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  • Report looks at captured nature of BC’s Oil and Gas Commission August 6, 2019
    From an early stage, BC’s Oil and Gas Commission bore the hallmarks of a captured regulator. The very industry that the Commission was formed to regulate had a significant hand in its creation and, too often, the interests of the industry it regulates take precedence over the public interest. This report looks at the evolution […]
    Canadian Centre for Policy Alternatives
  • Correcting the Record July 26, 2019
    Earlier this week Kris Sims and Franco Terrazzano of the Canadian Taxpayers Federation wrote an opinion piece that was published in the Calgary Sun, Edmonton Sun, Winnipeg Sun, Ottawa Sun and Toronto Sun. The opinion piece makes several false claims and connections regarding the Corporate Mapping Project (CMP), which we would like to correct. The […]
    Canadian Centre for Policy Alternatives
  • Rental Wage in Canada July 18, 2019
    Our new report maps rental affordability in neighbourhoods across Canada by calculating the “rental wage,” which is the hourly wage needed to afford an average apartment without spending more than 30% of one’s earnings.  Across all of Canada, the average wage needed to afford a two-bedroom apartment is $22.40/h, or $20.20/h for an average one […]
    Canadian Centre for Policy Alternatives
  • Towards Justice: Tackling Indigenous Child Poverty in Canada July 9, 2019
    CCPA senior economist David Macdonald co-authored a new report, Towards Justice: Tackling Indigenous Child Poverty in Canada­—released by Upstream Institute in partnership with the Assembly of First Nations (AFN) and the Canadian Centre for Policy Alternatives (CCPA)—tracks child poverty rates using Census 2006, the 2011 National Household Survey and Census 2016. The report is available for […]
    Canadian Centre for Policy Alternatives
  • Fossil-Power Top 50 launched July 3, 2019
    What do Suncor, Encana, the Royal Bank of Canada, the Fraser Institute and 46 other companies and organizations have in common? They are among the entities that make up the most influential fossil fuel industry players in Canada. Today, the Corporate Mapping Project (CMP) is drawing attention to these powerful corporations and organizations with the […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

Breaking The Taboo on Monetizing Deficits

In a very long and fascinating speech which has been amplified by Martin Wolf in the FT, Lord Adair Turner seeks to break the taboo on discussion of the potential ability of central banks to monetize fiscal deficits. His argument boils down to a political economic one … Some monetization might be useful in certain circumstances such as in Japan over the recent past, but there is a clear danger of going too far and stoking inflation if the central bank becomes too subject to political pressures.

He makes the interesting point that QE in the US and the UK may ex post amount to monetization of deficits since there is no technical reason why central bank purchases of bonds to lower interest rates need to be fully reversed, and since income from those bonds created through newly created money is being transferred to governments.

I was reminded that Friedman used to argue that all deficits should be financed through base money.

Enjoy and share:


Comment from Sam Gunsch
Time: February 22, 2013, 9:17 pm

re: “monetize fiscal deficits” and “financed through base money”

At the moment, it seems to me, in the absence of sustained effort for connection with the ordinary Canadian by the experts that gather here, I’m concerned that it is likely the accessible economic B.S/propaganda of the Lorne Gunter’s will continue to win the day.

I get that this blog does not, nor is it intended to have an audience among ordinary citizens.

But I wonder, would it be possible to translate (i.e. not dumb down) these statements but retain the import and convey them so ordinary citizens could get what’s going on? As the experts here see things?

…is it possible?

And if it’s possible, where’s the blogs or the news sites or aggregation sites for that conversation?

I’m very concerned that there is no bridging social media platforms that can translate and share the expertise/insight/agenda discussed here into the information world that is daily bathing the ordinary citizen.

Maybe I’m not seeing where it’s happening… maybe I’m not aware of “The Place(s)” that connection and sharing with the ordinary Canadian is happening, where it is being made a priority of the community of ‘progressives’ or ‘left’ that engage here to explain what’s going on with neo-liberal politics and that the hell ‘neo-liberal’ actually means?

But if there is no place or few places where this happens and is done regularly… and if the effort is not made to create those bridging places and translate the knowledge and insight found here at this forum…?

Then… is it not the case, that the talents and wisdom and potential contributions of the good and well-educated people that write here, that all this accumulated insight into political economy will in fact be mostly be impotent re any material effect on politics? That Gunter and Coyne and Mintz will continue to shape public opinion?

That what you have in your capacities to share will remain latent and impotent as far as the ordinary citizen’s take on politics is concerned…

So, as is my nature, bluntly…

Talking among yourselves without equivalent or greater effort to talk intelligibly with the Tim Horton Canadian is in practice a neglecting of the common good.


Maybe it’s not possible to share the knowledge here with the ordinary citizens out there… so then maybe my concern is utopian?

I think… We citizens need your help, and your help needs to be in language we understand. We need this content discussed here, discussed with us in “Progressive Citizens Forum(s)” where a Grade 12 education will suffice.

Sam Gunsch

Comment from Sam Gunsch
Time: February 25, 2013, 8:54 pm

I consider you citizens of great virtue.

And am greatly appreciative of your efforts.

I regret that I did not share this in my first comment.
No excuse, but I expect it’s apparent that my emotional regulation is a work-in-progress.

Sam Gunsch

Comment from Mike McCracken
Time: March 8, 2013, 9:15 am

Quantitative Easing (QE) is a synonym for creating money to finance government spending. The fact that the Federal Reserve is doing it rather than using the US Government Printing Office (GPO) is for the “cover” that an independent entity is providing the cash.

QE is a good thing, given high unemployment and a large output gap in the US (and elsewhere). It certainly is preferable to suggestions to cut government expenditures, lay off government workers, and cut transfer payments to the lower income segments of society.

But what happens if the policy is successful? If the economy moves to full employment (unemployment rate of 4%) will there be pressure to overspend leading to inflation? How can the money suppply be reduced?

Rising tax revenues and reduced transfer payments reflecting better economic performance will improve the governmenet balance, effectively taking money out of the system.

At any time, the Fed can reverse QE by buying back the bonds it sold earlier. This will also take money out of the system.

Indeed, if interest rates are raised, then the repurchase of bonds isssued under the QE will be at a lower price, leading to a “trading gain” for the Fed. Such “profits” accrue to the federal government and reduce the deficit directly.

The bottom line – move to full employment and many problems will diappear. At the same time, the options available to governments will widen.

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