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World News See other World News Articles Title: Canada's Debt Spiral: Does Justin Trudeau Live In An Alternative Reality? Living beyond our means requires us to borrow money to cover the difference between our income and our spending. Many Canadians now understand the financial consequences of this practice and regret the choices they’ve made. Unfortunately, Prime Minister Trudeau is not one of them, as evidenced by his government’s budget deficits which are further eroding the financial wellbeing of Canadians. He has broken a campaign promise, ignored basic economic principles, and seems hell-bent on setting an ignominious record. According to the Fraser Institute: "Justin Trudeau is the only prime minister in the last 120 years who has increased the federal per-person debt burden without a world war or recession to justify it." The Broken Promise The Liberals had won the 2015 federal election with a pledge to run annual shortfalls of no more than $10 billion over the first three years of their mandate, and to eliminate the deficit by 2019-20. The deficit for 2016-17, Trudeau’s first full fiscal year, was $17.8 Billion. The forecast for 2017-18 is $19.9 Billion, and for 2018-19, the forecast is $18.1 Billion. And now, from the government’s 2018 budget, we read this: While austerity can come from fiscal necessity, it should not turn into a rigid ideology about deficits that sees any investment as bad spending. The government says deficits are economically beneficial, and compares deficits to loans taken out by entrepreneurs and business owners. But here's the rub: in order to spend, the government must first raise money by taxing or borrowing (deficits). This deprives the private sector of money which would otherwise be available for businesses to borrow and invest in new production, thereby creating jobs and raising our standard of living. Moreover, government ‘borrowing and spending’ imposes a financial burden on future taxpayers who must pay pay back both the loan and the interest payments. In contrast, repayment of private business loans imposes a burden on the entrepreneurs — and because entrepreneurs are held personally liable, they are incentivized to be prudent decision makers. Politicians, on the other hand, lacking personal liability, tend to be fickle, reckless, arbitrary, and wasteful. Why Government Spending is Bad When a private business earns a profit by converting various resources (labour, raw materials etc.) into products which consumers voluntarily buy, this means it has made efficient use of the resources. Wealth is created. In contrast, a private business incurs losses when it fails to persuade consumers to voluntarily buy its products, which means it is wasting resources. If the firm cannot improve, it will discontinue operations, thereby conserving resources for entrepreneurs who can use them efficiently. Economic progress (wealth creation, rising living standards) comes from efficient allocation of resources through profitable enterprises, where consumers determine what gets produced. These are the basic economic principles which Justin Trudeau ignores. Politicians can pander to special interest groups because profit/loss calculations do not exist within government. This prevents consumers (taxpayers) from expressing their preferences as they do in the marketplace, where they "vote with their dollars." The government forces taxpayers to subsidize whatever it supplies, at a price it dictates, whether we want it or not. Thus, the government’s coercive taxing and spending tends to waste resources, which is economically counterproductive. And, as noted earlier, government spending reduces private investment. As Charles Lammam and Hugh MacIntyre wrote in the Financial Post (emphasis added): business investment in Canada has declined by a staggering 18 per cent (after accounting for inflation) since the end of the third quarter of 2014." Crucial to any plan to improve our country’s long-term economic prospects is encouraging private-sector investment, innovation and entrepreneurship … on this front, federal policy choices have been counterproductive. And Morneau’s fiscal update makes clear that the government will continue to run persistent deficits and rack up more debt, which signals potentially higher taxes in the future (since debt is simply deferred taxation), creating yet more uncertainty today among investors and entrepreneurs. … 64 per cent of CEOs said Canada’s investment climate had worsened in the last five years, noting growth in the tax and regulatory burden. Poster Comment: Our population is 11 times theirs so we are worse off. Our deficit was $668 billion for the whole of 2017 but was $598 for the first 6 months of 2018. Canadian household debt is greater than their GDP. That is worse than America. The difference is that we get to print money and buy things overseas for free. That is until the dollar is dumped. Then we will be hurting. Prices would double overnight. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: Horse (#0)
Yes -- a totally unreal one. With the rest of liberaldumb worldwide. _____________________________________________________________ USA! USA! USA! Bringing you democracy, or else! there were strains of VD that were incurable, and they were first found in the Philippines and then transmitted to the Korean working girls via US military. The 'incurables' we were told were first taken back to a military hospital in the Philippines to quietly die. – 4um
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