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By Greater Fool (Reporter)
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Tuesday, March 21, 2017 15:17
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(Before It's News)

Bill Morneau lives in a $5 million house within walking distance of the big Loblaws in Toronto’s upscale south Leaside, and earns about $230,000 a year as the finance minister. So, he’s a 1%er. He also has a few other million in equity in the family pension business. So, he’s a .oo1%er. But right now he’s a politician in a time when the forces of populism are sweeping neo-liberals over the dam of public opinion. So he’d rather you forgot about his personal fortune.

His biggest challenge comes Wednesday afternoon with the second T2 federal budget, in which Bill will try to look like a gun-totin’ Deplorable, and tax the rich – at least those wealthy people silly enough to be doctors, entrepreneurs or others making their money in the sunshine. This is popular. Just read the comments on this strangely addictive but demure blog. It’s there. The sentiment that anyone making a big wage is ripping off the system, deserving to be taxed into the dust, is a moister meme. And never forget that Mr. Trudeau is our leader because five million young people voted for the first time – and voted for the sexy guy with tats, a hot wife and MaryJane as his muse.

Also popular with the kids. Debt. Its dark embrace is part of the Canadian fabric now – with personal borrowing at an unheard-of level, twentysomethings clamouring to get mortgaged and credit out of control. The T2 guys understand they no longer need to adhere to the campaign promise of a “modest” $10-billion annual deficit for a three year period. They can go full Monty, and the kids will still slobber over them.

Thus a big (but largely ignored) part of the budget tomorrow will be debt. The Libs will be spending not $10 billion more than they take in, but $30 billion (plus). It won’t last three years, either, but at least 10 and likely 15 (says the Parliamentary Budget Officer). The new debt to be added in four years will be historic. And this is happening during the lowest interest rates since ever. As rates rise, the pile gets raunchier.

This brings us to eating the rich. After B-day, Bill may be getting some passing strange glances from Leasiders as he loads up at the olive bar, there beside the greens section, just over from the Ace bakery display. As you’ve been forewarned here, the Libs may up the capital gains inclusion rate (beware if you own mutual funds or an investment condo), or water down the dividend tax credit (ugly), or lower the boom on small corps with retained earnings or Mom on the payroll (inevitable). All that is speculation. A debt bomb is fact.

Over eight years of rule, which included the greatest financial crisis in 80 years, the Harperites ran up $150 in new debt, much of it through the ‘Economic Action Program’ that built a bunch of stuff. The Cons also dropped the GST from 7% to 5%, lowered corporate income tax and brought in a mess of family tax credits. So far the T2 government is on track to add at least $100 billion in just four years, has carved about ten bucks a week out of the middle class bill, upped taxes on the wealthy, rolled back OAS pogey to age 65 (the cost is $12 billion a year) and started paying people a lot more to have children. Apples and oranges, Ying and yang. Mars and Venus.

Said Bill in Germany a day or two ago when asked about the budget: “We talk about middle class ad nauseam and I’m sure it drives journalists crazy. But seriously. We look at what’s gone on around the world, is there anybody who questions that we should be focused on how people feel? What are the outcomes if we don’t? So I think we’re going to stay on that message.”

The translation: yah, the deplorables are winning. They want government to be the solution, punish the elites and kick the can of responsibility way down the road. People are pissed. If we don’t give them what they want, we’re history.

This is the rub of politics. Do leaders lead, taking tough decisions then braving the consequences? Or follow, telling throngs what they wish to hear, then obsessing over ratings? Logic tells us a little country like Canada can’t add $30 billion a year to its national debt without the mother of all tax increases in later years. And yet Trudeau’s supporters seem not to care because, dammit, they want condos. And a guaranteed annual income. And (count on it) debt forgiveness once the cost of money rises.

This is why our guys in Ottawa have expanded the CPP, enhanced child payments, increased unemployment payments, and reversed Harper’s brutal OAS decision. It’s all about giving more to people, even when it means looting the future and Hoovering the successful. So, Canada and the US are on divergent paths, even though Trudeau and Trump serve the same master. The elector.

“The best argument against democracy is a five-minute conversation with the average voter,” Churchill said. Now it’s 140 characters. Or an Instagram. We’re screwed.


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