Kevin Page believes that Jim Flaherty's GDP forecasts are too high, while the Royal Bank of Canada believes the Finance Minister's estimates are too low. Kevin Page's grim GDP outlook is the basis for his assertion that deficit projections should be much higher. How much higher? Kevin thinks that Jim is off by 10 billion dollars in 2014. Our GDP is 1.5 trillion dollars, good enough for 11th on the world list. 10 billion dollars is one half of one percent of our GDP. Long term GDP forecasts have a very high margin of error and wider confidence intervals than other economic variables, more so considering the critical importance of world resource prices to Canada's annual revenue.
One of the reasons for the surge in optimism is stronger than expected consumer spending. To all those who want to raise the sales tax, I would like to point out that people spending money is fueling our GDP growth. Our unemployment is significantly lower than the United States and our consumers are spending money. When people spend money, businesses make money. As businesses make money they hire more employees, who then spend money and pay taxes. It is the circle of life. We don't need to add to the sales tax.
For more information, read RBC Economics calls for 2010 GDP growth of 3.1% or More horrifyingly bad news for Libs...
I watched Rosemary Barton interview Kevin Page, and you could tell that she really had no idea what he was talking about. She is guest hosting for Soloman, and all she is talking about a ten billion dollar gap 4 years from now instead of how good things are right now.
ReplyDeleteWhen Tom Clark's PP video goes up, yah gotta post it. Don Drummond and another economist just blew Kevin Page out of the water.....with common sense and experience.
ReplyDeletePage thinks its too high, Royal thinks its too low, and TD thinks its just right! Reminds me of a nursery rhyme :-)
ReplyDeleteIf Harper was a legitimate small-c fiscal conservative, he would know that you can’t grow your way out of a deficit or debt; and therefore, spending cuts are mandatory. To acquire deficit eradicating, debt re-payment and tax cutting dollars, a genuine conservative PM would expedite a 7% across the board factual cut to of program spending rather than allowing program spending to increase by 5-7% annually, reduce provincial transfers, raise the retirement age, means test benefits and/or increase the % of employees contribution pursuant to the CPP, employ the “means testing” concept rather than the “universality” concept for some other entitlement programs such as the child care program by which the middle class subsidize the upper class, save billions by inviting the private sector to participate in many more of the peripheral sectors of the Medicare system, cut million of dollars of improvident foreign aid that ends up in dictators’ banks accounts, eradicate ineffectual programs completely, layoff thousands of excess public servants, place an absolute freeze on all government hiring and their wages, eradicate unions in the public service, amend the overly generous public service pension plans, sell government assets such as a few of the nine government Citation jets or some of the Gulfstream jets, close dozens of valueless crown corporations/agencies starting with the CRTC and the superfluous far-left bias, unfair and unbalanced affirmative action bimbo- driven CBC that cost tax payers $1.2 billion annually, and eliminate most of the corporate welfare. Other expenditure cuts would include agricultural subsidies and regional development funds. We would save additional billions by privatizing Canada Post, or at the very least instigating four day/week delivery by non-unionized employees. He would also save hundreds of millions of dollars annually by diminishing immigrant/refugee levels by at least 33%.
ReplyDelete--TomHobbes