dropped my gaze, said ‘yeah, okay’ and I marched off.
I’m proud that after an event all about Never Again and speaking against the rise of hate, that I was able to do just that. My Poppy, a Holocaust survivor and fierce leftist, would have been so proud of me.
Let’s see, Democrats and Liberals spend like crack fueled monkeys , add a near trillion on the Trudeau side and another 1. 3 trillion on the Biden side and the monkeys want more crack? It’s up to the adults to pull the crack pipe away. “Aggressive tax cuts” mean breathing room for an over attacked citizen , less crack for addicted spendthrift apes. I taught my kids to budget, why didn’t you? The reason governments spend aggressively is to pander more votes. Spending more money on Pan African oil and gas projects is a crack pipe for globalists, where’s the hospital care for taxpayers? What we’re faced with is not a debt ceiling but the act of taking the keys away from immature crack smoking Liberal spenders who have no restraint as they are not spending thier own money. The German Chancellor asked for a multibillion dollar gas order, guess what he filled his need in Qatar instead. No hospitals or schools for Canada. Japan came and asked nicely for a share of Canadian abundance, no way says Trudeau. Guess what, Japan is once again burning coal and going nuclear, no new infrastructure for Canada. South of the border it’s the same, money spent in dictatorships and the Democrats howl about needing to pass thier trillions in spending or else? Here’s a suggestion, let’s focus on what’s good for citizens here and less about Star Trek technology that hasn’t been invented yet. Trudeau went inside with every American request to kill Canadas energy , what does Trudeau get in return from Biden, tariffs on wood and no deal on cars? We need a national government concerned about the nation, not what Gerry Butts and Narc Carney want.
#60 Calgary on 01.28.23 at 6:48 pm
https://www.theglobeandmail.com/business/commentary/article-canada-federal-debt-inflation-economy/
US debt US$31.4 trillion
Canada debt C$1.2 trillion
US pop. 332M
Canada pop. 38M
Canada desperately needs capable leaders.
—————–
What?
#14 None on 1.28.23 @ 12:34pm
“What happened when Obama took power?? Oh right, that pesky financial crisis that almost destroyed the worlds economy. What should have Obama done? Austerity? By many analyses Obama should have spent more and it would have gotten the world out of that funk that much sooner. Trump? What did he do to explode the debt? Massive unnecessary tax cuts for the wealthy.. hardly a fair comparison. Biden? Oh right, that 1:100 year pandemic. Bush? A war based on lies.
This whole idea that republicans are in any way shape or form better financially than democrats is a lame right wing talking point which is lacking in any objective analysis”
But Bush only had to spend 800 billion according to Ryan Now what about Trump, Ryan says he spent 3 trillion on Covid 1.1 trillion more than Biden had to since the majority was in 2020 during Trump’s presidency.
Ryan’s figures of 13 trillion and 12.7 trillion make it look like both Republican and Democrats spent about the same. But Bush/Trump was 12 years, Obama/Biden only 10, so 1.27 trillion for the Dems but only 1.058 trillion for the Repubs average each year of those presidential terms. So what Ryan says was “a wash” is untrue!
#60 Calgary
“US debt US$31.4 trillion
Canada debt C$1.2 trillion
US pop. 332M
Canada pop. 38M”
So, very roughly, Canada’s debt per capita is about 1/3 the U.S.’?
RE: #60 Calgary on 01.28.23 at 6:48 pm
https://www.theglobeandmail.com/business/commentary/article-canada-federal-debt-inflation-economy/
US debt US$31.4 trillion
Canada debt C$1.2 trillion
US pop. 332M
Canada pop. 38M
Canada desperately needs capable leaders.
=======================================
You just proved that the US debt is THREE TIMES worse than Canada’s… Was that your intent?
Your chart is very illuminating, Ryan.
The flat line from the 1950s to the 1970s was a time of responsible policies. Even Republicans like Dwight Eisenhower agreed that the wealthiest would be taxed at about 90%.
This built a thriving economy and middle class.
WTF happened since 1971?
We have been preached that the economy is a game for the rich to play, but don’t worry, we’ll all be all right.
Middle class jobs have been outsourced, and we are now in the final stages of people thinking that gambling on overpriced real estate is their only chance to ‘make it’ financially.
We need to tax everything, have flat monetary transaction taxes, and raise the bar hugely on the tax rates for the wealthiest.
And if we don’t, considering the environmental calamity we are facing if we do not redirect capital right away, we are all likely doomed.
Well, the US will have to work this out. No point getting riled about something none of us have full information about or could have even the slightest influence on.
I do like the new speaker. And Twitter files showing the way the censorship sausage was made! Who watched the Pfizer video?
#19 Doug t on 01.28.23 at 1:10 pm
The potential that we are indeed part of a simulation is becoming more believable lately
————————————
Is it possible what you mean is that this potential of being part of a simulation
is more of a hopeful prognosis than any other
#63 Observer on 01.28.23 at 7:42 pm
Please clarify if what follows in your post # 63 is a QUOTE from “OneBadJoke from reddit” ….OR what follows are your opinions.
Thanks:
Alois
#63 Observer on 01.28.23 at 7:42 pm
Jaguar, #57, 58
OneBadJoke from reddit writes:
Poilievre gave an admittedly nice speech but I was furious that he even attended. I am a Jewish person and saw a swastika flag go down my street during the Convoy. The same types of people that he supports. After the event I approached him, said hello to Trudeau, and then told Poilievre that he should be ashamed for showing his face. This was a memorial for the millions upon millions of people who died at the hands of fascism. And he supported the antisemitic, white nationalist, domestic terrorist convoy that terrorized our city. He dropped my gaze, said ‘yeah, okay’ and I marched off.
—————
Thanks for sharing the performative histrionics, O.
Hey, even people who support citizens’ rights to peaceably assemble and protest their government can denounce the Holocaust.
It’s all just theatrics. The theft limit will be raised. And it don’t really matter how much or how little, all that affects is how long it is until the next time they have to raise the theft limit.
I sort of agree with Orange Man Bad that they can’t do anything about social security because a deal is a deal. The Canadian example would be cutting CPP, but how can you justify that when you’ve been taking money from people’s paychecks in return for CPP all these years? If it was a sort of savings program, you can’t change the deal. Otherwise it was just a tax all along (as many people believe).
Defense spending isn’t going to go down. What with Russia acting all naughty and China eying up Taiwan for breakfast? And those F-35’s don’t build themselves. Plus all the weapons they left behind in Iraq and sent to Ukraine will have to be replaced. War is good business. Unless you have to pay for it, then it’s a racket.
Taxes aren’t going to go up either, or at least not tax revenues. There is only so much you can bleed a person before they die. It’s simple that way. Wishing the golden goose to lay eggs in the morning and then be dinner in the evening isn’t going to work for more than a day.
So the debt will continue to go up on it’s current exponential course until the dollar is damn near worthless. There is no other choice. It is what happens to every currency eventually. Ours will be no different. There is no point being upset about it, it seems to be a law of human nature. Instead, plan as best as you can.
And buy all the things.
—————————–
In 10 years, we’ll be wondering how the US debt got to $64 trillion, but there are very few things you can forecast with as high a degree of certainty as that. I might be off by a year or two one way or the other, but $64 trillion is in the bag. Nothing can stop it.
#44 Shawn on 01.28.23 at 4:38 pm
So, market forces had nothing to do with the lower long-term interest rates?
______________________________
How about considering what interest rates will be the day when fiat money supply keeps being added to by sleight of hand on a keyboard.
As newby savers, we declined a 3yr. GIC in September 2008, because I foresaw a great need of my money by someone that would pay dearly to rent it, the way I used to do.
Held out for the real value of money….
Then came the Central Bank BS.
Why pay a saver interest for actual earned unspent money, when the CB can create competing money out of thin air?
Yes Virginia, market forces had nothing to do with lower long term rates!
My real money could have then earned .25%, at a time of liquidity shortage. Some market…
Kind of like Joe Schmoe getting an ACOA grant to build a brand new hotel beside your family Inn.
And then Joe gives a weekly rate with meals for the price your dad charges for a night with a doughnut at dawn.
Same thing. Joes motel came from thin air.
Edit, when fiat stops being supplied.
Misery for everyone… so very equal … such a pointless bunch of endless doomers
#66 Happy prairie guy now in Mexico on 01.28.23 at 7:48 pm
“What happened when Obama took power??
________________________________
The crash was before the election…a direct result of two terms of W, following the Clinton surplus years.
I remember McCain on the campaign trail being asked what he will do about the economy. He quipped “the economy is fine” in a tone of disdain.
Only a few days later Paulson had the weekend sleep over at the White House, lobbying a deal with the Devil to save his Goldman Sachs et al.
Douhh!
Not on Obama, but Haliburton/Cheney .
So we can tell which way the author leans here by his ” objective analysis” of deficit spending under republicans vs democrats.
His analysis is anything but objective.
Look at the annual deficit at the start and end of each administration going back to the 60s and you’ll notice a very clear trend.
Democrats take power with a big deficit, by the time they leave, it’s been reduced substantially.
GOP takes power and leaves power with a massively increased deficit.
The current debt crisis is a product of republican fiscal insanity, wreckless spending and tax cuts.
I do agree that the only way to reach a balanced budget will involve tax increases and spending cuts, or austerity as they call it, which disproportionately affects the poor, and is politically untenable. What a mess!
#71 wallflower
Um no
If you don’t sin, Jesus died for nothing.
If all countries are in debt then, who is doing the lending?
The Federal Reserve pays a 6% annual dividend to ‘stockholders’ (banks) which, implies it is a private corporation. They control the money supply, have reserve currency status, and control interest rates what better business model than this?
The debt ceiling is a non issue. All theatrics.
There should be more emphasis on the gender of the debt problem. Once determined the debt will take care of itself.
#5
It’s over. Inflation and dissolution like USSR.
Let the blue states STARVE cause the resources are in the red states.
Signed Gavin Newsom
—————————————————————–
One big problem with your conjecture: the brains are in the blue states.
Oh, great. Just what this blog does not need: another right wing troll.
#68 kommykim on 01.28.23 at 8:13 pm
USA has higher government debt but dramatically lower private debt than Canada.
Canada’s household debt as a % of net disposable income is 186%, vs 101% for the USA.
US lets citizens keep more of the money they earn.
Governments that control their own currency cannot go bankrupt.
Private citizens can.
Canada is in dramatically more trouble debt wise than the USA.
#73 Sail Away on 01.28.23 at 8:59 pm
Thanks for sharing the performative histrionics, O.
Hey, even people who support citizens’ rights to peaceably assemble and protest their government can denounce the Holocaust.
Thank you.
As a grandson of a survivor, being Catholic but simply the wrong person as well at the time, the parallels should be apparent however, that nuance is fading as time goes on.
Sad really.
#72 Alois on 01.28.23 at 8:44 pm
#63 Observer on 01.28.23 at 7:42 pm
Please clarify if what follows in your post # 63 is a QUOTE from “OneBadJoke from reddit” ….OR what follows are your opinions.
Thanks:
Alois
^^^^^^^^^^^^^^
I was quoting someone(not myself) who goes by OneBadJoke on reddit.
#85 AnonyMusk on 01.28.23 at 10:21 pm
#68 kommykim on 01.28.23 at 8:13 pm
USA has higher government debt but dramatically lower private debt than Canada.
Canada’s household debt as a % of net disposable income is 186%, vs 101% for the USA.
——————-
Let’s assume your numbers are correct.
Canada’s house prices are much higher than the US’s.
Therefore mortgage debt must be much higher, accounting for the higher household debt numbers.
But that higher debt is offset by higher net worth.
So we are more house rich than the Amis.
Money supply in 2020 started a parabolic rampage, hence crazy inflation. So much money pumped in by Biden that “too much chased too few”, classic. That inflation still raring hot and US WILL continue to raise rates, so Canada has no choice but to follow, unless you want to crater the LOON again. Don’t expect a comeback. There’s no margin expansion, ergo, no new bull . Keep your powder dry.
It is absolutely mind-blowing on how people keep repeating non sense and half truths in attempt to continue to ignore reality and in a hope that after jumping from the high-rise building they won’t hit the ground.
Canada’s federal debt is 1.2 trillions.
https://en.wikipedia.org/wiki/Canadian_public_debt
—
Total Canadian public debt is 3 trillions:
For 2021 (the fiscal year ending 31 March 2022), the market value of gross debt was $2,942 billion ($76,135 per capita) for the consolidated Canadian general government – federal, plus provincial, territorial and local governments (PTLGs)
———————
Due to different government strictures most of the public debt in Canada is provincial and local.
In US is it mostly federal, so things in the public debt sector are not that different.
For private debt US is in much better shape
————————–
#75 Wrk.dover on 01.28.23 at 9:13 pm
Pretty good summary.
And the bad news is the same incompetents central ‘bankers’ want now to control digital currencies and continue their idiotic stupid policies in enriching the banks and oligopolies while screwing regular people with inflation.
And what is not incompetence but by intend?
This demand for ‘trust’ and ‘reputation’, combined with constant lies aligns with the stealing habits of low level street thieves/pocket pickers.
I was supposed to comment on this a few hours ago, but I realized after watching a bunch of ABBA lyric videos they released recently it’s 4am.
My question is what happens to the USD when there is a disagreement between the parties to raise the debt ceiling?
As a proud Murican I can say we don’t be needin no fancy pants Canadian financial proselytizer telling us what to do. Let our military industrial complex solve everything and go watch Dr Strangeglove young ‘un
Gen Z “My question is what happens to the USD when there is a disagreement between the parties to raise the debt ceiling?”
It maybe dips for a bit during the negotiations but it would then likely bounce right back after they hash out an agreement and increase the limit. All of this should prove to be a non event in the end. – Ryan L
Gen Z “My question is what happens to the USD when there is a disagreement between the parties to raise the debt ceiling?”
It maybe dips for a bit during the negotiations but it would then likely recover once a deal is hashed out and they increase the limit. In the end this should be a non-event. – Ryan L
Humble “Money supply in 2020 started a parabolic rampage, hence crazy inflation. So much money pumped in by Biden that “too much chased too few”, classic.”
This is inaccurate. First the Fed, which is independent from the US government, implemented QE (the money printing) in 2020 to help counter the impact from Covid. This was when Trump was still in power. Second, Trump pushed and with Congress passed two massive stimulus bills at a cost of $3 trillion dollars. Again this was while Trump was in office. Then, in 2021 when Biden became the President he passed a third stimulus plan which I hated and was largely unnecessary since Trump had already done two packages and the economy was starting to recover. So this narrative that Biden is solely responsible for the inflation is a Republican talking point and wholly inaccurate. This is my point. They all spend excessively and kick the can down the road. – Ryan L
Re: #63 Observer on 01.28.23 at 7:42 pm/Jaguar, #57, 58/
OneBadJoke from reddit writes: ETC. +++
That ‘flag’ turns up at many protests and we know who the ‘fringe’ groups are that include it among their other divisive tactics. It’s presence at the January protest in Ottawa in no way means that everyone who attended or protested at that event, or did not attend but supported the right of attendees to protest , supports that flag or its principals.
Perhaps examine the current support for the war efforts in Ukraine where that flag and anti semitic views have a presence in some circles and a history in that country. (i.e. Azov, S.Bandera, etc). We don’t paint everyone with the same brush, now do we?
Note the poster reluctantly has to give up that ‘Poilievre gave an admittedly nice speech’ and she also describes her grandfather as a ‘ fierce leftist’, so it follows that she wouldn’t be a fan of Poilievre. FYI, I don’t support the events that took place in Ottawa last January. Things got completely out of control, and those who broke the law will now suffer the consequences, but the right to express one’s views and engage in peaceful protest is bedrock.
My post was about Poilievre working on his image and presentation, because like it or not that’s the world we live in (social media, presentation versus ideas, etc.). If he wants to win he needs to focus on that and get his own platform out versus constantly attacking the current state of affairs.
“… the Republicans refuse to consider tax cuts.” Excuse me?
#88 Ponzius Pilatus on 01.28.23 at 11:50 pm
Let’s assume your numbers are correct.
Canada’s house prices are much higher than the US’s.
Therefore mortgage debt must be much higher, accounting for the higher household debt numbers.
But that higher debt is offset by higher net worth.
Now that was funny. So if the way to wealth is debt let’s get some more, shall we?
Tell Warren Buffet about that, the poor shmuck who tir to invest vs loading on debt…
Hmmmm…….nope.
Make nearly everyone sick with metabolic syndrome by supporting food industries that produce garbage, then yank medical care out from underneath them at a time when so many need it most.
Let people die in hospital corridors? Lovely.
The reason we have all of these debts and deficits is because of irresponsible spending (read not enough on the right things like hospital staff) and too much on crap like ¨WE¨ and monstrous tax credits to the fabled ¨too big to fail¨ gang. Period.
Pull the other one.
Just for the record, Social Security, which does have issues, doesn’t add a penny to the deficit, as it has a completely separate funding stream.
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