Thursday, October 30, 2008

And Thank You for That, Paul Martin

A survey by TD Securities claims to have found that Canada is considered the most solvent country in the world. Pretty cool, eh? From The Globe & Mail:

Chief strategist Eric Lascelles examined credit default swap data for 25 countries, and found markets believe there is only the slimmest of chances that Canada would ever default on its obligations.

Canada is now regarded as quite possibly the world's safest sovereign country in terms of the solvency of the country's government,” Mr. Lascelles said in a research note.

“Since it is the government that is generally called upon to fix major problems that crop up, this suggests that the market does not expect major problems out of the broader Canadian economy and financial sector.”

Sovereign credit default swaps are the market's way of putting a number on the chances of a government defaulting on its debt. Canada's five-year CDS levels are at 13 basis points, which is less than half the rating given to second-place Germany, at 33 points. The United States is at 38 points, while Spain is at 93 and Korea is at 561.

http://www.reportonbusiness.com/servlet/story/RTGAM.20081030.wswaps1030/BNStory/Business/home?cid=al_gam_mostview

And to think all of us, even Stephen Harper, owe it all to Mr. Dithers, Paul Martin.

10 comments:

cLIFF said...

Well...Mr. Dithers had very little to do with this other then cuttings transfers to the provinces...
The FACTS clearly show that Free trade and the implementation of the GST replacing the FST that were the driving forces behind our economic recovery. These were measures that the Liberals were against and had actually promised to abolish...more Liberal broken promises.
Thank god...the libs came to appreciate their mistakes when in Government...it was these policies that allowed our country to prosper...

The Mound of Sound said...

Nice try, Cliff, but no banana. There was a great deal more to the bailout than trimming transfers to the provinces and if you don't know that then your answer is gibberish. If you do know it, your answer is fraudulent. Your pick.

Cliff said...

My pick is easy...as History often shows us the FACTS...
The GST and Free Trade were the engines that revitalized our economy...both policies your party voted against and promised to abolish.
Simply put...the FACTS are the FACTS...your party was wrong then...and is wrong now not to acknowledge these historical FACTS...
And...running large surpluses with taxpayers money at the expense of the provinces was not sound economic policy, when our infrastructure and health care was decaying...
While this may sound giggerish to those who wish to ignore history...these are the FACTS.

Anonymous said...

Too bad he didn't stick to his knitting
Martin's hubris wrecked the Liberal party.

sharonapple88 said...

The policy to defeat inflation (jacking up interest rate which in turn jacked up payments on debt -- at one point $100 million more a day because of the interest) during the Mulroney years was a big contributor to the debt/deficit. It was a odd policy with very little benefit to the country as a whole.

The higher rate lead to a higher Canadian dollar -- which made goods from Canada less competitive compared to US ones. We can see the effect of a high dollar on exports right during the dollar's current run.

An interesting letter from a supply-sider here.

Cliff said...

Well...sharonapple88;
Again the FACTS are that this debt was acumlated during the Trudeau years...
Without the substantial interest payment on this Debt created by the Liberals, the Conservatives would have been close to balanced budgets during their years in office.
Again ...The FACTS show that something had to be done to reverse this and revitalize the Canadian economy...GST and FREE TRADE were the engines that did this...both policies that the Liberals opposed.
Again...those darn old FACTS keep getting in the way don't they...

sharonapple88 said...

Cliff, the debt left by the Liberals was a fraction of what Mulroney built it up to. Trudeau had debt at $170 billion; after Mulroney the debt was at $450 billion.

Now a significant proportion of the debt Mulroney build up was because Canada wasn't able to make the payment at the high interest it was setting for itself at the time. If the government hadn't been trying to experiment with zero inflation by jacking up interst rates, they wouldn't have had the problem.

In fact this policy of zero inflation/high interest rates may have caused Canada to suffer more economically during the general downturn in the early nineties. Between 1989-1992, grown was at 0.3%. A slow down in the economy, always leads to less tax revenue for a government, and then helped dig a little deeper into the debt. A tax like the GST is of little use in an economy at the state it was in the early nineties.

It should be noted that if it was free trade that solved the national debt -- why is it that even after it started in 1989 that the national debt continued to increase? (Rhetorical question. See the letter from the supply-siders.)

The Mound of Sound said...

Well Cliff, the usual Tory histrionics. Your "cut and paste" facts are fairly clumsily sculpted to fit your chosen narrative. You believe that if you need to, don't expect me to buy your skewed nonsense.

The Mound of Sound said...

Sharon, I forgot to thank you for your helpful contribution. I doubt you'll make much of a dent in Cliff's perceptions. His type are ever so predictable.

sharonapple88 said...

MoS, I know, but maybe someone else reading this might decide to investigate the situation a little further.

By the way, I just wanted to say that I enjoy your posts on the economy.