# Laytons Credit Card Interest Cap



## LondonHomes (Dec 29, 2010)

I'm surprise there has been no Federal election thread on this forum so far. But with Layton on the rise in the polls it's possible that some of his policies could make it into law in a minority government.

I was wondering what people here thought of Laytons proposal to cap interest rates on credit cards.

When I first heard the proposal my thought was it was another example of "terrible policy but it's great politics".

As politics it's great, typical Layton it appeals to the people that I'm going to do something about these evil banks and it will save you money.

However it is my understanding that interest rates on credit cards are high because they are unsecured credit with a high rate of default. If the interest rates where capped as Layton proposes I would see that:

1) Credit card companies would immediately cut the credit limits on most cards.
2) A lot of people would have their current credit cards cancelled.
3) It would become a lot harder to get a credit card in the future.
4) An increase in annual fees and other fees on credit cards.

Of course with less credit available less people may over spend in the future which would be a good thing. But in the short term the response of the credit card companies could put the squeeze on a lot of people who would need to come up with the money to pay off their existing credit card balances.

What are your thoughts? Is my scenerio out to lunch?


----------



## Square Root (Jan 30, 2010)

I think you got it exactly right. A typically stupid proposal from the NDP.


----------



## the-royal-mail (Dec 11, 2009)

Correct. For every type of legislative action like this, there is a reaction by the company and that reaction never benefits the end users. It's just something to attract attention during a campaign. If the NDP really wanted this they would have done it by now. They've had numerous opportunities as they have been a sitting party for a very long time.


----------



## HaroldCrump (Jun 10, 2009)

LondonHomes, I had considered starting a thread on this topic but did not, lest I get accused of mixing politics with finance, which I am often guilty of 

Anyhow, my thoughts are that it is stupid, misguided and very typical of an extreme left winger totally divorced from reality.

Just consider some of their other proposals and you will see the logic : double CPP, double GIS, double corporate taxes, tax the energy companies to death, etc.

They are simply a band playing to the misguided voters that hate corporations, hate capitalism and hate the fact that they are not entitled to the same things that "the rich" are.


----------



## CanadianCapitalist (Mar 31, 2009)

I took a look at the NDP platform last night (here I should disclose that I'll likely never vote NDP) and there are more gems in it:

- Increase CPP payments with a goal of doubling it. Who is going to pay for it?

- Increase in EI benefits combined with a reduction in qualifying criteria. Who is going to pay for it?


----------



## HaroldCrump (Jun 10, 2009)

CanadianCapitalist said:


> - Increase CPP payments with a goal of doubling it. Who is going to pay for it?


Simple - the currently employed workers.
The contribution rate would be correspondingly jacked up.


> - Increase in EI benefits combined with a reduction in qualifying criteria. Who is going to pay for it?


Umm...the ones that are still employed.


----------



## LondonHomes (Dec 29, 2010)

HaroldCrump said:


> LondonHomes, I had considered starting a thread on this topic but did not, lest I get accused of mixing politics with finance, which I am often guilty of


It's election time, so it's current events that mix politics with finance!

I have been surprised that there haven't been any other threads so far that discuss the financial impact of the various policy proposals since some of them could have a far ranging impact on Canadian Money.

It is interesting so far that the responses have just panned this policy. There is normally good debate on all sides of an issue around here. I figured that somebody would advocate for credit card fee caps. The fact that nobody yet has speaks pretty loudly.


----------



## HaroldCrump (Jun 10, 2009)

LondonHomes said:


> The fact that nobody yet has speaks pretty loudly.


Why is it that Mr. Layton is so charged up about capping credit card fees, yet has never once thought of capping the salaries of the politicians?
I think that will have a bigger impact on the financial health of all ordinary Canadians rather than his other inane proposals.


----------



## Lephturn (Aug 31, 2009)

The recent run-up in the polls by the NDP is forcing my hand now. I can't risk somebody with these kinds of policy "ideas" being the Prime Minister - and if the current polls are even close that could easily happen.

Implement even one of these policies and the negative impact on retirement funds across the country would be horrible. Large pension funds, mutual funds & ETFs of individual investors, and CPP would get hammered.

Hmmm. I need to make sure I have protection in place for all my canadian equities since it is looking right now like could wind up the leader of a coalition government. Scary thought!


----------



## HaroldCrump (Jun 10, 2009)

Lephturn said:


> The recent run-up in the polls by the NDP is forcing my hand now. I can't risk somebody with these kinds of policy "ideas" being the Prime Minister - and if the current polls are even close that could easily happen.


I have already done the only thing I could to prevent such an outcome by advance voting - not much else I can do.
And I agree....that prospect is now looking more and more likely.
What a disaster it's shaping up to be.


----------



## andrewf (Mar 1, 2010)

Jack would need to get a majority to enact this policy. Both the Liberals and the Conservatives would veto it.


----------



## Helianthus (Oct 19, 2010)

CanadianCapitalist said:


> - Increase in EI benefits combined with a *reduction in qualifying criteria*. Who is going to pay for it?


Not only there is the question of who is going to pay for it, but I can't fathom why they would want to reduce the qualifying criteria. I've watched numerous people milk EI for months on end, only to blow it on alcohol and banned substances because they didn't actually need the assistance.


----------



## HaroldCrump (Jun 10, 2009)

andrewf said:


> Jack would need to get a majority to enact this policy. Both the Liberals and the Conservatives would veto it.


It is very likely that the Liberals would support the NDP if such a scenario pans out.
If the NDP emerges as the second largest party after the PCs, the choice for the Liberals is obvious : either support the PCs or the NDP.
I don't think there's any doubt which one they'd pick.
And that would clear the way for Mr. Layton to be PM.

I doubt the Liberals will veto any of the populist NDP policies, like the doubling of EI, doubling of CPP, capping credit card fees, etc.

The NDP will leave a path of destruction in its wake and once they've run their course (5 years or less), it'll be left to either the Liberals or to PCs to come back and clean up the mess, just like always.


----------



## the-royal-mail (Dec 11, 2009)

Yes, the only way a minority parliament can function is striking deals with the devil.

Bob Rae messed up Ontario pretty good when he was NDP there. He is with the Libs now lol.

NDP = tax and spend.


----------



## LondonHomes (Dec 29, 2010)

HaroldCrump said:


> The NDP will leave a path of destruction in its wake and once they've run their course (5 years or less), it'll be left to either the Liberals or to PCs to come back and clean up the mess, just like always.


I would like to think that the burden of actually having to govern would force the NDP to eject some of there more radical ideas. Similar to what happened in Ontario when the NDP had a surprise victory.

Of course I don't think it would be to the Liberals advantage to support a 2nd place NDP over a 1st place Con government.


----------



## Toronto.gal (Jan 8, 2010)

HaroldCrump said:


> Why is it that Mr. Layton is so charged up about capping credit card fees, yet has never once thought of capping the salaries of the politicians?


Yeah right, like that thought would ever enter the mind of a swindler.  

I voted on Saturday for the same reason you did Harold; I just couldn't wait & feel so much better now, lol.

I think the answer is simple as to why this thread was not created sooner, no one wanted attacks I suppose. 

With respect to capping interest rates on credit cards, not useful at all as no question that many would put themselves into higher debt. Even if limits were to be lowered, some people would still max them out; high interest rates curves temptation IMO.

Mr. Layton's policies are completely irrational. Are we in for a shock on election night?


----------



## I'm Howard (Oct 13, 2010)

The Party represents the ideals of people who vote for it, ad if you are to believe Layton etc, his appeal is geared to people who want more for doing less etc..

Bad Dream, He gets elected and now our Government MP's are people who want something for nothing, where success is a target for confiscation, where the Minister of Finance has a grade 9 education and has been unemployed most of his/her life . 

Canada would be run by Far Left Artsy academics or former union Types, what Rae did to Ontario would pale in comparison, look at England if you want to see the kind of damage inflicted by Socialist Agendas with strong union ties.


----------



## andrewf (Mar 1, 2010)

HaroldCrump said:


> It is very likely that the Liberals would support the NDP if such a scenario pans out.
> If the NDP emerges as the second largest party after the PCs, the choice for the Liberals is obvious : either support the PCs or the NDP.
> I don't think there's any doubt which one they'd pick.
> And that would clear the way for Mr. Layton to be PM.
> ...


I think it's naive to think the Liberals would ever support an NDP minority. It would be the death blow for the party.


----------



## HaroldCrump (Jun 10, 2009)

andrewf said:


> I think it's naive to think the Liberals would ever support an NDP minority.


I sincerely hope you are right.


----------



## Toronto.gal (Jan 8, 2010)

andrewf said:


> I think it's naive to think the Liberals would ever support an NDP minority. *It would be the death blow for the party.*


For once, I completely agree with you.


----------



## Cal (Jun 17, 2009)

A related Garth Turner post done yesterday from www.greaterfool.ca that doesn't have to do w RE. I thought I would post it in reference to Harold's comments above. Seems Harold isn't the only one that could forsee the effects of a minority NDP gov't. I will post GT's comments, politics aside, as they mention his opinion of what this type of gov't could do to our investments, dollar, and economy. (this is an investing site after all)


'Well, almost. Here’s the scenario, according to Ekos Research – Harper 131, Layton 100, Ignatieff 62, Duceppe 14. To govern with a reduced minority, the Conservatives would need the support of either the Libs or the Dippers, since the Blocheads are now a spent force. But, of course, Stephen Harper’s already had a five-year-long chance, so kiss that goodbye.

Infinitely more likely, Iggy eats his ego in return for Liberal cabinet seats in an NDP-led government. The guy with the stick and the stache gets the corner office on the third floor of Centre Block.

A month ago this was unthinkable. A week ago it was merely absurd. But in the wake of abysmal, bereft-of-testosterone, wooden campaigns by the main parties, Layton suddenly smells like the only choice for a lot of people. Especially in Quebec, where separatism’s fini.

But credit where it’s due. Jack Layton, recovering from hip surgery and prostate cancer, has looked like a prizefighter compared to his opponents. He’s connected with younger voters by knowing what a hashtag is, run a far superior campaign to Ignatieff’s and is now benefiting immensely from being the target of attack ads from both the Libs and the Cons. Besides, he’s the little guy – just perfect for a pissy nation.

But what would a Layton-led government do to the economy, housing, jobs and the markets?

Well, here is the NDP platform. As of 8 pm last night, it’s required reading. The Dippers plan to increase federal spending by $9 billion in the first year, then $12 billion and up to almost $15 billion by 2014-5. Big ticket items would include giving $1 billion to small businesses that create jobs, another billion to family caregivers, a billion for childcare, $700 million in removing federal taxes off home energy, $1.3 billion extra for education, and a host of other initiatives.

The green agenda would cost $3.5 billion extra in the first year, and be paid for entirely by a cap-and-trade system. This imposes a tax on emissions, through establishing emission limits by industry. Companies which achieve or exceed targets can sell credits to those who don’t. So, you either comply with stricter pollution guidelines, or you buy your way out of them. This is expected to raise $3.6 billion in year one and $7.4 billion in 2014.

Of course, those cap-and-trade billions have to come from somewhere. That’s corporate earnings. Economists think that will gut job creation. Market watchers think it’ll suck off earnings and crash stock prices. Environmentalists say, thank God. Or Jack. Whatever.

As for those non-green expenditures of $9 billion and up, the NDP would pay for them in two major ways: Raise corporate taxes to 19.5% (that’s an increase of about 18% from current levels), plus end subsidies to oil producers. Together those would bring Ottawa another $8 billion.

Of course, people in the Alberta patch will tell you it would virtually shut down the oil sands. Combined with the emission targets on existing heavy oil producers, they say, it would be lights out for companies like Suncor. At least then this blog would be spared emails from 30-year-old engineers making $170,000 a year in desperate Fort Mac.

So, in summary, the Dippers have promised – if elected government – to spend about $13 billion a year more than now, and to pay for it with $12.6 billion in new taxes in 2011-12, rising to $15 billion in taxes by 2014-5.

Now if this is what most people want, that’s what they’ll get. I’m not being judgmental, because both the Libs and the Cons have let people down dramatically, not only in this campaign but over the last two do-nothing years.

But Prime Minister Jack Layton, even tempered a bit with Liberal partners, would send a signal to the world that Canada has flipped. At a time when governments are trying to cut spending, unshackle business investment, tackle obese deficits, lower taxes and desperately create jobs, we’d suddenly turn into a giant Denmark with too many beavers. And Tims.

Likely results: a big drop in the dollar and a big jump in interest rates. Alberta could be a wilderness park while Ottawa could swell to be a province. And just imagine how all those house-horny Chinese in BC would feel about escaping communism to enter Laytonism.'


----------



## andrewf (Mar 1, 2010)

That Ekos poll is a bit of an outlier. I'll eat my hat if the election turns out that way.

I doubt that the market reaction would be as severe as theorized. A minority can only do so much, and anything really radical would be nixed by the Liberals. I can see the Liberals aligning with the Tories rather than the NDP in that scenario. Allowing the NDP to form government would cement the Liberal defeat and relegation to third party status--they might as well merge with the NDP in that event. Their only hope would be for Jack to blow the NDP apart Rae-style.

The Liberals would be able to get a pretty good policy accord out of the Tories in that event.


----------



## HaroldCrump (Jun 10, 2009)

There is some downside protection from Layton's misguided promises and plans for the simple reason that they can't actually implement many of these promises, not for want of a coalition partner, but simply because they can't.

They will realize within a matter of days after getting into office that a lot of these things are easier said than done.

It is easy to fart around when you are campaigning for an election, rather than actually do things like raise corporate taxes back above 20%, double CPP payments/contributions, impose high penalties on energy companies, etc.

The fear is that they will try, fail, and in the process botch the whole economy and the country.

It is best if they don't even get a chance to try.

I also feel that it is primarily Mr. Layton that is holding the NDP together.
Once he retires (and age is catching up with him, although he's a real trouper), I feel the party will start drifting and eventually wither away into irrelevance.


----------



## LondonHomes (Dec 29, 2010)

Cal said:


> So, in summary, the Dippers have promised – if elected government – to spend about $13 billion a year more than now, and to pay for it with $12.6 billion in new taxes in 2011-12, rising to $15 billion in taxes by 2014-5.


That reads like the first NDP budget in Ontario back in '90. No way would Ontario support that again. I wouldn't be surprised if NDP support in Ontario starts to dropped because of these poll results. Assuming people still remember.

But I do agree that the Liberals would do a deal with Harper before they play 2nd fiddle to the NDP.


----------



## I'm Howard (Oct 13, 2010)

Layton is pandering to Quebeckers with talk of reopening the Constitution?

Remember Rae Days.


----------



## Square Root (Jan 30, 2010)

I read an interesting article about political polls recently. It appears that they are much less reliable than in the past because most people refuse to participate and those that do are not representative. This was pretty clear when several polls seemed to predict results that were not within each others range of reliability. The NDP may gain some seats from the Bloc and the Liberals but this should not hurt Harper's chance of forming the next gov't in my opinion.


----------



## OhGreatGuru (May 24, 2009)

Making it harder for people to get credit cards, or high credit limits, might not be such a bad idea considering the rates of personal debt in Canada.

I agree that pegging the interest rate could have lot of unintended side effects though.

It might make more sense for government to cap the user fee they charge retailers for each purchase. Australia does it (I heard it was as low as 1%) This would quickly eliminate a lot of Rewards cards and affinity cards, but wouldn't affect accessibility to basic credit. (There is a huge hidden cost of 2-4 % for many cards that are consumers are paying for.) Imagine the fuss if government decided to hike the GST 2-4 percentage points.


----------



## OhGreatGuru (May 24, 2009)

Increasing CPP contributions and corresponding benefits is not a radical proposition at all, when numerous studies concluded Canadians are not saving enough for retirement. Even the Conservatives proposed a modest increase to the provinces but backed off when the usual parochial suspects objected.


----------



## financialnoob (Feb 26, 2011)

I think the OP is right on the mark about the fallout of this, but I do have to ask, is that really such a bad thing? So people with bad credit won't get credit cards. And people with high credit limits will see reduced limits. 

I don't think annual fees would become the norm. I do think there might be more competition for the people who qualify for the best credit, perhaps like how auto insurance companies offer the best rates for the lowest risks. It'd be harder to develop a credit history, but perhaps secured credit cards would become common. Again, I don't see that as necessarily a bad thing.

The rest of the NDP platform brought up seems wacko though.


----------



## andrewf (Mar 1, 2010)

FYI, doubling CPP payments would not require doubling of contributions. We're currently overcontributing to correct for the unfunded liability when CPP was PAYGO. Doubling benefits would require contributions to increase by 60%.


----------



## slacker (Mar 8, 2010)

I'm Howard said:


> The Party represents the ideals of people who vote for it, ad if you are to believe Layton etc, his appeal is geared to lower working class, recent immigrants, people who want more for doing less etc..
> 
> Bad Dream, He gets elected and now our Government MP's are recent immigrants, lower middle class, people who want something for nothing, where success is a target for confiscation, where the Minister of Finance has a grade 9 education and has been unemployed most of his/her life .


@Howard: I ask that you apologize and retract your unjustified and unfair over generalized attacks towards "lower working class, recent immigrants" as people who want something for nothing.

Your post has been reported, let's see if the forum moderators will actually do something about it.


----------



## Toronto.gal (Jan 8, 2010)

That's not what he said at all; the last part of that sentence was a 3rd category of people and not a description of the 1st two.


----------



## olivaw (Nov 21, 2010)

slacker said:


> @Howard: I ask that you apologize and retract your unjustified and unfair over generalized attacks towards "lower working class, recent immigrants" as people who want something for nothing.
> 
> Your post has been reported, let's see if the forum moderators will actually do something about it.


Slacker, you have to cut people a little _slack _during political discussions. Disagree with Howard and request a retraction if you like, but please don't try to have him censored. He might not have meant what you think he meant. 

The moderators are under no obligation to respect our right to free political speech (to the extent that such rights still exist in Canada) but I hope they will.


----------



## CanadianCapitalist (Mar 31, 2009)

I'm not sure I agree with Howard. My understanding is that the NDP traditionally derives most of its support from blue collar workers. Immigrants mostly tended to vote Liberal, not NDP in the past.

If the NDP does end up forming a Government, I agree with the point behind Howard's comment. I don't think they have enough bench strength to field a cabinet.


----------



## sags (May 15, 2010)

If Harper blows another election, where he was riding high in the polls and then collapsed, I think he will be shown the door.

The sudden and dramatic rise in the polls by the NDP, shows Canadians want certain things and Jack Layton is the one talking about them.

It also shows that begging for a majority, on the basis of fear tactics, doesn't work.

Still time left though. We will see how the rest of the campaign goes.


----------



## andrewf (Mar 1, 2010)

Indeed. I think Harper, Iggy, Duceppe and May might all be looking for cushy jobs in the private sector after this election.


----------



## Square Root (Jan 30, 2010)

Let's hope these polls(reliable or not) shake people up enough to give Harper a majority. I think an NDP gov't would be a disaster.


----------



## HaroldCrump (Jun 10, 2009)

sags said:


> The sudden and dramatic rise in the polls by the NDP, shows Canadians want certain things and Jack Layton is the one talking about them.


It is very easy to talk when you've never done anything in the past and have nothing to be judged by.
Mr. Layton's got promises and plans coming out of his hat.

Recall the movie : "The American President" with Michael Douglas.
There was a part during his final speech where he says : "it is easy to bring together a group of middle age, middle class folks and talk about family values, job security and promise a return to good times."

I don't recall the exact words, but Mr. Layton's agenda sounds similar.

We'll all have top world class free health care, lots of doctors, secure stable well paying jobs, secure stable lifelong pensions, evil corporations like banks and energy companies kept under check, etc.

And oh BTW, did you see those pigs that just flew by....


----------



## sags (May 15, 2010)

Harper and Iggy have done more to hurt themselves in this campaign than Layton has done to improve the NDP support.

The NDP agenda has always been clear, and Layton is simply following it, although he deserves full credit for presenting the message in a clear and understandable way.

Meanwhile, the PCs and Libs have been so involved in running negative campaigns against each other, that the public has been turned off.

Messages such as we might do something, maybe in the future, it all depends.........aren't gaining any traction.

Wishy washy.....negative campaigning.......are out of vogue this year.

Presenting a message, even if you don't agree with it entirely, is in style.


----------



## sags (May 15, 2010)

HaroldCrump said:


> I don't recall the exact words, but Mr. Layton's agenda sounds similar.
> 
> We'll all have top world class free health care, lots of doctors, secure stable well paying jobs, secure stable lifelong pensions, evil corporations like banks and energy companies kept under check, etc.
> 
> And oh BTW, did you see those pigs that just flew by....


I doubt Canadians believe that everything is possible all at once, but these are issues that they care deeply about, and they want to begin an open discussion on these topics.


----------



## Toronto.gal (Jan 8, 2010)

Mr. Layton said: *"I think the key thing is people felt Stephen Harper was going to bring change and he didn't do it."* 

But surely Mr. Layton would bring a big change; he would successfully bankrupt Canada.


----------



## the-royal-mail (Dec 11, 2009)

LOL exactly Toronto. These politicians who want power always use the 'change' card, and want us to believe their brand of change is somehow a good thing. I might remind everyone that McGuinty used the slogan "Choose Change" back in 2003 and he made an absolute mess of that province. Lied through his teeth and taxed everyone up the yin yang. Great legacy. Be very careful about subscibing to rhetoric and remember these politicians are all simply trying to figure out what you want to hear, so we'll vote for them. Layton can promise the world, it's all for naught if he can't form the gov't.


----------



## HaroldCrump (Jun 10, 2009)

sags said:


> Messages such as we might do something, maybe in the future, it all depends.........aren't gaining any traction.


Certainity must be a wonderful thing...Mr. Layton must feel great to be absolutely 100% certain that he can deliver on the promises.

Ironically, this uncertainity about the future promises is what endears me closer to the PC platform.

I don't think any of the promises that the PCs have made should be implemented now i.e. before the books are balanced.

I'm aghast that the NDP (and to a lesser extent, the Liberals) have the gall to make such tall promises and claim that they can implement them right now, before balancing the books.

To me, plans like doubling the TFSA, the adult activity credit, etc. are good things, but we must be patient for it until the budget is balanced.

Some of the statements attributed to Harper and Jim Flaherty in the attack ads, esp. the comment about a revision of the Canada Health Act, is also something I agree with.
Expert after expert has stated that the current health care spending levels are not sustainable.
Like the 6% growth in spending, when the GDP growth is not projected to be more than 3%, best case.
This is the path to US-style insolvency for the country.

We have to face up to the fact that being ideologically adamant about 100% public health care is no longer possible.
We can either play ostrich or face reality and take steps to protect ourselves.

Yes, we need open conversation about many things and you are right about that.
But, while we are talking, let's put everything on the table...including health care and pensions and stop pretending like there is no problem.
I don't think the solution is as simple as the left is making it out to be i.e. just tax the hell out of corporations and the so-called "rich" and feed the health care and the pensions monsters.


----------



## the-royal-mail (Dec 11, 2009)

Harold, the NDP has said they would implement major tax increases to pay for all of their promises.

Tax and spend, that's the NDP. It's like a lot of people don't realize this about them and are blinded by rhetoric.


----------



## LondonHomes (Dec 29, 2010)

HaroldCrump said:


> Ironically, this uncertainity about the future promises is what endears me closer to the PC platform.
> 
> I don't think any of the promises that the PCs have made should be implemented now i.e. before the books are balanced.
> 
> ...


There are no PC's running in the Federal election.

The Tories are smart to tie their claims to "when the book are balanced". If McGuinty had said that explicitly (instead of it being implicit) back in 2003 then an entire line of attack on him wouldn't exist today.

Of course what the Tories fail to mention is that they blew the budget and turned a 11 billion surplus into a massive deficit. And if you continue to lower taxes you'll never get the books balanced.

The key is that there are certain important things you need to do now in order to invest in the future, despite having to borrow today. ie I like the Liberals learning passport idea.

The Tories & Liberals have always needed to keep there campaign promises realistic because if they win they'd need to deliver. But the NDP as a party of opposition can promise anything since they'd never actually need to deliver the goods.

It is interesting how Jack has already backed off some of his promises already once it became possible that they could win.

I do wonder where Jack is going to get all these new doctors and nurses from he is promising?


----------



## financialnoob (Feb 26, 2011)

With an election coming up, I know it's easy to get caught up in rhetoric and spin.

I'd just like to remind everyone that the largest budget deficit in Canadian history belongs to Stephen Harper ($55.9B in 2009). In the past 5 years under Harper, the deficit has grown from $457B to a projected $535B this year. 

For all the talk of extremist left tax-and-spend policies, it's worth noting the biggest of those taxes, the GST, was implemented under Conservative Brian Mulroney. I'm not a fan of tax-and-spend, but I prefer it to cut-taxes-but-continue-to-spend-like-a-drunken-rich-kid.

And for those who blame everyone else for Harper's poor math skills, it's worth noting the Liberals reduced the deficit from a record-high $563B to $457B over 10 years, only to see Harper blow that back up in record fashion.

As for those who believe Harper is the only responsible voice for making promises only when the budget is balanced, the joke is on you: the budget isn't going to be balanced under Harper. 

It seems many here are fiscally conservative. I am too, which is why I can't vote for Harper. He's fiscally irresponsible, just as bad as Layton, and both are out to bankrupt the country through different methods.


----------



## olivaw (Nov 21, 2010)

financialnoob said:


> It seems many here are fiscally conservative. I am too, which is why I can't vote for Harper. He's fiscally irresponsible, just as bad as Layton, and both are out to bankrupt the country through different methods.


+1


----------



## sags (May 15, 2010)

We could legalize and tax marijuana.

It would bring in much needed revenue, and piss off the American right wing zealots.

A two for one shot...................


----------



## allgood (May 17, 2010)

financialnoob said:


> It seems many here are fiscally conservative. I am too, which is why I can't vote for Harper. He's fiscally irresponsible, just as bad as Layton, and both are out to bankrupt the country through different methods.


All of the parties have pretty bad fiscal policy, which is a big part of why I'm unhappy with all of them. I've voted in every election - be for prime minister or local dog catcher - since I turned 18. I've always had to hold my nose and vote for the least offensive of the bad options - but this time around I'm not sure I can even do that.

I've heard that in the netherlands you can vote for "none of the above".


----------



## ghostryder (Apr 5, 2009)

financialnoob said:


> It seems many here are fiscally conservative. I am too, which is why I can't vote for Harper. He's fiscally irresponsible, just as bad as Layton, and both are out to bankrupt the country through different methods.



+2


At least the "tax and spend" liberals realize that in order to spend money on the things that citizens demand, you have to collect taxes first.

As opposed to the "we take the conserve out of Conservative" CPC who seem to think that you can spend without taxing.



Someday the fiscal conservatives/PC's will tire of their social conservative/neo-con brethren, and the CPC will split into its logical parts. Then maybe I'll have someone to vote for. Everytime they turn around the CPC gives me another reason not to vote for them. 




sags said:


> We could legalize and tax marijuana.
> 
> It would bring in much needed revenue, and piss off the American right wing zealots.
> 
> A two for one shot...................



Imagine the trade imbalance from all those American "potourists"



LOL I almost forgot...



LondonHomes said:


> I was wondering what people here thought of Laytons proposal to cap interest rates on credit cards.
> 
> When I first heard the proposal my thought was it was another example of "terrible policy but it's great politics".



Agreed. bad policy, good politics. Like cutting the GST.

But it will never happen.


----------



## the-royal-mail (Dec 11, 2009)

Once again, everyone is comparing apples to oranges here. Let's review:

1. the Liberal balanced books came during excellent economic times when people were working and spending money. They also achieved this by downloading stuff to the provinces (which they then downloaded to municipalies a la GO Transit) and cutting back healthcare and infrastructure as well as many other cherished services. How convenient that people forget the price we are still paying (ie. not enough doctors) for this slash and burn.

2. They also broke their 1993 promise to get rid of the GST

3. Sponsorship scandal (and what else didn't we hear about?).

4. Flaherty in 2008 was forced by the bloody coalition to spend money on bailouts or else the coalition was going to bring down the gov't. That is why we started the deficit we have today. Then the sky fell, UIC usage soared, people weren't working and we're still in recession today. These conditions are nothing like the ideal conditions the Libs had in the '90s and are apples and oranges.

5. The current deficit will be less than anticipated due to....wait for it.....improving economic conditions, more people working etc. There was a news story about this this week in fact.

6. A GST cut was NOT bad policy. That money is in our pockets today. Can you HST lovers imagine where you would be today with a 7% GST? Your HST would be 2 pts higher. Do the math. We pay far too much tax and this was one of the few tax cuts we have received in recent years. The GST never should have been implemented in the first place - that was Mulroney panicking and trying to raise money after years of his financial incompetence. I might remind everyone that the Libs at the time raked him over the coals about that. Funny to hear the lefties today crowing about raising it again, considering they were so opposed to it when they were in opposition. Now the lefties are at it again, agitating to increase the GST.


----------



## HaroldCrump (Jun 10, 2009)

Excellent post, TRM.
I'm glad you put things into context so succinctly.



the-royal-mail said:


> The GST never should have been implemented in the first place - that was Mulroney panicking and trying to raise money after years of his financial incompetence.


Yeah, those times were not the best of times for sure.
In retrospect, he could have done several things differently.
However, keep in mind that he was taking over after years of Liberal style tax-and-spend and "crony capitalism" during the Trudeau and Turner years.
I don't recall numbers but he had inherited a large deficit.
Also, his second term (when the GST was introduced) was a highyl recessionary time.
The US (under the first George Bush Sr.) fared much worse.


----------



## BETTYVEE (Dec 23, 2009)

allgood - what happens when "none of the above" takes the majority lol..i would love that option right now but imagine the chaos


----------



## LondonHomes (Dec 29, 2010)

the-royal-mail said:


> 6. A GST cut was NOT bad policy. That money is in our pockets today. Can you HST lovers imagine where you would be today with a 7% GST? Your HST would be 2 pts higher. Do the math. We pay far too much tax and this was one of the few tax cuts we have received in recent years. The GST never should have been implemented in the first place - that was Mulroney panicking and trying to raise money after years of his financial incompetence. I might remind everyone that the Libs at the time raked him over the coals about that. Funny to hear the lefties today crowing about raising it again, considering they were so opposed to it when they were in opposition. Now the lefties are at it again, agitating to increase the GST.


A GST cut was bad policy but this shows why it was great politics.

If the government wants to lower taxes the better policy option is to lower income tax rates. But in Harpers case he actually raised income tax rates to pay for some of the first GST cut.

If there was no GST/HST I would probably have less money in my pocket because other taxes would have been higher and those taxes would have reduced economic growth.

Just like paying down your debt when your told to pay off your credit cards first (notice the tied back to the thread topic  and pay of your secured mortgage last. If you are reducing taxes you reduce taxes that are hardest on your economy first (income tax) before you reduce HST type taxes.


----------



## andrewf (Mar 1, 2010)

4. We were headed for a deficit in September 2008, before the election and before the bailouts. The government cut taxes and increased spending to an extent where balanced budgets were only possible under ideal economic conditions (booming oil and gas, etc.). That was destined to end in tears. Then the recession hit, adding to the deficit. Then Harper went to the G20 and promised a 'stimulus' (it wasn't the coalition, folks--that's revisionism) of 2% of GDP for two years. The auto bailouts were a small part of the deficit that year, and there isn't much evidence that they did it due to opposition pressure. Allowing the auto industry to collapse would have cost to Tories 20 seats in Ontario, so it's more likely enlightened self-interest.

5. Yes, it's smaller because the economy has improved. As you acknowledge in your point 1, the government has little control over the economy. The main reason the deficit has improved is due to much higher than expected commodity prices, particularly oil. I think we can agree that no government can take credit for that (except maybe Ben Bernanke!).

6. GST cut was bad policy. You could have used to same money to reduce income taxes, which would have had a greater economic benefit. GST is a 'least harmful' tax. It's silly to cut it while we have other, much more harmful taxes like corporate and personal income taxes, capital taxes, etc. It is indeed like using a windfall to reduce your mortgage when you have a huge credit card balance.


----------



## andrewf (Mar 1, 2010)

And I'm confused by your point 1. Do you want tax cuts or not? If yes, you have to accept spending cuts. Borrow-and-spend is a bad strategy. It's what Bush did for 8 years and put the US is a deep debt hole.


----------



## stephenheath (Apr 3, 2009)

You know, as much as I don't agree with a lot of the NDP policies, and even where I see value in their philosophies their implementation leaves me shaking my head. I have to admit, at this point, despite not being willing to vote for them, I don't really care if they get in for a bit.

Let's be honest, how much irreversible damage can they do in 4 years? And that's assuming they can keep a minority government going that long. And while they are saying they will increase spending, they are also planning on increasing taxes, and personally my preferences are, in order; don't tax don't spend, tax and spend, borrow and spend, so at least they aren't planning on running deficits forever.

Instead, what I think will happen if they do form the government is we will be rid of Ignatieff (sorry Mike, not a fan), and hopefully Harper and Flaherty and with any luck, the half dozen backroom boys currently running things (that may be wishful thinking). And hopefully, any new candidates might run on a "balance the books" platform, because the period we were paying off our debt was incredibly prosperous for us, paid dividends through lower interest payments, and buffered us from the worst that came.

And if not... someone will do a non confidence and we start over again.


----------



## CuriousReader (Apr 3, 2009)

stephenheath said:


> Let's be honest, how much irreversible damage can they do in 4 years?


I think quite a lot ... Even if they dont get too long to destroy things, the long term effects of any policies they implemented can hurt. ie. If they implement a policy that's not good for the economy but makes people happy, it will be hard to get rid of because it will make whomever try to yank out that policy unpopular and will lose votes.

Having a policy about credit card interest cap in election times show just how dumb NDP platform is. They will just tax us to death, create this feel-good social services ... tax some more, tax some more, create more welfare and pensions to the point that it's better off to be on welfare than spending your sweat to work and get taxed.

Layton might be the most popular guy, Iggy the smartest (at least academically) of the 3, and Harper is probably the worst personally. But party-wise, I prefer to have a mix of conservative/liberal platforms and none of NDP.


----------



## HaroldCrump (Jun 10, 2009)

stephenheath said:


> Let's be honest, how much irreversible damage can they do in 4 years?


Never underestimate the capacity of politicians to do irrepairable damage.
And the worst of politicians often end up staying in power longer than they themselves expected.
Just look at George W. Bush for examples of both the above.

IMHO, an NDP led majority or minority govt. will be an absolute disaster except for their own vote banks like the unions and depressed sector workers like manufacturing, forestry etc.
They will bankrupt the country with subsidies, tax changes and spending.
What takes decades to build can be destroyed within months.


----------



## financialnoob (Feb 26, 2011)

HaroldCrump said:


> Yeah, those times were not the best of times for sure.
> In retrospect, he could have done several things differently.
> However, keep in mind that he was taking over after years of Liberal style tax-and-spend and "crony capitalism" during the Trudeau and Turner years.
> I don't recall numbers but he had inherited a large deficit.
> ...


I think you should take a second look back at history. Trudeau and Mulroney are both equally responsible for the deficit, and I don't understand how you can blame one and not the other.

There's some merit to the Liberal style tax-and-spend and "crony capitalism," as the deficit went from $20B shortly before Trudeau to over $200B shortly after Trudeau.

But let's not overlook the Mulroney years, where he took Trudeau's $200B deficit and blew it up to $400B in 1992. 

They're both guilty of the same thing. To knock one and not the other shows an extreme bias. You defend Mulroney for facing tough obstacles left to him, yet ignore Chretien facing the same obstacles (only magnified). No excuses necessary for Jean though; he balanced the books. 

Royal has made some very valid points as to how they did it, though I find it amusing that now the same people who criticize the Liberals for cutting back on services to balance the books praised PC Mike Harris for doing the same thing in Ontario.

Though I think andrewf is right on the mark about the GST cut. That's not fiscally conservative. The income tax cut would have been the right move, but Harper is more interested in the popular move.

Edit: And just to clarify, I'm not taking sides. I haven't even decided who I'll vote for yet. But I do want to correct some of the misinformation out there. I think every party has pluses and minuses, but for anyone to act as if one party is significantly better than another is silly; they all suck. Just a matter of finding the one that sucks less each election.


----------



## the-royal-mail (Dec 11, 2009)

We never had a deficit that was as high as $200B and certainly not $400B.


----------



## stephenheath (Apr 3, 2009)

the-royal-mail said:


> We never had a deficit that was as high as $200B and certainly not $400B.


It's strange, considering this is a financial forum it's the last place I'd expect a lot of people to be calling the debt a deficit, but you can usually tell which they mean by the scale of the "deficit"


----------



## Addy (Mar 12, 2010)

LondonHomes said:


> 1) Credit card companies would immediately cut the credit limits on most cards.
> 2) A lot of people would have their current credit cards cancelled.
> 3) It would become a lot harder to get a credit card in the future.
> 4) An increase in annual fees and other fees on credit cards.


I would love to see credit limits lowered on most cards, Canadians are too far in debt to begin with. Same for 2), cancel cards you don't need. One should be plenty. For 3) it SHOULD be a lot harder to get credit cards than it currently is. 4) So be it. I don't like to pay annual fees, but if it means less and less people are tempted to get into heavy debt, it's the least I can do.


----------



## andrewf (Mar 1, 2010)

stephenheath said:


> It's strange, considering this is a financial forum it's the last place I'd expect a lot of people to be calling the debt a deficit, but you can usually tell which they mean by the scale of the "deficit"


Confusion is compounded by the fact that the debt is called the accumulated deficit! Even politicians sometimes make the mistake of saying 'let's pay off the debt' when they mean deficit. Slightly different scale there.


----------



## allgood (May 17, 2010)

BETTYVEE said:


> allgood - what happens when "none of the above" takes the majority lol..i would love that option right now but imagine the chaos


Well, my preference would be that in that case all of the party leaders and backroom boys are put in stocks on parliament hill, and we can all go throw tomatoes at them...

More practically, "none of the above" would likely never win, but the percentage of people voting "none of the above would effect the legitamacy of government - i.e. it would be politically difficult to say you have a strong mandate if the percentage of people voting "none" was high.

If a "none of the above" option won in Canada, I would guess that we would go right back to the polls, but I would imagine that the parties would remove their leaders, relook at their policies, etc.

Really, it's just an option to register a protest vote against all of them. SUre, I could ruin my ballot, but that just lumps my vote in with those too stupid to mark an X. And sure, I could vote for a fringe party - except that I haven't found one I would actually support.

I wish the natural law party was still making plans to teach us all yogic flying...


----------



## HaroldCrump (Jun 10, 2009)

allgood said:


> If a "none of the above" option won in Canada, I would guess that we would go right back to the polls


In such a case what should happen is that the election should be declared null & void and the previous parliamentary composition should be restored.
In other words, the no confidence motion that brought down the govt. is not valid any more.

If "none of the above" gets the majority then the electorate is essentially saying they have no confidence in the no confidence of the opposition 
What a waste of time this election is...


----------



## CanadianCapitalist (Mar 31, 2009)

stephenheath said:


> Let's be honest, how much irreversible damage can they do in 4 years?


More than anything else, the thing that scares me about the NDP is the way the party is pandering to Quebec sovereignists. Example: Mr. Layton says his government would respect a yes vote in a referendum. By "yes" vote he means a 50% plus 1 vote, not the provisions of the Clarity Act. And this from a Federalist who wants to also win in the rest of Canada. I can appreciate why the NDP is appealing to many Quebecers -- there is very little difference between the NDP and the Bloc but I fail to see why the rest of us should enthusiastically sign on to this platform. I think a NDP Government can do a lot of damage to this country. Mercifully, they are nowhere near majority territory and I for one hope they never get there.


----------



## andrewf (Mar 1, 2010)

To me, a 'none of the above' option on the ballot would simply mean that the vote does not count. Anything else would be chaos. It does weaken the moral authority of the party who gets <30% support from votes cast as speaking for 'all Canadians'


----------



## ChrisR (Jul 13, 2009)

There is one scenario where a huge boost to the NDP could result in a better government than we've had in years.

Imagine... NDP wins the most seats, but shy of a majority. 

The Conservatives and Liberals could then form a coalition. We would end up with a centrist government, even in the absence of any one centrist party.


----------



## HaroldCrump (Jun 10, 2009)

ChrisR said:


> There is one scenario where a huge boost to the NDP could result in a better government than we've had in years.
> 
> Imagine... NDP wins the most seats, but shy of a majority.
> 
> The Conservatives and Liberals could then form a coalition. We would end up with a centrist government, even in the absence of any one centrist party.


It is more likely that the Bloc will support the NDP to give them the required # of seats to form govt.
Tories and Liberals will be left licking their wounds for the next several years.
Iggy will go back to the States.
Harper will take up a cushy private sector job.
And Herr Layton will lead the country straight down the flush hole.


----------



## andrewf (Mar 1, 2010)

BQ supporting their main opposition in Quebec?


----------



## financialnoob (Feb 26, 2011)

the-royal-mail said:


> We never had a deficit that was as high as $200B and certainly not $400B.





stephenheath said:


> It's strange, considering this is a financial forum it's the last place I'd expect a lot of people to be calling the debt a deficit, but you can usually tell which they mean by the scale of the "deficit"


Alright, you guys got me there 

But I think the point was pretty clear. The books need to be balanced, and no left or right-leaning person should point the finger at the other when they're both guilty of the same things.

I'm kind of leaning to Green, to be honest. Dirty hippies. But the economic platform is actually interesting.


----------



## HaroldCrump (Jun 10, 2009)

andrewf said:


> BQ supporting their main opposition in Quebec?


yeah, but isn't there a saying that an enemy's enemy is a friend?
Recall from the English debate a particular exchange between Duceppe and Layton around the full implementation of Bill 101.
Duceppe forced Layton into a corner and arm twisted him into admitting that he (Layton) would support 101 in its entirety.
This is not the only thing...the recent references to renewing the referendum vote, the constitution signing, etc. are all telling signs.
Layton's surge began in QC, not by chance.
A big part of that surge is playing to some of the same themes and messages that the Bloc normally plays to.

One of the many TV projections running these days predicted the NDP may win up to 100 seats, making them a close 2nd to the Tories.
Most of those seats will come from Liberal and Bloc buckets.
I don't think it is too far fetched that they may take a shot at forming govt. with either Liberal or Bloc support - Bloc being more likely than Liberals to form an alliance.

Recall that the Bloc's only major ask from the budget was the $2B HST compensation.
Had the Tories agreed to that, there is a good chance the Bloc would not have participated in the no confidence vote.

At the end of the day, _somebody's_ got to support _somebody_ - nobody aint' getting no majority.
Surely, we won't make a laughing stock of our country by canceling the election and voting again.


----------



## olivaw (Nov 21, 2010)

the-royal-mail said:


> A GST cut was NOT bad policy. That money is in our pockets today. Can you HST lovers imagine where you would be today with a 7% GST? Your HST would be 2 pts higher. Do the math. We pay far too much tax and this was one of the few tax cuts we have received in recent years. The GST never should have been implemented in the first place - that was Mulroney panicking and trying to raise money after years of his financial incompetence. I might remind everyone that the Libs at the time raked him over the coals about that. Funny to hear the lefties today crowing about raising it again, considering they were so opposed to it when they were in opposition. Now the lefties are at it again, agitating to increase the GST.


A GST cut when the government is running a deficit is terrible policy. It's a government handout on borrowed money.

The GST itself was a very good policy when it was introduced. It replaced the ludicrous manufacturers sales tax. The year that it was introduced we saw a substantial decline in the price of manufactured goods like automobiles and appliances. The price decline was far higher than 7%

As for your comment about Mulroney's incompetence; Michael Wilson was Mulroney's finance minister. He inherited an operating deficit from the prior Liberal government and turned it into an operating surplus. He was unable to balance the budget entirely due to the high interest we paid to service our national debt. 

Paul Martin built upon Wilson's fine work to give us a real surplus. 

Then came Harper. We got unaffordable tax cuts for corporations, a GST tax cut, and a deficit. So much hard work by so many good finance ministers ruined in just a few years by a party that chose politics over policy and ideology over competence. 

The NDP would be just as bad.


----------



## sags (May 15, 2010)

Harper laid the groundwork for this election and it was his to lose.

If Layton does win, it is a statement to the Tories........time for change.


----------



## sags (May 15, 2010)

The business news outlets are all aflutter over the prospects of an NDP government.

The dollar will be crushed........big oil will leave........investment will vanish.....plagues of locusts will swarm the earth and devour everything it their path.........

It IS getting a little over the top.


----------



## LondonHomes (Dec 29, 2010)

sags said:


> The business news outlets are all aflutter over the prospects of an NDP government.
> 
> The dollar will be crushed........big oil will leave........investment will vanish.....plagues of locusts will swarm the earth and devour everything it their path.........


With the exception of the locusts most of the critism is rooted in their policies. This thread started looking at the effect of their interest rate cap policy and most agreed that it was bad policy.

What didn't come out in the analysis is that the sudden lack of credit for a lot of people would kill consumer spending and probably send us back into recession. 

I read another policy analysis this am that said their Oil policy would rate gas another 0.10 / litre.


----------



## Sustainable PF (Nov 5, 2010)

andrewf said:


> I think it's naive to think the Liberals would ever support an NDP minority. It would be the death blow for the party.


And propping up a PC government wouldn't be?


----------



## T.L. (May 1, 2011)

What I find ironic about educated Conservative supporters (generally the type who would frequent a forum like this one) is that they tend to be people who love money, yet they fail to realize that over and over history has shown that right-wing governments are not good for the economy. Furthermore, right-wing governments have an abysmal record when it comes to balancing the budget. 

If the Harper Conservatives win a majority we'll see the Reform Party / Canadian Alliance at work -- George W. Bush-style tax cuts, declining government revenues, and public sector lay-offs. As a small business owner, I cringe every time the prospect of a Conservative majority is considered. To put it simply, I can't make money if the average person is unemployed or not making a decent wage. The economy runs well when the government meets the needs of the middle class. Everyone benefits when there is a healthy consumer. If tax cuts for the wealthy and corporate welfare were the recipe for a strong economy, the United States would not have fallen apart like it did from eight years of Bush Jr. 

The Harper Conservatives hold the same misguided priorities. 

I want a strong economy and don't want to live in a country like the United States. That's why I'm hoping for Canada's best option: a Liberal / NDP coalition. 

Is it a coincidence that North America boomed and budgets were balanced when Clinton and Chretien (both leading ideologically centrist governments) were at the helm? Is it a coincidence that deficits arose, debts ballooned, and the economy tanked when the right (Bush and Harper) gained power? 

I don't think so.


----------



## JoeCool (May 1, 2011)

*Clarity on credit card interest rates*

Could someone explain whether Canada has something similar to the US "Credit Card Accountability, Responsibility and Disclosure Act (CARD Act)"

http://www.whitehouse.gov/the_press...orms-to-Protect-American-Credit-Card-Holders/

How does consumer protection (including education/clarity) with regards to credit cards compare between the 2 countries?


----------



## Longstreet (Dec 27, 2010)

financialnoob said:


> With an election coming up, I know it's easy to get caught up in rhetoric and spin.
> 
> I'd just like to remind everyone that the largest budget deficit in Canadian history belongs to Stephen Harper ($55.9B in 2009). In the past 5 years under Harper, the deficit has grown from $457B to a projected $535B this year.
> 
> ...


FinancialNoob: it s true that Mr Harper took over the books with a surplus and now we're in a deficit, however, most of that is not due to mismanagement. Don't you think that event called the global recession had anything to do with public finances? During a recession, government outlays (EI, social programs etc) increase and tax revenue decreases as unemployment rises. Apart from stimulus which was forced by the Opposition, almost the entire deficit is cyclical, not structural. For more information about recessionary finances, consult a macroeconomics textbook.

Mr Harper and Mr Carney has managed this economy quite well considering the severity of the recession.


----------



## Toronto.gal (Jan 8, 2010)

Longstreet said:


> Mr Harper and Mr Carney has managed this economy quite well considering the severity of the recession.


Mr. Flaherty also deserves some credit for rescuing the economy.


----------



## the-royal-mail (Dec 11, 2009)

Thank you longstreet for injecting common sense and fact into the discussion. Of course, the left-wing idealogues will disagree with you because that prevents them from villifying Harper.


----------



## financialnoob (Feb 26, 2011)

Longstreet said:


> FinancialNoob: it s true that Mr Harper took over the books with a surplus and now we're in a deficit, however, most of that is not due to mismanagement. Don't you think that event called the global recession had anything to do with public finances? During a recession, government outlays (EI, social programs etc) increase and tax revenue decreases as unemployment rises. Apart from stimulus which was forced by the Opposition, almost the entire deficit is cyclical, not structural. For more information about recessionary finances, consult a macroeconomics textbook.
> 
> Mr Harper and Mr Carney has managed this economy quite well considering the severity of the recession.


You're quick to complement Harper and Carney for managing this whole thing, but what exactly have they done? There was a stimulus package of $30B they were forced into apparently, what about the rest of the record $56B deficit in 2009?

And if they're strong-armed into it, what the hell is Flaherty doing when he says:



> "From Corner Brook to Kamloops, from Iqaluit to Kitchener, Canadians agree: We must do what it takes to keep our economy moving and protect Canadians in this extraordinary time," Finance Minister Jim Flaherty said as he delivered the budget in Parliament this afternoon.
> 
> "Making new investments is more challenging in such a time, but it is also more necessary than ever."


And let's not forget as the recession started in 2008, no less an authority than Stephen Harper himself told us he would not be running a deficit:

http://www.youtube.com/watch?v=pgHxTpUsTUo

Within a year of taking office, Harper had cut the GST and promised $60B in tax cuts, though not decreasing the income tax rate which would have been better than complicated tax credits. And it was around that time that he sowed the seeds for sub-prime in Canada. 

http://www.theglobeandmail.com/report-on-business/article727831.ece



> Just yesterday, Finance Minister Jim Flaherty repeated the mantra that the government acted early to get rid of risky mortgages. What he and Prime Minister Stephen Harper do not explain, however, is that the expansion of zero-down, 40-year mortgages began with measures contained in the first Conservative budget in May of 2006.
> 
> At the time, Mr. Flaherty announced that the government was opening up the market to more private insurers.
> 
> ...


I understand there have been difficult times and difficult choices. I'm not saying Jack Layton is a better choice. I'm just at the conclusion that Harper is not a good choice either.


----------



## andrewf (Mar 1, 2010)

Longstreet said:


> FinancialNoob: it s true that Mr Harper took over the books with a surplus and now we're in a deficit, however, most of that is not due to mismanagement. Don't you think that event called the global recession had anything to do with public finances? During a recession, government outlays (EI, social programs etc) increase and tax revenue decreases as unemployment rises. Apart from stimulus which was forced by the Opposition, almost the entire deficit is cyclical, not structural. For more information about recessionary finances, consult a macroeconomics textbook.
> 
> Mr Harper and Mr Carney has managed this economy quite well considering the severity of the recession.


I'll repeat this again. We had and have a structural deficit of about $10 billion because we cut taxes and didn't cut spending. We were headed for deficit in 2008/2009 before the recession hit, though that of course exacerbated it. Harper went to the G20 and promised a stimulus of 2% of GDP per year for two years before the opposition tried to force him out. He put out a fiscal statement that was utterly laughable in November 2008 saying that we'd have surpluses for five years and reneging on his already-promised stimulus. The opposition took this as, among other things, a sign that the government wasn't being credible or honest about the economic and fiscal situation. The government promised a stimulus before the opposition did anything. Look it up.


----------



## andrewf (Mar 1, 2010)

JoeCool said:


> Could someone explain whether Canada has something similar to the US "Credit Card Accountability, Responsibility and Disclosure Act (CARD Act)"
> 
> http://www.whitehouse.gov/the_press...orms-to-Protect-American-Credit-Card-Holders/
> 
> How does consumer protection (including education/clarity) with regards to credit cards compare between the 2 countries?


I think Flaherty and the industry worked out a voluntary code of conduct last year.


----------



## olivaw (Nov 21, 2010)

Toronto.gal said:


> Mr. Flaherty also deserves some credit for rescuing the economy.


Neither Harper nor Flaherty rescued anything. The government does not manage the economy. We partly dodged the global recession because: 
1) We have banking regulations imposed by a number of successive centrist governments. 
2) We have a resource economy during a global resource boom. 
3) We headed into it with a fiscal surplus. 

Harper and Flaherty needed only to maintain our surplus. Instead, they squandered it.


----------



## financialnoob (Feb 26, 2011)

the-royal-mail said:


> Thank you longstreet for injecting common sense and fact into the discussion. Of course, the left-wing idealogues will disagree with you because that prevents them from villifying Harper.


I wouldn't consider myself a left-wing idealogue. I probably identify most with the old PC party. But I guess any criticism of Harper makes you a communist.


----------



## Longstreet (Dec 27, 2010)

*Mr Harper and Mr Flaherty*

"You're quick to complement Harper and Carney for managing this whole thing, but what exactly have they done? There was a stimulus package of $30B they were forced into apparently, what about the rest of the record $56B deficit in 2009?"

FinancialNoob: apparently you can't read when I stated the reason for the other part of the deficit. Like I said previously, during a recession, government outlays (EI, social programs etc) increase and tax revenue decreases as unemployment rises. Read the following for more information: http://en.wikipedia.org/wiki/Recession, http://en.wikipedia.org/wiki/Deficit. 

"And let's not forget as the recession started in 2008, no less an authority than Stephen Harper himself told us he would not be running a deficit"

These people sound like pouty children when they talk about Mr Harper saying he wouldn't run a deficit. At the time he said that, not too many people knew exactly how bad the recession was going to be. Mr Harper stated he didn't want to run a deficit. However, with the market meltdown, TARP, and the liquidity crisis soon after, times change and the situation changes. I'm glad Mr Harper is smart enough to realize that deficits are a bad thing, unlike Mr Layton who would spend money like it was going out of style.

"Within a year of taking office, Harper had cut the GST and promised $60B in tax cuts, though not decreasing the income tax rate which would have been better than complicated tax credits."

Mr Harper did reduce the GST as you state. So what? A politician who actually kept his promise! If he didn't cut it, you'd be whining that he broke his promise. Personally, I think we should do away with this complicated, progressive tax system and go witha flat tax. However, I digress. He did what he said he was going to do and he also increase the basic personal amount which reduces the tax burden on everybody. 

"Neither Harper nor Flaherty rescued anything. The government does not manage the economy. We partly dodged the global recession because: 
1) We have banking regulations imposed by a number of successive centrist governments. 
2) We have a resource economy during a global resource boom. 
3) We headed into it with a fiscal surplus. 

Harper and Flaherty needed only to maintain our surplus. Instead, they squandered it."

OlivaW: you're ignoring the inherent contradiction in your argument. You first state that the government doesn't manage the economy (which it does) and therefore do not give credit to Mr Harper. You do a 180 by saying the reason why we are in such good shape is because we have banking regulations by successive centrist governments and that we had a fiscal surplus, two things actively managed by the government. You have a double standard. I have no problems with the government reducing a surplus. It's a sign that they are overtaxing the public. Lastly, most of our current banking regulations come from the Bank Act of 1992, so Liberals can't pat themselves and Mr Martin on the back as much as they do now. 

"I'll repeat this again. We had and have a structural deficit of about $10 billion because we cut taxes and didn't cut spending. We were headed for deficit in 2008/2009 before the recession hit, though that of course exacerbated it. Harper went to the G20 and promised a stimulus of 2% of GDP per year for two years before the opposition tried to force him out. He put out a fiscal statement that was utterly laughable in November 2008 saying that we'd have surpluses for five years and reneging on his already-promised stimulus. The opposition took this as, among other things, a sign that the government wasn't being credible or honest about the economic and fiscal situation. The government promised a stimulus before the opposition did anything. Look it up."

AndrewF: the facts do not support your argument despite you 'repeating it again'. The federal government first posted a deficit in sometime in 2009. I suggest you follow your own advice and look it up, because clearly you haven't.

http://www.statcan.gc.ca/daily-quotidien/090616/dq090616a-eng.htm
http://www.statcan.gc.ca/daily-quotidien/090616/t090616a2-eng.htm

The Opposition tried to get into power via coalition because Mr Harper was going to cut off their per vote subsidy. Given Mr Layton's extensive business experience, I doubt he could sell water to a person dying of thirst.


----------



## financialnoob (Feb 26, 2011)

Longstreet, I understood the points, but I think you're quick to make excuses without looking at the entire picture. Part of the tax decrease was directly attributable to a large tax cut package by Harper early in his first term. Some of those tax cuts, I agreed with, but I felt it was quite aggressive at the time. 

*Mr Harper stated he didn't want to run a deficit.*

Earlier in your post, you questioned my reading comprehension abilities. But based on the line above, I have to question your hearing.  Or maybe you didn't click on the video link. But here are some quotes from the video.

Harper: We're not going to run deficits. I think it would be dangerous to just sort of fly off in that direction.

AND

Reporter: Can you just clearly and unequivocally rule out that you will run a deficit at any point during your term if elected?

Harper: Yes. Yes. And yes. And I know I saw some coverage that suggested I didn't yesterday. I think I was asked one question about whether we would run a deficit, and I said no. That's my answer.

There's a difference between saying he didn't WANT to run a deficit, and saying he WON'T run a deficit. I think the above is pretty clear. Unless I can't read what I heard.

What a pair we are. I can't read and you're deaf  j/k

I don't disagree about Layton mind you. And I'm beginning to think Harper might be the best of a flawed bunch. 

Harper certainly deserves credit for keeping his promise on the GST cut. But as I said, I would have preferred a broader income tax cut. And I agree, I'd like to see a simpler tax system. But not sure how you defend that while blindly ignoring the additional tax credits implemented by Harper, including the fitness, home buyers, and an additional $2K child tax credit. And while Harper kept a promise, let's not start the process for becoming a saint. The same year he kept that promise, he also broke the promise on income trust taxation. 

That was an absolutely necessary thing to do in my eyes, but he shouldn't have made that a promise, just as he shouldn't have promised anything about the deficit. It's the willingness to make promises he doesn't even know if he can keep that concerns me.


----------



## andrewf (Mar 1, 2010)

Longstreet, I suggest you read up about structural deficits before you throw non-cyclically adjusted budget balance figures at me. Then, you'll realise that they are moot. We had a surplus in fiscal 2008 because oil prices were at record levels in the first months of the year and corporate profits were spiking. If you adjust for the business cycle, we were in a structural deficit already. We still are, unless the government finally cuts spending or raises revenue. 

The PBO, our independent fiscal watchdog, puts the structural deficit at over $10 billion. Check out page three of his 2010 report:

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
($ billions)
Structural balance -15.6 -16.6 -13.8 -13.2 -13.7 -13.7

So we need to find an extra thirteen billion in new revenue or spending cuts to close to budget deficit _over the course of the business cycle_. That means we would run surpluses some years and deficit other years, which should cancel each other out.

Coincidentally, this hole is about the size of the 2 point reduction in the GST.


----------



## andrewf (Mar 1, 2010)

financialnoob said:


> That was an absolutely necessary thing to do in my eyes, but he shouldn't have made that a promise, just as he shouldn't have promised anything about the deficit. It's the willingness to make promises he doesn't even know if he can keep that concerns me.


The problem is that the budget balance was rapidly deteriorating, as well as leading economic indicators, in summer of 2008. There were stormclouds on the horizon for anyone who was looking. Harper predicted a rocky economy in his Christmas 2007 television interview. Look it up. To say that no one saw it coming, _when Harper himself saw it coming_ is ridiculous. 

So, with the economic outlook going from bad to worse, Harper wanted to get an election out of the way so that it would happen before the economy went totally pear-shaped. He made a show of asking the opposition whether they would submit unconditionally and without compromise to his will, and finding that they would not, declared Parliament dysfunctional and broke his fixed-date election law by dissolving the House and calling an election. Time was of the essense, and he couldn't wait for the opposition to defeat him or not--the recession was bearing down.

Then we were in a campaign. It was not obvious to everyone yet that things were getting pretty bad. Then Lehman collapsed. A few weeks too soon for Harper's plan to get the vote in before the recession hit the news. But he could still divert attention by claiming everything was fine and that Canada would continue to run surpluses. I have too much respect for Harper to think that he honestly believed this was true. Anyone paying attention at the time knew we would have at least small deficits for the next few years of a couple billion. In other words, he lied and wasn't merely incompetent. Oh well, politicians lie. But let's be clear: he lied in October 2008 when he promised on a stack of bibles that he wouldn't run a deficit. They were comfortable doing this because they had already focus grouped it and determined that Canadians would forgive him for running a deficit.

Moral of the story: people are obviously way too naive about how our political system works. The entire system is rife with manipulation and opportunism by the party in power, and encourages politicians to lie to us before they get elected. We deserve it, because we force them to make promises they can't keep in order to get elected.


----------



## Square Root (Jan 30, 2010)

@andrew. Good posts. Perceptive I think.


----------



## realist (Apr 8, 2011)

HaroldCrump said:


> And Herr Layton will lead the country straight down the flush hole.


Where is the massive eye roll emoticon? I suppose I could explain to you the irony of using terminology that is so obviously right wing focused to deride such a left wing party but I am sure that is lost on you.


I realize the election is over so most of this will die down but in future could people who are calling the candidates salesman cheats and liars, please offer a smidgen of evidence to support the allegation? Its tiring to hear people regurgitate rhetoric they clearly don't understand.


----------



## Guest (Jun 1, 2011)

You are right realist. Credit cards exploit a person's choice and give them the total freedom to spend as they wish without worrying about the current cash availability in the bank. If this rule will come into existence then there will be many companies who will reduce their credit allotment to a certain fixed amount so that they can avoid huge losses in the future.


----------



## andrewf (Mar 1, 2010)

They may or may not be cheats, but all the parties told lies and half-truths in the campaign. Maybe it's the nature of the business. We get what we deserve.


----------

