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Canada’s government spending is now on unsustainable path, warns PBO
Financial Post's reporting is a bit, what's the word? alarmist?
Things really aren't so dire.
Canada’s sub-national governments need a combination of new revenue or spending cuts totalling 1.5 per cent of GDP to put themselves on a sustainable path, up from 1.4 per cent last year — what the PBO called a “modest deterioration.” That would require a combined $30.2 billion in spending cuts or tax increases from provinces, territories, local and indigenous governments.
You know, the major, important thing is, that no one ever really mentions, is Canada will always have a modest to wealthy tax base. And also, Canada prints its own money. That's a major strength. It means Canada can always repay its dept, even if the value of its currency falls.
$30 billion? It shouldn't be an impossible amount for the government to raise.
It should be a multi-pronged approached. Modestly raise taxes, starting from the top earners, and work downward. Borrow, too: with the currency weak as it is, now's as good as any time for the government to borrow. Close tax loopholes: there's money going to waste, hidden away in off-short bank accounts.
Most importantly, get money into the hands of people who'll spend it. The gears of the economy are screaming for lubricant. And that's what money's for. To keep the economy healthy.
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