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Noah Schafer

Federal deficit could be lower than expected - CTV News - 0 views

www.ctv.ca/...updated-deficit-110527

debt Canada jobs deficit operations stimulus

shared by Noah Schafer on 05 Jun 11 - No Cached
  • The federal deficit for the year just finished will come in lower than the $40.5 billion predicted in March's budget, Ottawa says.
  • The assessment about the deficit is contained in the Finance Department's monthly update of the government's books, which sets the preliminary standing on the deficit at $34.4 billion for the fiscal year 2010-11.
  • the department is careful to caution that the figure is preliminary and will likely rise after end-of-year adjustments on tax returns and valuation adjustments for assets and liabilities are done in the fall.
  • ...6 more annotations...
  • Ottawa set a record $55.6 billion deficit in 2009-10, when the recession hit hardest, but has improved that position by between $15 and $20 billion in one year.
  • "However, based on the results to date, the final 2010-11 deficit is expected to be lower than the $40.5 billion as projected in the March 22 budget."
  • History has shown those adjustments can amount to billions of dollars in additional expenditures.
  • During the election campaign, the Conservatives pledged they would balance the budget in four years -- one year earlier than planned -- by finding an additional $4 billion in savings from operations.
  • The department said $17 billion, or about half, of last year's deficit was due the stimulus package.
  • In April, the International Monetary Fund pegged Canada's combined federal-provincial fiscal deficit at 4.1 per cent of gross domestic product, lower than the U.S. (10.5 per cent) and the United Kingdom (8.1 per cent).
Noah Schafer

Battle to slay the budget deficit continues to stall - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2040896

debt Canada deficit lower economy

shared by Noah Schafer on 05 Jun 11 - No Cached
  • The Department of Finance estimates that the budget balance for the fiscal year 2010-11 will come in below what had been forecasted, and well below the deficit of 2009-10.
  • he Department of Finance estimates that the budget balance for the fiscal year 2010-11 will come in below what had been forecasted, and well below the deficit of 2009-10. It was expected and hoped that the budget balance would improve as the econom
  • The deficit has been stalled in the $35-billion a year range for the past 8-10 months.
  • ...3 more annotations...
  • The steep decline in the 12-month moving sum that was produced by the recession finally turned around in early 2010, but the rebound lasted only a few months.
  • The graph also makes it clear that the trend to deficit began in early 2008, several months before the recession began.
  • The federal government’s decision to cut the GST would have produced a deficit even if the economy had remained stable.
Kevin Yeo

AmericanEconomicAlert.org Blog Network - 0 views

americaneconomicalert.org/blogger_home.asp

US Trade Deficit Export

shared by Kevin Yeo on 03 Jun 11 - No Cached
  • The rise in the oil deficit did indeed greatly outpace the rise in the overall deficit for March – 22.78 percent versus 6.03 percent.  But the increase in the deficit for high-tech products also surged – by 17.00 percent.  And the manufacturing deficit grew by 6.24 percent.
  • But deficits in these sectors kept increasing because their much larger import levels rose robustly, too.  Meanwhile, for the first quarter of this year, the overall trade deficit is running  23.46 percent ahead of last year’s comparable total – which in turn was up 25.91 percent from the first quarter 2009 number.
  • In March alone, U.S. exports of high tech products jumped by 20.26 percent (from $21.01 billion to $25.27 billion), while manufactures exports overall rose even faster – by 21.57 percent (from $71.56 billion to $86.99 billion).  
  • ...1 more annotation...
  • Bottom line: Despite genuinely booming imports, trade flows still kept dragging down America’s growth and employment performance, and still kept boosting the country’s debt burden.  Do these trends really deserve the label “recovery”?
Ms Cuttle

Show cards on structural deficit, watchdog tells Tories - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2268052

structural deficits federal budget

shared by Ms Cuttle on 12 Dec 11 - No Cached
  • “Distinguishing between structural and cyclical components of a government’s budget balance is crucial because, while the cyclical component may be expected to dissipate over a medium-term horizon as the economy returns to its full potential, the structural component may necessitate policy measures,”
  • he PBO’s own analysis concludes that if the Conservative government succeeds at reigning in spending as planned over the coming years, the structural deficit will fall from $25-billion this year to only $1.6-billion in 2016-17.
Ilia Merkoulovitch

Government can't balance books by 2014: watchdog - thestar.com - 1 views

www.thestar.com/...balance-books-by-2014-watchdog

Defecit debt economic growth

shared by Ilia Merkoulovitch on 01 Jun 11 - No Cached
  • The Conservatives, who are running a $30-billion deficit this year, said in the March 22 budget that they could erase the deficit by 2015.
  • The likelihood of realizing budgetary balance or better in 2014-15 is approximately 20 per cent and approximately 35 per cent in 2015-16
  • The parliamentary budget office forecasts annual budget deficits between now and 2015 totalling $128 billion
  • ...2 more annotations...
  • Unemployment, now at 7.6 per cent, will remain considerably higher between now and 2015
  • Sluggish U.S. growth combined with the Canadian dollar remaining above parity will subdue near-term growth in the Canadian economy and restrain the decline in the unemployment rate.”
  • Ilia Merkoulovitch on 01 Jun 11
     
    Government won't be able to get rid of deficit by 2015 as planned
Noah Schafer

CTV Toronto - Harper plan would eliminate deficit by 2014 - CTV News - 2 views

www.cp24.com/...20110408

debt Canada jobs deficit

shared by Noah Schafer on 05 Jun 11 - No Cached
  • Prime Minister Stephen Harper unveiled his party's election platform Friday, promising a Conservative government would eliminate the deficit by 2014-2015
  • Harper said there were no plans to cut major programs and said the billions in cost savings required to balance the books would come from slashing government's operating cost
  • Conservatives understand you cannot tax your way to prosperity, you cannot create jobs by raising taxes," Harper said.
  • ...2 more annotations...
  • It also features a bundle of crime bills that would be passed in the first 100 days of Parliament
  • The five main priorities of the campaign platform are jobs creation, supporting families, eliminating the deficit, getting tough on crime, and investing in the North.
alex yesikov

Governments Are The Primary Creators Of Systemic Risk - Charles Kadlec - Community of L... - 2 views

blogs.forbes.com/...mary-creators-of-systemic-risk

Greece Systemic Risk Blog Resession Euro

shared by alex yesikov on 30 May 11 - No Cached
  • The greatest lesson of the still young 21st century is proving to be that governments are the primary source of systemic risk to the economy, our standard of living, and our liberty.
  • The latest case in point is the European government debt crisis, with Greece once again running out of money and threatening to trigger yet another financial crisis.  The government’s debt now totals more than 150% of its GDP, and continues to grow.  Last year’s bailout by other European governments was supposed to give it the time needed to reduce its budget deficits so that next year Greece could roll over its maturing debts, as well as finance additional deficits at interest rates under 6%. However, the government’s austerity plan of tax increases and budget cuts has not reduced current or projected government deficits because the economy in 2010 contracted by 4.5% and the unemployment rate jumped to 15%.
  • Normally, this would be a matter between a debtor and its creditors. However, European Central Bank (ECB) Executive Board Member Juergen Stark warns that the effects of restructuring “could overshadow the effects of the Lehman bankruptcy,” which is associated with the beginning of the 2008 financial crisis.
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  • In the case of Greece, government actions and regulations also lie at the heart of what threatens to be a European financial crisis.
  • This risk is amplified by special rules created by politicians that encourage banks to lend freely to governments.
  • Here’s how it works. Governments require banks to hold capital against the loans that they make, anticipating that in the normal course of business, some of the loans will not be repaid.  The riskier the loan, the more capital that needs to be held in reserve. However, under international rules negotiated by government representatives through the Bank for International Settlements (BIS), government loans fit into a special category that has a 0% risk requirement.  That means European banks do not have to hold any reserves against loans they make to European governments.  That’s right, politicians implicitly promised banks that governments would never default.  And, given the opportunity to make “risk free” loans that require no capital commitment, bankers purchased mountains of government debt.
Joey Keum

UPDATE 2-Canada unveils plan for jobs, balanced budget | Reuters - 0 views

www.reuters.com/...politics-idUSN0316118820110603

canadians market jobs

shared by Joey Keum on 04 Jun 11 - No Cached
  • Aims to balance budget by 2014 without raising taxes
  • OTTAWA, June 3 (Reuters) - Canada's Conservative government will focus on jobs and growth while eliminating the federal budget deficit, it said on Friday as it unveiled a plan for the four-year mandate it won in last month's election.
  • "We will get back to work on the things that matter most to Canadians: good jobs, security for our families and a prosperous future," Johnston said on behalf of the government.
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  • "Jobs and growth will remain our government's top priority," Johnston said.
  • "In order to accelerate the return to a balanced budget and to eliminate the deficit one year earlier, over the next year we will undertake a strategic and operating review of government spending," he said.
  • "Our government's plan will put us on a strong footing to resume paying down the federal debt, further reduce taxes on families and continue investing in priorities."
Chris Li

The Progressive Economics Forum » Out of Equilibrium: Why EU-Canada Free Trad... - 2 views

www.progressive-economics.ca/...de-wont-work-in-the-real-world

Free Trade Canada European Union

shared by Chris Li on 02 Jun 11 - No Cached
  • comprehensively liberalize trade in goods and services, government procurement, foreign investment, and other important economic interactions between the two parties.
  • The recent appreciation of the loonie against the euro (up 18% since the two sides first committed to free trade talks) vastly overwhelms any cost advantage Canadian exports could hope to attain in European markets through tariff elimination.  Aggregate trade imbalances, and the skewed sectoral composition of trade, imply that Canada already loses some 70,000 jobs
  • The EU and Ottawa commissioned a joint economic study which predicted mutual economic gains from a free trade agreement, worth approximately $12 billion per year to Canada by 2014.  However, that report incorporates bizarre and far-fetched assumptions regarding the self-adjusting nature of all markets, and the manner in which free trade would be implemented and experienced. 
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  • even the government’s own report shows that Canadian imports (of both goods and services) from the EU will increase by twice as much as Canadian exports to the EU, substantially widening the existing bilateral trade deficit.
  • exports grew less rapidly with FTA partners than with non-FTA partners, but imports grew quicker with FTA partners than with non-FTA partners. 
  • In the real world, free trade agreements (not surprisingly) tend to make existing trade imbalances even worse: this is true throughout economics, where deregulation generally tends to exacerbate the imbalances and unevenness of market outcomes.
  • Three scenarios are presented: one in which tariffs are mutually eliminated; one in which EU-Canada trade expands in line with the historical experience of Canada’s previous FTAs; and one in which tariff elimination is combined with the appreciation of Canada’s currency (versus the euro) which has been experienced in fact since the two parties launched free trade negotiations.  In every case, the bilateral trade balance worsens significantly (and in the third scenario, it worsens dramatically – since the higher Canadian dollar reduces Canadian exports, even as imports from the EU are surging).  Based on average employment intensity across 23 goods-producing industries, the simulations suggest an incremental loss of between 28,000 jobs (in the first scenario) and 150,000 jobs (in the third).  Direct losses in Canadian GDP range between 0.56 percent in the first scenario, and almost 3 percent in the third.
  • A free trade agreement with the EU will exacerbate Canada’s existing large bilateral deficit, at the expense of output and employment in many important sectors of the economy. 
ngodup yaklha

http://www.theglobeandmail.com/report-on-business/economy/eu-grapples-with-greek-crisis... - 0 views

www.theglobeandmail.com/...article1463543

Deregulation

shared by ngodup yaklha on 05 Jun 11 - No Cached
  • ngodup yaklha on 05 Jun 11
     
    The second was failure to deal with its huge structural costs, the result of excessive government hiring and lack of deregulation. Stefanos Manos, the retired politician who was minister of economy and finance in the early 1990s, launched Greece's deregulation and privatization process. Before he lost his job in 1993, the telecom industry deregulation was well under way and public-private partnerships were put in place. Later, banking was deregulated to some degree. But then the political will to keep going evaporated and the deregulation process pretty much stopped. By last year, Greece's debt as a percentage of GDP was about 112 per cent, more than double that of Spain (another ailing euro zone country) while its budget deficit reached 12.7 per cent of GDP, the EU's highest. The spectre of Greece going bust sent Greek bond yields soaring last week, sending the euro in the opposite direction.
ngodup yaklha

http://www.theglobeandmail.com/report-on-business/greece-prepares-for-asset-fire-sale/a... - 0 views

www.theglobeandmail.com/...page2

Greece-Deregulation

shared by ngodup yaklha on 04 Jun 11 - No Cached
  • ngodup yaklha on 04 Jun 11
     
    Greece's first privatization effort was launched in the early 1990s under Stefanos Manos, who was minister of economy and finance at the time. Before he lost his job in 1993, the telecom industry deregulation was well under way and public-private partnerships were put in place. Later, banking was deregulated to some degree. But then the political will to keep going evaporated and the deregulation and privatization processes pretty much stopped. Mr. Mitsopoulos says the biggest potential obstacle to the success of the privatization program is a dragged-out process. Fast sales would do two things, he said. It would collect a lot of money quickly, which could be used to pay down debt, and it would deliver the message that Greece is finally serious about making its economy competitive. "All these state investments are burdens on the government," he said. "Privatizations will deliver productivity gains and they can be transformed into tax-paying entities." Privatizations are expected to pick up pace across the EU, as countries with budgets deficits above the 3-per-cent EU limit look for quick debt fixes in the absence of strong GDP growth. The Loterias privatization in Spain is expected to raise about €10-billion, valuing the company at as much as €25-billion, making it the second-largest gaming company in the world, behind casino manager Las Vegas Sands.
Kiruban Mahadeva

The Canadian Press: Time for U.S. to deal with debt problem; spillover could hurt Canad... - 1 views

www.google.com/...M5gJ9kKsGOWKz-UmEeHBogtbF6PLHw

Debt GDP

shared by Kiruban Mahadeva on 02 Jun 11 - No Cached
  • concerned about the mounting level of debt in the United States and its potential to slow Canada's recovery
  • when debt exceeds 90 per cent of GDP, economic growth will slow, and that is a situation facing most of Canada's major trading partners, particularly the U.S
  • as markets lose patience with the pace of deficit reduction, the result will be higher interest rates that impact all
  • ...1 more annotation...
  • It's a transformation that sees emerging markets like China bound forward while advanced countries — Canada's traditional economic partners — muddle along through years of slow growth because of massive debt.
Kiruban Mahadeva

Canada 2011 Budget: Flaherty Budget Speech (Text) - Bloomberg - 1 views

www.bloomberg.com/...herty-budget-speech-text-.html

Government Spending Taxes Debt

shared by Kiruban Mahadeva on 03 Jun 11 - No Cached
  • The global economy is still fragile. The U.S. and our other trading partners are facing challenges. Compared to other countries, Canada's economy is performing very well-but our continued recovery is by no means assured. Many threats remain.
  • Securing our recovery from the global recession The Next Phase of Canada's Economic Action Plan is critically important
  • Now is not the time for instability. It would make it harder for Canadian businesses to plan and to expand. It would drive investment away to other countries. It would jeopardize the gains we have made.
  • ...18 more annotations...
  • We will keep taxes low. We will undertake additional targeted investments to support jobs and growth
  • massive tax increases
  • We will not give in to Opposition demands to impose
  • This reckless policy would lead to continuing deficits and higher taxes on all Canadians. It would stall our recovery, kill hundreds of thousands of jobs and set families back.
  • Sustained growth comes from the private sector. We will help businesses to create jobs. We will not raise taxes on growth.
  • Since July 2009, the Canadian economy has created more than 480,000 new jobs-more than were lost during the recession
  • we remain concerned about the number of Canadians looking for work
  • We need to keep protecting and creating jobs now
  • Keeping taxes low A key part of that foundation is low taxes.
  • Our government has delivered tax relief for all Canadians
  • Our tax cuts are also helping employers to invest, grow and create jobs.
  • Our commitment to low taxes is supported by a strong consensus: that protecting Canada's tax advantage is key to securing our recovery.
  • Canadian industries Even so, in the current global economic climate, many businesses remain hesitant to invest and to hire.
  • Our government will take further action to encourage them to expand and create jobs.
  • The Hiring Credit for Small Business will provide a one-year EI break for some 525,000 Canadian small businesses
  • Expanding international trade Beyond this, we will promote new export opportunities for all Canadian businesses
  • We need to keep expanding our access to foreign markets, to create new jobs here at home.
  • We will provide greater financial security for Canadians, and practical help to make ends meet.
Ilia Merkoulovitch

UDPATE: Canada Budget Watchdog Sees Deficit Through Fiscal 2016 - WSJ.com - 0 views

online.wsj.com/...BT-CO-20110601-711646.html

Economic growth defecit debt election

shared by Ilia Merkoulovitch on 01 Jun 11 - No Cached
  • Ilia Merkoulovitch on 01 Jun 11
     
    Odds are very slim for the Canadian government to balance the budget by 2015. Though growth is projected at 2.9% for 2011, it is projected lower around 2% for 2012 and 2013
Noah Schafer

Jobless rate, global uncertainty to test Tories' economic strategy - thestar.com - 0 views

www.thestar.com/...-test-tories-economic-strategy

Canada USA Corprate tax stimulus governmentspending

shared by Noah Schafer on 05 Jun 11 - No Cached
  • The new Conservative government’s business-friendly economic strategy will be tested by uncertain global conditions and a stubbornly high jobless rate in Canada. One of the first items on Prime Minister Stephen Harper’s agenda when Parliament re
  • The new Conservative government’s business-friendly economic strategy will be tested by uncertain global conditions and a stubbornly high jobless rate in Canada.
  • n February, Canada’s output sank by 0.2 per cent, the worst monthly performance since May 2009.
  • ...9 more annotations...
  • One of the first items on Prime Minister Stephen Harper’s agenda when Parliament returns will be reintroduction of a $278 billion budget that includes a sprinkling of social and economic spending and a plan to slay the budget deficit in several years. And the government will continue with a $6 billion corporate income tax cut.
  • “The risks still lie outside the Canadian border, which as we’re well aware can have a spillover effect on Canada,” said Royal Bank chief economist Craig Wright.
  • “We’re seeing continued uncertainty and concerns still with respect to the Eurozone and where it’s headed,” he said. Uncertainty on economic growth is also being fanned by volatile energy markets and the questionable U.S. business rebound, Wright said.
  • Prospects for Canada are also complicated by expectations that spending by debt-burdened consumers could slow in 2011 and by the shut-off of the Conservatives’ two-year, $47 billion emergency stimulus program.
  • With government spending slowing, the Conservatives have staked a great deal on their view that the business community will pick up the slack and stimulate the economy with expansion-minded investments.
  • Besides phasing in corporate income tax cuts worth $14 billion by 2012, the Conservatives in recent years have provided a wide range of investment incentives for business, including easing taxes on small business and manufacturers. In all, tax cuts for business by the Conservatives total an estimated $60 billion by 2013.
  • both Flaherty and Bank of Canada Governor Mark Carney have pointedly talked about the urgent need for more spending on machinery and equipment by companies.
  • But many are not convinced, with some Canadians saying the government would be smarter to tie tax incentives directly to company investments to ensure that corporations don’t just pocket the extra profits.
  • Speaking of corporate tax cuts, Canadian Association of Social Workers spokesperson Fred Phelps said it would be one thing “if corporations turned around and invested those funds into the economy.” But he said that hasn’t been happening in recent years. “What really has driven us out of the recession,” he said, “is spending by households and government, not business.”
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