Secular Stagnation

I have written a couple of pieces for Economy Lab in the Globe and Mail recently on the issue of secular stagnation. (Links below) The term was coined by the pioneering American Keynesian Alvin Hansen who argued that the US economy of the late 1930s faced a long period of stagnation due to a chronic, structural gap  between aggregate supply […]

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A Trillion Dollar Coin for Canada?

Arun here…breaking radio silence to share with you a thought-provoking piece by Larry Kazdan, a graduate of York University in sociology and history, and currently a Council Member with the World Federalist Movement-Canada, an organization that monitors developments at the United Nations and advocates for more effective global governance. Our friend and fellow blogger Keith Newman recently wrote some words […]

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How Harper can avoid turning a Budget Implementation Bill into a Duffy budget bill

On November 25th, I made the following submission to the House of Commons Standing Committee on Finance regarding Bill C-4, Economic Action Plan 2013 Act No. 2, on behalf of the Canadian Centre for Policy Alternatives.    1.     Introduction and Context Thank you for the invitation to appear before the Committee, as Members of Parliament review the second budget implementation […]

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Why Is Tom Mulcair Opposed to Tax Increases?

A recent online article suggests that Federal NDP Leader Thomas Mulcair is opposed to increasing federal tax rates. I find this quite surprising. According to the August 8 article: Mulcair seemed surprised when he was asked if taxes would go up under an NDP government. “You’re the first person who’s ever asked me that,” he said, adding quickly that they […]

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Funding Cuts to Alberta’s PSE Sector: There Are Alternatives

It has recently been reported that the University of Alberta wants to “reopen two-year collective agreements” with faculty and staff “to help the university balance its budget…” This appears to be in direct response to Alberta’s provincial government announcing in its March budget that there would be a “7% cut to operating grants to universities, colleges, and technical institutes.” This […]

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Housing Policy Under Harper

Today I gave a presentation on Canadian housing policy at the annual conference of the European Network for Housing Research.  Points raised in the presentation include the following: -Fiscal context, more so than which party has been in government, appears to have shaped federal housing policy in Canada over the past two decades.  Program expenses by the federal government (as […]

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Niall Ferguson’s Latest Idiocy

As I discussed in an earlier post, Niall Ferguson, the Harvard historian and author of numerous bad books about economics, is prone to writing and saying completely ignorant things, making one wonder about the intellectual heft of so-called academic “stars” who populate our institutions of higher learning. The latest bit of idiocy uttered by Ferguson was heard last week when […]

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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 of cranks. But we told […]

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Back to Balance in Nova Scotia

The Nova Scotia provincial government is set to introduce its promised balanced budget this year. The Nova Scotia Alternative Budget, released today, proposes some concrete choices rooted in Nova Scotia communities. Rather than pay down debt, the NS-APB prioritizes balancing the social debt threatening Nova Scotia. Can a budget really be considered balanced when unemployment is 9.3%, and 47,000 Nova […]

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NYT study on public subsidies in the US

This is a little old, but it was brought to my attention late and it seems to be of durable relevance. Last month, the New York Times (NYT) published an article chronicling public giveaways to corporations in the United States. What is extraordinary is that the article is the result of ten months – 10 months! – of investigative journalism […]

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The PQ budget

On Tuesday, November 20th, the Parti Québécois released its first budget since taking office. This budget was widely anticipated in view of the many fiscal promises the PQ had made during the campaign, most of which where fairly progressive in nature. In the end, the exercise was (aptly) described by Marc Van Audenrode, who followed the proceedings and interviewed with […]

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Fiscal Cliff Notes

The US federal budget is back in the spotlight now that the election is over. In one sense, not much has changed in that the Republicans continue to hold the House, the Democrats the Senate and White House. But what we are now witnessing is the culmination of budget deals going back to the first Bush II administration, right up […]

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Fewer Unemployed Eligible for Benefits

The annual Employment Insurance Coverage Survey is out, here.  The rate of eligibility for regular benefits from Employment Insurance is the lowest since 2003, the earliest year that there is comparable data. To qualify, a person must have worked in the past 12 months and contributed to Employment Insurance, they must have left their job for a valid reason (layoff is valid, […]

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The Austerity Trap

Below is a recent editorial from the New York Times that does an excellent job of summarizing the failures of austerity policies. The NYTimes also published a very good analysis of how austerity measures have actually increased debt loads in many countries, instead of reducing them:  “Despite Push for Austerity, European Debt has Soared” I made the same point in the […]

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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) is identical to what Ontario’s […]

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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 first figure shows the net financial […]

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GDP: Petro-Rebound Conceals Underlying Problems

The main story in today’s GDP numbers is that the oil, gas and mining industries rebounded sharply in April after being hobbled by temporary maintenance and production difficulties in February and March. While the upswing in fossil-fuel and mineral extraction was large enough to boost the overall economy, other key sectors showed signs of weakness. Manufacturing looked like a bright […]

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Deflating Housing Bubble Risks Recession

Seen in isolation,  Finance Minister Flaherty probably did the right thing yesterday in seeking to safely deflate the housing bubble and lower the dangerous growth of household credit to a record level as a share of household income. But he did it very late in the game, and risks tipping an already very fragile economy into recession if he and […]

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Complete details of 2008-09 Bank Support

Readers of this blog will have hopefully read my report “The big banks big secret” which examines the $114 billion that Canada’s banks received during the 2008-09 financial crisis.  Its major finding was that at some point three of Canada’s five big banks had received support worth more than their market capitalization, or the value of all the stock, at around $20-25 […]

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PBO Strikes Again

I wanted to tip my hat to the hard working folks at the PBO for a particularly revealing Economic and Fiscal Outlook that was published today.  While the PBO has more than once eaten my lunch on various issue they’ve done a superb job of looking at Canada’s economic and fiscal position.

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Federal Job Cuts…the Real Numbers

Andrew Jackson has started off this discussion with his post today looking at the job impacts of federal cuts.  I wanted to add my own two sense and some calculations that I’ve whipped up. Thankfully the federal budget has started to fill in some of the details of its latest round of cuts.  In particular, it now estimates 19,200 positions lost […]

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Fiscal Austerity and Growth

This may come as a bit of a shock to Andrew Coyne and Jim Flaherty, but even the IMF are warning in their most recent fiscal policy update that  austerity in the advanced economies is going too far, and will dampen growth. Indeed, they even suggest that too much austerity may spook the dreaded bond markets. “Further declines in cyclically […]

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Coyne on Krugman and Keynes

Krugman hardly needs me to leap to his defence against Canadian economic flat earthers like Andrew Coyne,  but here goes. Coyne’s latest column  argues  that there is a recovery underway in the US which owes nothing to Keynesian stimulus.  Accordingly, “we can add America post-2008 to the long list of failed experiments in Keynesian demand management.” He charges Krugman with […]

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Could McGuinty’s cuts be worse than Harris?

The Ontario government’s long awaited and much discussed report of the Commission on the Reform of Ontario’s Public Services (aka, the Drummond report) was finally publicly released this afternoon. As was rumoured, the report says Ontario would need to increase program spending by no more than 0.8% per year for the government to reach balance by 2017/18.   Drummond has adopted […]

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