Saturday, November 15, 2008


It's the pre-budget surplus sale!

Everything must go!

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  • Sell the CBC's assets first.

    By Anonymous Anonymous, at 6:55 p.m.  

  • Maybe we can sell Stornoway and charge the Liberals rent. The Libs would force Dion to move into a one-room basement to save cash.

    Would a sub-prime mortgage be considered for sale of the CN Tower?...

    By Blogger Mike514, at 10:55 p.m.  

  • Typical conservative economic sense. Wait until the real-estate market crashes, THEN sell it.

    You know why conservatives think government makes lousy decisions? Because conservative governments do.

    By Anonymous Anonymous, at 2:57 a.m.  

  • The Liberals permitted the sell-off of Inco, of Falconbridge, of Alcan, which are much more important entities than the CN Tower.

    By Blogger whyshouldIsellyourwheat, at 12:38 p.m.  

  • For what it's worth, a media guy who was at the presser told me on Thursday night before Harper's speech that he couldn't believe anyone would be dumb enough to take the CN Tower story seriously.

    The minister was obviously cracking a joke with his demeanor and delivery, yet the guy laughed that "some of my colleagues" would actually believe that the minister was suggesting such a sale.

    By Blogger The Hack, at 5:21 p.m.  

  • 1. The Toronto real estate has not crashed. Real estate prices there are still growing. More to the point, assets have value beyond simply real estate prices.

    2. This is the fault of the large percentage of voters who have the irrational expectation that all hell will break loose if the government runs a small short-term deficit. An irrational electorate begets irrational policies (NB: I am not in favour of deficits, but when the economy is going downhill a small deficit is probably acceptable - the US is on track to run a trillion dollar deficit).

    3. I think a more productive discussion would be to ask what assets being sold provide in terms of a public good, whether those public goods can be delivered by private firms, and so on. The state I live in recently sold a toll road for billions of dollars. The revenue from the sale totaled more than the toll road had raised in 50 years of operation combined, and will fund a decade of infrastructure spending (sometimes you sell assets to make new assets). Moreover, the purpose of toll roads are to provide fast transit lanes for those with pressing needs (eg. businesses delivering something). Private enterprise is better at managing such an institution because they have no political incentives to keep tolls low (and toll roads crowded). That said, you might not be able to make the same argument about other things like the CBC. I think the high standard of impartial journalism it provides forces other stations to avoid pandering to the lowest common denominator like our American counterparts.

    Were Canada a business, should it sell off assets just to balance the budget? No. However, hard times should bring about a sober appraisal of whether some crown assets are necessary or not (in part because of their sale value, but also because of their operating costs).

    4. You also need to consider credible commitments. The government may run a short-term deficit - markets can interpret that one of two ways. Either the government has credibility that in the long-term they will return the budget to balance, or markets will believe that governments will use the financial crisis as an excuse to run deficits in the long-term. This matters because it affects the long-term projection of where the economy is going.

    So selling off a crown asset to balance the budget may even be bad policy, CETERIS PARIBUS, but ceteris is never paribus. It may be the case that the payoff in terms of credibility is worth its weight in gold - by signaling to markets that the government will balance the budget no matter what, long term horizons are improved.

    That essential strategy is a page out of Martin's book (and the Liberals DID sell off crown assets). The 1995 cuts signaled that Martin meant business. Subsequent cuts were not necessary because long-term expectations improved, therefore investment improved, therefore government revenues improved, therefore the deficit shrank and disappeared.

    By Blogger french wedding cat, at 9:10 p.m.  

  • Bonus points for Arrested Development reference in the subject line!

    By Blogger Fungineer, at 8:33 a.m.  

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