[andyt]

http://www.theglobeandmail.com/news/opinions/opinion/uncertainty-over-the-us-means-a-shadow-over-canada/article1919397/

Quote:

We’ve also observed the inability of the United States to govern itself properly, in the sense of paying its bills and balancing obligations and revenues. Already the world’s largest borrower by far, the U.S. political system seems ready to borrow trillions of additional dollars, presumably on the assumption that the world will continue to lend it ever-increasing sums at rock-bottom rates with no impact on its credit rating.

But what would happen if a major ratings agency downgraded U.S. debt, or a big lender began to diversify away from U.S. debt, or the U.S. dollar plunged? This is a country accustomed to making the rules, then breaking them with impunity. But what happens if that impunity is removed, and the very forces of globalization that the Americans have trumpeted turn against the chief trumpeter.

In this circumstance, Canada could get sucked down by the world’s panicky reaction to U.S. mismanagement, in which case little would cushion our economy. Or Canada could be seen as a comparatively safe haven, with upward buying pressure on the Canadian dollar pushing it to levels beyond anything in our lifetimes.

With so much uncertainty, the best option for Canada is to get deficits down much faster than federal and provincial governments are now intending, refocus as much spending as possible on improving competitiveness rather than politically attractive subsidies and useless tax expenditures, and diversifying our economy like mad outside North America. The resulting life jacket would be thin, but it might provide a little insurance against the storms ahead.

[DanSC]

If Canada is worried now, how worried was Canadians back during the civil rights era?

[andyt]

Not at all. The US economy was doing well. Extending civil rights to blacks didn't seem like it would destroy that.

[DanSC]

andyt wrote:

Not at all. The US economy was doing well. Extending civil rights to blacks didn't seem like it would destroy that.

Good to see Canada has its priorities straight then.

[Thanos]

I wasn't around back then but, given the sober and mature character of most of Canadian politics and society overall, I highly doubt that there was mass panic verging on open violence at the thought of some changes being made.

The editorial is fairly two-faced though. It's just a clarion call to institute in Canada the same harsh, breakneck-pace austerity measures that have proven themselvs to be such collosal failures everywhere they've been attempted. I never thought that I'd see the day where a Liberal rag like the Globe would start to make noises that are suspiciously similiar to that of FOX News.

[andyt]

Thanos wrote:

I wasn't around back then but, given the sober and mature character of most of Canadian politics and society overall, I highly doubt that there was mass panic verging on open violence at the thought of some changes being made.

The editorial is fairly two-faced though. It's just a clarion call to institute in Canada the same harsh, breakneck-pace austerity measures that have proven themselvs to be such collosal failures everywhere they've been attempted. I never thought that I'd see the day where a Liberal rag like the Globe would start to make noises that are suspiciously similiar to that of FOX News.

I agree with him that we need to live within our means and start paying down debt rather than increasing it. I just see the source of the money to do this coming from a different source - ie starting the pain at the top and working your way down instead always hitting the poor. Saves money that way too - if you keep kicking the poor they keep kicking back with crime and by getting sick, so we have to spend money on the judiciary and health care. Take the fat from the top, and it will do them some good, they afford to lose a little weight.

The Globe seems more like a small c conservative paper to me, and Jeffery Simpson is one of their more conservative writers. None of that screaming mimi neo-con stuff tho (except for Neil Reynolds) and a little conservatism is a good thing.

[sandorski]

Looks like our Deficit is going to be less than Projected this year. GDP Growth may also be higher than Projected as well, TD Bank is Projecting 3.5% rather than the more commonly accepted 2.8%. If Oil Prices remain at these levels long enough, "Austerity" may be unnecessary. Given our GDP Growth though, that the Private Sector is doing quite well at this time, and that Stimulus Funds are waning as a factor in that GDP Growth, "Austerity" won't be as harmful to the Economy as it is/will be for other Nations.

In short, Canada remains in a very good position in comparison to other Nations.

[EyeBrock]

sandorski wrote:

Looks like our Deficit is going to be less than Projected this year. GDP Growth may also be higher than Projected as well, TD Bank is Projecting 3.5% rather than the more commonly accepted 2.8%. If Oil Prices remain at these levels long enough, "Austerity" may be unnecessary. Given our GDP Growth though, that the Private Sector is doing quite well at this time, and that Stimulus Funds are waning as a factor in that GDP Growth, "Austerity" won't be as harmful to the Economy as it is/will be for other Nations.

In short, Canada remains in a very good position in comparison to other Nations.

You know what Sand, when you get away from the silly 'fail' stuff, you have some good points. I'm verging on a postive rep for you. Nearly....

[sandorski]

EyeBrock wrote:

sandorski wrote:

Looks like our Deficit is going to be less than Projected this year. GDP Growth may also be higher than Projected as well, TD Bank is Projecting 3.5% rather than the more commonly accepted 2.8%. If Oil Prices remain at these levels long enough, "Austerity" may be unnecessary. Given our GDP Growth though, that the Private Sector is doing quite well at this time, and that Stimulus Funds are waning as a factor in that GDP Growth, "Austerity" won't be as harmful to the Economy as it is/will be for other Nations.

In short, Canada remains in a very good position in comparison to other Nations.

You know what Sand, when you get away from the silly 'fail' stuff, you have some good points. I'm verging on a postive rep for you. Nearly....

When I post "Fail", it isn't me being silly. True facts.

[andyt]

Sandorski - you fail to take into consideration what the article is talking about - the perilous state of the US. Us being smug about how well we're doing could see us get into serious hot water.

[sandorski]

andyt wrote:

Sandorski - you fail to take into consideration what the article is talking about - the perilous state of the US. Us being smug about how well we're doing could see us get into serious hot water.

We can't do much about what happens in the US. What we can do to help ourselves as best we can, we have pretty much done. So getting too worked up about the possible US scenario is largely a waste of our time. If it happens, it happens.

[andyt]

sandorski wrote:

andyt wrote:

Sandorski - you fail to take into consideration what the article is talking about - the perilous state of the US. Us being smug about how well we're doing could see us get into serious hot water.

We can't do much about what happens in the US. What we can do to help ourselves as best we can, we have pretty much done. So getting too worked up about the possible US scenario is largely a waste of our time. If it happens, it happens.

I think the author of the article makes some reasonable suggestions. So again, doing nothing because we're so sure we're OK, or following what would be good advice under any circumstances (pay down debt, diversify exports) - seems like a no brainer.

[CommanderSock]

One thing Harper has gotten right is signing free trade agreements with Colombia and South Korea, as well as promoting trade with China and setting up talks with possible EU market integration.

It won't hurt for us to hedge our bets.

[andyt]

Absolutely. I'ts good to hear that Asian wood exports are approaching those sent to the US. And, I would like to see that oil pipeline to the west coast built tout suite so we don't just send all our oil south. Gives us a better bargaining chip too.

Free trade with Europe is the big one, but there seem to be many impediments in the way.