[Bruce_the_vii]

Bruce_the_vii wrote:

……………………City of Toronto Social Disaster




……………………………Half-a-million Immigrants before job recovery
The Greater Toronto Area took 6 years and 5 months to recovery its jobs total after the 1990/91 recession, until Nov. 1996. In that time some 558,579 new immigrants arrived in the city. That is half-a-million immigrants before a single new job was created. The area has not recovered as of 2009.

I post these monster statistics on macro economic folly here in the Economist? thread to almost no reaction. That happens to be grassroots politics.

[Bruce_the_vii]

The Chairman of the federal Liberals Election Platform Committee, one Navdep Singh, writes me on Sept. 11 that my economic ideas are "intriguing" and he is circulating them amongst the platform develment team. So,good.

[Bruce_the_vii]

Economic and social facts of life on the City of Toronto (416):

Child Poverty as per the 2006 Census data is 31.8%
Median family income in the city is $12,800 less than the Ontario median
Adults earning less than $12 an hour is 2.2 times the rate in Calgary
The real unemployment level, by comparison to Alberta, would be 21% in 2009


This is my summary of economic data, data which I’ve posted before but do so here briefly. The City of Toronto has been driven by political immigration and this is the result. It’s topical as it’s shows Ignatieff/McCallum’s macro economics is on the level of Trudeau/McDonald and why the two have no future with the Liberal caucus, let alone us.

[Bruce_the_vii]

It's interesting but the money is there to afford the aging population without heavy tax increases. I was looking at the numbers and there are three sources of additional tax revenues without tax increases. They are productivity, getting more people in the labour force and paying down the federal and provincial debt. In the next 20 years these each provide a percent or two of the GDP to federal tax revenues and cover the dramatic cost increase in the number of people retired compared to the number of people working.

It should be noted that the usual fix of economic growth through immigration is not effective in comparison. Getting the population bigger through immigration only shaves government costs. This is because immigrants come as families and add dependants in the way of children. So the advantage of economic growth through population growth is only the difference in cost between children and the elderly.

The Canadian economy just came through a seventeen year long expansion which was only interupted because of the American Mortgage Meltdown. If the Canadian economy returned to this performance in the next 20 years the aging problem would take care of itself. There might be a need to increase taxes a percent or two of GDP but this would be bearable.

The seventeen year long expansion is not generally mentioned in the newspapers but it's incredible and unprecidented. It is the result of the Bank of Canada targetting inflation. That and the cooperation from the citizens. Unions have gone from being militant to leading the way in inflation control and accepting below inflation and below average wage increases. In addition we live in an era of the Global Economy and wage disparity and these promote co-operation by business and citizens with controlling inflation.

Good luck to you. My own future is secured by my wifes government pension, some investiments and the government pensions. In the worst case I will live like a student again, which was fine.

[Bruce_the_vii]

You can work out that there are three ways to get more tax revenue without tax increases with a calculator.

If the national debts was paid down as it was in the last decade and there was economic growth, the carrying charges on the debt would shrink as a percent of GDP. This is where Harpers surpluses came from. If government pays 5% interest and the debt is reduced from 50% of the GDP to 25% then the federal tax revenues available as a percent of precent GDP are 25 * 0.05 = 1.25%

Also you can get more people working. If Canada came to Alberta's present level of employment there would be 1.3% more of GDP in federal tax revenues. Alberta is 8% - 10%ahead of Canada in employment.

Productivity of the economy has been increasing by about 3/4% lately so in fifteen years there'll be an 11.25% larger pie - of which the federal government will get 1.9% of GDP in tax revenues.

That's 1.25 + 1.3 + 1.9 for 4.45% of GDP as new federal tax revenues, a stiff increase. The patterned is repeated with the provincial tax revenues, so double it to 8.9% of present GDP without a tax increase. There’s money there for the aging challenge. The problem is the politicians will try to spend it, spend it twice.

[Lemmy]

How about reducing tax rates? If we're on the downslope of the Laffer curve (which we are), reducing tax rates will increase total tax revenues.

[Bruce_the_vii]

That's by getting more people working, item 2. That growth is simply as cutting taxes has been tried in the US and it's different from deficts how?

[Lemmy]

Bruce_the_vii wrote:

That's by getting more people working, item 2. That growth is simply as cutting taxes has been tried in the US and it's different from deficts how?

huh?

[Curtman]

Lemmy wrote:

If we're on the downslope of the Laffer curve (which we are)

Just because you keep saying it, doesn't make it true.

[Bruce_the_vii]

Lemmy wrote:

Bruce_the_vii wrote:

That's by getting more people working, item 2. That growth is simply as cutting taxes has been tried in the US and it's different from deficts how?

huh?

As I recall Reagan cut taxes to create jobs but ran huge deficits. It was deficit spending again. How did Reagan work out in the end?

[Lemmy]

Bruce_the_vii wrote:

As I recall Reagan cut taxes to create jobs but ran huge deficits. It was deficit spending again. How did Reagan work out in the end?

The USA wasn't on the downslope of the Laffer curve. We are.

[Lemmy]

Curtman wrote:

Just because you keep saying it, doesn't make it true.

Huh? It's true whether I say it or not. And why would you be argumentative about this?

[andyt]

http://www.politicsandcurrentaffairs.co.uk/Forum/peak-oil-economics-environment/24190-debunking-laffer-curve.html

Quote:

But here's the problem when we take Laffer's theory and try to apply it in the U.S.: We don't have a 99 percent marginal tax rate. Or 70 percent. Or even 50 percent. We start with low marginal tax rates relative to the rest of the developed world. (Yes, I understand that it may not feel that way after the check you wrote last month.)

So cutting the tax rate from 36 percent to 33 percent is not going to give you the same kind of economic jolt as slashing a tax rate from 90 percent to 50 percent. There's no huge black market to be shut down, no big supply of skilled workers to be lured back into the labor market, and so on.

Will it generate new economic activity? Probably. And that will generate some incremental tax revenue for the government. But remember, it also means that the government will be taking a smaller cut of all the economic activity that we already have.

Think about a simple numerical example: Assume you've got a $10 trillion economy and an average tax rate of 30 percent. So the government takes $3 trillion.

Let's cut the average tax rate to 25 percent and, for the sake of example, assume that it generates $1 trillion in new economic growth (a Herculean assumption, by the way). So now, what does Uncle Sam get? One quarter of $11 trillion is only $2.75 trillion. The economy grows, government revenues shrink.

That's basically what happened with the large Reagan and George W. Bush tax cuts, both of which were followed by large budget deficits. Yes, spending has a lot to do with that, but the bottom line is unequivocal: In both cases, government revenue was lower than it would have been without the tax cuts.

Are our tax rates really that much higher than in the US, that this argument doesn't apply to Canada?


To bad Dick Cheney didn't shoot Laffer instead of Whittington. I think we'd all be a lot better off.

[Proculation]

Like said in your quote, that's not the same thing. The taxes were VERY high before Reagan for the individuals. That's quite obvious it was counter productive.

As for the Laffer curve, the problem is that it is a concept, not a "real" curve that you can refer to. It's pretty much an "essai et erreur" (try and mistakes?) concept.

[Bruce_the_vii]

andyt wrote:

To bad Dick Cheney didn't shoot Laffer instead of Whittington. I think we'd all be a lot better off.

lol