[andyt]

OnTheIce OnTheIce:

andyt andyt:

We've been down this road before. The poor people get more back in GST rebates than they can pay in GST. If you're worried about the poor, increase that rebate..

Poor people living paycheque to paycheque can't wait for a rebate months down the road.

Well, if you're so concerned about the poor, use the money garnered by the 2 xtra GST points to send monthly cheques to them the way the child benefit works now. Just send it to people without children too. With 14 billion to play with, you could have a real impact on poverty. Much more than the poor paying 2% less on GST since they don't pay much GST. Their biggest expenses, by far, are rent and food.

OnTheIce OnTheIce:

andyt andyt:

The money didn't disappear, a lot of it got sent to China.

How so?

Really? YOu need to have it explained to you what happens when you make consumption cheaper?

OnTheIce OnTheIce:

andyt andyt:

Absolutely, Trudeau could and should raise the GST. He could have cut the deficit in half and still spend every penny that he budgeted.

Raising the GST would have no impact on the economy?

No doubt it would. Since economists seem to be united in saying that consumption taxes are the best form of taxation, I'll take their word for it that the overall benefit outweighs any negatives.

[andyt]

Do you ever read the papers, or just dismiss them as the lieberal media?

$1:

Last year’s GST cut did not stimulate increased consumer spending or the economy and, unlike some other tax cuts, will not pay for itself in the long run, a new analysis has concluded.

“Do tax cuts pay for themselves? Well, certainly the GST reduction didn’t,” Global Insight said in an analysis Tuesday of the costs and impact of the one-point cut in the sales tax rate by the minority Conservative government to six per cent from seven last July.

“The relationship between GST revenues and consumer expenditures reveals no significant evidence of stimulated consumer spending,” concluded the analysis, based on Finance Department fiscal reports that run through June 2007 - the first 12 months since the Harper government carried through on its election promise and cut the GST.

“A cut in almost any other kind of federal government tax would have been more effective in stimulating economic growth and would have resulted in it getting more of the lost revenue back,” Dale Orr, the think tank’s chief economist, and author of the report, said in an interview.

Among the tax cuts that would be the most effective in stimulating economic activity and boosting future revenues would an income-tax cut, which as well as leaving people with more money to spend, would encourage them to work longer and harder to earn more, Orr said.

However, he noted that the Conservative government instead raised personal income taxes in its first budget.

“That was done specifically to finance the GST cut,” Orr said.

http://www.nationalpost.com/news/story. ... 6e&k=58191

$1:

The GST cut: a triumph of politics over economics

Prime Minister Stephen Harper has a master's degree in economics. Finance Minister Jim Flaherty attended Princeton University, an elite U.S. Ivy League school. They are both well-educated, intelligent men.

How then to explain their support for a idea so demonstrably stupid that, had they defended the idea in an undergraduate term paper, they would have flunked the course.

The idea is to cut the goods and services tax from 7 per cent to 6, and then to 5 per cent. The first one-point drop, at a cost of about $5-billion, came in the Harper government's initial budget. The Speech from the Throne proclaims that the second point drop will be forthcoming, likely in the next budget.


Just how stupid is this idea? This week, The Globe and Mail's Report on Business asked 20 economists across Canada, and from across the political spectrum, about the wisdom of cutting the GST. Sixteen of 20 said it was a bad idea, two said it was irrelevant and two thought it sensible. Eighty per cent, therefore, denounced the idea; 10 per cent supported it. They read the Harper-Flaherty GST tax cut term paper and gave it an F.

The Organization for Economic Co-operation and Development recently rendered the same general verdict on tax policy. Said the OECD: Consumption taxes are the way to go, offset by lower personal and corporate taxes.

If such a widespread consensus exists among economists across Canada and in the OECD, why are Messrs. Harper and Flaherty persisting with an idea they must know as economists to be stupid?

Answer? Politics, pure and simple. The GST cut is the triumph of base politics over sensible economics.

When the Harperites sat down to craft their last campaign document, they observed that the Liberals had in fact cut personal income taxes, but the public had not seen or appreciated those cuts. In fact, polls demonstrated that Canadians didn't even know their taxes had been reduced.

So the Harperites decided to give Canadians a tax cut they could see, feel and therefore appreciate at voting time; namely a reduction in the GST, whose creation by the Mulroney government had been attended with much political controversy.

http://www.theglobeandmail.com/news/pol ... cle725982/

[OnTheIce]

andyt andyt:

Really? YOu need to have it explained to you what happens when you make consumption cheaper?

Yes.

I would like you to explain to me how the money from the GST cut went to China.

[andyt]

Where do you think so much of the crap people consume is made? Except of course the articles in the papers make clear it didn't actually spur consumption. So while more money didn't go to china, none of it also went back into govt coffers thru increased economic activity.

Are you really going to keep slogging away at this every time the topic comes up, when it's been so well established that cutting the GST was a mistake?

[OnTheIce]

andyt andyt:

Where do you think so much of the crap people consume is made? Except of course the articles in the papers make clear it didn't actually spur consumption. So while more money didn't go to china, none of it also went back into govt coffers thru increased economic activity.

Are you really going to keep slogging away at this every time the topic comes up, when it's been so well established that cutting the GST was a mistake?

The GST cut was a financial mistake and a political victory. I reject your simplistic notion that adding or removing 2% tax from everything will have a net-zero effect on the economy.

You've still failed to demonstrate how the money from the GST cut went to China.

While a lot of retail consumer goods are made in China, that's not all that's effected by the GST. Further, when people buy these items, they do so in stores with employees. Canadian employees on Canadian real estate and they get to those stores via cars sold and perhaps made in Canada.

You make far too many bold and sweeping comments that really have no basis.

[andyt]

Actually the effect was net negative, as my links make clear.

Nowhere did I say all the money went to China, I said a lot of it. Except I was wrong, since the gst cut it turns out didn't spur spending. If you don't think any of the money from consumption goes to China, well talk about sweeping statements. (see how easy that is?)

[housewife]

andyt andyt:

Poor people living paycheque to paycheque can't wait for a rebate months down the road.

Well, if you're so concerned about the poor, use the money garnered by the 2 xtra GST points to send monthly cheques to them the way the child benefit works now. Just send it to people without children too. With 14 billion to play with, you could have a real impact on poverty. Much more than the poor paying 2% less on GST since they don't pay much GST. Their biggest expenses, by far, are rent and food.

You have over simplified it. Throwing money at the problem will not help. First you have to deal with the stupid shits who think electronics are more important than buying food. Teaching people how to budget, shop and cook would be good ideas too. Our local food bank can give away food that requires real cooking.

[andyt]

If money won't help, why worry about poor people not being able to wait for their gst cheques? You've taken my comment out of context to have your little rant about how stupid poor people don't know how to spend money.

[housewife]

andyt andyt:

If money won't help, why worry about poor people not being able to wait for their gst cheques? You've taken my comment out of context to have your little rant about how stupid poor people don't know how to spend money.

Not a rant experience. I shan't bother you any explanation as I doubt you would care. I will go back to the dinosaur... I so love that comment.

[bootlegga]

Canadian_Mind Canadian_Mind:

Instead, the Harper term ended up being nothing but colossal fiscal failure.

I'd argue they were also a huge failure when it comes to the military.

They put a ton of effort into developing their 'Canada First' plan but never actually funded any of the major systems that were the basis for it. Even the armed icebreakers Harper promised way back in 2006 still haven't even started construction yet.

Sure they bought 100 tanks, a few helicopters (after we left Afghanistan where we really needed them) and some transport planes, but they did absolutely nothing for the Navy and even after fighting the last election largely over the F-35, they didn't buy that or have a competition to select an alternative.

Guess we're going to have to go back to the way things were - depending on our allies to pressure us to buy military equipment instead of being smart enough to think ahead and do it ourselves.

[Canadian_Mind]

bootlegga bootlegga:

Canadian_Mind Canadian_Mind:

Instead, the Harper term ended up being nothing but colossal fiscal failure.

I'd argue they were also a huge failure when it comes to the military.

They put a ton of effort into developing their 'Canada First' plan but never actually funded any of the major systems that were the basis for it. Even the armed icebreakers Harper promised way back in 2006 still haven't even started construction yet.

Sure they bought 100 tanks, a few helicopters (after we left Afghanistan where we really needed them) and some transport planes, but they did absolutely nothing for the Navy and even after fighting the last election largely over the F-35, they didn't buy that or have a competition to select an alternative.

Guess we're going to have to go back to the way things were - depending on our allies to pressure us to buy military equipment instead of being smart enough to think ahead and do it ourselves.

I wouldn't call the military failure as big of a failure as the fiscal failure. That $119 billion could have payed for a lot of boats, a lot of planes, and a lot of ground equipment (which we are still short on). Plus side of this is that, had it played out this way, many places which aren't doing so well right now would be doing much better because of those procurements that should have, but didn't happen.

[PublicAnimalNo9]

BeaverFever BeaverFever:

Where were the deficit hawks when Harper ran up the debt in aevery single year of his administration?

Well, one of them is now the PM, or as he referred to himself during his campaign, "The Slayer of Deficits".

[BeaverFever]

Reposting from a different thread:

BeaverFever BeaverFever:

Great Britain has been carrying debt for over 300 years - since before the Industrial Revolution. The US has carried debt for almost 200 years. Old debts get paid off and new debts get taken out . Debt is not inherently bad. The first 2 links I recently posted in another thread.

Debt Is Good
http://www.nytimes.com/2015/08/21/opini ... .html?_r=0

Public debt: How much is too much?
http://www.economist.com/blogs/freeexch ... ublic-debt

Why You Should Love Government Deficits
http://www.forbes.com/sites/johntharvey ... eb318e1351

Why You Should Learn to Love the Deficit: Federal Budget Fallacies
http://www.forbes.com/sites/johntharvey ... 4fd7232095


The Horror Movie That Is Fiscal Responsibility
http://www.forbes.com/sites/johntharvey ... b07a4326cf

Paul Krugman: The austerity delusion
http://www.theguardian.com/business/ng- ... y-delusion


The Pragmatic Capitalist: The Biggest Myths in Economics
http://www.pragcap.com/the-biggest-myth ... mics-page/