Government has a spending problem. They spend way too much. The deficit should result in large spending program cuts, not tax increases. Cut all advocacy funding right and left. Reduce the federal government agencies like the hrc's. Cut the the thousands of social problems that don't work. Consolidate those that do. Don't replace civil servants that retire. Consider what the federal government does. There is way to much impingement on provincial duties and rights. Get rid of many Crown corporations. There is so much more that needs cutting. Let's hope HM Government will get serious about cuts. The grits seem incapable of standing up to the Tories. It is time to go ahead with large cuts.
Governments make it sound so hard to reduce deficits. The question of the moment is: What’s the problem? When the average family spends too much, it tightens its belt, and consumes less. When the average government spends too much, it loosens its belt and consumes more. Essentially, it extends slightly the time required to reach the next notch. Yet it asserts, and apparently believes, that this illusion of restraint constitutes an extreme and punitive austerity.
U.S. economist and journalist Paul Krugman, writing a couple of weeks ago in The New York Times, personifies the problem. He says the U.S. has now entered a period of dangerous austerity – deliberately “inflicting pain” on the country – simply by declining yet a further increase in deficit spending and by declining yet a further accumulation of long-term debt.
By Mr. Krugman’s standard, the G20’s Toronto Consensus is barbaric. Yet the agreement merely admonishes the world’s biggest economies to cut deficits in half within the next three years and to hold the line on debt within the next five. It does not aspire either to a balanced budget or to any repayment of debt. Looking specifically at Germany’s program for fiscal restraint, Mr. Krugman cites ominous consequences. He mentions, by historic analogy, the collapse of the Weimar Republic – presumably implying, through association, a collapse of democracies in Europe and a rise of – well, precisely what?
But how much more public debt must countries assume to protect themselves against such dire results? What percentage of GDP must governments control? Why does the doubling or tripling of governments’ share of their economies since the 1930s not suffice? In 1920, U.S. government spending required only 10 per cent of GDP and the country emerged quickly, all on its own, from a vicious recession. During the Great Depression, government spending never exceeded 20 per cent. U.S. government spending now approaches 45 per cent. What will it take to satisfy the exuberant champions of debt? Will 50 per cent of GDP be enough? How about 60 per cent?