Alberta's $8,000,000,000.00 Deficit

[Jedi Ninja]

$6.9b deficit in the core budget plus a $1.1b deficit in Alberta Health Services.

So, sounds like our deficit will clock in at $2.2b more than expected, but Stelmach has promised no new taxes, so they're talking cuts now. Snelgrove, the head of the Treasury Board had recently speculated about 15% cuts to core programs (health, education) and 30% cuts to infrastructure spending.

More here:

http://www.calgaryherald.com/busines...951/story.html

[Resolute 14]

At this time, I would like to thank all of the bleeding heart liberals who insisted that the government engage in a massive spendathon when we had large surplusses.

[Cowboy89]

$8 Bill a year is probably the amount that spending increased over the past 5 years. Bottom line, don't spend like drunken sailors when times are good, because boom times are inevitably followed by bad times. The big problem now is that going back on spending now would probably increase unemployment and hurt the economy.

Very difficult bind to be in for the premier. The only prudent thing Eddie can do is continue the hiring freeze and start zero based budgeting in every government department to attempt to make the government more efficient(of course my personal belief is that there are numerous slush fund style reward positions for friends of the PC party that account for most of the waste which can only be eliminated if the PC's are ousted from power). That won't even get him a quarter of the way back to balance for the the budget but it's all he can do until gas prices improve. If he starts chopping wildly, Klein style, there will only be more unemployment and backlogged infrastructure plans that would require more spending down the road.

[Bunk]

Originally Posted by Resolute 14

At this time, I would like to thank all of the bleeding heart liberals who insisted that the government engage in a massive spendathon when we had large surplusses.

I love this. Conservatives are in office. But liberals are at fault.

I think the real problem was that when aggressive debt payment was occuring in the late 90s and early 2000s we weren't actually building the necessary infrastructure for a fast growing province when it was cheap. Then all the sudden a big boom comes along, government realizes we're effed because we fell 10-15 years behind in infrastructure and then builds it when the economy and costs are at an all time high. As a result projects cost double what they would have if built only a few years before that. Example A; South Hospital.

[Resolute 14]

Originally Posted by Bunk

I love this. Conservatives are in office. But liberals are at fault.

liberals, small l, not Liberals, capital L. It was not a partisan party comment.

People lost sight of the concept of fiscal conservatism, and it bit us in the ass.

[Jedi Ninja]

Originally Posted by Cowboy89

$8 Bill a year is probably the amount that spending increased over the past 5 years. Bottom line, don't spend like drunken sailors when times are good, because boom times are inevitably followed by bad times. The big problem now is that going back on spending now would probably increase unemployment and hurt the economy.

The unemployment rate in Alberta has already almost doubled since last year, standing now at 7.2%. Still better than Ontario's 9.3%, but if the government proceeds with large scale cuts, we will very quickly be neck-in-neck with Ontario or worse.

[Pastiche]

I don't see the big deal. Alberta's current account balance is, (not confirmed) larger than the deficit.

People get all agitated because they think that a government being in debt is the same situation as personally in debt. They aren't the same. Why not borrow now when interest rates and costs (human, materials )are low? If it will lead to growth then you pay off the debt then.

[Cowboy89]

Originally Posted by Jedi Ninja

The unemployment rate in Alberta has already almost doubled since last year, standing now at 7.2%. Still better than Ontario's 9.3%, but if the government proceeds with large scale cuts, we will very quickly be neck-in-neck with Ontario or worse.

Not only that, if you layoff a bunch of people and give them packages and then have to rehire/retrain the positions 1-2 years later the net result could be even higher spending than avoiding massive cuts.

[Bunk]

^ I don't think it's fiscal conservatism, but fiscal prudence. The government should be saving/paying debt during high economic times (lots of revenue, infrastructure is expensive), and spending when times are bad (revenues are lower, infrastructure is cheap).

By 2003 or 2004 the writing was already on the wall that we were heading into a massive growth period - this is the time they decided to start spending like drunken sailors. In the late 90s when oil was $11 a barrel they were so hung up on paying off that debt they forgot infrastructure.

If they had built hospitals and schools, LRT lines, roads in that time period and perhaps paid the debt off half as slowly they would have saved billions later that could have gone into savings. Sure paying off the debt is nice, but that strategy ended up costing more than it saved us.

[yads]

Originally Posted by Resolute 14

liberals, small l, not Liberals, capital L. It was not a partisan party comment.

People lost sight of the concept of fiscal conservatism, and it bit us in the ass.

But, Bunk is correct that the main problem was that the government didn't spend at all in the 90's which forced them to play catchup during boom times when everything was much more expensive.

[Maritime Q-Scout]

Dear Alberta,

Where did your high horse go? I thought you were investing your money properly? I thought you were passing out cheques to every citizen because you were so rich and powerful? I thought you were diversified so a downturn in your economy wouldn't hurt you?

What happened? I thought you were so much smarter than us?

Sincerely,

~ The Maritimes


(For the record, this had to be said for the asshats that preached the above 'truths' about Alberta's economy, I don't mean it as a generalization on all Albertans, or the people who post here. I've heard so much preaching over the past few years it's nice to tell the idiots "I told you so" when in reality I don't wish ill on your province)

[Jedi Ninja]

Originally Posted by Pastiche

I don't see the big deal. Alberta's current account balance is, (not confirmed) larger than the deficit.

People get all agitated because they think that a government being in debt is the same situation as personally in debt. They aren't the same. Why not borrow now when interest rates and costs (human, materials )are low? If it will lead to growth then you pay off the debt then.

Sounds like Ed is unlikely to take this approach. Deficit cutting is ingrained into the provincial PC's DNA.

[Pastiche]

Originally Posted by yads

But, Bunk is correct that the main problem was that the government didn't spend at all in the 90's which forced them to play catchup during boom times when everything was much more expensive.

Which was precipiated by the simplistic and so thoroughly Albertan values (as evocated by Resolute) that debt is a terrible thing and you must never go into it.

[Slava]

Originally Posted by Pastiche

I don't see the big deal. Alberta's current account balance is, (not confirmed) larger than the deficit.

People get all agitated because they think that a government being in debt is the same situation as personally in debt. They aren't the same. Why not borrow now when interest rates and costs (human, materials )are low? If it will lead to growth then you pay off the debt then.

C'mon be reasonable here. The government should never, ever be in debt. We are fiscally conservative and that either means we have the money to pay for it in cash or we don't buy it....just like everyone on this board runs their personal finances I'm sure.

[LChoy]

I was too young to experience the Klein area of cutting, but right now, it's a pretty scary time for me

[Cowboy89]

Originally Posted by Slava

C'mon be reasonable here. The government should never, ever be in debt. We are fiscally conservative and that either means we have the money to pay for it in cash or we don't buy it....just like everyone on this board runs their personal finances I'm sure.

I had to thank that post for the last line. Well done!

[Bunk]

Debt in certain circumstances is good.

[metallicat]

Doesn't this have more to do with the worldwide recession than it does the government currently in power? Is there a province in Canada currently running a surplus?

[Resolute 14]

Originally Posted by Maritime Q-Scout

Dear Alberta,

Where did your high horse go? I thought you were investing your money properly? I thought you were passing out cheques to every citizen because you were so rich and powerful? I thought you were diversified so a downturn in your economy wouldn't hurt you?

What happened? I thought you were so much smarter than us?

Sincerely,

~ The Maritimes


(For the record, this had to be said for the asshats that preached the above 'truths' about Alberta's economy, I don't mean it as a generalization on all Albertans, or the people who post here. I've heard so much preaching over the past few years it's nice to tell the idiots "I told you so" when in reality I don't wish ill on your province)

Well, if we weren't writing cheques to support YOU, we wouldn't be in this mess.

[The Goon]

Maybe we should all give back that $400 from a couple of years ago.