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jazzbro
Cabinet Minister
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Joined: 27 May 2006
Posts: 641
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| Posted: Sun Nov 09, 2008 3:51 pm Post subject: Economic Stimulus... |
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Concerned about manufacturers, Ottawa eyes another round of economic stimulus
http://www.financialpost.com/news/story.html?id=944632
Lots of talk about economic stimulus these days. One problem is that any money going directly to 'consumers' may very well simply be saved, not spent. This would apply to lower tax rates, tax credits, etc. Didn't GWB send cheques directly to US citizens/taxpayers?
The problem is that what's good for the economy (spending) isn't necessarily good for any individual who doesn't trust the economy. You add up all the self-interested actions (saving) and you get a death spiral, which is what we're headed for in North America right now.
So now let's revisit the Tories' cuts to the GST. Apparently all of the economists, according to the pundits, decried the GST cuts as lousy economic policy. But what better way to encourage spending than to cut the consumption tax? I failed to see at the time how a 1% GST cut did not increase everyone's consumable standard of living immediately by 1%. And again the next time they did it.
Wouldn't a temporary further decrease of the GST by one or two points be a more effective economic stimulus than income tax cuts, rebates, etc?
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jazzbro
Cabinet Minister
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Joined: 27 May 2006
Posts: 641
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| Posted: Sun Nov 09, 2008 3:55 pm Post subject: |
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btw - do you all get hot links to a bunch of key words in the posts as I do? I count ten in the post above ("manufacturers", "consumers", etc.).
Very annoying. Perhaps Largs' idea of moving to another host is a good one. |
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Phillippe
Sgt. at Arms
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Joined: 21 Feb 2005
Posts: 2539
Location: Westmount, Québec, Canada
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| Posted: Sun Nov 09, 2008 4:47 pm Post subject: |
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Jazz,
I'm not sure economists really have all that it takes to tackle this issue, as much as that may seem contradictory. They hate the notion of cutting government revenues by any percent, but then don't offer up practical solutions to the financial crisis. In Québec, the Parti Libéral du Québec have decided that they will team up with Hydro-Québec (Crown Corporation) to create a 100,000 jobs by investing billions of dollars into infrastructure repairs, and new hydro developments.
Does QC have the money? No. In fact, the Caisse Dépôt... du Québec is hiding losses.
Is Québec's strategy of attempting to fix this crisis by buying its way out a pragmatic solution? No.
Economists seem to forget that beyond the very rational-practical models they construct, that humans have agency, and that their very intelligent models usually blow up in their face because they forget to consult on human behavior. Cutting the GST one percent prior to the Christmas sales rush could give the economy the boost that is needed. Market this GST cut and get people shopping! Canada's financial position isn't really too bad. Harper's having not made massive income tax cuts (even though people on CPI and here bitched about a 24.3 Billion surplus) and using the surplus to pay down the debt has given us some breathing room. We're under no serious obligation to make payments we cannot afford (i.e we can maintain the current levels of repayment and still be ahead) and if need be, cuts to certain programs, like... Heritage, the CRTC, CBC, Indian and Northern Affairs, etc.
By the way, Ontario better hurry up and become a "Have" province again because I have a bad feeling that Québec's going to be in a world of hurt in about a year and a half.
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I run a student organization.. You can call me El Presidente. |
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Nomad
Cabinet Minister
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Joined: 13 May 2005
Posts: 2189
Location: British Saskatchalbertatoba
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| Posted: Sun Nov 09, 2008 9:14 pm Post subject: |
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| jazzbro wrote: |
btw - do you all get hot links to a bunch of key words in the posts as I do? I count ten in the post above ("manufacturers", "consumers", etc.).
Very annoying. Perhaps Largs' idea of moving to another host is a good one. |
Personally, I'm seeing none of them. Firefox and some combination of my extensions has them all blocked. I suspect it's the CustomizeGoogle plugin, as it allows you to disable Google ads on any web site.
No way to know without trying, but the next site might also generate money from embedded Google ads. |
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jazzbro
Cabinet Minister
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Joined: 27 May 2006
Posts: 641
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| Posted: Sun Nov 09, 2008 11:00 pm Post subject: |
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Hmmm. Thanks Nomad.
I didn't see them a minute ago, then went out to check for the plug-in, went back in and now they're back. The heading on the little pop-ups is "Powered by echoTopic". Time to run spybot and whatever else I can find! |
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Nomad
Cabinet Minister
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Joined: 13 May 2005
Posts: 2189
Location: British Saskatchalbertatoba
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| Posted: Mon Nov 10, 2008 9:31 am Post subject: |
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Jazz, if you're running Firefox, make sure you also install AdBlock. If Customize Google didn't get rid of them, AdBlock likely will.
I see very, very few ads anywhere on the web these days. If I hit a site that AdBlock doesn't know, a couple of quick clicks and the ads are gone forever. |
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Midwest
Cabinet Minister
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Joined: 22 Feb 2005
Posts: 2257
Location: In the darkness at the edge of town
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| Posted: Mon Nov 10, 2008 11:37 am Post subject: |
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I'm not seeing any ads either, and I have the same set-up as Nomad, thanks to his good advice. |
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Nomad
Cabinet Minister
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Joined: 13 May 2005
Posts: 2189
Location: British Saskatchalbertatoba
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| Posted: Mon Nov 10, 2008 5:41 pm Post subject: |
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Another one to use in conjunction with AdBlock is AdBlock Filterset.G Updater. It has a "white list" of known advertising servers that it will incorporate into AdBlock, then automatically update the list periodically. |
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Nomad
Cabinet Minister
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Joined: 13 May 2005
Posts: 2189
Location: British Saskatchalbertatoba
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| Posted: Sun Nov 16, 2008 7:10 pm Post subject: |
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Sorry - seemed to have hijacked this thread.
I have multiple computers at home, plus laptops and my work computer. If you use Firefox, you customize it, and then you want all the machines to be the same. Set up a new install, go to Mozilla, install Firefox, then install add-on after add-on. Right?
Nope. I just found my new favourite add-on for Firefox. It can backup all your extensions, themes, cookies, passwords, bookmarks, etc. You install Firefox on a machine, set it up the way you like it, then run this backup utility.
Now go install Firefox on a new machine. Drag and drop all the stuff from the backup, and new machine is instantly like other machine. If you install Firefox regularly on various computers, this is like manna from heaven.
https://addons.mozilla.org/en-US/firefox/addon/2109
FEBE (Firefox Environment Backup Extension) |
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Midwest
Cabinet Minister
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Posts: 2257
Location: In the darkness at the edge of town
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| Posted: Tue Nov 18, 2008 12:33 pm Post subject: |
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Very cool. Now to get myself a new laptop and test this out.... I can just hear Himself now. [author ducks her head to avoid brickbats] |
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marginallymanic
Cabinet Minister
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| Posted: Wed Nov 19, 2008 1:02 pm Post subject: |
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Back to the thread.
This is basic Keynesian economics.
The best way to stimulate the economy is public work projects by government..........build roads, bridges, power stations and hospitals.
_________________
“The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.”
Marcus Aurelius |
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Nomad
Cabinet Minister
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Location: British Saskatchalbertatoba
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| Posted: Wed Nov 19, 2008 5:35 pm Post subject: |
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But when Keynes wrote that, government didn't have to factor in all the environmental hassles of roads, bridges and power stations, not to mention the NIMBY factor. Plan a bridge today and you might break ground five years from now.
Hospitals? It's one thing to borrow money to erect a building - finding the ongoing funds to pay for the staff is another matter entirely. Every time you build a hospital, you've committed yourself to additional millions annually to keep it running (read taxes).
There are no quick fixes, and borrowing money for the sake of injecting it back into the economy through make-work projects is temporary relief at best. Especially if it takes years for the money to actually flow. |
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Monty Burns
Cabinet Minister
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| Posted: Thu Nov 20, 2008 12:36 am Post subject: |
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Keynes was a self-promoting flake. Neill Ferguson did an exceptional job of exposing him for the pompous fraud he was in "The Pity of War".
There is an argument, of course, for countercyclical fiscal policy - but is has to be a lot more sophisticated than rushing out and building a bridge when the economy dips.
To the extent that existing plans for projects can be moved forward, that helps, and can even make good business sense for government (paying for stuff when material and labor costs are likely to be lower)
Otherwise, however, stimulus is best delivered directly...ie. to people. Direct, fast, cash in pocket immediately.
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"You can always count on the Americans to do the right thing - after they've tried everything else."
- Churchill |
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marginallymanic
Cabinet Minister
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| Posted: Thu Nov 20, 2008 6:36 am Post subject: |
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I would agree Monty IF you can target who you give it to.
Right now there is little point in giving it to the Middle class, or the rich. The rich don't need it, and will likely not spend it. The middle class is petrified, and in debt up their eyeballs, and will therefore not spend it.
A few years back I said the best way to stimulate demand was to stand on the street corner and hand out twenties, and I think that principle still stands, give it to people who really need it.
Big public infrastructure projects do stimulate demand, and considering the state of N American roads and bridges, that is a good place to start.
There is a lot of work being done in new teck but it has been well funded by individuals who see the need, I don't know if this will continue with the crash, we will see. All of a sudden of course, the advantage on spending a fortune to replace the internal combustion engine has gone away, but it will return.
I don't see a lot of point in funding pure research at the moment, but now would be a good time to update systems for publicly funded entities and government departments.
Last but not least. Rat was right. The backlash against the fat cats is in full swing. Another example this morning.
http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1
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“The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.”
Marcus Aurelius |
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jazzbro
Cabinet Minister
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| Posted: Thu Nov 20, 2008 8:28 am Post subject: |
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You're proving the original point. If handing out cash is good, and it may be effective in some regard, lowering the GST and PST's should only be better in that it's only a benefit to the individual when money is actually spent.
Problem now - what's good for the individual (saving) is collectively very, very bad for the economy. |
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