[Winnipegger]

dino_bobba_renno wrote:

don't you think the market crash in that happened in October 2008 had any impact on the Federal revenues for the 2008/2009 year?

Of course it did. But if we started with around $17 billion surplus, we would have had a smaller surplus that year rather than a deficit. Stimulus spending in subsequent years would have caused a deficit, but starting with a surplus rather than deficit would have resulted in a smaller deficit.

Furthermore, I don't think Conservative stimulus spending has been well spent. For example, they didn't subsidize a sewage treatment plant for the town of Stonewall, Manitoba; just north of Winnipeg. That town had a major employer move in a few years ago, causing a housing boom. Employees want to leave near work rather than drive 45 minutes to an hour each way to/from Winnipeg. The town's sewage treatment plant is at capacity; the province prohibitted further house construction until they expand it. So subidizing that would have stimulated major house construction. Instead of doing that, they're building bicycle paths in Winnipeg.

[dino_bobba_renno]

Well, first off I have to address a comment from your previous post. It is impossible to tell what would have happened had Martin been re-elected. To say that we would have had the debt paid off by 2009 is in my opinion nothing more than speculation and poor speculation at that. There’s no telling what type of spending and/or policy initiatives Martin would have introduced in that time frame.

Maybe he would have introduced a carbon tax which could have had possible adverse effects, maybe he would have increased spending to win the 2008 election, maybe he would have followed a similar path of corporate tax cuts, who’s to say?

I think his spending would have been a bit more under control but to say he would have had the federal debt paid off by 2009, I’m sorry but that goes even beyond a long shot. You’re basically saying that he would have paid off over 500 billion in 3 years.

As for increases in spending over the past few years, some of it was necessary, some not. The “New Deal” for the provinces, increases to military spending, corporate tax cuts, child tax benefit, TFSA’s …. Most of the larger spending initiatives were election pledges and it was those spending commitments which got them elected. You or I may not have agreed with some or all of them but enough Canadians did and that’s why they’re in government and Martin and Dion are not. It’s what Canadians wanted.
*(For the record though, I would agree that not all of the spending initiatives were necessary)

As for stimulus spending the provinces did have some say in where the money was going. Also, with the time frame in which the stimulus was rolled out I’m surprised it’s not worse.

Now I gotta hit the sack, long day tomorrow and that damn proposal still isn’t done.

[Winnipegger]

No, I said he would have paid the debt down to the level it was when the Liberal government was elected in 1993. Not the whole debt, just pay off the debt incurred during the Liberal years. The deficit was killed so quickly that there wasn't much debt to start with, and had been paid down so rapidly that he need only stay the course. Furthermore, the 2005 budget stated the intention of raising the surplus to $14.4 billion by 2009. But the surplus for 2005/06 ended up much larger than predicted in the 2005 budget, so they didn't need to raise it. If they only kept the surplus between $17.4 billion (the actual surplus for 2005/06) and their stated target of $14.4 billion, then the debt would have been reduced to the level it was at the 25-October-1993 election, and they would have done that by 31-March-2009. I think expecting them to stay the course between their actual surplus and their stated intent is a reasonable assumption.
source for stated target: 2005 budget, "full budget plan", PDF document, page 249
source for 2005/06 "status quo surplus": 2006 budget, mentioned serveral times

Carbon tax? No, Stéphane Dion stated he pushed for that while Jean Chrétien was Prime Minister. The Chrétien/Martin Liberals said no. That's based on what Mr. Dion said during leadership debates, and a personal 2-hour conversation I had with him when he was campaigning for the leadership. I was a delegate. Based on past decisions, it's reasonable to believe they would stick by them. Dion only got his carbon tax in the platform by winning the leadership.

Corporate tax cuts? The Liberals did pass the bill to abolish corporate capital tax. The Conservatives try to take credit for it, but it was the Martin Liberals. They did state their intention to abolish corporate surtax, but not until after they could reduce personal income tax a little more. They did reduce corporate income tax from 28% when they took over from the Mulroney Conservatives in 1993, down to 21% as it was in 2006. They stated their intention to reduce it further to 19%, but only when the economy improved enough to do so without jeopardizing the surplus. So my assumption is based on Liberal stated intentions.

GST? No, Liberals stated their intention to keep it at 7%. No increase, no decrease. Just don't touch it.

Spending? Yes, the Paul Martin Liberals did state their intention to implement a national childcare program. This program would have cost roughly $500 million. That is instead of the Conservative $100/month childcare cheques; what does that cost, $2.6 billion?
source: http://www.cbc.ca/news/politics/canadav ... omise.html

So yes, it is reasonable to assume that Paul Martin would continue the policies he had implemented since he was Finance Minister in 1993. (Or was he sworn-in January 1994?) That would have resulted in reducing the debt to the October 1993 level by the date I calculated.

[dino_bobba_renno]

I’m sorry I misread what you had said. I was going off of the following statement:

Winnipegger wrote:

I'm saying all the debt would have been gone by 31-March-2009 if the Liberals had been re-elected in 2006

But I see now where you were talking about it being down to the level it was when they entered government. I thought for a minute there you were just one of the biggest optimists this side of Ontario.

I think the debt probably would have been paid a bit more but really were talking about a three year time frame here. Now don’t forget that the debt was paid down the first few years under Harper including one doozey of a payment in 2008. I don’t really think you would have seen any additional payments which would have been sizable enough to have made a significant difference. But I do agree it probably would have been paid down a bit more.

Carbon tax, well I don’t personally believe he would have introduced one either but if you look at the time frame in which we are referring to there was a lot of pressure to implement something. He may not gone all the way on a carbon tax but some form of a cap and trade scheme or something to a lesser effect may have come to be. The reason I don’t think he would have is because oddly enough he and Chretien were fairly supportive of increasing Canada’s oil exports despite the face they presented to the public when it came to issues like Kyoto. That’s why I can’t for the life of me understand the party’s stance on the moratorium for oil tankers off the west coast. It was under Chretien/Martin when the whole idea of increasing oil exports to China via those terminals came to be.

On corporate tax cuts, as you yourself have pointed out Martin was a very big proponent of them. I would agree with you to some degree in saying that I don’t think he would have gone as far as the Conservatives had but I would say he would have at least hit his target of 19% by the time the financial crisis hit. If they had as much money as you say they would have then he would have had no reason not to.

Child care; Martin had committed a measly 500 million to childcare, 1/5 of what the current $100/month costs annually. There are only two ways this would have gone: either that program spending would have increased dramatically or we would have been stuck with some half assed program that didn’t get the job done. On one hand the Liberals say that the current 2.5 billion isn’t enough and then they turn around and say they can do more with 1/5 that amount. $20 a month per child, you’re gonna have to give me some really detailed info on their plan before you convince me that you can do anything meaningful with that amount of money. Hell, you couldn't even impliment a snack program in the existing daycare system for that kind of money.

In my view, you would have to have a pretty sizable amount budgeted to create the day care plan they had envisioned. Personally I think up to a certain point in spending giving money directly is more effective. If you can afford to spend a larger amount then Liberal plan would be more effective but you need to be ready to not only sustain that spending but also increase it as time goes by.

I don’t know, I think you’re painting a pretty rosey picture of what could have been. I don’t disagree with everything your saying out right but it’s a pretty optimistic point of view.