Andrew Coyne has done a lot of homework with this piece in Macleans. My head started reeling trying to grasp how Coyne would have the Harper govt underspend and then overspend or perhaps it is first overspend and then control the spending or maybe it's first let the stimulus work a bit and then keep a steady increase or maybe it is stop spending so much altogether so we can erase the deficit by 2014 or maybe ... anyway I am sure all you math wizards will understand exactly what he means and how he thinks it should be done. I gave up after the first few paragraphs, I am not ashamed to say.....Suppose we were to try to erase the deficit in four years, that is by fiscal 2014. The timetable seems reasonable, as that is the period over which the Parliamentary Budget Officer reckons the cyclical component of the deficit would have been retired by economic growth, leaving only the structural component, which he estimates at $19-billion. So to wipe that out without raising taxes, the government would need to cut about $20-billion out of spending — not from this year’s projected total of $273-billion, but from spending in 2014, projected to be $296-billion. (Where did I get that number from? See page 22 of the September fiscal update, where the government’s five-year spending track is laid out.)
For simplicity’s sake, assume there is nothing we can do about the government’s biggest single spending program, interest payments on the debt — forecast to explode from just under $31-billion this year to $42-billion in 2014. So that means we have to cut $20-billion out of $254-billion in program spending. The $234-billion target that implies is $8-billion less than we’re on track to spend this year. Sounds tough. But this year’s figure is inflated by the enormous surge in one-time spending rushed out the door in the name of stimulating the economy. A better comparison would be with last year’s total of $208-billion. The 12.5% increase in spending this implies between 2009 and 2014 is just slightly more than the combined increase in prices (6.1%) and population (5.3%) projected over the same period....
As one of the small number of Canadian degree holders in Mathematical Economics, this doesn't make much sense to me. It is all based on a unpredictable prediction of tax receipts. If oil goes up to say $110+ per barrel, the Government of Canada is unlikely to run a deficit.
ReplyDeleteThis vapid character can be best described as the King of Windbaggery. Reading his guff is like listening to the mind numbing white noise while being immersed in dense fog.
ReplyDeleteEvery muttering of the CBC's "Made for TV" Conservative is designed to undermine the real Conservatives and to get the Grifter Party of Toronto back in power. Every one of his ideas are designed so as to insure that the Conservatives don’t get re-elected.