Board of trade president Sharon Horan wrote in her Telegram column last weekend that the unfunded pension liability will make up 85% of the provincial government’s debt not to long into the future. That will be up from the 75% of the public debt it makes today.
There you have proof that even the president of the largest business organization in the province does not understand the first thing about the state of the provincial government’s finances.
Public debt is a really basic idea that you have to know if you want to understand public finance. And you need to understand public finance if you want to have a useful say in how the government is running things. That’s what the folks at the board of trade want to do, one would expect.
And yet Horan got it wrong.
Not a mere technicality.
But dead wrong.
So if the . . . → Read More: The Sir Robert Bond Papers: Budget basics: debt #nlpoli
The Toronto Star just published an article I wrote in response to claims made by the Fraser Institute and the Toronto Sun that Ontario has a runaway debt problem worse than California’s.
The short version: I call BS. The slightly longer version: California has constraints, such as limits on the size of debt and difficulties in raising new taxes, that have severely hampered its ability to take on and manage debt. It has a smaller debt than Ontario on all measures but much worse credit standing. Ontario, on the other hand, still has a lot of flexibility to deal with (Read more…)
Today’s National Balance Sheet Accounts indicate that the amount of cash held by private non-financial corporations in Canada soared from $591 billion in the third quarter of 2013 to $626 billion in the fourth quarter of 2013. Corporate Canada’s accumulated stock of cash now exceeds the federal government’s accumulated deficit, which was $612 billion at the end of 2013.
Corporate Canada’s cash stash had been on track to exceed $600 billion at the start of 2013, but Statistics Canada narrowed its definition of “total currency and deposits.” Even under the new definition, this hoard of dead money surpassed (Read more…)
Numbers season is over but good inequality data is still missing. January sees us regularly bombarded with a whole range of economic statistics about the previous year. GDP growth: likely 1.7%, low but looking brighter for next year. Unemployment: 7.2%, low but lots of workers leaving the job market altogether as the employment rate stagnates. Inflation: 1.2%, low but deflation risks under control. “Low, but” is the theme of the year for the average Canadian. For the super-wealthy, however, the story is quite different. Indeed, if Canada had an official Luxury Index or reliable data on inequality, (Read more…)
Yesterday, I gave a pretty harsh critique on the self contradicting core conservative talking point of cutting debt and taxes to create jobs. What I argued was that if your vision is a dramatic reduction in the size and scope of government, then be honest about it and run on that. People will approve or they won’t, but don’t dress this up as being able to magically reduce the debt, cut taxation, and increase jobs simultaneously as if there are not contradictory trade offs to each of these.
So what about the left? Is the left similarly about a (Read more…)
“Privatizing gains and socializing losses” could be the motto for the neoliberal era. Alongside this and “there is no alternative”, few slogans better capture the ideology that has been so successfully diffused throughout the world over the past several decades.
Five years after latest financial crisis, this motto rings true as ever. To say that the losses stemming from the crisis were large is a heroic understatement; indeed, not only were they humongous, their exact size remains a tad fuzzy. Meanwhile, across the world in the aftermath of the crisis, stock markets have rebounded, wealth and income inequalities have grown (Read more…)
Virtually all incidences of modern Conservatism – Canada and the US, federally, state/provincially and municipally, from politician to politician – has a consistent central theme. Campaign planks comes and go, but this is the frame of the Conservative movement. It is also a lie, known by all who say it to be false, and at best a sort of spun half truth used for partisan gain. I’ll let the Ontario Tories’ big new Million Jobs Act talking point number one be the choice example of this theme: “Reduce debt and taxes to encourage employers to hire and to signal to (Read more…)
Imagine an eco-community of micro-homes designed as a first step out of homelessness.
Housing, easy to get into, if people care. Occupy Madison in Wisconsin has come up with an innovative first step of a solution [see below].
These 96 square foot homes are no long term solution, at all. But if you’re struggling to get some stability in your life and you’re homeless, it’s that much harder. Just having a roof over your head can give you warmth and a good night sleep to help you be more capable of doing everything else you need to improve your life.
This is the third and final post in what has become a three-part series on the puzzle of high profitability and low investment in the Canadian economy. In the first part, I looked at some data that shows the existence of the puzzle and explored a few of the factors that could be behind it. The follow-up post outlined broadly Keynesian and Marxian solutions aimed at raising investment: the former based on stimulating demand, the latter on eliminating overcapacity and increasing the relative profitability of productive capital. Here, I want to continue the thoughts that concluded the second part, (Read more…)
The following article was written on October 25. I wanted to read it over once more before publishing it, then got busy with other things and forgot about it. In the roughly six weeks that have passed since the writing of this article, the Bitcoin prices have gone from roughly $200 to over $700. There […]
Warning: A wonky, but thankfully short, post follows.
Yesterday, the Naked Capitalism blog reposted some recent research by OECD economist Eduardo Olaberria that looks at the effect of capital inflows on bubbles in assets, particularly housing. With so many other signs of a housing bubble forming in Canada, I decided to quickly see if the dangerous trends highlighted in this report are present in our economy today.
First, a quick recap. Several previous studies have found the same correlation between capital inflows and housing price booms; however, they merely used the current account balance (the measure of whether a (Read more…)
Debt and Deficit as Shock Therapy » CounterPunch: Tells the Facts, Names the Names.
When Naomi Klein published her ground-breaking book The Shock Doctrine (2007), which compellingly demonstrated how neoliberal policy makers take advantage of overwhelming crisis times to privatize public property and carry out austerity programs, most economists and media pundits scoffed at her arguments as overstating her case. Real world economic developments have since strongly reinforced her views.
Using the unnerving 2008 financial crash, the ensuing long recession and the recurring specter of debt default, the financial oligarchy and their proxies in the governments of core capitalist countries (Read more…)
Activist and art professor Max Haiven recently delivered a TED talk at TEDxNovaScotia titled “>The Debt of Creativity, in which he elaborates on the ideas he discussed in his essay Privatizing Creativity. It’s worth 15 minutes of your time to tune in.
Image: A Debtors’ Prison — William Hogarth.
Sometimes Question Period is downright funny. Witness this exchange on the provincial debt between Opposition Leader Danielle Smith and Premier Redford.*
Ms Smith: In Medicine Hat earlier this month the Premier said this about debt: it’s not debt; it’s hope. So let’s take some of the Premier’s other quotes and sub in “hope” for “debt” to see if that sentence makes sense. First: Alberta does not have hope, and we will not incur hope. Then there’s this: we cannot come out of the current fiscal situation with hope. And a PC campaign ad: Albertans want to know that (Read more…)
Indebted States of America by Maine artist Eric Leppanen is created with 169 of his own credit cards, collected over the past 23 years, adorned with the 50 U.S. state quarters and framed in gold leaf.
“It speaks to the marketing of ‘Big Banks’ to indebt Americans with bait and switch tactics and easy/free money,” explained Leppanen in an email. “The last 20 years of credit card marketing has fueled the economic boom, collapse and enslavement of millions and our own government is a shining example for all of us to follow.”
“After 16 years working for Bank (Read more…)
While this was written by Cicero in 44 BCE, after the assassination of Caesar and a year before Antony had Cicero murdered, the sentiment can be heard in today republicans–particularly those associated with the Tea Party. Any attempt at redistribution, according to Cicero, threatens the very foundation of the republic, which, he points out, was instituted to protect the sanctity of private property:
‘Those who wish to present themselves as populares, and for that reason attempt agrarian legislation so that landholders are driven from their dwellings, or who think that debtors ought to be excused from the money that (Read more…)
I’m not sure what to make of the hoopla going on in the US right now. I’m inclined to think it’s all just political theatre, as Gerald Celente calls it, designed to distract the people from the real issues – the central one being, who controls the government and the nation? Wall Street, the big […]
This comic does in one cartoon what the first chapter of Debt, the First 5000 Years does (pretty well) in one chapter. Alltop is a macro-humor generator.
This week’s TED Talk features Adam Baker, founder of ManVsDebt, a blog which focuses on a simple message: The first step to living a life of passion and purpose is to remove the barriers that hold you back. It sounds like good advice to me! * ManVsDebt.com
Brazil has announced that they will essentially “write off” about $90 million in debt from African nations. This is for helping the countries alleviate their huge levels of debt while helping create stronger economic ties between Brazil and their indebted partner nations.
“To maintain a special relationship with Africa is strategic for Brazil’s foreign policy.”
He added that most of the debt was accumulated in the 1970s and had been renegotiated before.
A spokesman for Brazil’s Foreign Ministry told Efe news agency that the debt restructuring for some countries would consist of more favourable interest rates and longer repayment (Read more…)
They’ve haunted me. Incessantly. The ghosts of Reinhart and Rogoff. Their research here, there, everywhere.
Bank of Canada speeches? Yes. Finance Department talking points? Check. House of Commons debates? Yup. Globe editorials? Ditto. Discussions with fellow progressives? Sadly, yes.
Results? Arguments conjured in their name. Reason decapitated. Modern Monetary Theorists (MMT) banished to the netherworld of cranks.
But we told you so. We told you so**:
Randy Wray, writing a little more than a year ago, called them out, saying: “One hopes that the database they have assembled might provide more detail. . . . → Read More: The Progressive Economics Forum: Beating Back the Ghosts: Be Gone Appeals to Reinhart and Rogoff Authority. Welcome the Triumph of Reason.
Please see today’s Vancouver Sun — or click here — for my latest letter to the editor. This one is about BC Premier Christy Clark’s efforts to raise government revenue via liquefied natural gas production. As regular readers might expect, I am not exactly on board.
Assorted content for your Sunday reading.
- Joseph Stiglitz discusses how the U.S.’ extreme inequality is limiting its prospects for economic recovery: There are all kinds of excuses for inequality. Some say it’s beyond our control, pointing to market forces like globalization, trade liberalization, the technological revolution, the “rise of the rest.” Others assert that doing anything about it would make us all worse off, by stifling our already sputtering economic engine. These are self-serving, ignorant falsehoods.
Market forces don’t exist in a vacuum — we shape them. Other countries, like fast-growing Brazil, have shaped them in
. . . → Read More: Accidental Deliberations: Sunday Morning Links
Many scoff at the conservative analogy that the American government should manage its finances like a household, but little do they realize the idea doesn’t strengthen conservativism, it weakens it.
After a fiscal cliff deal that only increased taxes, many right-leaning politicians are preparing for a fight in order to cut spending. To bring the budget debate of Washington to the kitchen table of American families, many fiscal conservatives are comparing government finances to those of a household, progressives should not just let them, but they should do the exact same thing.
Democrats shouldn’t fight this nation-as-a-household analogy, they should
. . . → Read More: The Scott Ross: Your Country’s Finances Are Exactly Like Yours