Tag Archives: fiscal policy

The PC Government in Ontario has introduced Bill 87 which would eliminate the rate-based borrowing to subsidize electricity prices and replace it with Government borrowing. Last week’s Provincial Budget estimates that the required borrowing to subsidize electricity prices for 2018/19 was $2.8 billion. It is likely to exceed $3 billion in 2019/20. Ontario is the only jurisdiction in North America where the Government would directly subsidize electricity prices. Today the Government...

I’ve written an opinion piece that appears in today’s Regina Leader-Post. The piece argues that the Saskatchewan government shouldn’t brag about the province’s low-tax climate (which it recently did). Rather, I argue that taxes serve important functions. The link to the opinion piece is here. Nick Falvo is a Calgary-based research consultant with a PhD in Public Policy. He has academic affiliation at both Carleton University and Case Western Reserve University, and is...

I’ve written an opinion piece that appears in today’s Regina Leader-Post. The piece argues that the Saskatchewan government shouldn’t brag about the province’s low-tax climate (which it recently did). Rather, I argue that taxes serve important functions. The link to the opinion piece is here. Enjoy and share:

Lars Syll schools Douglas Carr (The Hill op-ed) on austerity and the Swedish economy. Lars P. Syll’s BlogSweden as a case of MMTLars P. Syll | Professor, Malmo University

In this two-part series I will: 1. Consider the question as to whether fiscal policy is sufficiently flexible enough to provide an effective counter-stabilisation against the non-government spending cycle.If a nation is heading into recession, can governments act quickly enough with discretionary spending changes? If a nation is ‘overheating’ and inflation is threatening to accelerate, can spending and tax changes be implemented quickly enough to counter these tendencies? 2. Should...

My debut post at CapX develops a theme I have written about many times. Central bankers are tasked with controlling inflation, but they don't understand it. For the last decade, central banks in developed countries have been pursuing policies designed to raise inflation. Quantitative easing, cheap funding for banks, tinkering with yield curves, low and negative interest rates – all aim to raise inflation to the ubiquitous 2% target. Understandably, central banks’ inflation forecasts...

We don't understand inflation. Those who lived through the high inflation of the 1970s are convinced that inflation is always and everywhere caused by wage-price spirals. Germans, economic Austrians and Bitcoiners are convinced that inflation is always and everywhere caused by central bank money printing. Small-state supporters are convinced that inflation is always and everywhere caused by profligate governments borrowing and spending excessively. Hard money enthusiasts are convinced that...

I’ve just been updating our data for GDP per head of population (from the OECD database plus adding the ONS estimate for 2018) and noticed a startling fact. The age of austerity, starting with the 2010 Coalition government, and on to the Cameron / May governments, has to date been the worst since records began for annual change in GDP per head . The average increase in GDP per head of population, from 2010 to 2018, inclusive is lower than the decade 2000 to 2009, i.e. the...

Backing into MMT. The point of all this is, IF higher inflation is desired (and I am by no means advocating any such policy), THEN why not keep the policy rate low and use "free lunch" fiscal policies as long as inflation remains below target? Why bother experimenting with the Neo-Fisherian prescription of raising the policy rate that's somehow supposed to make people magically expect higher inflation? The post is a just a bit wonkish (equations) but worth reading since this is coming up...

Most people want government to spend more money on them than on anyone else. This applies regardless of their tax contributions (those who don’t pay tax often demand more than those who do). And it is completely understandable. After all, charity begins (and when times are hard, ends) at home. So when voters in the US were asked what the government’s spending priorities should be, it comes as no surprise to discover that their preferences varied by age: As we would expect, the...