Friday, January 30, 2009

Lump of Coalition

Don't you find it interesting how quickly the Liberal/NDP/Bloc coalition was put together and then how quickly it was torn apart?

Yet when it was alive, Bloc leader Gilles Duceppe said, just last week, that it was "stronger than ever".

When the federal budget was released, NDP leader Jack Layton said a coalition gov't would better address the needs of Canadians.

Really, Jack? Or should we call you Jack Shit from now on?

Hmmm... how quickly you released radio ads attacking your former ally, Liberal interim leader Michael Ignatieff, you know, the one who would have given you a cabinet post. Must have had those ads ready for proofing around the same time you said a coalition gov't would work better together.

And Jack says at every turn that Prime Minister Stephen Harper can't be trusted?

Riiight.

Put a lump of coal into the coalition kettle and let's call it black, shall we?

Wednesday, January 28, 2009

"The Coalition is dead." Long live the coaltion!

“The coalition is dead. It's finished. It's over,” said [Bloc Quebecois leader] Mr. Duceppe.
Just last week, Duceppe said, "The coalition is stronger than ever." What happened?

Now that the Liberals are "reluctantly" supporting the budget (as predicted), NDP Leader Jack Layton now says he can't trust Liberal Leader Michael Ignatieff. (Does Layton trust anybody anymore? Sour grapes?)

Ok, so what does this mean now?

It means the Conservatives will be in power all year long, propped up by the Liberals, as Ignatieff wants regular budgetary updates from Harper.

It's too bad. I wished Harper and Flaherty would have soured the budget enough so that the Liberals couldn't support it and possibly force an election in which the Conservatives would have a better chance at winning a majority against the notion of a separatist-Coalition.

And that's why the Liberals dumped Dion so quickly and put in Ignatieff. Although they all signed that coalition promise document for the Governor General (including Ignatieff), it really wasn't binding after the prorogue anyway.

I don't think though, that Ignatieff has said anything significant to win over soft-conservatives. In fact, I think this budget really strattles the middle, forcing to push the opposition Liberals to the left more because, well, they have to oppose something!

If there weren't any middle class tax cuts, it would just be like a Liberal budget ... or heck, a coalition budget. Earlier in the month though, Ignatieff was FOR a middle class tax cut, then hearing that it would be in the budget, scrapped that idea and said he was against it.

Harper's long time goal is to replace the Liberals as the natural governing party. Every political move he's made is indicative of that strategy.

Now the question is, does Stephen Harper want to REPLACE the Liberals, or BE like them?

Except for the middle class tax cut, this budget makes me think so.

So while the old Liberal/NDP/(Bloc) coalition is dead, a new one begins, but it's really the old old one when Dion was leader of the Liberals.

So now we simply wait until Michael Ignatieff rebuilds the Liberal party until he's comfortable fighting an election .... and we'll wait ... and wait...

Long live the coalition!

Tuesday, January 20, 2009

O


Got a fuzzy feeling inside? Yeah, me too.

Friday, January 16, 2009

The case for and against a deficit

Few people can outright buy a house or a car, which is why they take out a mortgage or a loan. The beauty of a house is that it usually increases in price so in a sense the mortgage is you paying yourself and increase in value is above the interest you pay to the lender. Owning a home is a good investment as it becomes the most significant part of your assets which you can also use to lien against later on in a reverse-mortgage for retirement, renovations, or what-have-you. Not only do you own the house, but the property as well, which alone, has value.

A car, however, usually depreciates. Cars are not a good investment, unless it's for business purposes. With fuel, insurance, repairs, maintenance, it's a burden. But soooo worth it at times. When fuel was above $1.40/L, it was cheaper to fly than drive.

Anyway, my point here is that there's good debt and bad debt. Sometimes it's good to buy something now while it's cheaper than later.

In the case of government, the sooner we spend on infrastructure, roads, and transit now, even by going into debt, it's actually much cheaper. I could give you numerous examples, especially in Edmonton where if they spent now, the project would be done and the city would have saved money in the long run. But they don't and construction and labour costs go up and up costing much more later on.

So with the current federal budget reported to have a $40 billion deficit (!), a lot of this is supposed to be economic stimulus in the form of targeted tax cuts, bailouts (loans?) to specific industries, and massive infrastructure spending.

I am all for the infrastructure spending as I mentioned. This will actually save us cash in the long run because the longer we wait, the way more expensive it gets and this country needs a big injection. It appears that there are a lot of project where the federal government is involved and this is a good thing.

The other reason why there's going to be a big deficit is that tax revenues are decreasing. While unemployment is between 6 and 7 percent, it's not near how it was in the early-mid 90's or early 80's, between 10 and 12 percent. It could be. But the point is that if someone isn't working, the gov't can't collect payroll, EI, or income taxes. Plus the person isn't spending as much, so there's no GST collected.

And it's this reason why the gov't doesn't want to see so many autoworkers without a job right now, so that's why they're helping GM and Chrysler.

But I will say this again, and I keep hearing intelligent economists saying that what we need to do is be spending more on higher level training and education and get our economy not so dependent on manufacturing, such as auto. Basically, invest in people. There's still lots of job shortages in key areas of I.T., health, accounting, and other areas. There's a reason for that. Our economy is demanding it.

What's appearing obvious to me now is that the government, whether Conservative or Liberal, Bush or Obama, are seeing where the free-market system works and where it doesn't work as well. They see that jobs are the key component and having credit and money flowing through is important.

In the end though, I don't see how a $40 billion change in Canada or a $825 billion change in the U.S. is actually going to make a huge impact on the economy in the long run.

What it's going to do is make us all dependent on the gov't when things go awry rather than take our own personal responsibility for it.

And it's amazing how we didn't learn that 75 years ago.

Let's just hope this deficit is temporary and the way out of it is for the gov't to cut its own useless spending, sell off useless assets, just like the rest of us regular folk have done.

Friday, January 09, 2009

Deficit Spending

It appears the upcoming federal budget is going to have everything in it--infrastructure spending, bailouts, tax cuts, retraining programs, etc. to try and boost the economy. Will it help? A little, but it won't cure it.

The tax cuts won't have effect on the economy until a few years later as folks will likely pay off their own debt and save a little to put into the new Tax Free Savings Account, but I'll take what I can get.

To me, the most imporant part is the retraining aspect as job losses are increasing and people need to get into sectors that have better job stability. I think eventually, Canada has to move its manufacturing out and replace with more stable, long-term jobs and this is done through accessible education and training.

Anyway, I thought the budget was going to be a modest one, with a slight deficit, and with a spoiler to have the Liberals vote it down and likely force an election which Harper could win a majority. But it appears newly anointed (read: 'not party elected') Liberal Leader, Michael Ignatieff, will probably have his caucus support it, basically killing the coalition. Aw darn.

However, with regard to deficit spending rumoured up to 30 billion, I have this to say (which I've been saying for years)...

If there are direct income tax cuts in this budget, then I could care less what the deficit is. Canadians have their own bills to pay and have been cutting their own expenses, using credit cards, getting loans for decades to get by. I'm mostly talking about low to middle income folks here who are taxed to the gills.

And if the gov't wants to get out of deficit, they'll have no choice but to sell off useless 'assets' like empty buildings, cut waste and improve departmental efficiencies.

This is really too bad as it appears they'll be deficits for the next several years, completely negating the paying down of debt and freeing up money from debt interest payments, which still makes up the largest piece of the budgetary pie.

Unfortunately, because Canada's gov't is one of the biggest in the world per capita, even ever since we've been in the black for the past 12 years, they only got to pay about a third of the debt down, because they were still increasing spending, although their tax revenues shot up.

So I'm glad both Harper and Ignatieff agree on tax cuts. In fact, they seem to be agreeing on a lot of things, including deficit spending.