How many job losses since March 15th?

[Austrian Economics]

You cannot borrow your way out of this depression. We did not borrow our way out of any past ones either. What happened in the 30s was that debt service costs eventually consumed the budgets as spending increased. Since the spending was literally on make work projects which amounted to paying some people to dig holes and other people to fill them, the useless tasks were a net subtraction from the economy, not an addition.

The damage was compounded in the 30s by the failed attempts to make commodity prices go up through ruinous policies of crop and livestock destruction. Other attempts were made to cartelize industries by fixing prices, which just caused more businesses to fail.

The analogy to World War Two is also deeply flawed. Government debt soared during the war, and then abruptly fell the moment it was over. National governments did not start the war deeply in debt, and burdened by a string of bankrupt provincial governments and a heavily indebted private sector as we find ourselves faced with today.

The Depression of the 30s did not actually end until 1947. That was when wartime price controls, wage freezes and rationing were discontinued. Government spending fell by 60% and millions of government workers were fired. It was only then that the economy could recover because people could finally be put to work producing goods that consumers actually wanted, instead of building things whose only purpose is to get blown up.

[farming101]

You cannot borrow your way out of this depression. We did not borrow our way out of any past ones either. What happened in the 30s was that debt service costs eventually consumed the budgets as spending increased. Since the spending was literally on make work projects which amounted to paying some people to dig holes and other people to fill them, the useless tasks were a net subtraction from the economy, not an addition.

The damage was compounded in the 30s by the failed attempts to make commodity prices go up through ruinous policies of crop and livestock destruction. Other attempts were made to cartelize industries by fixing prices, which just caused more businesses to fail.

The analogy to World War Two is also deeply flawed. Government debt soared during the war, and then abruptly fell the moment it was over. National governments did not start the war deeply in debt, and burdened by a string of bankrupt provincial governments and a heavily indebted private sector as we find ourselves faced with today.

The Depression of the 30s did not actually end until 1947. That was when wartime price controls, wage freezes and rationing were discontinued. Government spending fell by 60% and millions of government workers were fired. It was only then that the economy could recover because people could finally be put to work producing goods that consumers actually wanted, instead of building things whose only purpose is to get blown up.

Please check your history books.....thanks.
When you say national governments I assume you are including the US Government?
Ever heard of the Public Works Program? Over 34,000 projects. Check it out

[TASFarms]

https://www.theglobeandmail.com/politics/article-despite-the-biggest-deficit-since-the-second-world-war-canada-can/ https://www.theglobeandmail.com/politics/article-despite-the-biggest-deficit-since-the-second-world-war-canada-can/


Despite the biggest deficit since the Second World War, Canada can afford this crisis

John Ibbitson
Published 14 hours ago
Updated April 6, 2020

The close co-operation between the government of Justin Trudeau, seen here on March 29, 2020, and Doug Ford’s Progressive Conservative Ontario government is wondrous to behold.

In the space of a few long weeks, Canada has shifted from business-as-usual to a wartime economy, with the federal and provincial governments shutting down businesses and taking over direct control of many people’s wages, even as deficits head for levels not seen since the Second World War.

But here’s the good news: The debt that governments are piling on should be manageable, provided the new normal reverts to the old normal in a matter of months rather than years.

There will be bills to pay. But we should be able to pay them without sacrificing the quality of life of future generations.

That isn’t to understate the magnitude of what’s happened. The past few weeks roughly correspond to 1940, when Canada shifted suddenly from a peacetime economy trying to drag itself out of the Great Depression to a mobilizing wartime economy, with massive increases in government spending and government control.

“Our projected deficit this year, as a proportion of the size of government, will be roughly the same as the first full year of the war effort,” Drew ***an, a professor at University of Toronto’s Munk School of Global Affairs and Public Policy and a former Ontario deputy minister, said in an interview. He has written a paper for the Munk Centre comparing the pandemic to the war

Then, as now, Ottawa massively increased spending as part of the war effort. The difference, we all hope, is that the Second World War lasted for six years, from Germany’s invasion of Poland in September, 1939, to Japan’s surrender in August, 1945.

Yet despite the massive deficits and debts that financed the war, Ottawa was back to running surpluses within two years of its end. “One might hope for something of the same turnaround,” Prof. ***an said.

A surge in economic activity once governments release us from this national quasi-quarantine should also bring revenues up and deficits quickly down, though Prof. ***an added that the federal government would need to continue spending as the economy transitioned back to normal.

That doesn’t change the fact that by the time this is all over “we will be looking at hundreds of billions of dollars in debt that we did not anticipate six weeks ago,” said Kevin Milligan, a professor of economics at University of British Columbia.

The good news is that federal and provincial governments are taking on this unexpected debt “at a time when we have some of the lowest interest rates we have ever seen,” said Douglas Porter, chief economist of the Bank of Montreal.

It costs only about a billion dollars to service $100-billion in debt. “That’s not a trivial amount, but it’s affordable,” Mr. Porter said.

And this economic shock has forced us all to confront realities that we were trying to avoid: One way or another, maybe sooner or maybe later, the Canadian economy needs to transition away from oil and gas to cleaner forms of energy, especially with oil prices so low it’s hard to make a living off them.

And as many have already pointed out, our aging society was going to force up the cost of health care, even before the pandemic arrived.

The difficult but essential task will be to sustain the economy as it recovers after the pandemic, while also bringing public-sector spending under control. Prof. Milligan fully supports the government’s emergency spending measures, such as the Canada Emergency Response Benefit and the Canada Emergency Wage Benefit.

But “the 'E’ part is the critical part to me," he said. "We cannot be paying $2,000 a month to anyone who checks a box forever.”

The best outcome would be a gradual ramping down of government spending and deficits as business and industries ramp up and life returns to normal.

We will also see the return of politics. Right now, opposing political parties are limiting their criticism of each other as governments struggle to respond to the greatest national emergency since the war. The close co-operation between the Justin Trudeau’s Liberal federal government and Doug Ford’s Progressive Conservative Ontario government is wondrous to behold.

But the day will come when politicians go back to wrangling over deficits and spending that are a tiny fraction of what we’re seeing now.

What a blessed day that will be.

When are the unicorns coming?

[seldomseen]

I listen to CBC radio more than i should and there is a idea that keeps popping up the last couple of weeks from the far left thinkers.

"Basic annual income for everyone"

I know what their idea is but have no idea how how they would stop the whole country from collapsing completely financially and personalty. I guess the cannabis industry would improve.

Maybe our left leaning buddies on here could explain this theory?

[cuban_assassin]

These far left thinkers should either walk into the ocean or check themselves into a mental health facility!

[farmaholic]

I listen to CBC radio more than i should and there is a idea that keeps popping up the last couple of weeks from the far left thinkers.

"Basic annual income for everyone"

I know what their idea is but have no idea how how they would stop the whole country from collapsing completely financially and personalty. I guess the cannabis industry would improve.

Maybe our left leaning buddies on here could explain this theory?

If I have to pay a disproportionate amount of my income from the risk I took and work I did to support people that won't have to work to receive it.... I'll be doing alot less myself.

See where this is going.

[ajl]

If no have to pay a disproportionate amount of my income from the risk I took and work I did to support people that won't have to work to receive it.... I'll be doing alot less myself.

See where this is going.

Only a fool works hard when government is printing money.

[Guest]

Shouldnt we just look back at all the historical events that caused major disruptions for some of the answers to what is going to happen? World war 1, The 1918 spanish flu, the great depression, world war 2, and several of the financial crisis that came to pass? Many of these events caused massive disruption for much longer periods of time.

For those who think governments shouldn't increase spending during a crisis, history shows you are wrong.

Yes there is more pain to come and some things are going to fail. But Big Wheel is spot on when he asks what would the Cons do different? Almost all the leaders in the developed world are following a similar fiscal path in this crisis.

Too *** ken bad the spineless pricks let the protestors wipe out billions in canada before the crisis

[seldomseen]

I am just scared the lefty's are going to push that idea through while the country is down and out. Once the hordes of unemployed gets desperate this will look good and they have the right government in power now to get it done!

I think this is just another crack pot idea from the UN.

[Oliver88]

Over 3 million Canadians have already filed for Emergency Aid Cheques.
And the program just started.

Good thing Skippy let protesters shut down our failing economy for a month straight before the virus. We will see how a budget works with a very weak energy sector and double digit unemployment.