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Archive for 'debt'

Corporate Cash Stash Surpasses National Debt

Today’s National Balance Sheet Accounts indicate that the amount of cash held by private non-financial corporations in Canada soared from $591 billion in the third quarter of 2013 to $626 billion in the fourth quarter of 2013. Corporate Canada’s accumulated stock of cash now exceeds the federal government’s accumulated deficit, which was $612 billion at […]

Do High Tuition Fees Make for Good Public Policy?

This afternoon I gave a presentation to Professor Ted Jackson’s graduate seminar course on higher education, taught in Carleton University’s School of Public Policy and Administration.  The link to my slide deck, titled “The Political Economy of Post-Secondary Education in Canada,” can be found here. Points I raised in the presentation include the following: -Tuition […]

Beating Back the Ghosts: Be Gone Appeals to Reinhart and Rogoff Authority. Welcome the Triumph of Reason.

They’ve haunted me.  Incessantly.  The ghosts of Reinhart and Rogoff.  Their research here, there, everywhere. Bank of Canada speeches? Yes.  Finance Department talking points? Check. House of Commons debates? Yup.  Globe editorials? Ditto.  Discussions with fellow progressives? Sadly, yes. Results? Arguments conjured in their name.  Reason decapitated.  Modern Monetary Theorists (MMT) banished to the netherworld […]

Ontario hiding savings from lower interest rates

The Ontario government Fall Economic Statement and Fiscal Review ignores and hides billions savings the province will gain from lower borrowing rates in coming years. While this statement acknowledges that borrowing rates will be considerably lower in coming years–and more than 100 basis points lower in 2014–their forecast of debt interest costs (on page 85) […]

Household debt going from bad to worse

Canadians are now more indebted than either Americans or the Brits at the peak of their housing bubble.  Statistics Canada today revised the national accounts.  The result on the household debt front was that instead of Canadian households having a debt to disposable income ratio of 154, it has now been revised upwards to 166. […]

Pour en finir avec la dette…

The previous post reflects a general mood about the Québec election and its perennial debates, constitutional and otherwise. Nonetheless, for all the talk about Québec’s specificity, many economic discussions bear striking resemblance to what is happening in the rest of North America. Worry about the public debt is one of them, one that has taken […]

Dead Money

Kudos to Bank of Canada Governor Mark Carney for raising the profile of the over $500 billion Canadian corporations are holding in excess cash surpluses and not investing in the economy, which garnered front page coverage (and kudos to the CAW for inviting him to speak.) It’s not the first time he’s raised this  concern. […]

Fiscal “Crisis” In Context: Two Indicators

With all the predictions of doom and gloom coming from the austerity camp, one would think that Canada was already about to hit the famed (but never seen) “debt wall.”  Before we get too carried away, however, with the scary debt stuff, consider these two indicators of the fundamental fiscal fragility/stability of Canadian governments. The […]

US family net worth crushed by financial crisis

The US Federal Reserve today released its triennial examination of incomes and net worth of American households in the Survey of Consumer Finances.  It shows the crushing effects on net worth of a housing and financial bust unparalleled since the great depression. The shocking results of this study overviewed in the New York Times are […]

Canada’s Self-Imposed Crisis in Post-Secondary Education

On June 7, I gave a keynote address to the Alberta Union of Provincial Employees Education Sector Conference.  My PowerPoint presentation (with full references) can be found at this link. Points I raised in the address include the following: -Canada’s economy has been growing quite steadily over the past three decades, even when one adjusts […]

Record Low Interest Rates Mean Governments Can Save By Borrowing More

Today’s record low interest rates on long term Canadian government bonds present a fantastic opportunity to save money by borrowing more. Back last December I wrote a post pointing out that the federal government could and should be much more aggressive in locking in low interest rates by shifting new borrowing to long term bonds […]

Quebec Tuition: Between a Rock and Hard Place?

In the context of student protests over Quebec tuition fees, my friend Luan Ngo has just written a very informative blog post on Quebec’s fiscal situation. While I encourage readers to read his full post, I do want to use the present space to make mention of three important points he makes: -On a per […]

Discussing Quebec Student Protests on Talk Radio

Last Friday, I blogged here about the Quebec student protests.  Subsequently, I was invited to appear on 580 CFRA News Talk Radio, with hosts Rob Snow and Lowell Green. I should note that Mr. Green is the author of several books, including: -How the Granola Crunching, Tree Hugging Thug Huggers are Wrecking our Country; -Mayday […]

The Economist Takes Note: Modern Monetary Theory Gets Much Deserved Attention

As faithful readers of this blog will know, I make only very sporadic contributions to this blog but a substantial fraction of those contributions have made reference to modern monetary theory (MMT), the view (crudely put) that, based on a detailed understanding of the institutional mechanisms behind monetary operations, calls into question our obsession with […]

Why Not Lock In Low Interest Rates?

The federal government has failed to take up an historic opportunity to lock in ultra low interest rates on long term Government of Canada bonds. Normally – as outlined in annual debt management reports – the government follows a strategy which is intended to achieve two main goals -  low overall debt servicing costs, and […]

Why the Excitement About Debt?

Further to our recent discussions on this blog about the role of private finance and credit in our present crisis, we present a guest contribution from Ralph Musgrave, an economist in the U.K. National debts have risen recently, which has caused excessive and unnecessary consternation. The consternation is particularly unnecessary for countries which issue their own […]

Who’s Bailing Whom? Challenging the Private Credit System

The time since 2008 has been a crucial historical moment for progressive economists to pull back the green curtain that surrounds the operation of the for-profit banking system, and expose that system for what it is: a government-protected, government-subsidized license to print money. The problem is, as soon as you start saying things like that, people […]

Student Debt Rising Amongst New Physicians

Newly-released data indicate that student debt is rising amongst new physicians in Canada. In 2010, 23 percent of medical residents reported having more than $120,000 in education-related debt upon completion of their residency training (as compared with just 17 percent in 2007). (Note: across Canada, average tuition fees for medical students amount to just over $10,000 a year.) This appears to have […]

PSE in Newfoundland and Labrador

Last March, Keith Dunne and I wrote an opinion piece on Danny Williams’ post-secondary education (PSE) legacy in Newfoundland and Labrador. Among other things, we pointed out that average undergraduate tuition fees (for domestic students) in Newfoundland and Labrador are $2,624/yr., compared with $5,138 for Canada as a whole and $6,307 in Ontario. With a provincial election slated to take […]

“Grade-Boosting” Stimulant Use on Campus

A recent editorial in the Canadian Medical Association Journal looks at the use of “grade-boosting” stimulants (such as Ritalin) by Canadian post-secondary students. According to the editorial: “Universities and colleges are ground zero for ‘grade-boosting’ stimulant abuse.” The thrust of the editorial’s argument is that universities and colleges need to work proactively to reduce the misuse […]

Ontario Student Debt

Last week, the CCPA released a paper by David Macdonald and Erika Shaker entitled Under Pressure: The Impact of Rising Tuition Fees on Ontario Families. The paper does a good job of explaining which households have been most impacted by rising tuition fees in Ontario. Points made in the paper include the following: -In light of […]

Is There a Student Debt Bubble?

A recent article in The Atlantic looks at student debt in the United States and suggests there may be a student debt bubble. Written by the authors of the recent book, Higher Education?, the article points out that “college loans are nearing the $1 trillion mark, more than what all households owe on their credit cards.” The article also […]

Mythologies: Money and Hyperinflation

In an earlier post, Marc Lee mentioned in passing the German hyperinflation episode of the 1920s. It’s remarkable that this event still holds such sway over the popular imagination despite other more recent instances of hyperinflation. Certainly, the imagery is powerful: German citizens pushing wheelbarrows full of worthless paper money around for everyday purchases, banknotes […]

MMT: What it Means for Canada

Arun Dubois’ blog post yesterday on Modern Monetary Theory has prompted me to write my own take on the subject.  For those interested, an interesting thumbnail sketch of MMT, essentially functional finance augmented by a full understanding of monetary operations, is explained here. While MMT deals with the details of monetary and fiscal matters, the […]

No Retreat, No Surrender: Time For Progressives to Explode Deficit/Monetary Myths

Friends, I’m concerned. I fear that too often, we on the left retreat when we should attack, surrender when we should vanquish.  What do I speak of?  Well, I am concerned that too many of us are willing to play in the frame, the box, the straighjacket of modern discourse about fiscal and monetary policy.  […]

Thoughts on “Why not print money?”

Richard Gilbert’s “Why not print money?” in the Globe’s Economy Lab toys with more radical monetary intervention as a response to the crisis. Desperate times, they say, call for desperate measures. The title (which was perhaps not Gilbert’s at all) is more provocative than the article itself, which is mostly about tolerating higher inflation that […]

S&P Pantsed by US Treasury

I have been reluctant to condemn the credit-rating agencies for sovereign downgrades because it seemed like shooting the messenger. As the bond markets have noticed, a few European countries have serious fiscal problems. Blaming the raters for also noticing did not seem like an effective response. However, I think that Standard and Poor’s decision – […]

More on Public Sector Austerity in Canada

A short addendum to my previous post: I checked the most recent IMF projections in the June, 2011 Update to the Fiscal Monitor. Table 1 provides estimates of changes in the general government government cyclically adjusted balance in percent of potential GDP. Basically changes are the result of discretionary changes in fiscal policy rather than […]

Public Sector Austerity: Why is Canada Leading the Way?

The major economic problem faced by Canadians is a very slow recovery and weak job market, not government deficits or rising debt. But public spending cuts at the federal and provincial level will make the real problem even worse. And, government spending cuts in Canada seem set to be even greater than in other advanced […]

Navigating challenging economic waters

Down south, the Obama administration is in a dangerous game of chicken with Republican congressional leaders, who are cynically holding the US economy hostage in order to impose a radical agenda of spending cuts. Obama has seemingly bought into the rhetoric of cutting debt, rather than focusing on the real US problem of unemployment. Yet, […]