Author Topic: Economics Culture  (Read 3951 times)

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Offline wilber

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Re: Economics Culture
« Reply #90 on: March 09, 2020, 10:21:49 am »
Your $2 trillion estimate also relies on the exact same inflation driven growth.

I agree that services should never be financed, at least not for longer than say 12 months. Yes, infrastructure ages. That does not mean that they are still paying for that specific infrastructure. Am I still paying for WWII?

My two trillion is based on the annual interest we pay today times 80 years. 26 X 80 = 2080. Inflation has nothing to do with it.

Of course you are, if you never pay off the principal, you pay interest on it forever and so are your descendants long after it an you are gone.
"Never trust a man without a single redeeming vice" WSC

Offline waldo

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Re: Economics Culture
« Reply #91 on: March 09, 2020, 10:32:40 am »
Why do these debt/deficit proponents only point to the same economist?  Is Kevin the only economist in Canada?

What really needs to be shown is if it's better for Canada's economy in the long-term to run deficits and pay the interest payments on that debt, or if it's better to tax Canadians more to balance the budget and save on the interest payments, or if it's better to cut some of this spending to achieve a balanced budget, or if it's better to actually run a surplus and pay down our debt?

oh snap! Ya, he's the only guy... out there on a ledge all by himself - not ever, as member wilber drones on, "thinking of the kids, thinking of the kids"!  ;D

perhaps you should tout your favoured Conservative aligned economists that forego their own concerns over deficits/debt in favour of reduced taxation... and the grand (and disproved) posit that reduced taxation spurs the economy and creates jobs, jobs, jobs!

Offline wilber

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Re: Economics Culture
« Reply #92 on: March 09, 2020, 10:47:22 am »
oh snap! Ya, he's the only guy... out there on a ledge all by himself - not ever, as member wilber drones on, "thinking of the kids, thinking of the kids"!  ;D

perhaps you should tout your favoured Conservative aligned economists that forego their own concerns over deficits/debt in favour of reduced taxation... and the grand (and disproved) posit that reduced taxation spurs the economy and creates jobs, jobs, jobs!

People who borrow and borrow leaving the debt for future generations are thinking of no one but themselves. If you have to borrow every year just to pay your bills, you are living beyond your means. It isn't complicated.
"Never trust a man without a single redeeming vice" WSC

Offline waldo

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Re: Economics Culture
« Reply #93 on: March 09, 2020, 11:05:45 am »
People who borrow and borrow leaving the debt for future generations are thinking of no one but themselves. If you have to borrow every year just to pay your bills, you are living beyond your means. It isn't complicated.

try reading the linked article this time - it isn't complicated!

per UBC Econ Prof Kevin Milligan: Don’t Worry About the Federal Deficit --- Politicians often argue that government debt will cause hardship for future generations. They’re wrong



Quote
But won’t taxes have to rise? At the risk of belabouring the analogy: if our children are saddled with the mortgage we take out now, won’t they need to raise funds to pay it down? No. When debt growth is modest and interest rates are low, the economy grows faster than the cost of servicing debt. This (though politicians would have you believe otherwise) is Economics 101: what matters is not the absolute size of the debt but its size relative to the country’s economy overall. As with the financing of your home, there isn’t such a thing as a “big” or “small” mortgage per se—it entirely depends on your income. Economists use the debt-to-GDP ratio, which measures a country’s debt burden relative to its national income, to assess this for Canada’s economy. When we think of the fiscal—or moral—consequences of our debt policy on the next generation, the debt-to-GDP ratio is the right guidepost. And a responsible fiscal policy ensures that the debt-to-GDP ratio does not grow, not that we have no debt, or run no deficits, at all.
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Over the five years from 2009 to 2014, Canada added $158 billion to the federal debt—which sounds like a lot, but our economy’s size was closing in on $2 trillion at the time, so the crucial debt-to-GDP ratio didn’t move much. We did add $71 billion of debt over the last four years—but the debt-to-GDP ratio actually fell by 1 percent over that period, since the economy grew more quickly than the debt did. Debts rise and fall, but there is no inexorable march to crisis that is unleashed by allowing some degree of discretion on deficit spending or the debt that ensues. We should just accept that the debt battle has been won and move on.

Offline ?Impact

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Re: Economics Culture
« Reply #94 on: March 09, 2020, 11:10:58 am »
My two trillion is based on the annual interest we pay today times 80 years. 26 X 80 = 2080. Inflation has nothing to do with it.

Inflation has everything to do with it. We don't borrow money at a fixed rate with an infinite period. We were paying $50 billion in 1995, and $23 billion in 2019 even though the accumulated deficit was lower then.

Offline wilber

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Re: Economics Culture
« Reply #95 on: March 09, 2020, 11:15:25 am »
try reading the linked article this time - it isn't complicated!

I read it. It says the government has no fiscal obligation. I agree. He doesn't say it has no moral obligation to not stick future generations with the burden of debt accumulated today. Apparently you feel there is no such obligation. **** em, I got mine. I also have no doubt the same people who are critical of Harper for running up the debt after the 2008 financial meltdown will be justifying Trudeau doing the same thing in the wake of this year's blockades and Covid-19.

"Never trust a man without a single redeeming vice" WSC

Offline wilber

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Re: Economics Culture
« Reply #96 on: March 09, 2020, 11:28:27 am »
Inflation has everything to do with it. We don't borrow money at a fixed rate with an infinite period. We were paying $50 billion in 1995, and $23 billion in 2019 even though the accumulated deficit was lower then.


Interest rates were more than quadruple today's in 1995. Do you think they will stay this low forever? Can you guarantee that? Chretien and Martin were slashing spending and paying down debt because our credit rating was going in the tank. We are a can we afford the payments today culture and have learned nothing from history.

I'll say it one more time. I'm not saying we should never borrow money, I'm saying we shouldn't do it with the intention of never paying it back. Which is what we are doing
now and what this debt to GDP con is all about.

There is a real disconnect here. On the one hand we are being told we can't be so wasteful and excess consumption is destroying our world and on the other hand, many of the same people are saying we can continue to borrow and not pay it back because infinite growth will allow us to make the payments. Non renewable resources are finite and we are already consuming renewable resources at a rate greater than the planet can replace them. It defies logic.
"Never trust a man without a single redeeming vice" WSC

Offline waldo

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Re: Economics Culture
« Reply #97 on: March 09, 2020, 12:06:30 pm »
I read it. It says the government has no fiscal obligation. I agree. He doesn't say it has no moral obligation to not stick future generations with the burden of debt accumulated today. Apparently you feel there is no such obligation. **** em, I got mine.

it says nothing of the kind! Read it again...

Offline waldo

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Re: Economics Culture
« Reply #98 on: March 09, 2020, 12:13:11 pm »
"In the long run, fiscal policy is sustainable if it stabilizes the ratio of debt to GDP" --- says the guy who won some kind of Nobel thingee for Economics!


Offline wilber

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Re: Economics Culture
« Reply #99 on: March 09, 2020, 12:17:49 pm »
it says nothing of the kind! Read it again...

Maybe you should read it, particularly the last line.

He is wrong about that as well. In the early nineties the federal government ran into a fiscal obligation it couldn't ignore. His field may be economics but history definitely isn't.
"Never trust a man without a single redeeming vice" WSC

Offline wilber

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Re: Economics Culture
« Reply #100 on: March 09, 2020, 12:31:32 pm »
"In the long run, fiscal policy is sustainable if it stabilizes the ratio of debt to GDP" --- says the guy who won some kind of Nobel thingee for Economics!



Read it yourself, he is talking about a "hypothetical economy"  and the "arithmetic of debt in a low interest economy".

Debt to GDP will take a real hit this year as blockades and Covid-19 will ramp up deficits while kicking the crap out of GDP. If interest rates were 5% we would be getting crushed.
"Never trust a man without a single redeeming vice" WSC

Offline waldo

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Re: Economics Culture
« Reply #101 on: March 09, 2020, 12:51:01 pm »
... "hypothetical economy"  and the "arithmetic of debt in a low interest economy".

to feed your debtHawkishness, what hypotheticals are you presuming upon? Or do you just have a... feeling?  ;D

Q/A with that Nobel guy:

Offline wilber

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Re: Economics Culture
« Reply #102 on: March 09, 2020, 12:58:32 pm »
to feed your debtHawkishness, what hypotheticals are you presuming upon? Or do you just have a... feeling?  ;D

Q/A with that Nobel guy:


He used the words "hypothetical economy" numb nuts. Don't you read what you post?

Again, none of this works without infinite growth. Do you think infinite growth is a realistic expectation?
« Last Edit: March 09, 2020, 01:05:50 pm by wilber »
"Never trust a man without a single redeeming vice" WSC

Offline ?Impact

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Re: Economics Culture
« Reply #103 on: March 09, 2020, 01:06:06 pm »
I'm not saying we should never borrow money, I'm saying we shouldn't do it with the intention of never paying it back. Which is what we are doing
now and what this debt to GDP con is all about.

The target of slowly reducing the debt:GDP ratio is not a con, it is responsible fiscal policy. The con is selling off revenue producing assets at firesale prices to produce a fake surplus.

Offline wilber

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Re: Economics Culture
« Reply #104 on: March 09, 2020, 01:14:34 pm »
The target of slowly reducing the debt:GDP ratio is not a con, it is responsible fiscal policy. The con is selling off revenue producing assets at firesale prices to produce a fake surplus.

Who is talking about selling off assets? It's funny you bring that up because when people talk about net debt to GDP, that is exactly what they are talking about, debt after government sells off all its assets.

Again, you are depending on infinite growth in order to support infinite borrowing. Do you think infinite growth is a reasonable expectation on a planet where it is uncertain the present economy is sustainable in the long term, let alone infinite growth?
"Never trust a man without a single redeeming vice" WSC