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Canada's Place in the Global Economy

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kevincanada said:
It is a our politicians that lets the big chain stores in, as they have to acquire a permit.  I have nothing against big chain stores existing, just that they will stop at nothing for making a profit.  Walmart been sued many times for hiring cash laborers and employing illegal immigrants,  they have even had developing stores shut down.  At the end of the day it is bad for everybody and poor people will shop at walmart no matter the damage as they cannot afford to go elsewares.  Hey when you can get a T-shirt for $7 bucks why not right?

With respect, it is not really up to "our politicians" to decide which businesses to protect us from, assuming the business model is legal in the first place.  Shop there, or don't.  Those are your choices.
 
I go to a box store because they generally have:

a.  what I need;

b.  a few varieties of what I need; and

c.  a cheaper price.

No government hand in that....
 
kevincanada said:
It is a our politicians that lets the big chain stores in, as they have to acquire a permit.  I have nothing against big chain stores existing, just that they will stop at nothing for making a profit.  Walmart been sued many times for hiring cash laborers and employing illegal immigrants,  they have even had developing stores shut down.  At the end of the day it is bad for everybody and poor people will shop at walmart no matter the damage as they cannot afford to go elsewares.  Hey when you can get a T-shirt for $7 bucks why not right?

I'm not what I would call poor but I go to Wal-mart because you will find more North American stuff there than at Sears......
Ditto for Costco.....try getting Stanfield's underwear anywhere else in Ontario.
 
E.R. Campbell said:
:goodpost:

The very fact that Home Depot Loews and Rona coexist and compete means that there is no monopoly in the home building supply business.

What you have is a very mature industry where, in so far as the market permits, economies of scale, and the efficiencies they create, provide that old utilitarian standby: the greatest good for the greatest number. I understand that in the more competitive environment which used to exist, when many, many small stores competed, they went out of their way to try to win your business, kevincanada - it cost them money something to do that, something that the owner could have used in a more productive manner. Home Depot doesn't do that; it doesn't have to; it wants your business but the marginal impact of your business is not not big enough to make them "pay" any more for it.

Ergo, why I am against monopolies due to abuse of their powers but not in principle for their existence.  For example, home depot will sell you anything they don't even care if it works or is done correctly.  At the contractor service desk they have foundation crack repair kits.  I read the ingredients.  100% polyurethane and very overpriced.  They don't sell the proper repair kits as they are toxic and dangerous,  you need chemical respirator and it is a two stage solution mixture, something like automotive bondo filler.


People purchase these kits from home depot being outright deceived and lied to by the staff.  The proper stuff is good for something like 30,000 pounds of pressure per square inch, it actually seals a foundation crack and stops it from shifting.  Stuff from home depot?  You can scratch it off by rubbing your car keys on it.  So what happens is you fix your crack, finish your basement, in 2 months the foundations shifts more the polyurethane falls out and you have ruined your basement from water seeping in again.

Home Depot doesn't 'win' anyone business, they lie, cheat and stole their way to the top.  I keep log of a few items to track market changes, one item is a 4x8x1/2 standard drywall sheet, it was $11.97 in 2005, it is still $11.97 in 2012.  But they always have sale on how it was mark down from $13.82 or $14.13 down to $11.97.

Most of the products are junk also, all tool boxes sold by home depot leak water, no wood is properly stored, all hardwood sold by them uses a low grade urethane, that is easily damaged,  there $3 range hardwood per square foot actually cracks and finish flakes off when being installed.  plus a dog claws will gouge the finish. 

See for yourself when you are in there, rub a key on a display piece of hardwood,  you will be very very disappointed.  But hey, it's $3 bucks a square foot!
 
SeaKingTacco said:
With respect, it is not really up to "our politicians" to decide which businesses to protect us from, assuming the business model is legal in the first place.  Shop there, or don't.  Those are your choices.

Actually it is, some area's are banning and putting limitations on big box stores now due to their negative affects,  As in new york, google it.  "walmart and new york"  there is no walmarts in the area.

When I registered my corporation, there is a lot of zoning laws, and legalities, all business's are tightly regulated by the government it is up to your politicians to decide what business's to protect us from, always has been.

Locally, big box store permits are being issued based on local population so they there isn't to many.  They are allowed, but limited.
 
Bruce Monkhouse said:
I'm not what I would call poor but I go to Wal-mart because you will find more North American stuff there than at Sears......
Ditto for Costco.....try getting Stanfield's underwear anywhere else in Ontario.

I shop there too, picked up some christmas stuff today actually.
 
kevincanada said:
Ergo, why I am against monopolies due to abuse of their powers but not in principle for their existence.  For example, home depot will sell you anything they don't even care if it works or is done correctly.  At the contractor service desk they have foundation crack repair kits.  I read the ingredients.  100% polyurethane and very overpriced.  They don't sell the proper repair kits as they are toxic and dangerous,  you need chemical respirator and it is a two stage solution mixture, something like automotive bondo filler.


People purchase these kits from home depot being outright deceived and lied to by the staff.  The proper stuff is good for something like 30,000 pounds of pressure per square inch, it actually seals a foundation crack and stops it from shifting.  Stuff from home depot?  You can scratch it off by rubbing your car keys on it.  So what happens is you fix your crack, finish your basement, in 2 months the foundations shifts more the polyurethane falls out and you have ruined your basement from water seeping in again.

Home Depot doesn't 'win' anyone business, they lie, cheat and stole their way to the top.  I keep log of a few items to track market changes, one item is a 4x8x1/2 standard drywall sheet, it was $11.97 in 2005, it is still $11.97 in 2012.  But they always have sale on how it was mark down from $13.82 or $14.13 down to $11.97.

Most of the products are junk also, all tool boxes sold by home depot leak water, no wood is properly stored, all hardwood sold by them uses a low grade urethane, that is easily damaged,  there $3 range hardwood per square foot actually cracks and finish flakes off when being installed.  plus a dog claws will gouge the finish. 

See for yourself when you are in there, rub a key on a display piece of hardwood,  you will be very very disappointed.  But hey, it's $3 bucks a square foot!


If you're dumb enough not to read the label yourself then,....meh, never mind.................I need to call my Dentist to see what kind of car I should buy.
 
Bruce Monkhouse said:
If you're dumb enough not to read the label yourself then,....meh, never mind.................I need to call my Dentist to see what kind of car I should buy.

It's a 5 year apprenticeship to do what I do for a living, people off the street don't know this stuff.  That is the whole point.  Expecting people to grasp these concepts which is being pitched by Home Depot is like my Dentist calling me a idiot for not knowing how to remove my own wisdom teeth, stitch up my mouth and stop the bleeding.  You cannot expect the general public to understand it.

That's where Home Depot gets their sales, they know they don't get it, and people just keep buying it up.  No one wins, but Home Depot.
 
The problem was with real wages shrinking and middle class buying power decreasing the only way to shore up our life style was Walmart and cheaper manufactured goods from China. Businesses then needed to compete and then almost all our manufacturing went overseas.

Now our economy is a house of cards that runs off of our "financial services" sector. With no manufacturing our economy has no future. Now that we are selling our natural resources to China we can't even live off the profits from that. We can't go on like this, unless you want the financial instability of the last 5 years to be the new normal.

Pure free market capitalism can be almost as disastrous as communism. Cronyism and monopolies are the great flaw of both systems. But there is a strange area in between the two. When countries switch systems there is often  a time of great prosperity and short periods where people become successful based on their merits.  Unmapped by economists and not yet named by the political classes. It seems we are not at the end of history as Margaret Thatcher claimed. New and better ideas will replace our current archaic ones.
 
There seems to be a lot of economics 101 type misconceptions out there, mostly to do with large business like "big box" stores.

On the free market side of the equation, big box stores allow for economies of scale and minimizing marginal costs. It costs Home Hardware far more to get an extra customer than Home Depot on a percentage basis, since all the costs for advertising, storefront space, stocking and labour are coming from a much smaller capital base.

On the government side of the house, all the regulatory and tax burdens are also smaller in proportion to the capital base for large business. It is estimated that an Ontario business must spend 30hr/month to deal with the various paperwork associated with business regulations and taxes. For Home Depot this is another position on the payroll; for the owner of Home Hardware this is almost an entire work week taken away from actually running the store.

Now there have been a fair number of articles in the US in the last several years examining the perverse incentives of lobbying for government favours; spending monies to lobby politicians turns out to be a far better "investment" than anything else. Larger business don't mind because they can afford to lobby and recoup their costs, and the marginal costs argument means that would be competitors are frozen out since they cannot afford the costs of compliance, taxes etc.; nor can they lobby effectively.

WRT what the stores are selling, the rules have always been the same; the stores stock what they believe customers will demand, and customers will buy or not. Ancient merchants drove caravans vast distances to supply exotic goods and services, and people flocked to the markets to haggle and buy them. You may not believe they are selling "quality" merchandise, but so long as the buyer is satisfied, then the bargin is sealed and everyone goes away happy (until next time).
 
E.R. Campbell said:
It's Tweedledumb vs Tweedledumber; neither offers much to America or the world. It is "events, dear boy, events"* that will drive the US society and economy for the next four years, not politicians. The politicians will march (or flee or scramble, etc) in the directions the events dictate, not the other way around.

tweedlee_dee_dum.jpg


No vote from me as the outcome is inconsequential.


-----
* Probably not said by Harold Macmillan, but a useful quote anyway

Further to "on why Obama vs Romney is inconsequential," in this report ~ reproduced under the Fair Dealing provisons of the Copyright Act from the Council on Foreign Relations ~ about the "events, dear boy, events"that will drive American politics no matter what any US poltician, anywhere, or even blithering f___ing idiots like Grover Norquist think:

http://www.cfr.org/economics/fiscal-cliff/p28757
Renewing-America-Icon.png
Renewing America
What Is the Fiscal Cliff?

Author: Jonathan Masters, Online Editor/Writer

Updated: August 1, 2012

Introduction

The "fiscal cliff" is a term used in discussions of the U.S. fiscal situation to describe a bundle of momentous tax increases and spending cuts that are due to take effect at the end of 2012 and early 2013. In total, the measures are set to automatically slash the federal budget deficit by $607 billion or approximately 4 percent of GDP between FY 2012 and FY 2013, according to the Congressional Budget Office (CBO). The abrupt onset of such significant budget austerity in the midst of a still fragile economic recovery has led most economists to warn of a double-dip recession in 2013 if Washington fails to intervene in a timely fashion.

But many analysts see little chance of a compromise before the November election, and questions remain on what action would be taken either in the lame duck session of Congress or in the early days of 2013. While taking no action could have deleterious economic effects in the short term, analysts say putting off or cancelling all of the measures without a long-term deficit deal in place would be equally dangerous for U.S. economic health.

What are the components of the fiscal cliff?

The following set of revenue and spending measures are set to expire or take effect at year's end, representing an acute fiscal consolidation that could be further intensified by a potential showdown over the debt ceiling:

Deficit_Reduction2.jpg


Revenue Increases

2001/2003/2010 Tax Cuts & AMT Patch. This series of legislation, often referred to collectively as the "Bush tax cuts," will expire on December 31, 2012, raising all income tax rates (top will go from 35 to 39.6 percent), as well as rates on estate and capital gains taxes. The alternative minimum tax (AMT) will also automatically apply to millions more citizens.

Payroll Tax Cut. The Social Security payroll tax holiday will expire December 31, raising the rate from 4.2 to 6.2 percent.

Other Provisions. Several other policies such as the Research and Experimentation tax credit, many of which are typically enacted retroactively, are due to sunset at years' end.

Affordable Care Act Taxes. Some provisions in the Obama health care legislation, including increased tax rates on high-income earners, are set to take effect in January 2013.

Spending Cuts

Budget Control Act. The automatic spending cuts or sequester legislated by the Budget Control Act of 2011 will hit January 2. Half of the scheduled annual cuts ($109 billion/year from 2013-2021) will come directly from the national defense budget, half from non-defense. However, some 70 percent of mandatory spending will be exempt.

Extended Unemployment Benefits. The eligibility to begin receiving federal unemployment benefits, last extended in February, will expire at year's end.

Medicare "Doc Fix." The rates at which Medicare pays physicians will decrease nearly 30 percent on December 31.

Debt Ceiling

The debt limit, which sets the maximum amount of outstanding federal debt the U.S. government can incur by law, is currently capped at $16.394 trillion. Treasury could hit this borrowing capacity again sometime in early 2013. Analysts fear another protracted debate on the debt ceiling could bring repercussions similar to those that followed the debt battle in summer of 2011, which rattled markets and, according to a study from the Government Accountability Office, raised the cost of borrowing by $1.3 billion for FY2011.

How did it come to this?

The fiscal cliff is in many ways the culmination of a series of increasingly contentious fiscal showdowns between the two parties over the last few years. The most noteworthy, the debt-ceiling fight of August 2011, threatened the country's ability to meet its financial obligations and resulted in an unprecedented downgrade in the U.S. credit rating by Standard and Poor's. The subsequent failure of the bipartisan supercommittee to reach a deal on $1.2 trillion in targeted budget savings over ten years unleashed automatic spending cuts for both defense and non-defense spending.

Most critics believe that the lack of a comprehensive, long-term deal on deficit reduction--one that addresses the need for major tax and entitlement reform--has propelled the use of short-term political expedients like the "doc fix" and other extenders. Meanwhile, the nation's debt soars on an unsustainable path, according to most projections.

Taxes and the role of government lie at the heart of the debate. Generally speaking, Republicans favor spending cuts as a primary means to achieve deficit reduction. Most have also publicly pledged to oppose all tax hikes, suggesting growth through tax cuts will increase revenue. Democrats typically believe tax increases should be part of any bargain to reduce long-term entitlement spending, and have generally supported greater reductions in defense spending.

This philosophical rift is on display in the debate leading up to the fiscal cliff. The two parties are divided over how to extend the Bush-era tax cuts, the largest single component of the fiscal cliff. Republicans, including presidential candidate Mitt Romney, are pushing for all cuts to be extended, while many Democrats, led by President Obama, would extend all cuts except for the wealthiest 2 percent of taxpayers. The fight over taxes is also very much part of the sequester debate (Politico), with Democrats pushing for more revenue as part of any deal to avert the drastic mandatory cuts.

What are the domestic consequences?

A $607 billion budget contraction in 2013 would likely send the United States into another recession in the first half of the year, according to the CBO. In such a scenario, analysts project real economic output in 2013 to grow at just 0.5 percent, resulting in lower taxable incomes and higher unemployment (one to two million).

International shipping giant UPS, which is often considered a bellwether for the business community at large, has already reduced its growth forecast for the second half of 2012 to just 1 percent, citing the climate in Washington (The Hill). "[Our] customers are concerned. They're not going to invest. They're not going to hire people. They're not going to stock inventory with all that uncertainty," said CEO Scott Davis.

A July report from Morgan Stanley (WashPost) similarly states the company is already experiencing cutbacks in business orders and hiring, and notes that "the negative impact of fiscal cliff uncertainty is becoming more widespread."

Moreover, a report from the bipartisan Committee for a Responsible Federal Budget (CRFB) suggests CBO projections "may underestimate the pain associated with the fiscal cliff since they do not fully account for the continued market uncertainty or the potential 'hysteresis' associated with continued long-term unemployment." In economic theory, labor market hysteresis occurs when persistently high unemployment fosters even higher levels of joblessness in the long term due to a number of causes (i.e., the skills of long-term unemployed diminish, thereby reducing the chances of becoming re-employed.)

What are the national security implications?

Automatic, across-the-board spending cuts of approximately $55 billion per year (through 2021) are scheduled to hit the Pentagon in January unless Congress steps in before the new year. Details of how the cuts will be enacted are yet to be fully worked out by the White House Office of Management and Budget, but some preliminary decisions have been made. In late July, President Obama exempted all members of the military from the potential cutbacks, an authority granted to the White House under the 2011 Budget Control Act (TheHill).

The decision will likely shift the burden of sequester cuts onto other areas of the Pentagon, including weapons programs. Defense contractors have already condemned the sequester as a potential "jobs killer." A fact sheet from the Republican-controlled House Armed Services Committee describes the looming defense cuts (PDF) as an "unacceptable risk" that will "severely diminish America's global posture" and lead to the loss of over one million private sector jobs.

Similarly, the White House has described the potential cuts as "highly destructive to national security and domestic priorities, as well as to core government functions," and continues to push for a political compromise that would avert major cuts.

What are the global consequences if Congress fails to act?

The repercussions abroad would likely be significant if Congress is unable to at least temporarily stave off the acute onset of year-end tax increases and spending cuts. A July 2012 IMF report notes that massive fiscal tightening in the United States in early 2013 is a primary risk to global economic stability. Protracted gridlock in Washington would stall the U.S. recovery "with significant spillovers to the rest of the world," say experts. In addition, "delays in raising the federal debt ceiling could increase risks of financial market disruptions and a loss in consumer and business confidence."

What are the practical policy considerations?

Economists suggest a more prudent compromise would involve extending some current provisions either indefinitely or at least temporarily in order to avoid undercutting economic growth. The IMF advises U.S. policymakers to pursue tax and spending policies that bring down the 2013 deficit by a more modest 1 percent. At the same time, analysts say policymakers should forge a credible plan to impose a requisite amount of medium to long-term fiscal consolidation.

A host of public and private policy groups have proposed more than thirty different deficit reduction approaches that address the root problems of soaring U.S. debt: an aging population, longer life expectancies, and rising health care costs. A fiscal cliff dive, on the other hand, would significantly slash the deficit but would not address the fundamental drivers of long-term U.S. debt. A comprehensive deficit deal would map out a gradual schedule of targeted tax and entitlement reforms that businesses, individuals, and government agencies can plan for and adjust to.

The sooner such a plan can be worked out, the better, say analysts. "Failure to make the hard but necessary choices now on our own terms will lead to much harder and more severe choices later" at the behest of the markets, says CRFB. Continuing to grow the debt at unsustainable levels threatens to trigger a sharp increase in U.S. borrowing costs and further downgrades to the nation's credit rating. While global investors may continue to fund high U.S. deficits for several more years, recent experiences of several advanced economies in Europe indicate the unpredictability and speed at which fiscal crises can come.

What are the prospects for progress over the next few months?

Analysts say the approaching fiscal crisis at year's end offers Republicans and Democrats yet another opportunity to strike a balance between the short-term measures needed to feed the recovery and the medium to long-term policies that will stabilize and eventually lower the debt. But prospects for a significant political compromise that averts the fiscal cliff (Reuters) before the November election is highly unlikely, and some speculate that lawmakers may even wait until a Congress is seated in January before any action is taken.

Timeline.jpg


The theory behind a deliberate cliff dive (CSM) would be to enable election winners to return to Washington with swollen coffers in January, hit the reset button, and put together a new package of policies they can frame as "tax cuts." Part of the recouped revenue could also be used for deficit reduction. Some think policymakers are already telegraphing this strategy in order to inoculate the markets. Even if there is a temporary crisis, it would likely only last a couple months before recessionary pressure forces Congress into action, some analysts say.

Expectations for a pre-election deal that would put the brakes on the $1.2 trillion in automatic budget cuts are also quite low. While both parties have expressed opposition to the "meat axe" approach to deficit reduction (WashPost), they remain divided on a workable alternative. However, similar budget sequesters in 1988 and 1990 (PDF), which were reduced or erased by subsequent legislation, may offer insight into a likely outcome.

This matters, the presidency ... not so much.
 
Bruce Monkhouse said:
I need to call my Dentist to see what kind of car I should buy.

Based on what a dentist makes, not sure any of us could afford what he could recommend. ;D
 
>The WHO when they kept records have always pegged the USA around 25th to 30th overall for quality of service.

"Fairness" isn't a health care outcome.  When I wrote of outcomes, I meant concrete measurables: eg. rates of survival for various types of cancers.
 
>At the end of the day it is bad for everybody and poor people will shop at walmart no matter the damage as they cannot afford to go elsewares.

That statement is self-contradictory.  If "poor people" shop at big box stores because the prices are low, it is difficult if not foolish to try to argue that it is "bad for everybody".

Everyone else can generally manage look after themselves; the "poor people" can not always do so.  To paraphrase, it doesn't help if the poor and rich alike are both allowed to shop at designer stores.  I will continue to cheerfully support the existence of stores devoted to pressuring suppliers to provide goods and services at low prices.  As long as there is a supplier, it means someone is still able to make a profit, and the market has not "failed".
 
>many Democrats, led by President Obama, would extend all cuts except for the wealthiest 2 percent of taxpayers.

Which is to say, they are either being exceedingly unrealistic or exceedingly dishonest.  The arithmetic has been done; the tax increases the Democratic Party supports will not meaningfully close the gap.  This was an election year - an excellent opportunity to state unambiguously how much they intend to increase taxation and reform spending - particularly entitlement spending - and yet for some reason they chose to abdicate responsibility and avoid the problem.
 
This chart, reproduced under the Fair Dealing provisions of the Copyright Act from The Economist guesses projects the per capita GDP, measured as a % of US per capita GDP of several countries:

20121110_FNC400.png


The accompanying text says:

http://www.economist.com/news/finance-and-economics/21566005-oecds-forecasts?%3Ffsrc%3Dscn%2F=tw%2Fdc
The world in 2060
The OECD's forecasts


Nov 10th 2012 - from the print edition

IN rich, debt-laden economies the policymaking horizon is short-term: a recovery is the priority. Very long-range forecasts from the OECD, a think-tank, may seem an exercise in irrelevance. But they are a useful reminder of the economic and demographic factors that keep grinding away in the background.

In particular, the OECD’s projections for 2060 (at constant purchasing-power parities) show the impact of fast catch-up growth in underdeveloped countries with big populations. Economic power will tilt even more decisively away from the rich world than many realise. In 2011 the current membership of the OECD made up 65% of global output, compared with a combined 24% for China and India. By 2060 the two Asian giants will have a 46% share of world GDP, the OECD members a shrunken 42%. India’s economy will be a bit bigger than America’s, China’s a lot.

Even so the Chinese and Indians will still be much less well-off than Americans (see chart). The same forecasts show GDP per person in China at 59% of that in America; in India it will be only 27%. And Americans will increase their lead over the citizens of some developed countries like France and Italy.


In other words our economy will grow slightly faster than the USA's, but some Western countries, notably France, will decline. The big "winners" are guesstimated to be China and India and, in Europe, the Czech Republic.
 
E.R. Campbell said:
Both Mark Carney and Larry Summers said, at a Canada 2020/TD seminar in Ottawa, that:

1. The Fiscal Cliff has the very real potential to drive the US back into recession; and

2. The uncertainty caused by the reelection of the status quo ante is being felt in the markets, right now.

Maybe correlation isn't causation but, in this case, it - political uncertainty - is real and investors are hedging their bets, assuming that Obama, Boehner and Reid cannot make the requisite deals. The DJIA is headed down again, for a third day in a row; Germany isn't the only problem.


More on what Larry Summers said in Toronto in this Editor's Letter which is reproduced under the Fair Dealing provisons of the Copyright Act from the Globe and Mail; I put it here because of what Summers is reported to have said (in the last paragraph):

http://www.theglobeandmail.com/community/editors-letter/join-lawrence-summers-on-a-tour-of-the-looming-fiscal-cliff/article5156800/
Join Lawrence Summers on a tour of the looming fiscal cliff

John Stackhouse
SUBSCRIBERS ONLY
The Globe and Mail

Published Friday, Nov. 09 2012

Goodbye tax breaks. Hello ‘efficiencies’

There are few Americans better versed in fiscal cliffism than Lawrence Summers, the brilliant Harvard economist and former economic adviser to President Barack Obama, and Bill Clinton before him. Some peg him to replace Ben Bernanke as chairman of the U.S. Federal Reserve.

Dr. Summers spoke Thursday night to a group of business and political leaders in Ottawa, and laid out two scenarios for the U.S. budget fight Mr. Obama faces with Congress – and therefore the world as we know it.

The first would see a staged negotiation, producing some budget measures before Dec. 31, with an agreement to do more in the new year.

The other option? “Catastrophe.”

Look for an attack on tax breaks, especially for corporations with offshore income. (Note that Republicans oppose raising tax rates, not tax revenue.) There will also be grand promises of crackdowns on tax fraud, producing overblown promises of windfalls that won’t come.

On the spending side, there are enough “efficiencies” in health-care spending to make both sides happy. And states that are dependent on federal transfers for social spending stand to get shafted.

Finally, there’s a risk both sides in Congress will agree to raise payroll taxes, punishing small business most of all.

Paraphrasing Winston Churchill, Mr. Summers predicted that “America always does the right thing, but only after exhausting the alternatives.”

Watching Mr. Summers hold the room in near-rapture, I couldn’t help but notice his leg twitching, almost nervously, through his talk.

His greatest fear: Big spending cuts or tax increases will throw the world into a deep recession. His best odds: Muddling through, with growth barely over 2 per cent, which is not enough to dent unemployment.


Larry Summers is a partisan Democrat, but he's also a pretty good economist. There are, no doubt, procedural ways to delay the Fisacl Cliff and, in fact, to turn it, in the words of former US Labour Secretary Robert Reich, into a Fiscal Hill which Congress can negotiate one step at a time. But those delays and procedural tricks do not solve the problems, they just postpone the days of reckoning.
 
Brad Sallows said:
>At the end of the day it is bad for everybody and poor people will shop at walmart no matter the damage as they cannot afford to go elsewares.

That statement is self-contradictory.  If "poor people" shop at big box stores because the prices are low, it is difficult if not foolish to try to argue that it is "bad for everybody".

Everyone else can generally manage look after themselves; the "poor people" can not always do so.  To paraphrase, it doesn't help if the poor and rich alike are both allowed to shop at designer stores.  I will continue to cheerfully support the existence of stores devoted to pressuring suppliers to provide goods and services at low prices.  As long as there is a supplier, it means someone is still able to make a profit, and the market has not "failed".

Yes this argument would be true if the goods sold to Canadians from walmart was balanced for imports/exports.  Nearly all the crap we get from walmart comes imported,  Which makes it bad for our economy.  The money gets sucked out, goes over seas or to the United States and doesn't come back.  If the crap from walmart was made in Canada borders it would be very good for Canadians.

Canada does a pretty good job balancing the ratio's so no harm no foul for buying cheap imports, For our neighbours to the south it is a major problem.  Obama tried to address it early on as President with his protectionism clauses.
 
Balance of payments and cheap, imported goods are not two sides of the same coin: they are quite unrelated.

We and the USA both have a balance of payments problem with China - it's a long standing, structural problem. Put simply we want a lot of what China makes, especially cheap consumer goods, and they want some of what we have: raw materials and a few luxury goods. The global market prices for cheap consumer goods, raw materials and luxury goods are all set in the market. WalMart, by itself, is a "market maker" for some cheap consumer goods but raw materials and luxury goods are priced in a bigger, broader market. The simple fact is that we want what China makes and one big company, WalMart, is the main conduit through which those goods flow - take away WalMart and it is most likely that the prices of all those cheap consumer goods, the ones to which we are accustomed, will rise.

Now consider the cheap consumer goods, themselves. You need a new something, say an electric skillet. They cost about the same in Sears, The Bay and WalMart, but the ones in WalMart are, almost always, just a bit cheaper. If the average low/middle income consumer cannot buy them at WalMart she has two choices: do without - use a non-electric skillet which uses more power and takes more time; or pay a higher price and, therefore, not buy something else, food or tooth-paste, for example.

There are not many options for the low and lower middle income consumers - it's products made, for low ages, in Asia or it's a harder choice. If you want a better balance of payments then more and more and more lower income consumers must be forced to make the tough choices.

The market is not a nice place: it is efficient and fair, but not disposed towards charity.
 
>The money gets sucked out, goes over seas or to the United States and doesn't come back.

There is no final destination for getting something with a Canadian dollar except Canada.  Sure, people abroad can recognize it and tender it and it can stay abroad for a long time, but ultimately the only thing someone can do once they take a Canadian dollar is buy something Canadian with it.  (Or burn it to heat/cook something.  But it has no inherent value.) And the longer it stays abroad, the less it buys (ie. the less we have to export to get it back).
 
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