Budget 2010: Time to Cut or Continue Pump Priming?
January 22, 2010 by admin
Filed under Feature, Of interest
Budget 2009 was the first in decades designed to stimulate the economy out of recession through heavy government spending and budget deficits. It was broadly consistent with Keyensian economics and the actions of virtually all major industrial economies.
In recent weeks, the federal government has been signaling that Budget 2010, to be delivered on March 3, will mark the beginning of a period of fiscal retrenchment, the assumption being that the economy does not need further stimulus and is starting to grow on a sustainable path. The basic policy posture of the federal government appears to be shifting away from macro economic stimulus toward several years of cuts in spending to reduce/eliminate the deficit.
Yet there are continuing signs, particularly in the labour market, that the Canadian economy remains fragile. This is also true in the US and other large economies which have a direct bearing on Canada’s growth performance.
On the eve of another important budget that could set the fiscal policy framework for the federal government for years, Canada 2020 will host a panel discussion of leading economic thinkers. They will address the broad question of whether now is the right time for fiscal restraint, or whether further stimulus should be contemplated. Will cuts in government spending in 2010 potentially hinder the economic recovery? Or is the economy growing at a sustainable rate on its own?
The panel will be moderated by award-winning journalist Don Newman.
Panelists
- Avery Shenfeld, Chief Economist, CIBC
- The Hon. John Manley, President, Canadian Council of Chief Executives
- Scott Clark, President, C.S. Clark Consulting (former Deputy Minister of Finance)
- Kevin Page, Parliamentary Budget Officer
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The poll question does not mention some needed wealth tax increases. interesting.
mk
Excellent presentation on our economic situation and possible solutions. All the speakers were great, and very articulate, and clear thinking.
I would like to add my thoughts:
1) Although the debt/deficit has been worse in past years, I believe it is important for the government to tackle and reduce debt, with the goal to get in the surplus position the previous liberal government left Canada in.
2) The present government position, as expressed by it’s finance minister appears to be a hide your head in the sand attitude. As well, it is a dishonest position being taken re the countries financial situation.
3) The number one idea coming from this presentation for me is that open and honest dialog is needed across the land to arrive at the correct solutions to the debt/deficit; and then to implement the solutions.
4) I believe the federal, and provincial, governments indeed need to be part of the solution; and if presented properly, Canadians are prepared to pay for the services we need and desire; like health care, improved education possibilities, child care, funding of OAP and CPP, the arts, sports, culture, etc. If increased taxes is the route that must be taken, then Canadians will pay, provided they can be confident the money is well spent. We all too often hear about waste, rather than smart spending.
Thanks.
Jim
What a facinating informative two hours. How wonderful to hear an adult conversation about where we stand economically. If only our government could treat us as mature adults and have these discussions instead of painting some rosey fairytale with no expectation of success. Thank you gentlemen for your insight and participation at this critical time in our history.
Denyse Mouck,
Stirling, Ontario
Happenstance, brought me to CPAC this afternoon. Enjoyed every Q & A and personalities. For this WW11 woman Veteran, ardent feminist etc. The gentleman at mike with snide remark about ‘liberal’ thought that encouraged women to not produce babies had me sitting up, rigid. Women love to have babies, some go to great expense to get/have them. Alas, as I looked at the participants not a female among all the ties. Talk about punishing the producers, unlike ‘goods’ producers with the ever-decreasing corporations taxes (hidden,public, or harmonized), baby producers get short shrift. First make it difficult for them to profit from their education, talents and energy in the workforce because of total lack of public child care facilities and trained child educators in them amd work for eual value. I recall, out of a common wage income 2/3rds of the equivalent male wage, Revenue Canada did not even allow a deduction of child care expenses (usually a local neighbour the child carer) whereas a workman could claim his boots! Things have changed slightly, but obviously if Nations want to preserve their ‘identies’ in the free world (ie democracies) they had best look to nurturing, appreciating, and even coddling their well-educated, energetic, baby producers. Boy, the future population would be something to behold.
I agree with Maijas Kagis. Why was there no mention of tax increases in the “Poll if the Week”?
As mentioned by Mr. Clark during the presentation there’s only two things that can be done to deal with a deficit: cut spending or increase taxes. Without acknowledging both options the poll loses focus.
Also, when will this video be available online here?
This was a very worthwhile panel. Despite the current Deficit concerns, Canada is very well off fiscally compared to most G-20 nations.
But, it is unfortunate that the political parties have not agreed (on a non-partisan nature) to an informal scheduled retirement of the National Debt. Even if the huge sum of $10 billion was applied against it annually, it would take three generations to pay off the sucker. This is an unacceptable and unconscionable burden to place on our children, grandchildren & great-grandchildren.
It could be worse: Americans are on track to build up a $60 Trillion Nat’l Debt over the next 30 years!