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Originally Posted by Slava
That is pretty interesting. There are some hard decisions there and its not simple to get rid of that deficit without increasing taxes.
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It's actually pretty damning how stupid the 2% GST cut was to the federal budget. That plus a 10% across the board government program cut (Which is significantly more than just a haircut) plus raising the OAS age to 67 gets you within a stones throw of a balanced budget without other tax hikes. Combined with economic growth a budget like that would improve Canada's Debt to GDP numbers despite being still a 'deficit.'
It's funny how non-finance types get all pissy about deficits and fail to realize that as an economy grows the absolute quantum of debt can increase too (ie deficits) while actually improving credit metrics. In fact in the US their best hope for the next decade is to reduce the deficit (not eliminate it) enough that growth starts to push down the debt-GDP ratio.