Thursday, November 22, 2018

TRUDEAU'S FLAWED APPROACH TO BUDGETING

Experts, academics and economists argued over the past couple of years that now was not the time to balloon the deficit and add to the debt. You only do that when you’re in genuinely bad economic times and there is an emergency situation to contend with. You don’t do it just for some vague notion about growing the economy or supporting the middle-class. Because there could soon come a time when there really are troubles afoot and you need to act to deal with them. Like a recession. Or like the very issue Trump placed on our lap.
    This is really the basics of what’s called Keynesian economics, named after the godfather of liberal deficit spending. Trudeau didn’t follow these rules though. He keep hiking the deficits. And now we finally find ourselves in a situation where we arguably do need to engage in a bit of deficit spending – to get competitive with the U.S. – but because we were so loose with our budgeting in the years beforehand the measures undertaken now will have a disproportionately larger negative effect on our budget. We’ve got less room to absorb these expenses because we’re already more leveraged than we need to be.
    This is the original flaw to Trudeau’s approach to budgeting. Prepare for bad times while times are good. We never did that. And we’re in a worse off situation because of it.

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