header image
The world according to David Graham

Topics

acva bili chpc columns committee conferences elections environment essays ethi faae foreign foss guelph hansard highways history indu internet leadership legal military money musings newsletter oggo pacp parlchmbr parlcmte politics presentations proc qp radio reform regs rnnr satire secu smem statements tran transit tributes tv unity

Recent entries

  1. Trump will win in 2020 (and keep an eye on 2024)
  2. January 17th, 2020
  3. January 16th, 2020
  4. January 15th, 2020
  5. January 14th, 2020
  6. January 13th, 2020
  7. January 12th, 2020
  8. January 11th, 2020
  9. January 10th, 2020
  10. January 9th, 2020
  11. January 8th, 2020
  12. January 7th, 2020
  13. January 6th, 2020
  14. January 5th, 2020
  15. January 4th, 2020
  16. January 3rd, 2020
  17. January 2nd, 2020
  18. January 1st, 2020
  19. December 31st, 2019
  20. December 30th, 2019
  21. December 29th, 2019
  22. December 28th, 2019
  23. December 27th, 2019
  24. December 26th, 2019
  25. December 24th, 2019
  26. December 6th, 2019
  27. A podcast with Michael Geist on technology and politics
  28. Next steps
  29. On what electoral reform reforms
  30. 2019 Fall campaign newsletter / infolettre campagne d'automne 2019
  31. older entries...

On cross border shopping and tax cuts

Where is the demand for lower salaries to match US salaries to match the demand for lower prices to match US prices? Why are we borrowing another $60B of interest payments against our future in tax cuts?

Our prices and our salaries are generally related; the money you are paid has to come from somewhere. In order for Canadians' demand that our prices be lowered to match US prices to be met, we will ultimately pay the price in lower Canadian salaries to match US salaries. While it is nice to get a better price by going south of the border, that money is directly leaving our economy and will also ultimately contribute to the lowering of Canadian income. If prices in Canada are lowered to match US prices too quickly and the US dollar recovers from its decline, we will be hurt again by having unaffordably low prices in Canada that consumers will not tolerate being raised. It sounds great in theory and I am not one to shun a better price, but there are greater ramifications to the national price match than just saving a few dollars at the checkout counter.

The one caveat though is if the much-feared SPP's plans include a currency integration, which I do not doubt, then the price and salary match will inevitably come sooner or later. With the dollar where it is at, if we as a country were to collectively convert all our currency to US $ at today's exchange rate as we integrate currencies, we would stand to do mighty well. But then we'd be stuck with an integrated currency, for better or for worse.

Which leads me to finance minister Flaherty's mini budget, which gives us, collectively, $60B more in tax cuts. That brings us to what, $200 billion in tax cuts in the last few years? What could we have done with $200 billion? If it were up to me, we'd have paid off 1/3 of our national debt and used the interest savings of another $10 or $15 billion a year to pay off more of the national debt. Once it's gone, then I'll take my tax cut. Until then, any tax cut is little more than borrowing against our future. Any dollar we don't put against our debt now will be two we have to pay later in interest payments and debt that remains.

When will the current governing generation stop borrowing from ours?

Posted at 10:24 on October 31, 2007

This entry has been archived. Comments can no longer be posted.

The new Rat Pack? | foreign money | Harper's motives

(RSS) Website generating code and content © 2001-2020 David Graham <david@davidgraham.ca>, unless otherwise noted. All rights reserved. Comments are © their respective authors.