GD's Political Animal: debt crisis

Showing posts with label debt crisis. Show all posts

Wednesday, September 23, 2026

President Trump's $5,000 bribe

"Some commentators have expressed outrage over President Trump’s attempt to bribe voters. These commentators have tended to ignore the fact that, since the rise of the welfare-warfare-regulatory state, most political campaigns are little more than legalized bribery."

President Trump Bribes the People | Ron Paul Institute | Ron Paul:

September 21, 2026 - President Trump, speaking at the Republicans’ midterm convention, pledged that if Republicans maintained control of the Congress in the November election every adult American will receive 5,000 dollars from the government.... Trump said that the government could afford the estimated 1.3 trillion dollars cost 'because we’ve done so well and because our country is making so much money.'

The truth is the economy is not doing well. Prices are rising faster than incomes. And, thanks to the Iran War, the price of diesel fuel has reached an average of over six dollars a gallon. This increases shipping costs, thus further increasing many prices. The national debt now exceeds 40 trillion dollars, which is one reason why interest on Treasury bonds is at the highest level since 2007.

President Trump claims the 5,000 dollars payments can be financed with tariff revenue. The truth is that the government has not collected nearly enough tariff revenue to finance these payments.

Secretary of Commerce Howard Lutnick has suggested the government could raise the funds through actions including selling its shares in the tech company Intel. Selling those shares would only raise at most four percent of the cost of the payments. Nonetheless, the federal government should sell all the shares it has acquired in private companies. This corporatist policy distorts the market by incentivizing businesses to put pleasing politicians and bureaucrats ahead of pleasing consumers.

Some commentators have expressed outrage over President Trump’s attempt to bribe voters. These commentators have tended to ignore the fact that, since the rise of the welfare-warfare-regulatory state, most political campaigns are little more than legalized bribery. How else would you describe politicians who court support from the military-industrial complex with promise to deliver endless wars financed by ever-increasing Pentagon spending? Or court votes of farmers with promises of ever-increasing farm subsidies? Or court votes of senior citizens with promises concerning Social Security and Medicare? Or promise to those whose standard of living and prospect for economic advancement are harmed by the Federal Reserve’s destruction of the dollar that government will take care of them with food stamps, Medicaid, and government-subsidized housing?

This system of legalized bribery makes it impossible to make real spending cuts because every item in the federal budget has a constituency behind it. Politicians are convinced that their electoral success depends on them protecting this spending.

This system of legalized bribery cannot last much longer. The continued failure of Congress and presidents to cut spending will further efforts to replace the dollar as the world’s reserve currency. This will cause a major economic crisis that will force Congress to cut spending.

President Trump could avoid this fate by fulfilling his promise of no new wars and working with Congress to cut the bloated military budget. President Trump should also end all forms of corporate welfare and work with Congress to shut down all unconstitutional federal agencies. The savings from these cuts should be used to start paying down the debt and support those reliant on government programs during the transition away from the welfare state. Returning to local communities, private organizations, and churches the responsibility to help the less fortunate is more effective and compassionate than leaving the matter to government bureaucracies. Following this agenda would allow President Trump to “bribe” the people with peace, prosperity, and liberty.

Copyright © 2026 The Ron Paul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.
https://ronpaulinstitute.org/president-trump-bribes-the-people/

Thursday, February 26, 2026

Epstein Files will increase distrust of governments

"The belief that government agencies used the sexual abuse of children as a means of ensuring rich and powerful people did their bidding will increase distrust of government and the interests that profit from, and often control, the state."

Epstein Files: An Opportunity for Libertarians | Ron Paul Institute | Ron Paul:

February 23, 2026 - "Those who have examined the Epstein files have seen information about how connected Jeffrey Epstein was to members of the political, business, and academic elites. Many of these connections started after Epstein’s 2008 conviction.

"The Epstein files support claims that Epstein worked with intelligence agencies, in particular Israel’s Mossad and the American CIA. Yet the mainstream media and most politicians seem uninterested in whether Epstein used underage girls in a scheme to blackmail powerful individuals on behalf of intelligence agencies.

"Fortunately, the alternative media is not afraid to discuss Epstein’s intelligence connections or any other matters related to Epstein, including suspicious circumstances surrounding his death.

Geoff Livingstone, Good Trouble Protest in Washington,
DC, July 2025. CC BY-SA 4.0, Wikimedia Commons.

"The Epstein files and the Justice Department’s failure to let the people see the full files present an opportunity for libertarians. The belief that government agencies used the sexual abuse of children as a means of ensuring rich and powerful people did their bidding will increase distrust of government and the interests that profit from, and often control, the state. The Trump administration’s failure to release the files until forced to by Congress will further increase the distrust of government.

"This distrust can lead to support for liberty if those of us who know the truth [can] explain that the problem is a government that tries to run the economy, run the world, and run our lives. This type of government will inevitably attract unscrupulous individuals. Therefore, the solution is to limit the government’s power. The first step is to build a critical mass of people committed to restoring liberty and able to see through the propaganda used to convince us government is taking our liberty for our own good.

"Following the Watergate scandal, Murray Rothbard wrote that, “[i]t is Watergate that gives us the greatest single hope for the short-run victory of liberty in America. For Watergate, as politicians have been warning us ever since, destroyed the public’s ‘faith in government’ — and it was high time, too.” Unfortunately, the people’s distrust in government did not last. However, Representative Thomas Massie, who is leading the fight to make the files public, has argued that abusing minors in order to blackmail wealthy and powerful individuals, along with the refusals to expose the full truth about these horrific crimes, is bigger than Watergate.

"The controversy over the Epstein files comes at a time when the US is on the verge of an economic crisis. This crisis is rooted in President Nixon’s 1971 abandonment of the last link between the dollar and gold, giving the United States a purely fiat currency. This fiat money system, combined with the dollar’s reserve currency status, made it possible for the government to run up huge debts. Today the federal debt is almost 39 trillion dollars and is increasing quickly. This exploding debt, along with resentment of America’s hyper-interventionist foreign policy, is leading to increased international support for abandoning the dollar. These factors all suggest that the next crash could end the welfare-warfare-fiat currency system.

"If those of us who know the truth can take advantage of the growing distrust of government to further spread the ideas of liberty, the next crisis may lead to a return to limited constitutional government, liberty, and peace."

Monday, September 29, 2025

Liberals' deficit trajectory unsustainable, warns Parliamentary Budget Officer

Interim Parliamentary Budget Officer Jason Jacques warns that the federal Liberal governments' current fiscal path is unsustainable,

Budget watchdog sounds alarm about Ottawa's 'unsustainable' fiscal path | Yahoo News | Craig Lord, Canadian Press:

Interim PBO Jason Jacques (from X).

September 25, 2025 -'Stupefying,' 'shocking' and 'unsustainable' — those were just some of the words Ottawa’s fiscal watchdog used Thursday to describe his scathing forecast for federal finances ahead of a long-anticipated fall budget.

"Interim Parliamentary Budget Officer Jason Jacques published an updated economic and fiscal outlook on Thursday where he projected the federal deficit would balloon to $68.5 billion this year, up from an estimated $51.7 billion last year.

"He also expects the federal debt-to-GDP ratio — previously a major fiscal anchor for Ottawa — will no longer decline in the coming years. Jacques told a parliamentary committee Thursday afternoon it is the first time in 30 years he has seen a projection where that key metric rises over time. Based on public statements from federal officials, spending plans announced over recent months and a weakening economy in the U.S. trade war, he said the path for federal finances appears broadly 'unsustainable.'

"'I think everybody should be concerned,' Jacques told MPs on the government operations and estimates committee. ]We’re hoping, and certainly expecting, the government as part of Budget 2025 to clearly indicate what the government plans to do to address … this problem, because it’s certainly not sustainable.'

"The PBO is a non-partisan officer of parliament. The office's updated fiscal and economic outlook offers parliamentarians a baseline estimate of the state of federal finances heading into the Liberals' fall budget on Nov. 4....

"The previous Liberal government under former prime minister Justin Trudeau set an anchor of capping the annual deficit at one per cent of GDP and maintaining a declining debt-to-GDP ratio. The PBO report forecasts that Ottawa will blow past those anchors in the upcoming budget.... The PBO expects deficits to decline slightly but to remain close to $60 billion annually over the forecast horizon. The Liberals projected a deficit of $42.2 billion for this fiscal year in its most recent update last December.

"The watchdog’s update does not include plans to incrementally ramp up defence spending to meet the updated NATO benchmark of five per cent of GDP by 2035.... Kristina Grinshpoon, the PBO’s director of fiscal analysis, told the committee that she believes there’s about $20 billion of proposed spending included in the Liberals’ spring election platform that’s not included in the office’s updated outlook....

"Jacques was named parliamentary budget officer on a six-month interim basis earlier this month, before the House of Commons began its fall sitting. A permanent appointment must be approved by the House, and the Conservative party has pushed to keep Jacques in the role."

Friday, July 4, 2025

Canada's deficit could top $90 Billion this year

Canada's C.D. Howe Institute expects federal deficits to average $78 Billion over the next four years, more than double what the parliamentary budget officer forecast before the spring election.

Federal deficit could average $78B over 4 years, think tank warns | CityNews Toronto | Craig Lord, The Canadian Press, and Cormac MacSweeney:

July 3, 2025 - "The C.D. Howe Institute predicts Ottawa’s recently announced spending plans — which include a much bigger defence budget — will drive its deficits markedly higher in the coming years. In a new analysis released today, the think tank says it expects Canada’s deficit to top $92 billion this fiscal year, given Prime Minister Mark Carney’s plan to meet NATO’s defence spending target of two per cent of GDP.

"C.D. Howe says it expects deficit growth to slow after that but predicts deficits will still average around $78 billion annually over four years, more than double the level forecast by the parliamentary budget officer before the spring federal election. The Liberal government did not publish a spring budget this year and has said it will instead push the planned fiscal update to the fall.

"In addition to ramping up defence spending, Prime Minister Carney’s Liberals recently pushed forward legislation to accelerate major project development and delivered a one-percentage-point cut to the lowest income tax rate.

"The C.D. Howe Institute accuses Ottawa of making costly commitments without showing the numbers to Canadians."

BIG BUCKS LOST: Federal deficit numbers keep soaring with no end in relief | Toronto Sun | July 4, 2025:

Federal deficit projected to soar to $92B this year: 'Unfair to pass these burdens on,' C.D. Howe Institute says | National Post | Simon Tuck:

July 4, 2025 - ""If this fiscal year’s deficit turns out to be as hefty as projected, it would be the second-largest deficit in Canadian history, topped only by the $327.7 billion shortfall from the pandemic year of 2020-21....

"Based on the most current and largely optimistic variables, the report says, federal deficits will remain above $71 billion during each of the following three years and in the fiscal year 2028-29 will be greater than three times what the government itself forecast in its most recent federal budget. But more likely, the report says, it will likely be a bit worse than that because the report’s authors say that they’re skeptical that all of the government’s plans to increase revenue through promised higher fines, penalties and savings will actually occur....

"But the most recent federal budget was now well over a year ago. The government took the highly unusual step this year of waiting until the fall to release its annual budget, more than half-way through the fiscal year.... The C.D. Howe report criticizes the government’s decision to wait until the fiscal year is more than half over before releasing its budget 'Delaying a budget until the fiscal year is more than half over is never good, but Canada’s current high-spending trajectory makes this delay especially bad.'

"Ottawa is making costly commitments, the report explains, without showing key numbers to the public such as how much more tax it expects to gather, the extent of its new spending and what the increased debt will mean for interest payments.... C.D. Howe suggests that the Liberal government eliminate or forgo some of its costly platform promises, make deeper cuts in its operating spending, substitute some revenue from less harmful taxation such as the GST, and cut federal transfers to provinces and territories."

Wednesday, June 11, 2025

What's up between Musk and Trump?

After Donald Trump's "Big, Beautiful Bill," conflict between Trump and Elon Musk was only a matter of time.

Can Trump and Musk Make Up? | Ron Paul Institute | Ron Paul:

June 9, 2025 - "Last week’s dramatic blowout between President Trump and his one-time top collaborator Elon Musk was shocking yet predictable. According to media reports, a cold war had been brewing between Musk’s people and Trump’s appointees and it was bound to break out into the open. It was only a matter of time.

Trump and Musk. Composite by Buadh, Wikimedia Commons.

"On the campaign trail, Musk provided much energy and helped ramp up enthusiasm for Donald Trump. His support for Trump made him a lightning rod for Trump-haters and he saw his personal wealth take a hit for his troubles.

"After Trump’s victory, Musk’s Department of Government Efficiency [DOGE] project was truly revolutionary. Americans were able to see up close and in real time just how government operates. Not only did the billions and trillions of dollars spent by the federal government not achieve the stated goals, but much of the spending actually harmed the United States.

"Americans were able to see that the 'aid' they send overseas does not provide food and relief for those suffering through disasters but is actually used to create a global US empire encompassing everything from the media to military spending to non-profits.

"Once USAID was targeted by DOGE, for example, we learned that 90 percent of the 'independent' media in Ukraine was US government controlled. Other countries chimed in to say that much of their own 'independent' media is propped up by the US government. Foreign 'journalists' paid by the US government are going to publish what the US government wants to be published. That is one reason Americans to this day are so ill-informed about Ukraine and what started the war. For example, how many Americans know that their own government staged a coup in Ukraine in 2014 that directly led to the disaster we have seen these past three years?

"The message was there for anyone who wanted to see it: The United States is being undermined by a government that demands the right to intervene in every aspect of our lives – and of the lives of everyone on the planet. It is not sustainable.

"In the end it was Trump’s 'Big Beautiful Bill' that broke it all apart. The US House served up a massive funding bill that, as usual, blew up the national debt with more spending and promised that sometime down the road spending cuts would kick in and we would start saving money. We’ve seen this movie many times before.

"In a post seen by over a hundred million people on his social media platform X, Elon Musk finally could hold his tongue no longer. 'This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,' he wrote.... Musk was no-doubt frustrated that despite all of the work he and his team did to uncover government waste, he hit a brick wall in a Washington that recoils from any attempt to shrink its size and level of interference in our lives.

"Can Trump and Musk 'make up' and find a way to work together in the future? After the smoke has cleared we can only hope for a return to the principles of DOGE and the idea that current levels of spending and debt are unsustainable. Surely both men can agree on that."

Tuesday, May 20, 2025

Ron Paul: USA needs to rein in military spending

Cutting spending wasted on a futile pursuit of a global empire is not just a fiscal necessity. It is also the best thing Congress can do to promote peace and prosperity.

Cutting Military Spending Would Make for a Big and Beautiful Bill | Ron Paul Institute | Ron Paul:

May 19, 2025 - "Last week, Moody’s Ratings lowered the United States credit rating. Fitch Ratings and S&P Global Ratings had already lowered the US rating. This new downgrade was driven by Congress’s failure to make any efforts to reduce the almost 37 trillion dollars national debt. When Moody’s made its announcement, the House Budget Committee was scrambling to get the votes to pass legislation extending the 2017 tax cuts.

"President Trump has dubbed this the “big beautiful bill.” The bill also has new tax cuts including repealing federal taxes on tips and overtime. The bill 'offsets' the 'lost' revenue from the cuts by making some cost saving reforms in domestic welfare programs, most notably Medicaid and food stamps. However, it increases spending in other areas, most notably military spending.

"According to the Committee for a Responsible Federal Budget, the 'big beautiful bill' would increase the national debt by at least 3.3 trillion dollars over ten years. This number is likely to rise because several moderate Republicans are threatening to vote against the bill unless the Medicaid and food stamps 'reforms' are limited or dropped.

"Tax cuts are always worth supporting because they advance liberty and sound economics by ensuring the people have more and the government has less. However, tax cuts that are not combined with real spending cuts are delayed tax increases. This is because cutting taxes without cutting spending leads to more debt that leads to higher taxes. These tax increases are likely to come from the Federal Reserve’s monetization of debt, which weakens the dollar’s purchasing power. This 'inflation tax' benefits political and financial elites while hurting most Americans.

"The reason Republicans are finding it difficult to offset their tax plan in a way that is politically palatable is that they are following exactly the opposite of the politically smart path to cut spending. Instead of starting by cutting welfare for the poor, Republicans should have started by cutting welfare for the rich, particularly the military-industrial complex.

"Last week, while visiting the Middle East, President Trump delivered an important speech refuting the neocon crusade that has dominated American foreign policy thinking since 9-11. Yet, President Trump is proposing to increase the military budget to one trillion dollars.

"President Trump and congressional Republicans will never cut spending until they stop pretending they can pay down the national debt, cut taxes, and continue massive spending on militarism. Similarly, fiscal conservatives need to stop targeting single mothers on food stamps while increasing federal spending on foreign intervention.

"The debt that caused Moody’s and other credit rating agencies to lower the US government’s credit rating is because of spending, not tax cuts. Congress should be giving the people more tax cuts and offsetting them with deep cuts in military spending. Cutting spending wasted on a futile pursuit of a global empire is not just a fiscal necessity. It is also the best thing Congress can do to promote peace and prosperity. Congress should then begin phasing out welfare programs in a manner that does not harm those currently reliant on the programs. Congress should also rein in the welfare-warfare state’s great enabler by auditing then ending the Federal Reserve. It should also repeal the 16th Amendment. These actions would free the people from 1913’s great mistakes — fiat money and income taxes."

Wednesday, April 30, 2025

Elon Musk's departure signals end of DOGE

Elon Musk's reported imminent departure from his Department of Government Efficiency (DOGE) project signals the end in failure of that attempt to limit government.

The Empire Strikes Back | Ron Paul Institute | Ron Paul:

April 28, 2025 - "News this week that Elon Musk will soon be departing his 'Department of Government Efficiency' (DOGE) is a grim reminder of what happens when you challenge big spending DC.... President Trump rode into office with the help of Elon Musk’s ambitious plan to cut two trillion dollars in spending and slash useless and bloated government bureaucracies. Opinion polls demonstrated the huge popularity of the 'Department.' Americans were excited when DOGE came to DC.

"The exposure of the real harm being done to the country by agencies like USAID and others reinforced the idea that much of the 'Federal bureaucracy' was simply not needed. Although Musk became a figure of hate for the entrenched special interests, to the large chunk of America forced to pay for Washington’s excesses he became a hero.

Trump and Musk. Composite by Buadh, Wikimedia Commons.

"Many in Congress, seeing its popularity, actively embraced DOGE. Suddenly those who helped us rack up $37 trillion in debt were talking about making huge cuts and posing for photos with Musk.

"Unfortunately, after the photos were taken and the hoopla had died down, Congress returned to doing what it usually does: nothing. There is no way for a DOGE to succeed without the Legislative Branch enshrining those cuts in legislation. But when the massive 'Big Beautiful' spending bill was introduced, the spending cuts were nowhere to be found.

"In the end it was the Beltway addiction to the global US military empire that may have hammered the final nail in DOGE’s coffin. The 'Big Beautiful' spending bill actually increased military spending even after President Trump hinted that a 50 percent cut was possible. Defense Secretary Pete Hegseth bragged about presiding over the 'first' trillion-dollar defense budget. Starting a war on Yemen – at over a billion dollars a month – and saber rattling over Iran are the most obvious evidence that the empire has struck back. And of course the DC hawks want to 'confrontz' China.

"This isn’t the first time a populist, popular movement to tame the Beltway beast was embraced then defeated by that same beast. The 'Tea Party' movement was launched in December, 2007, with volunteers supporting my 2008 Presidential campaign holding a record-breaking 24 hour “money bomb” on the anniversary of the 1773 Boston Tea Party.... The 'money bomb' success got Washington’s attention – money is the lifeblood of the political class – and before too long politicians of all stripes declared themselves to be part of the 'Tea Party'.... But actually cutting government? Not so much.

"The first thing these newly-minted 'Tea Party' members rejected was our demand for an end to the unsustainable, bloated military budget and our aggressive foreign policy. Eventually they backed away from other spending restrictions and within a few years the “brand” was diluted and tossed away.

"What is the lesson here? Is it all futile? Hardly. The popularity of DOGE shows that Americans still want a much smaller government. That is great news, and the country owes a debt of gratitude to Elon for reminding us of this. But until Americans elect Representatives who have the courage to follow through beyond photo-ops, we will sadly continue down the path toward bankruptcy and collapse."

Saturday, April 19, 2025

Socialist magazine warns Poilievre is a libertarian

American socialist magazine Jacobin has warned its readers that Pierre Poilievre is not just another right-wing populist, but has a "radical libertarian agenda".

Pierre Poilievre Wants Radical Austerity for Canada | Jacobin | Ryan Kelpin:

February 1, 2025 - "Much has been written about [Pierre] Poilievre in recent years, often framing him as the champion of the Freedom Convoy, anti-lockdown politics during the height of COVID-19, or a right-wing populist fighting against woke tyranny. While these characterizations highlight key elements of his political strategy, they risk oversimplifying his ideology. Poilievre is not merely a populist reactionary; he is a deeply ideological figure with a long-standing engagement with ... particularly the ideas of Milton Friedman. His contemporary anti-state politics are grounded in this intellectual lineage.... Understanding Poilievre’s ideological foundations is critical to grasping the broader implications of his rise — and the threat it poses.

"Poilievre has often expressed admiration for Friedrich Hayek and the Virginia School of public choice founders James M. Buchanan and Gordon Tullock. However, his most consistent and fervent ideological inspiration comes from Friedman’s radical libertarian critiques of the state. This is evident in Poilievre’s decades-long proselytizing in the name of two of Friedman’s most significant books: 1962’s Capitalism and Freedom and 1963’s A Monetary History of the United States, 1867–1960. During his formative years in Calgary, he became an avid reader of Capitalism and Freedom, shaping his worldview around Friedman’s ideas about voluntary exchange versus coercion, economic freedom versus the bureaucracy of the welfare state, and the role of inflation and monetary theory. These ideas informed many of his university essays, including his 1999 scholarship-winning 'Building Canada Through Freedom' essay....

"Poilievre himself traced this ideological lineage in [a] recent interview with Jordan Peterson, stating, 'I’ve been saying precisely the same thing the entire time . . . building Canada on freedom. The entire piece was on making government small and maximizing personal freedom'.... For Friedman and Poilievre, voluntary exchange occurs in a social and power vacuum. This notion presents a romanticized view of private economy in which real-world consequences and inequality do not exist. Poilievre has expressed this extreme interpretation of voluntary exchange in stark terms, stating, 'Everything the government does, even the good things, is done by the coercive force of taxation, a gun to the head.' He has fleshed this out even further in the House of Commons:

Every exchange in a free market economy, literally every single one, without exception, is based on voluntary exchange. . . . By contrast, every single transaction done by government is done by force, even legitimate, desirable transactions. . . . However, surely, we should also agree that the use of that force should be limited to cases where it is absolutely unavoidable and necessary. We should not expand government into areas people can decide upon and act out on their own volition. The government continually gets involved in areas that are easily done through voluntary exchange. In fact, it replaces free choice with force very often....

"Poilievre routinely draws on not just Friedman but also Buchanan, whose public choice theory influenced Friedman’s later work, including Free to Choose. Poilievre’s rhetoric reflects their shared disdain for the welfare state, which he once referred to in a National Post op-ed as 'truly horrific,' claiming: '[it] ... engenders a self-serving bureaucracy whose survival depends on a growing clientele of poor welfare recipients. To end poverty, this bureaucracy would have to put itself out of business, something it will never do'....

"Poilievre has routinely championed several key neoliberal policy ideas. Dating to his time in the right-wing populist Reform Party, he has supported the idea of balanced budget legislation — or at least the principle of cutting $1 from government spending for every $1 of new expenditure. This approach aims to depoliticize spending by limiting the ability of 'special interests' to extract benefits from self-serving politicians and a growth-focused bureaucracy. Poilievre has also endorsed Friedman’s specific neoliberal proposals, such as a negative income tax system — where people earning below a certain threshold would receive payments to bring them up to that minimum income level — as well as universal basic income (UBI).... UBI, as Poilievre understands it ... would come with a catch: 'Governments would pay for Friedman’s basic income by eliminating all other programs, including housing, drug plans, childcare and the bureaucrats who administer it all.' Poilievre has criticized attempts to use UBI as a distributive tool....

"Poilievre has become most notable for his focus on the inflationary crisis of the 2020s. But there has been little examination of the intellectual roots of his inflation rhetoric — it is a mistake to understand it as simply part of his constructed populist persona. When asked by the Canadian Taxpayers Federation what book on economics he would recommend, he held up one book to the camera: his well-worn and bookmarked copy of Friedman and Anna Schwartz’s A Monetary History of the United States, saying that it 'taught [him] was that money supply was the driver of inflation.' This tome has become a cornerstone of his political philosophy, referenced frequently in interviews, his Friedman-inspired Free to Choose–esque YouTube video series Debtonation [see video] and even on the House floor....

"Poilievre’s views on inflation reproduce Friedman’s monetarism and his argument that the overproduction of money supply drives up purchasing costs and government deficits, characterizing inflation as an invisible, coercive tax created by centralized government. As he describes it, 'You could not design a more damaging and unjust tax than the inflation tax.' In his Debtonation series, Poilievre takes Friedman’s ideas to their extremes, making questionable connections between overproduction of the money supply, inflation, government debt, and even the suicide rate. He doesn’t simply reproduce Friedman’s ideas; he amplifies them to appeal to contemporary political audiences. Poilievre clearly views himself not just as a proponent of Friedman but as his Canadian ideological heir apparent....

"Poilievre’s view of the state and capitalism represents a more radical libertarian agenda than that of any previous potential Canadian prime minister. He is an idealogue, a true believer, but also a pragmatist and convincing speaker. If he has his way in 2025, Canada will continue deepening its commitment to neoliberalism, but with a Friedmanite flavor not yet seen in the country."

Debtonation (Episode 1) | Pierre Poilievre | December 27, 2025:

Sunday, December 29, 2024

Milei tames deficit and inflation in first year

Argentine president Javier Milei ends his first year in office with a combined budget surplus of $3 billion and an inflation rate that is down by almost 90%. But plenty of problems remain in the country.

Javier Milei’s first year: $3 billion surplus and tenfold lower inflation in 2024 | Financial World | Sededin Dedovic:

December 14, 2024 - "A year after Argentine President Javier Milei came to power, after deep reforms and a drastic reduction in public spending, Argentina had a tenfold lower inflation rate. The controversial Argentine president introduced free trade in the country, and Argentina has a budget surplus after more than a century. President Milei and the government hope that the new laws, which offer investors decades of tax and customs relief, will quickly attract capital and curb the recession.

"Although challenged by the public, Milei firmly advocated for the reduction of public administration, which won the favor of younger voters and won the election with 55 percent of the vote. He fulfilled his campaign promises quickly after coming to power, resulting in a $3 billion budget surplus a year later.

"The peso was devalued, price controls were lifted, numerous public works were suspended, and local government budgets were cut tenfold. It was 'shock therapy' ... that initially led to many unemployed people and a huge recession. Many Argentines were skeptical about these changes, and many world media outlets wrote that Milei would further set Argentina back. However, the number of poor people is lower than a year ago, and [monthly] inflation fell from 25 percent in December last year to 2.7 percent.

"Although this looks good statistically, ordinary citizens still can't feel any significant improvement. The country is in deep problems that have been accumulating for decades due to poor economic strategy and debt....

"Milei and the government hope that the new laws, which offer investors decades of tax and customs relief, will quickly attract capital and curb the recession. However, large global corporations and investors are still waiting for the new laws to stabilize in Argentina, and the number of foreign investments is only slightly higher than last year. The IMF does not expect the Argentine economy to grow this year, but rather to decline by 3.5%....

"Milei needs economic stability both for foreign investment and to reassure the public in a country that is facing such significant changes for the first time in decades. The initial adjustment has hit the working and middle classes hard because historically the largest part of government spending has been concentrated in these segments. However, some changes for the better for the Argentine population can already be felt, and [one] is the fall in [inflation] compared to December last year....

"Although there was much skepticism at the beginning of his presidency, even among his voters, today Milei has a stable approval rating of 50 percent....

"Most of the reforms implemented in Argentina under Milei — the abolition of price controls, the elimination of subsidies, and the dismantling of import tariffs and export restrictions — are policies the developed liberal world has long abandoned. Milei is trying to create a modern and functional Argentina modeled after Western models of states, after decades of accumulating problems and a complicated system of governance with an overly large state administration."

1 Year Later: How Has Argentina Been Going? | Economics Explained | December 8, 2024:

Video begins at 2:13.

Wednesday, December 18, 2024

Canadian deficit crashes through $40B guidepost

Canada's Finance Minister Chrystia Freeland resigned rather than deliver the Trudeau government's Fall Economic Statement, which shows a federal deficit 50% higher than the $40.1 Billion "fiscal guidepost" Freeland had committed to in the spring Budget.

Government still planning to unveil economic statement despite Freeland's resignation | CBC News | Karina Roman:

December 16, 2024 - ""The federal government is still planning to unveil its long-awaited fall economic statement (FES) today — putting to rest weeks of speculation about a higher-than-projected deficit and the potential failure of other fiscal 'anchors' Ottawa claimed would keep its budget on track. The government's plans for the FES were thrown into chaos this morning when Finance Minister Chrystia Freeland announced she would resign from Prime Minister Justin Trudeau's cabinet....

"Just last spring, in her Budget 2024 speech, Freeland laid out three 'fiscal guideposts' she said would demonstrate the government's continuing commitment to fiscal responsibility. The first was a promise to keep the 2023-24 deficit at or below $40.1 billion. Last week, Freeland would no longer commit to meeting that target."

Federal deficit climbs to $61.9B as Freeland resigns | CBC News: The National | December 16, 2024:

Federal deficit balloons to $61.9B as government tables economic update on chaotic day in Ottawa | CBC News | Catharine Tunney:

December 17, 2024 - "The federal government tabled a fall economic statement Monday that calls for more than $20 billion in new spending and explains how last fiscal year's deficit ballooned to $61.9 billion — but it was Chrystia Freeland's abrupt resignation as finance minister and her questioning of her own government's economic policy that sent Canadian politics into a frenzy....

"Freeland, who was meant to deliver the statement, resigned from Prime Minister Justin Trudeau's cabinet just as reporters and stakeholders were headed to a media lockup to view the document.... Government House leader Karina Gould ended up tabling the fall economic statement in the House of Commons on Monday afternoon just after 4p.m. ET. By dinner time in Ottawa, Public Safety Minister Dominic LeBlanc had been sworn in as the new finance minister.

"Along with showing that the federal government blew its own deficit target by more than $20 billion, the document — overseen by Freeland before her resignation — includes ... $1.3 billion for a border security package over six years ... although the 270-page document doesn't explain exactly how that money will be spent. The government is also earmarking billions of dollars to boost Canadian businesses amid global uncertainty....

"Freeland's resignation letter suggests she did not agree with her boss on how to tackle those challenges.... She also took a parting shot at her boss's handling of the country's economy, denouncing what she called the government's 'costly political gimmicks' and imploring him to work collaboratively with the country's premiers to confront Trump['s] tariff threat....

"In her spring Budget 2024 speech, Freeland laid out guideposts she said would demonstrate the government's continuing commitment to fiscal responsibility. The first was a promise to keep the 2023-24 deficit at or below $40 billion. The federal government has blown past that benchmark; Monday's update posts a deficit of nearly $62 billion for last fiscal year. [Given an inflation rate of at least 1.7%, a $61.9 billion deficit will add more than $1 billion a year to debt interest charges. - gd]

"The federal government says the 2023-24 spike is due to one-time costs, including $16.4 billion related to Indigenous claims playing out in court and $4.7 billion related to the COVID-19 pandemic. The deficit is projected to dip down to $48.3 billion for this current fiscal year."

Friday, April 19, 2024

Budget 2024 shows Liberals' fiscal irresponsibility

Spending, taxes, and debt will all increase under the Liberals' Budget 2024; the only thing expected to decline is Canadians' standard of living.

Federal budget’s scale of spending and debt reveal a government lacking self-control | Fraser Institute | Jake Fuss & Grady Munro:

April 16, 2024 - "Time and time again, Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland have emphasized the importance of being fiscally responsible with federal finances. Unfortunately, this year’s federal budget ensures once again their rhetoric rings hollow due to their ongoing mismanagement of federal finances. This mismanagement is rooted in the government’s insatiable appetite for new and expanded programs or services, which has endured for nine years and will continue for the foreseeable future.

"The budget introduces billions of dollars in additional spending for a national school food program, housing initiatives and artificial intelligence. As such, program spending (total spending minus debt interest costs) is now expected to be $77.2 billion higher over the next four years than the government forecasted last spring. In 2024/25 alone, federal program spending will reach a projected $483.6 billion—an increase of $16.1 billion compared to the previous budget’s estimates.... The Trudeau government has already recorded the five (2018 to 2022) highest levels of federal program spending per person in Canadian history (inflation-adjusted).... This is despite recent polling data that shows the majority of Canadians (59 per cent) think the Trudeau government is spending too much. Nearly two-thirds (64 per cent) of Canadians are also concerned about the size of the federal deficit.

"As it has done nine times before, the Trudeau government will borrow to fund some of its spending spree, resulting in a projected budget deficit of $39.8 billion this year, which is $4.8 billion higher than previously forecasted. And it doesn’t intend to stop borrowing, with annual deficits exceeding $20 billion planned for the subsequent four years.... Simply put, there’s no plan for a return to balanced budgets any time soon. As a result, federal debt (net debt minus non-financial assets) is expected to climb $156.2 billion from now until April 2029....

"Growing federal debt leads to higher debt interest costs, all else equal, which eat up taxpayer dollars that could otherwise have provided services or tax relief for Canadians. For context, the government now spends more ($54.1 billion) on debt interest as on health-care transfers to the provinces ($52.1 billion). Accumulating debt today also increases the tax burden on future generations of Canadians who are ultimately responsible for paying off this debt. Research suggests this effect could be disproportionate, with future generations needing to pay back a dollar borrowed today with more than one dollar in future taxes....

"But again, it didn’t have to be this way.... [H]ad the government simply limited the growth in annual program spending to 0.3 per cent for two years, it could have balanced the budget by 2026/27.... Instead, the government chose to increase annual program spending by an average of 4.4 per cent over the next two years and kick the debt problem down the road for another government to solve.

"Yet for all this spending and debt, living standards have not improved for Canadians. In fact, inflation-adjusted GDP per person was actually lower at the end of 2023 than it was nine years prior in 2014. And going forward, the OECD predicts Canada will record the lowest growth rates in per-person GDP up to 2060 of any industrialized country....

"The combination of tax hikes and scale of spending and debt in this year’s federal budget demonstrate the Trudeau government has no interest in being fiscally responsible or improving living standards for Canadians. Instead of showing restraint, the government chose to repeat its mistakes and lead federal finances down an increasingly perilous path."

Debt Dilemma: Unpacking Canada's 2024 Budget | KelownaNow | April 17, 2024:

Monday, April 1, 2024

Pass my bill without reading it, Canada's Deputy PM tells Senate

Deputy Prime Minister Chrystia Freeland recently told Canada's Senate to pass an almost $9 Billion spending bill without reading it. (Note: This is not an April Fool's story.)

Freeland urges senators to pass last-minute $8.9 billion bill before reading it | Western Standard | Jen Hodgson:

Chrystia Freeland, 2017. Wikimedia Commons.

March 29, 2024 - "Finance Minister Chrystia Freeland provoked outrage after asking senators to pass an $8.9 billion budget bill they had not yet read, Blacklock’s Reporter reports. The greatest portion of Freeland’s last-minute increased spending bill tacks on $3.2 billion to cover interest charges on the national debt.... This is not the first time the Trudeau Liberals have tried to get a bill passed before it was adequately reviewed.

"Bill C-67 An Act For Granting To His Majesty Certain Sums Of Money, seeking approval for new spending in the billions to take care federal expenses until the end of the fiscal year (March 31, 2024), without disclosing the legal text of the bill. 'Prudent spending is the government’s focus,” said Sen. Patti LaBoucane-Benson, Cabinet’s legislative deputy in the Senate, adding the failure to publish the bill in advance was 'really a House of Commons problem.'

“'You need the bill to vote on it,' said Sen. Elizabeth Marshall, a former provincial auditor. 'I haven’t seen the bill. It’s not posted. I don’t know how we can vote on a bill that we haven’t seen'....

"Senators suspended the meeting for an hour while clerks distributed copies of the bill. 'This is an embarrassment,' said Senate opposition leader Senator Donald Plett....

"In addition to the $3.2 billion to go towards paying interest charges on the national debt, Freeland’s bill proposes $2.2 billion more for national defence and $1.2 billion in pay increases for federal employees. The bill granted Canada Mortgage And Housing Corporation (CMHC) an extra $101 million to cover loan losses and write-offs under the National Housing Act and approved an extra $34.6 million to run the federal prison system.

“'I want to bring up a little bit of history,' said Sen. Denise Batters. 'This is not the first time this sort of thing has happened.' Parliament from the outbreak of the COVID-19 pandemic on Friday, March 13, 2020 in less than two hours passed without debate three budget bills granting cabinet wartime spending powers for 90 days. The Commons then voted itself out of session for five weeks. Blacklock’s that day confirmed no text of the bills was disclosed until hours after they were signed into law.... Prime Minister Justin Trudeau’s Liberal government then used the bills to grant itself authority to borrow without parliamentary scrutiny a total $350 billion by March 31, 2020."

Monday, February 19, 2024

Milei gov't balances budget in first month

Javier Milei's administration achieved a balanced budget in January, its first month of office, the first time the government of Argentina has had a positive balance in over a decade..

Argentina sees first monthly budget surplus in 12 years | Straits Times | AFP:

February 18, 2024 - "The Argentine government in January saw its first monthly budget surplus in nearly 12 years, as new President Javier Milei continues to push for strong spending cuts, the Economy Ministry announced. January was the first full month in office for Mr Milei, a far-right [sic] libertarian who took office in December, and it ended with a positive balance for public-sector finances of US$589 million (S$800 million) at the official exchange rate, the government said late on Feb 16. The figure includes payment of interest on the public debt....

"Milei has been negotiating with the International Monetary Fund over its US$44 billion loan and has vowed to achieve balance in public finances in 2024 [see video]. 'The zero deficit is not negotiable,' Economy Minister Luis Caputo said on Feb 16 on X, formerly Twitter....

"Following a 50 per cent devaluation of the peso, a lifting of price controls and strong rate increases, Argentina saw an inflation rate for January of 20.6 per cent, with a 12-month rate of 254.2 per cent. The year 2023, the final year of the centre-left government of Mr Alberto Fernandez, ended with a 211 per cent inflation rate. With poverty affecting 45 per cent of the population, Mr Milei has predicted an economic rebound within three months."

Javier Milei's Budget Miracle: Libertarian Principles in Action! | GoldSilver | February 27, 2024:

Javier Milei’s Argentine success is paving the way for freedom and prosperity across Latin America | New York Post | Axel Kaiser:

February 14, 2024 - "Shortly after coming to power, Milei dramatically narrowed the gap between the official and the market exchange rates by devaluing the peso 54%. He went on to shut down ministries and public offices and lay off swarms of useless bureaucrats. He also passed an emergency decree with 300 measures to deregulate the economy. Among them are the privatization of all public companies, the elimination of rent controls, an open-sky policy, cutting subsidies to different sectors of the economy, ending import restrictions, deregulating satellite services and many others....

"During the first month of Milei’s administration, public spending decreased by 30% in real terms compared with the previous year and the previous month. In other words, the government is already spending almost a third less than in the same period last year when adjusted for inflation. Needless to say, this is only the beginning of the 6.1 points of gross domestic product worth of deficit spending Milei has to adjust to restore a balanced budget. Most of this adjustment (3.2% of GDP) will affect the public sector by cutting spending, while a temporary taxation increase (2.9% of GDP) will do the rest.

"Despite the harsh measures adopted so far and the challenges some of them face in the courts and congress, Milei’s popularity has stayed at around 60%.... [T]he demonstrations the infamous Argentinian unions orchestrated have not been able to harm the government. If anything, they have contributed to increased public support for Milei’s efforts to fight what he calls the 'caste' of 'parasites' that have exploited Argentinians for so long.

"If he is successful in getting rid of the 'caste\” so he can turn Argentina around, the ideological and political impact throughout the region will be enormous — even more so because he and other free-market advocates have already achieved a lasting change in the mentality and values of millions of young people by replacing collectivist and statist ideas with notions of individual responsibility and freedom."

Friday, November 24, 2023

Cost of Canadian gov't debt doubles in two years

The cost of servicing the Canadian federal government's debt has jumped from $20 billion in 2020-21 to an expected $46 billion in 2022-23.

Canada's debt charges are ballooning as Freeland tables a gloomy fall economic statement | CBC News | John Paul Tasker [stress added]:

November 21, 2023 - "The cost to service the federal government's sizeable debt load will spike in the years ahead — and those public debt charges will eat up much more of Ottawa's revenue than they have in recent years, according to Finance Minister Chrystia Freeland's fall economic statement, tabled today. Freeland's document suggests Canada will avoid a recession but predicts economic growth will slow to a crawl....

"Freeland wants to spend about $20.8 billion more over the next six years than the federal government initially projected. Freeland is pitching the increase as smaller than in years' past and as a sign of fiscal prudence....

"The federal Liberal government has run a deficit every year since it was elected. It posted even bigger deficits during the COVID-19 pandemic.... Now, with interest rates at a 20-year high, the cost to borrow all that money has spiked from $20.3 billion in 2020-21 to $46.5 billion in this fiscal year. The debt service charges will march even higher in the years ahead. Carrying the debt is expected to cost the federal treasury $60.7 billion in 2028-29, according to the economic statement....

"To put that in perspective, Ottawa will spend $28.9 billion on the Canadian Armed Forces this fiscal year — about $18 billion less than what the government will send in payments to the banks and bondholders carrying Canada's debt.

"The government's debt costs this year are $20 billion higher than the sum it has earmarked for one of its signature policies — the Canada Child Benefit, which sends cheques to families with kids. The debt charges are also more than double what the employment insurance (EI) program will cost Ottawa this year....

"Kevin Page, the former parliamentary budget officer, said it was 'inevitable' that debt servicing costs would rise once the government decided to backstop the entire economy during the pandemic. 'There was an enormous increase in debt. There were really massive increases in debt. Now it's going to come back to bite us,' he told CBC News.

"The federal debt has doubled from $619.3 billion in 2015-16, the first year of Trudeau's government, to $1.2 trillion last year. It's expected to climb to $1.4 trillion by 2028-29.... The deficit for this fiscal year is projected to be $40 billion — almost exactly what Freeland said it would be in the spring budget.... The deficit for 2024-25 is now expected to be $38.4 billion — $38.3 billion in the year after and $27.1 billion in 2026-27....

"The government says it doesn't expect to post a balanced budget for the foreseeable future."

How much federal debt is too much for Canada? | About That | CBC News | November 23, 2023:

Thursday, August 10, 2023

U.S. credit rating downgraded by Fitch

U.S. Credit Rating Downgrade Is a Sign of Government Dysfunction | Reason = Eric Boehm:

August 2, 2023 - "Fitch Ratings downgraded the U.S. government's credit rating from 'AAA' to 'AA+' on Tuesday afternoon.... In its announcement, Fitch said the downgrade reflected the federal government's growing mountain of debt and the country's fraught political dynamics—most recently evidenced by the brinksmanship over the debt ceiling that nearly triggered a default on the national debt.

"'The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,' Fitch said in its announcement. The change also reflects an 'expected fiscal deterioration' over the next few years, as the federal deficit is projected to grow wider, adding to America's already staggering total of $32 trillion in national debt. The rating service also pointed to the widening gap between the federal government's tax revenue and its spending, as well as the 'limited progress' being made toward solving looming issues like the projected insolvency of Social Security in the early 2030s.

"While the AA+ rating reflects that U.S. debt remains a trustworthy investment, Fitch's downgrade is a warning signal about the federal government's fiscal trajectory.... The national debt is on course to double relative to the size of America's economy in the next 30 years, and as the debt grows, so will the cost of interest payments. The Congressional Budget Office (CBO) estimates that interest on the national debt will consume one-third of the federal budget by 2050. That means more than 30 cents of every dollar taxed out of the economy will be directed towards the ongoing costs of past deficit spending rather than being used to cover government services.

"'High and rising debt would have significant economic and financial consequences,' the CBO warned in June, echoing similar recent concerns raised by the Government Accountability Office and non-governmental groups. The mountain of debt will 'slow economic growth, drive up interest payments to foreign holders of U.S. debt, elevate the risk of a fiscal crisis, increase the likelihood of other adverse effects that could occur more gradually, and make the nation's fiscal position more vulnerable to an increase in interest rates,' the CBO said.

"Fitch is the second of the 'big three' credit rating firms to downgrade the federal government from its highest to second-highest category. In 2011, Standard and Poor's (S&P) knocked America's debt rating from AAA to AA+, where it remains today. That change also followed a tense political standoff over the debt ceiling, though the federal government had a now-quaint $14 trillion in debt at the time. The current total is over $32.6 trillion....

"Given current fiscal and political trends in Washington, it was a question of when, not if, the U.S. would see another credit rating downgrade. Unless something dramatically changes, this is unlikely to be the last."

Fitch Ratings on why it cut the US credit rating to AA+ | Bloomberg Television | August 2, 2023:

Wednesday, March 29, 2023

Canada's Liberals plan to add $50 Billion to debt

Chrystia Freeland abandons budget balance plan, adding $50 billion in debt | National Post - Ryan Tumilty:

March 28, 2023 - "Finance Minister Chrystia Freeland has abandoned the Liberal government’s pledge to return the federal budget to balance, instead committing to years of further deficits as she made bigger spending plans to transform the economy to use less carbon. Freeland unveiled the 2023 budget Tuesday afternoon. Last fall, she predicted that after years of sky-high, pandemic-driven deficits, the government would finally return to balance, gradually reducing deficits until moving into a $4.5 billion surplus in 2027. That previous projection has been dropped and replaced with a $14-billion deficit.

"Across all of the next five years, the deficits are also larger than previously estimated, with the government ending this coming year $43 billion in the red compared to an estimated $36.4 billion just a few months ago. In total, Canada’s debt will climb by over $50 billion in the years ahead. Freeland also dropped previous Liberal promises to keep the debt-to-GDP ratio declining as a 'fiscal anchor,' as it rises this year to 43 per cent..... "

"Over the next five years, the government will spend an additional $22 billion on health care as part of a deal with the provinces announced last month. They’re also adding roughly $7 billion in that time to pay for an expanded dental care program, part of the confidence and supply agreement with the NDP. The government is also providing an extra GST credit for low-income Canadians, at a cost of $2.5 billion, to help with the rising cost of groceries, as inflation continues to surge....

"Beyond the new spending, the government is offering major tax credits to companies promising lower-carbon technologies. A senior government official estimated the value of the credits at roughly $80 billion over the next decade, with $25 billion going toward clean electricity generation alone.... The tax credits are Canada’s answer to the U.S. Inflation Reduction Act, a legislative suite of proposals that the government had feared would suck in almost all new investment in green projects for initiatives like nuclear and hydrogen....

"Freeland said even with that additional spending, Canada still has a lower debt-to-GDP ratio than any other G7 nation....

"The budget also promises to cut back on federal government travel and on contracting for outside consultants. It also asks departments for an across-the-board three per cent reduction in spending. If implemented, those reductions are estimated to save $15 billion. Freeland said the spending reductions won’t come with any layoffs or hiring freezes.

"NDP Leader Jagmeet Singh swiftly confirmed his party will support the budget, ending any speculation about whether the minority Liberals will fall. He said his party is pleased to have pushed for and created the new dental care program....

"Conservative leader Pierre Poilievre was quick to denounce the budget he said the Liberals are simply adding to the burden Canadian families face.... He said the Liberals have essentially caved to the NDP and it is driving up costs to the government."

Saturday, February 11, 2023

America's looming budget battles

The Fight Over the Debt Ceiling Is Just Beginning | Reason - Veronique de Rugy:

February 9, 2022 - "People are uneasy about the debt ceiling fight. Many think it's unhealthy and a sign of poor fiscal management, and they are right. However, they should get used to it. These budget fights will keep getting more frequent and more intense. That's because no one wants to talk about budget restraints. The truth is that existing spending commitments are rapidly shrinking the share of the budget that politicians have control over....

"Those who believe that government is the answer to all problems are always full of ideas about new programs to be funded. They want to prepare for the next pandemic or emergency by funding new government capabilities. They want government to engineer an energy revolution while simultaneously paying off all outstanding student loans as well as all future enrollments. They also want the government to relieve parents of the financial burden of raising children, while expanding the military and funding every project on the books.... But I wouldn't count on the completion of any of them — and that's not just because the government usually fails to deliver on its loftier goals. Rather, it's because these ambitious objectives will mostly have to be funded from the discretionary part of the federal budget, which is melting away....

"[T]he discretionary budget is what pays for homeland security, most of the military, farm subsidies, education, and much more. It's the only part of the budget legislators directly and regularly control. Today, discretionary spending accounts for 30 percent of total spending. In 1970, it was 62 percent. Defense spending is about half of it and 14 percent of the total budget.

"By contrast, the amount spent on non-discretionary programs such as Social Security, Medicare, and Medicaid has doubled as a portion of total spending, from 31 percent of the budget in 1970 to around 62 percent in 2023. Meanwhile, interest payments on the national debt are another fast-growing mandatory-spending component of the federal budget. Altogether, mandatory spending on entitlements and interest payments accounts for over 70 percent of the budget and is projected to consume more than 80 percent by 2040....

"What's more, many mandatory spending programs are growing even faster than the economy and will therefore rely heavily on borrowing. Above and beyond the debt problems we might face, this reality has serious implications for all those politicians who believe they can fund their new projects or expand existing ones with the discretionary side of the budget. The budgetary turnip is rapidly running out of blood.

"So expect more intense budgetary battles. While discretionary spending is still growing in nominal terms, albeit at a slowed rate, legislators will increasingly fight over how to spend this constantly diminishing budget while overall spending is simultaneously exploding. There won't be much room politically to grow discretionary spending out of borrowed money. And with fewer dollars to go around, competition for each one of them will become increasingly fierce....

"Of course, with our debt and deficit growing, legislators will try to collect more taxes. If they succeed, the revenue will be a drop in the bucket full of mandatory red ink. However, I predict that their effort will fail. A look at the data shows that no matter the federal tax rates under the current regime, since the 1940s, collections have never been more than 20 percent of GDP. That's in part because politicians are pressured to redistribute lots of resources back to taxpayers through the tax code with provisions like the child tax credit and other deductions. Adding to the difficulty is the fact that higher marginal tax rates slow the economy and eventually limit the scope of tax collections as Americans make less money.

"If you're tired of debt ceiling fights, I'm sorry to report that they're just the beginning of a long series of fights over fiscal management."

Michael Tanner, America's Debt Crisis Explained - Prager U, 2014:

Friday, July 30, 2021

The rising costs of Canada's lockdowns

What 16 months of COVID lockdowns have cost us | National Post - Tristin Hopper:

July 28, 2021 -"Canada’s pandemic response, particularly in Ontario, has been defined by strict lockdowns — often at a level of severity well beyond anything seen in the rest of the developed world. It will take years to fully assess the societal costs of social distancing, from learning loss in schools to a rise in famine conditions caused by disruptions to global trade. Below is a rough accounting of the price Canada has paid thus far.

"In March 2020 ... the country’s federal debt stood at $721.4 billion. Only one year later, the Department of Finance was pegging the debt load at $1.2 trillion.... And that’s just federal spending. COVID-19 has also blown out the debt of every other conceivable public institution in the country. In the three post-pandemic years, Ontario is set to run up as much debt as the prior 10 years combined.... Dozens of Canadian post-secondary institutions are posting multi-million dollar deficits, often for the first time. Newfoundland and Labrador’s already-shaky financial situation has been thrust onto the brink of bankruptcy.... For now, all this unprecedented borrowing has not overly compromised Canada’s federal credit rating, but the consequences will begin to show in future budgets as the cost of servicing debt becomes our single greatest public expense....

"It’s difficult to put an exact figure on the number of businesses wiped out by COVID-19, but a running list of retail closures includes everything from the shuttering of 300 Canadian Starbucks locations to the mass-closure of Canadian Disney stores. In November, the Canadian Federation of Independent Business was estimating that 225,000 firms would not survive the pandemic.

"And the worst wave of business closures may be yet to come. Last month, the Canadian Chamber of Commerce projected that a disproportionately high rate of bankruptcies and business closures could extend well into 2022. Many businesses that were critically wounded by COVID-19 remain open by taking on debt or relying on government supports such as the Canada Emergency Wage Subsidy....

"As of this writing, Canadian COVID-19 deaths stood at 26,550. Second only to the Spanish Flu, the toll makes COVID-19 our deadliest natural disaster. However, Canada’s average death rate (70.53 per 100,000) is roughly in league with Israel, which has often received praise for its handling of the pandemic....However, COVID-19 deaths have overshadowed a dramatic rise in fatalities in other areas, often as as a direct result of pandemic measures.

"Most notably, the opioid crisis has never been worse. Between April and December of 2020, 5,148 Canadians died of an overdose, a rise of 89 per cent over the same period in 2019. As Health Canada has theorized, border closures made the illicit drug supply more toxic, and social distance caused the curbing of medical services that had previously been instrumental in keeping many addicts alive.

"The months-long suspension of routine medical services is also expected to yield a rise in preventable cancer deaths that will be playing out for years after the official end of lockdowns. Modelling by Statistics Canada has estimated ... an extra 440 Canadians will die of colorectal cancer as a result of the more than 540,000 screenings missed during the pandemic. A November paper in the Journal of Medical Screening similarly estimated that just six months of missed mammograms could yield up to 250 additional breast cancer deaths in Canada. In Quebec, the province’s health ministry has estimated that up to 4,000 people have gone undiagnosed with cancer as a result of a sharp dropoff in mammograms, pap smears and colorectal cancer screens.

"One spot of good news, however, is that lockdowns haven’t inspired a spike in deaths in the one category where everybody assumed they would: suicides. Although the pandemic has played havoc with people’s mental health, the number of Canadians taking their own lives under lockdown has either remained stable or gone into decline."

Wednesday, January 13, 2021

Guess who wants to reopen his state?

Andrew Cuomo Makes an Infuriating Declaration for Those Living in His COVID-19 Dystopia | PJ Media - Stacey Lennox:

January 11, 2021 - "Governor Andrew Cuomo delivered his annual State of the State address on Monday. He has overseen some of the most draconian COVID-19 lockdowns and restrictions in the country. Some of his more chilling moves were threatening to close churches and synagogues, yanking the licenses of business owners who defied his ridiculous orders, and covering up his own culpability in forcing COVID-19-positive patients into nursing homes. More recently, he has led what might be the most botched vaccine rollout in the country. Originally he had set strict rules about who would have priority to receive the vaccine, and threatened to levy fines of up to $1 million if a healthcare provider gave it outside of his specified hierarchy. When doses, which have a short shelf life, expired, they were thrown in the trash.

"Meanwhile, businesses are dying in the state, especially in New York City. As of August, the New York Times reported that up to one-third of the state’s small businesses were closing for good. In-person schooling has been an on-and-off affair thanks to the teachers’ unions insisting on a ridiculous 3% positivity rate to trigger closings.... Supposedly, according to Cuomo and many others, the vaccine was going to save us all, and everyone could get back to normal when a sufficient number of people were vaccinated. That was before the Electoral College vote was certified.

"Today he said: 'We simply cannot stay closed until the vaccine hits critical mass. The cost is too high. We will have nothing left to open. We must reopen the economy, but we must do it smartly and safely'.... I predict he will be the first of many lockdown governors to say this.

"Here’s how I think things will go: Joe Biden will be inaugurated in nine days and make some proclamations about how he will defeat COVID-19 in the next 100 days. A national mask mandate and some other useless moves, like another “30 Days to Slow the Spread,” will be announced.

"During that time, the National Center for Health Statistics will change the way COVID-19 deaths are reported to mirror how influenza deaths are tracked. This will cause the death rate to fall. The cycle threshold on the PCR tests will be lowered to indicate active illness and the ability to transmit the disease. According to a New York Times analysis in August and a study by Jaafar et al., this means positive tests will gradually fall to about 10% of what we see now.

"I predict it will be underreported and ignored that states that ignore the national mandates, like Florida and South Dakota, will fare just as well, if not better. Governor Ron DeSantis has already said he will not lock Florida down again and Governor Kristi Noem has said she would not enforce any national COVID-19 mandate. Other governors whose states are open, like Georgia and Tennessee, will face backlash if they follow the mandates.

"Then Cuomo and the other governors — who did the Democrats’ bidding by crushing their economies and keeping people isolated and miserable and blaming it on President Trump — will get their due. Remember how Mitch McConnell and President Trump said they were not bailing out years of mismanagement in states like New York, California, and Illinois?.... With complete Democrat control in Washington, leaders in the state are looking for that bailout with renewed hope. In his speech, Cuomo said: 'Washington has savaged us for four years.... We expect basic fairness from Washington. Finally'....

"New York ... got the same resources from the federal government to manage the pandemic that are available to every state. Cuomo’s projected deficit comes from decreased tax revenue from business closures, people fleeing the state in record numbers, and unbridled spending. New York’s budget for 2020 was $177 billion. Florida, with a similar and slightly larger population, spent $93.2 billion.

"Cuomo is sure his deficit problems are solved now so he can 'safely' open. Meanwhile, the rest of the country will pay off New York’s debts with our tax dollars and higher inflation caused by the additional money we will print. That’s just 'fair,' according to Governor Cuomo. You have to wonder how the New York business owners and parents whose children have lost nearly a year of education will view it."

Saturday, December 19, 2020

Canada's Liberals double national debt in 5 years

Mind-blowing Liberal spending spree a massive rip-off of future generations | National Post - John Ivison:

December 4, 2020 - "This week’s fiscal update has already passed from the news cycle. The sums we are talking about are so mind-blowing — $621 billion in government spending this year — that shaken citizens have ignored the barking fiscal watchdogs and the caravan has moved on. Maybe we should call it the banality of spending – a minister buying a $16 orange juice induces thrombosis but a government that doubles net federal debt in five years would be re-elected with a majority were an election held tomorrow.

"The Liberals could be excused their mistakes in the early fog of the pandemic. As one veteran policy-maker noted, Ottawa realized it could be fast or accurate, but not both. Benefits were so absurdly generous that household income rose 11 per cent, even as GDP tumbled. Yet given the chance to re-align benefits closer to lost income, the Liberals doubled-down, increasing the money available under the wage subsidy and disbursing an extra $1,200 in Canada Child Benefit to 1.6 million families.

"Mistakes are presented as virtues – a 'pre-loading' of stimulus into bank accounts across the land. That pent-up demand has not removed the need to inject a further $100 billion in stimulus in 'smart, time-limited investments' over the next three fiscal years.

"Stimulus spending, by its very nature, is temporary. Yet elsewhere in the fiscal update, the government committed itself to 'historic investments' in a national daycare system and the implementation of universal pharmacare.... Permanent social programs are not stimulus.

"The undefined temporary spending package envisaged in the fiscal update would see deficits average $115 billion for three fiscal years and the debt to GDP ratio average 57 per cent, BEFORE any additional spending on childcare, pharmacare or health. There is no mention of how any of this spending would be paid for – it would simply be added to a national federal debt that has risen from $615 billion when the Trudeau government took power to $1.2 trillion this year....

"[T]axpayers befuddled by millions, billions and trillions should understand that what is taking place is a massive rip-off of future generations, who will be handed the bill for today’s consumption. The cost of servicing that debt is as low as it has ever been and the government touts a management strategy that locks into low rates by issuing more long-term debt. But that doesn’t mean taxpayers aren’t obliged to pay it off; it just means they will never stop paying it off.

"As Paul Boothe, a former senior public servant at Finance Canada, put it, we need to have a discussion about taxes.... 'Giving away money is the easiest thing to do in government. Collecting it is less easy. And the hardest thing is to deliver services efficiently,' said Boothe. 'With permanent programs, you need to talk about how you are going to fund them. We need to know the costs as well as the benefits.'

"The only tax increases in the fiscal update were applied on corporations – in this case, GST and HST on digital products and goods held in fulfillment warehouses. Inevitably, they will be passed on to consumers but that’s not the government’s concern....

"It will probably be no comfort to be reminded that in times like these, there have always been times like these. They come along when governments forget that budget constraints are a fundamental principle of economics. And they tend not to end well."

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