(I wrote the following to circulate to some European colleagues.) Apparently former Canadian Finance Minister and Prime Minister Paul Martin is being tapped by the Europeans for advice on fiscal matters. “Former prime minister Paul Martin, finance minister in the 1990s when Canada’s dangerously high federal deficit was tackled and then eliminated, said Thursday he’s been engaged in “informal” discussions […]
Read moreIn an important series of columns in the Financial Times, economics editor Martin Wolf has been making the argument that – to avoid a relapse into recession – governments must run deficits so long as the private sector is running large surpluses of savings over spending. “Jumps in fiscal deficits are the mirror image of retrenchment by battered private sectors. […]
Read moreAn interesting column, arguing that the very limited rise in unemployment in the Great Recession in Australia owes a lot to a well-constructed stimulus program of the Labour government, based on higher transfers to lower income households plus short and medium term infrastructure investment. http://column.global-labour-university.org/2009/11/riding-your-luck-and-adopting-right.html
Read moreLast Monday, I testified twice to the Ontario legislature’s finance committee: as an “expert witness” and then on behalf of the United Steelworkers. I emphasized the provincial deficit’s manageability, the folly of trying to reduce it through cutbacks or privatization, the importance of maintaining tax rates to bolster future revenues, and the advantage of targeted measures to create jobs rather […]
Read moreThe Global Labour University are publishing Global Labour Columns on the general theme of how labour should be responding to the crisis. The most recent is by yours truly, re working some pieces previously posted to this blog. The other columns posted are well worth a look. http://column.global-labour-university.org/
Read moreAs the communique from the Pittsburgh G20 put it, “it worked.” Unprecedented macro-economic stimulus in the form of ultra low interest rates and large government deficits pulled the global economy back from the abyss. Canada has now joined most countries in exiting the recession, at least very tentatively. But what is next? The official line from the Canadian government, the […]
Read moreLast Saturday the Globe and Mail (November 28, page B1) ran a multi-page spread on national government debt. It was a mish mash of large titles, large numbers and sensational assertions: “A World Awash in Debt”; “Climbing out of this hole won’t be easy”; “the numbers are staggering”, “debt would climb to about 300 percent of GDP… tweak that and […]
Read moreThe Economic Policy Institute in the US have released a five point American Jobs Plan which, hopefully, will be a major focus of discussion at the soon to be convened Presidential Jobs Summit. http://www.epi.org/index.php/american_jobs/american_jobs_plan Speaking to a joint CLC/CCPA meeting a couple of weeks ago, EPI President Larry Mishel – who has been invited to the Summit – said that […]
Read moreAs everybody who reads this blog knows, then Finance Minister Paul Martin brought the federal budget back into balance in the mid 1990s by, in significant part, slashing federal transfers to the provinces and eliminating automatic escalators in the new transfers he created. That cannot and will not be allowed to ever happen again, says Canada’s (now not so) New […]
Read moreI blogged recently about the likely pending attack on public service workers. http://www.progressive-economics.ca/2009/11/10/public-sector-workers-the-recessions-next-victims/ This battle will, of course, be fought by right wing (and perhaps not so right wing) governments in the name of “fiscal responsibility”, and justified with reference to the imperative need for “exit strategies” from Great Recession deficits and debt accumulation. The International Monetary Fund staff recently […]
Read moreI fear that Tom Walkom of the Toronto Star is bang on when he argues that the next victims of the recession will be public sector workers. http://www.thestar.com/news/canada/article/722505–walkom-recession-s-next-victim-will-be-public-sector As he writes: “The federal government has already signalled plans to get tough with its workers. In Ontario, Premier Dalton McGuinty gave notice this week that the province’s public sector – including […]
Read moreA guest post from PEF Steering Committee member, Nick Falvo, initially published in The Charlatan: Spending on students makes sense Students from across Ontario took to the streets Nov. 5 to fight for a fairer deal for post-secondary education. This is a struggle that students must fight to win, as decreasing government funding, rising tuition fees and a slumping economy […]
Read moreFurther to my post of last week, I note that the Department of Finance Update of Economic and Fiscal Projections shows that the federal debt to GDP ratio will start falling after the next fiscal year … ie from 2011-12…. even though we will be running quite significant fiscal deficits — eg $27.4 Billion in 2011-12. While many media pundits […]
Read moreWe seem set to go into the next election – which could be in a matter of days - with both the Conservatives and Liberals firmly committed to bringing the federal Budget back into balance in a relatively short time frame, with no tax increases. There appears to be no sign of a break in the conventional wisdom that “exit […]
Read moreThe London G-20 summit last fall may go down history as the meeting that saved the world. That’s a huge exaggeration of course, but leaders did agree to a program of co-ordinated monetary and fiscal stimulus which may have arrested an economic free-fall, and they agreed to an agenda for financial re-regulation with a view to making sure that it […]
Read moreThe September BC Budget is a new look at a budget most have come to see as a fake. February’s budget was not passed through the legislature due to the May election, and up to E-Day the government maintained the fiction that it had a small-ish deficit of just under half a billion dollars. Since that time, the government has […]
Read moreMy friend and former union (AFL-CIO) economist colleague Tom Palley has produced a characteristically lucid piece on the macro economic roots of the US and global crisis for the New America Foundation. He interprets our predicament as a crisis of the neo liberal growth model and not as a failure of financial regulation or, for that matter, conventional macro economic […]
Read moreBelieve it or not, in 2011, the “new” EI Fund will begin life $10.5 Billion in the hole, setting the stage for a big job-destroying hike in premiums, even though there is a $57 Billion surplus in the “old” EI Account. In the 2009 Budget (p 106) , the federal government announced that it would freeze the EI premium rate […]
Read more(This covers some familiar ground, but I was asked to summarize a presentation I made to a Columbia Institute organized session for progressive locally elected officials last week and thought it might be of wider interest.) The world and Canada are in the deepest economic downturn since the 1930s as the financial crisis has spread with a vengeance into the […]
Read moreThe 2009/10 federal deficit is now projected to hit $50 billion, the largest ever in nominal terms. The media seem to be obsessed with the nominal number, even though Canada’s economy has more than doubled in nominal terms since we saw the previous record of $39 billion in 1992/93. If that deficit number holds (and it most surely will not […]
Read moreWe may all be Keynesians now in terms of the public discourse,  but governments are mainly posturing rather than delivering. That strikes me as a fair summary of a technical and rather dismal discussion of fiscal stimulus packages by the OECD (Chapter 3 of the Interim Economic Outlook relased just before the London G20 Summit.) http://www.oecd.org/document/59/0,3343,en_2649_33733_42234619_1_1_1_1,00.html The OECD calculate that […]
Read moreA year and a half ago I published an updated study on tax incidence in Canada. It found that the Canadian tax system is progressive up to the middle of the income distribution, then flattens out before becoming regressive at the very top. (Interestingly, a short piece on the US tax system by Citizens for Tax Justice just came out […]
Read moreI was out of the country but have the impression that the extremely gloomy OECD forecast and critical recommendations for Canada released just before the G20 London summit were not given the attention they deserved. http://www.oecd.org/document/59/0,3343,en_2649_33733_42234619_1_1_1_1,00.html The OECD released its intermim outlook largely to push the case for more stimulus by G20 countries, particularly those, like Canada, with strong fiscal […]
Read moreIn the last few months, governments here and abroad have made every effort to “turn on the taps” of credit — in Canada, we have more than half a dozen such programs (and counting) under the banner of the EFF (Extraordinary Financing Framework), including (but not limited to): the IMPP (InsuranceMortgage Purchase Program); the CSCF (Canadian Secured Credit Facility); the […]
Read moreJust before Christmas, and lost between a trip to the mall and turkey with stuffing, David Laidler wrote a phenomenal piece on how we should be thinking strategically about a coordinated monetary and fiscal policy. I have reposted the key excerpt below because it should really be part of the mainstream discussion about how we address the growing crisis in […]
Read moreI am a great admirer of Arthur Donner and Doug Peters who have kept the flame of Keynesian economics alive in Canada for many years and regularly provide good progressive commentary. But I’m a bit out of sympathy with their column in today’s Toronto Star. http://www.thestar.com/comment/article/590916 Their major argument is that Canada now faces structural deficits, and that tax increases […]
Read moreFaced with a nasty recession at its doorstep, the BC budget is uninspiring and underwhelming in its ambition. Overall there is little that actively plans for a recession, preferring instead a steady-as-she-goes budget, perhaps aimed at cultivating the image of responsible economic managers in a time of crisis. There are no tax cuts or drastic spending cuts, thankfully, but nor […]
Read moreIn today’s Vancouver Sun, Neils Veldhuis and Milagros Palacios act as yang to my yin on the oped page. Their pre-budget oped seems strangely distant from the day-to-day reality of a recession that is unfolding in BC and elsewhere. Their response could have been written two or five years ago: the solution is to cut taxes and spending, and all […]
Read moreI have an oped in today’s Vancouver Sun, juxtaposed against the Fraser Institute, unfortunately. I’d like to think mine is much more timely and appropriate given the current economic situation (I’ll get to theirs in a subsequent post). BC Needs an Action Plan to Fight a Nasty Recession On February 17 the BC government will table the province’s first recession […]
Read moreThe Canadian Bankers’ Association must be happy. They’ve somehow managed to convince pundits south of the border, and even a few here who really ought to know better, that they’ve somehow been able to weather the economic and financial storm with absolutely no help from the federal government. The most recent evidence for this position is this editorial by Newsweek […]
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