The Progressive Economics Forum

I was taken a bit aback by Kevin Carmichael’s piece on Obama’s budget plans in today’s ROB. In what is more a news than an opinion piece on  concerns regarding fiscal sustainability in the US , he baldly states without attribution that “Research and history suggests that a debt-to-GDP ratio of 60 per cent or [...]

Conversation fragment overheard the other day: “This deficit thing. It worries me. My grandchildren you know?”  To which his interlocutor replies:  “Yes, it worries me too. We just can’t keep this up.” And so it goes.  The grandchildren are trotted out.  We shudder in collective guilt, thinking about the financial hardship that our selfishness imposes [...]

It’s a funny old economy we live in. The release of today’s national balance sheet accounts has aroused great concern about the rise of the ratio of household debt to personal disposable income to a new record of 148%. Mark Carney and our banks want – quite rightly – to discourage further borrowing to prevent [...]

Martin Khor, of the South Centre, has done an interesting analysis for the (doomed) Cancun negotiations on climate change. The talks have broken down on north-south lines, with southern countries wanting to keep the Kyoto framework that puts the onus on northern (advanced, industrialized) countries to reduce emissions and give carbon space to southern countries [...]

Further to Marc’s post on alternatives to extreme fiscal austerity available to hard hit countries like Ireland and Greece,  it is manifestly unfair to attack the living standards of Irish workers to resolve a crisis that was not of their making, especially given that most of the fruits of the the debt financed housing  boom [...]

What are banks for?  Typically, banks are described as intermediaries that take deposits and lend them out, earning what is called net interest margin on the gap between what is paid on the savings and what is earned on loans.  From where I stand, this description is wrong on three counts. First, it suggests that [...]

Back in May when Greece was in the process of getting its “bailout” I kept wondering why it had to be that Greece would accept such harsh conditions when it held an ace up its sleeve. The proposed package of austerity, which would make the economy worse, was only an issue as long as Greece [...]

It’s always been my understanding that left-of-centre economists, on the whole, like it when real interest rates are low (but not negative).  Among other things, this encourages more companies to borrow (and hire more workers), reduces unemployment, reduces debt-servicing costs for government, and increases the power of labour. In July of this year, I blogged over my [...]

In the past few weeks some of Canada’s most respected economic authorities, including Bank of Canada Governor Mark Carney, have voiced concerns over the fragility of the recovery, globally and at home.  Now Paul Krugman joins that chorus of Cassandras, pointing his finger straight at the wishful thinkers who say Canada’s heavy lifting is done [...]

Today’s Toronto Star features an op-ed by John Cartwright, President of the Toronto and York Region Labour Council. (I once had the chance to hear John speak at a press conference in Toronto and found him to be an oustanding public speaker.  But I digress…) In the piece, he argues that “we” (I think he means both [...]

The latest issue of the quarterly Economic Climate for Bargaining publication that I produce has just been posted on CUPE’s website. In this issue I have pieces about: the new spectre that is haunting Europe, this time of a public debt crisis impact analysis of Ontario’s HST tax reform by income group, already discussed below some analysis [...]

The Austrian School is a venerable tradition in economics, albeit one antithetical to this blog’s perspective. But it became apparent this morning that we should instead have been studying Hungarian economics. As far as I can tell, a vice-chairman of Hungary’s right-wing governing party (not a government official) made some loose remarks about public finances [...]

A guest post from PEF Steering Committee Marc Lavoie of the University of Ottawa: Tax the very rich and solve the PBO problem Among the dozen or so sessions I attended at the meeting of the Canadian Economics Association last week-end in Quebec City, one was devoted to the forthcoming fiscal crisis and another to [...]

Last Friday I had the honour of sharing the podium (and a good supper afterward) with Steve Keen, the awesome Australian economist who was recently named the winner of the “Revere Award” for most accurately forewarning of the global financial crisis.  In fact, that award was announced the same day we spoke together to the [...]

Here former IMF Chief Economist Simon Johnson urges Greece to default rather than impose a swingeing austerity program. http://www.project-syndicate.org/commentary/johnson6/English

Earlier this month the Economist ran a leader (editorial) and longer article asking and then largely answering who should for the costs of the economic crisis (public services and workers of course!). That’s when I wrote the piece that leads the March 2010 issue of the Economic Climate for Bargaining publication that I produce quarterly.  (I [...]

In an important series of columns in the Financial Times, economics editor Martin Wolf has been making the argument that – to avoid a relapse into recession – governments must run deficits so long as the private sector is running large surpluses of savings over spending. “Jumps in fiscal deficits are the mirror image of [...]

Last Monday, I testified twice to the Ontario legislature’s finance committee: as an “expert witness” and then on behalf of the United Steelworkers. I emphasized the provincial deficit’s manageability, the folly of trying to reduce it through cutbacks or privatization, the importance of maintaining tax rates to bolster future revenues, and the advantage of targeted [...]

Ontario’s pre-budget consultations include a session for which each party caucus selects an “expert witness.” This year, the Liberals invited Warren Jestin from Scotiabank, the Conservatives invited Catherine Swift from the Canadian Federation of Independent Business (CFIB) and the NDP invited me. In general, my role was not to engage with the other witnesses. The [...]

Last Saturday the Globe and Mail (November 28, page B1) ran a multi-page spread on national government debt. It was a mish mash of large titles, large numbers and sensational assertions: “A World Awash in Debt”; “Climbing out of this hole won’t be easy”; “the numbers are staggering”, “debt would climb to about 300 percent [...]

I just saw Michael Ignatieff on TV warning that Canada could hit “the deficit wall.” I assume he means “debt wall.” (I would not fault a slip of the tongue, but the written text of a recent speech also incorrectly calls it “the deficit wall.”) The concept is not that a country hits the wall [...]

We seem set to go into the next election – which could be in a matter of  days -  with both the Conservatives and Liberals firmly committed to bringing the federal Budget back into balance in a relatively short time frame, with no tax increases.  There appears to be no sign of a break in [...]

The conventional wisdom seems to be that the  financial situation of Canadian  households is generally sound and certainly much better than that of our profligate and heavily indebted American neighbours.  The Bank of Canada argued in its end of 2008 Financial System Review that  “(O)verall, despite a modest deterioration, the financial position of the Canadian [...]

A lot of people I meet these days ask about the risk of a future surge in inflation, or even a return to “hyperinflation,” as a result of government’s efforts around the world to stimulate spending and demand — in part through large deficits, and in part through very loose and unorthodox monetary policy (including, [...]