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Just a few words, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail, about why DND's budget is going to be tight for a few more years:
http://www.theglobeandmail.com/report-on-business/top-business-stories/jim-flaherty-lauds-frugal-germans-rejects-us-printing-more-money/article14125180/?cmpid=rss1&utm_source=dlvr.it&utm_medium=twitter#dashboard/follows/
There are three classes of people who don't like defence spending:
1. Senior bureaucrats, many of who are economists, in every government department, including a handful in DND itself, because they recognize that defence spending is discretionary and politically difficult;
2. Economists, because they recognize that defence spending is, broadly, unproductive; and
3. Voters, the vast majority of them, anyway, because they realize that every dollar spent on defence, a common good, is a dollar that cannot be spent on themselves or on their pet projects.
The Americans always consider themselves exceptional and, in defence production, they are; America produces the overwhelming majority of the defence hardware it buys - in a less than wholly efficient and effective way US defence spending does create US jobs. There are similar situations in Russia and China (who, together with the USA have the biggest defence budgets in the world). Canada, like Germany and most other countries, does not have much of a defence export industry ~ we have some, just not much. In our situation frugality, especially with regards to the nation's defence makes economic sense.
http://www.theglobeandmail.com/report-on-business/top-business-stories/jim-flaherty-lauds-frugal-germans-rejects-us-printing-more-money/article14125180/?cmpid=rss1&utm_source=dlvr.it&utm_medium=twitter#dashboard/follows/
Jim Flaherty lauds ‘frugal’ Germans, rejects U.S. ‘printing more money’
MICHAEL BABAD
The Globe and Mail
Published Thursday, Sep. 05 2013
Flaherty rejects Fed stimulus
Canada’s finance minister gave a nod to “frugal” Germany today as he again rejected the money-printing ways of the Americans.
Jim Flaherty was referring to the Federal Reserve’s massive stimulus program known as quantitative easing, or QE, under which the U.S. central bank is acquiring $85-billion (U.S.) a month in bonds.
All eyes are on that program, of course, because of indications that the Fed could soon begin to pull back, something that has caused angst among investors who want to be certain the economy and the markets can withstand that.
“The Americans tend to emphasize creating more jobs and less concern about the accumulation of public debt and printing more money, with which I’ve never agreed,” Mr. Flaherty said in St. Petersburg, Russia, where he’s attending the G20 summit.
“The Germans tend to be more prudent and frugal like Canadians tend to be.”
The Federal Reserve is trying to ease the high level of unemployment in the U.S., where 11.5 million people can’t find work.
The U.S. jobless rate stood at 7.4 per cent in July, and the August reading is scheduled to be released tomorrow. In Canada, where unemployment rate is 7.2 per cent, 1.4 million people are without jobs.
Mr. Flaherty's comments came as his government appeared to step back from its target for reducing the national debt, even as it presses other nations at the G20 summit to follow Canada’s lead in curbing debts and deficits.
Mr. Flaherty and Prime Minister Stephen Harper used the setting of this year’s G20 leaders’ summit to release new debt targets for the federal government, The Globe and Mail's Bill Curry reports from St. Petersburg.
Ottawa is now promising to bring its debt-to-GDP ratio down to 25 per cent by 2021. The government said this would be in addition to erasing annual deficits by 2015.
However the new target of 25 per cent appears to represent a softening of a timeline Mr. Flaherty’s own department released in 2012. Last fall, Finance Canada released long-term projections suggesting a debt-to-GDP ratio of 23.8 per cent in 2020-21.
There are three classes of people who don't like defence spending:
1. Senior bureaucrats, many of who are economists, in every government department, including a handful in DND itself, because they recognize that defence spending is discretionary and politically difficult;
2. Economists, because they recognize that defence spending is, broadly, unproductive; and
3. Voters, the vast majority of them, anyway, because they realize that every dollar spent on defence, a common good, is a dollar that cannot be spent on themselves or on their pet projects.
The Americans always consider themselves exceptional and, in defence production, they are; America produces the overwhelming majority of the defence hardware it buys - in a less than wholly efficient and effective way US defence spending does create US jobs. There are similar situations in Russia and China (who, together with the USA have the biggest defence budgets in the world). Canada, like Germany and most other countries, does not have much of a defence export industry ~ we have some, just not much. In our situation frugality, especially with regards to the nation's defence makes economic sense.