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Principles for economic revival

From Saturday's Globe and Mail

Budget should do no harm, and put people first ...Read the full article

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  1. Red Suspenders from The Big Chair, writes: Do no harm. Put people first. Don't put off to tomorrow what you can do today. Go the extra mile. Buy low, sell high. Give 110%. Gel together as a team. Don't look a gift horse in the mouth. Dream the impossible dream. A bird in the hand is worth two in the bush. A platitude said is a penny earned.

  2. KT Ocean from Canada writes: Good editorial. I don't think broad based middle class income tax cuts qualify. People who now have disposable income will just save more if they get tax cuts. Better to give it out as tax credits for things like home renovations which require spending.
  3. Jack Sprat from Calgary, Canada writes: The budget must include a plan for the end of deficits and a return to surplus, by setting deadlines on many of its stimulative programs.

    * The budget's projects should pursue long-term goals, supplying genuine public goods, not just spending vehicles to give the economy a boost or a jolt.

    Above all, the budget's policies should enhance productivity growth, the key to economic well-being.

    ______________________

    And these little points, tacked onto the end, is why budgets around the world will fail and are failing. This is why Keynsian economics fail. Governments don't do the right thing. They do the popular thing.
  4. Mark Dip from Canada writes: With an unemployment rate four times the national average, the spouses of Canadian government employees serving overseas have been fighting EI inequities for over 3 decades and in the meantime it has been calculated that we lose over $1 million per year from being forced to pay overseas for EI while being ineligible for benefits. Quitting their job to accompany their partner and getting one’s EI revoked on arrival at an overseas capital has become the Canadian Foreign Service’s version of a diplomatic hazing ritual to welcome you to your posting. The way it typically goes is that spouses are forced to pay EI premiums overseas because CRA defines them overseas as Canadian “Factual Residents” (Residents of Canada) due to diplomatic status, but then they later get their EI social benefits revoked afterward because HRSDC says they’re not physically “Residents in Canada”. If a spouse manages to land a menial embassy McJob while overseas, CRA still sticks its hand out again for their cut, especially for EI premiums. At the end of the contract, you even get another pretty Record of Employment, followed by a letter from HRSDC stating that the EI social benefits for which you were just paying overseas have been revoked yet again. BTW, this also happens to non-diplomatic Canadians defined as “Factual Residents” by CRA while overseas, including paying $900 a year for OHIP that you’re not entitled to access because the Ontario Government also says that you’re a non-resident. Another bitter pill for any Canadian spouse that has been sentenced to 3 years less a day of overseas servitude to our foreign service is that although Corrections Canada won EI benefits for inmates being released from prison without having contributed to EI, for decades DFAIT Management has tried and failed at gaining this for its spouses. Apparently, Canada thinks that spouses would perform better at helping to represent their country overseas after being disenfranchised by their own government.
  5. Robert McDougall from Canada writes: "Above all, the budget's policies should enhance productivity growth, the key to economic well-being." --
    A very good point. It is distressing to see Diane Finley, for instance, immediately define immigration as the solution to a labour force that will start to decrease, within, I think she said, five years -- as opposed, for instance, to a planned and compensating increase in productivity.
    Perhaps our total population could be capped at, say, 30-to-35million to be achieved by immigration of specifically-needed skills, with the growth in our standard of living to be achieved through innovation and explicitly pursued planned productivity increases!
    Actually, I will see what I can do about writing a short paper describing demographic simulations that demonstrate what this might entail -- and how we might thus become a very rich country without bursting the population bubble. Watch for it!
  6. William J. (Willy) Godfrey from Whitby, Canada writes: Harper has been wrong about the Economy for his entire time as Prime Minister! Does anyone really think that he knows what to do? He cannot be Trusted!!! He must Go!
  7. bob adamson from Victoria, Canada writes: The editorial describes a good set of criteria but three improvements can be suggested. Firstly, while an end deficits should be an important component of the plan, it would be counterproductive to now set time deadlines for the end of deficit spending. The point is that the government should embark on deficit spending to counter the deep cut in private sector spending and its resultant economic imbalance. It follows that deficit spending should continue while that imbalance continues. Ad hoc shorttermism must be avoided and, as well as shorter term projects, longer term spending ones included, albeit planned in segments that can be downsized or delayed as improvements in the economy or the onset of inflation dictate that public spending should be lowered. Secondly, a current danger is that the depth of the economic contraction will result in destruction of industries and communities that goes well beyond the 'constructive destruction' represented by assets and people moving into more productive endeavers from unproductive ones. Maintenance of these communities and industries anticipating their recovery in better times must be one of our goals. Thirdly, we must appreciate that there will be conflict between certain of these stated goals in particular situations, that the nature of the economic challenge changes rapidly and that errors will occur because of the need to address arising situations quickly. It follows that appropriate maintenance of people and communities so that these can adjust creatively rather than simply go under must be the priority objective,
  8. Dave Patterson from same old problem, same old failed 'solutions', Thailand writes: This is more of the old 'rearranging the deck chairs' stuff, a lot of platitudes demonstrating that the writers really have no idea of what is happening, or do understand what is happening but are not interested in addressing the root causes because they work for the people for whom the current system works well, and they'd like to keep it that way, which involves keeping certain things as they are, no matter the damage this system causes for most people. Far too few people have any idea of the central problem here - our entire financial structure is a giant ponzi scheme, in the process of collapsing. Think about this, deeply - commercial banks create ~98% of our money supply, and expect interest on that money every year. This 'interest' can be handled for awhile through systemic inflation, creating more money to cover the old debts, or from simply reposessing collateral, but eventually the system will collapse from too much money, or collateral running short, as we are currently seeing. A 'sovereign state' allowing its money to be created as debt by private banks is simply an oxymoron. It is only catching up with us now, because prior to the 70s, the government kept some control of the banks, and created some of their own money through the Bank of Canada. After the 70s, and the neocon takeover, the government of Canada turned over all money creation to private banks, including allowing commercial banks to create the money that the government then borrowed, at prime interest, thus the national debt etc, and the escalation of the money creation bubble to the point of implosion, as we are witnessing and experiencing today. More here - Banketeering http://www.rudemacedon.ca/banketeering.html
  9. Peter Lucas from langley, Canada writes: I think most elected officials are sub prime - why else would they run for office? So now we have these officials who know nothing about economics making decisions on how to spend our money.

    'Feel good' choices will be made. The editorial itself blesses public transit and port funding, and is silent on other infrastructure projects. I suspect building or improving roads and bridges will have a greater and more immediate return. But roads are unpopular.

    Cuts in income taxation, as long as not perceived by taxpayers to be very short term, would probably have a fast return and a much higher multiplier effect. Furthermore, people spending their own money usually make better decisions than those who spend other people's money.
  10. Misty Morning from Canada writes: Perhaps the Government might reverse their decision to reduce the wage increases the RCMP had been told they were getting this year. I understand that what had been agreed to has been cut in half. What a terrible way to "save" money while they were trying to cut corners to come up with a non-deficit budget! It used to be that the Armed Forces and the RCMP were given raises at the same time. Did, in fact, the Armed Forces get any pay raise this year, or are they also being added as more fodder in the government's cannon attack on those who serve their country?

    How about a system that gives rebates on money spent in Canada by Canadians for Canadian products? Better than giving tax breaks that go directly into savings accounts!

    Your editorial gave us hope that ethical decisions may yet be made. If only our Government would read it! If it's not on the front page with a picture with lots of teeth showing, I'm afraid it's lost on them.
  11. Jim Kelly from M'Chigeeng, Canada writes: Your editorial offers constructive suggestions for the budget. In particular, "the budget's projects should pursue long-term goals, supplying genuine public goods" sounds hopeful.

    Alas, in Canada the Minister of Finance offered a "fiscal update" only six weeks ago which was a fairy tale of a sound economy and a modest budgetary surplus. It brought the country to near parliamentary and constitutional crisis.

    The Prime Minister never apologised and the minister who mouthed the update did not offer his resignation.

    Jim Flaherty is slated to deliver the upcoming budget. The most constructive comment we could make at this time is that Flaherty must resign.
  12. Bobby Dy from Canada writes: I'd like to see a lot more editorials like this that attack the silly notion of a middle-class tax break as bad policy. It is bad policy for a large number of reasons. Apart from it doing next to nothing to stimulate the economy, it has the greatest potential to create a "structural deficit". No other part of the plan is a greater threat to cause a structural deficit. So, something that does nothing to stimulate the economy and simply amounts to deferred taxation of the very people that the break is targeted at adds up to poor policy. Precisely why Harper has floated the idea--it's always politics over policy with this government.
  13. Mark Dip from Canada writes: Canada should allow tax breaks for the spouses of government employees serving overseas who are living in high cost-of-living countries. If you are a government family overseas, the normal CRA formula for residency determination is overruled. Instead, the Vienna Convention on diplomatic immunity is the sole deciding factor used by CRA to declare them as “Factual Residents”. As a “Factual Resident”, overseas government families fill out a domestic tax form from overseas. This works fine for the government employees who are taxed solely to Canada and are getting overseas allowances to compensate for the high cost-of-living of the country where they are serving. Additionally, CRA has dual-tax treaties with foreign nations in order to keep getting its cut, especially from Canadians living in areas where taxes are low. However, an overseas Canadian Non-Resident will get tax breaks through these treaties if they reside in countries that have high living expenses – but only if they are classified by CRA as a “Non-Resident“. An overseas government spouse gets no such relief from either scheme owing to their CRA residency determination from their marriage to a government employee. Essentially what this means is that dual-income government families, which are common and ignored in Canada, are penalized for their two incomes by CRA when serving Canada overseas. As such, spouses are paid at the low foreign wage rate that was designed for locals (low wages because local taxes are low). However, the spouses are taxed by CRA at the high Canadian rate, leaving them with less after-tax take home pay than the janitor. This is despite having waived the Vienna Convention diplomatic immunities (a normal formality for government spouses to work in the host nation) that caused them to gain the CRA “Factual Resident” determination in the first place. The Income Tax Act was written before such immunity-waiving arrangements were designed, and has not been updated since.

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