Conservatives reversed financial mistakes

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So Stephen Harper is finally leaking out what he has cryptically been referring to as steps his government took to avert the financial crises in the States.

[He] again noted Canada isn’t plagued by a serious banking system meltdown like the United States, and took credit for that, noting his government has already put a halt to risky practices such as zero-down payment mortgages; set a maximum amortization period of 35 years for new government-backed mortgages; and enacted new disclosure rules for disclosure of risk by banks.

Oh really?

You mean his government eliminated the same 40-year mortgages and zero-down mortgages they implemented shortly after taking power in 2006?

What will they reverse next?

16 thoughts on “Conservatives reversed financial mistakes

  1. Does the government allow “credit default swaps”? The latest episode of This American Life explains how the financial crisis that started from bad mortgages is spreading to the rest of the American economy. (Listen to Another Frightening Show About the Economy

    All of the world’s economies have become more and more dependant upon each other. I was bothered by the news that the Icelandic government has been hit so extremely hard.

    With our economies so tightly intertwined with the US, it seems likely that this will spread into Canada. Any thoughts?

  2. Jeff

    I agree with you. I feel that unless we, as various countries, and right now, most especially the US (with Canada following their lead, and this is coming from someone who normally doesn’t like following the American lead) don’t take some serious measures to avert this it will most definitely spread. I don’t know the exact approach, but the experts who have been speaking up for ages need to be listened to.

    On a grander scale we need REAL leaders with real answers. Honestly, though I am voting NDP this time (and I am not an NDP adherent, I normally just like some of their ideas) I don’t know who the right leader is, with proper leadership skills and I am doubting we have anyone in politics or government right now who have these skills. If we do, I hope they get on the ball and start preparing because I see a downfall of the US and us by default if this continues. It may sound fatalistic, but the Romans, Egyptians, Assyrians, etc etc didn’t think they would crash either, but they did. It’s about time we actually learned from history instead of trying to repeat it over and over again.

  3. hear hear Mary. I agree. I just chewed a political canvasser’s ear off the other day when he came knocking on the door to ask which party I was going to vote for. I very plainly asked what is your leader going to do about the economics? Are they going to bring in new policies the second they come into power then reverse them when it’s time for re-election? What are they going to do to keep our dollar strong and help us with exports not just imports?

    The leaders bring in toll bridges on the highways (Coquihalla) amidst controversy with the public and now remove it 3 weeks before election. Leaders bring in air-care with the public in full outcry and now you say you will make them a thing of the past just because it’s election? Did the cars all of a sudden not pollute the air?

    We have economists and scientists that have been telling the local and federal leaders what they need to do to keep the country strong. But unfortunately it usually isn’t what the political leader wants to hear OR do.

    This is the first time in all the years I have been voting that I have had to really re-think my political strategy. It no longer is just the simple matter of voting who you would LIKE to have in office. You have to speak up and stand your ground.

  4. Canada is already in a better position than most countries owing to the recent practice of running the books in the black.

    Many people disagree with tax surpluses (they’re taking too much of our money) but it was precisely this action that allowed for us to be in much less debt than other countries. This means we can be more responsive, fiscally, than other countries and we have the capability (let’s hope the motivation as well) to take full advantage of this fact.

    When I hear promises of more programs and more spending, it concerns me that those programs will remove this advantage we have. We need to stay fiscally responsible – regardless of how much people want money from the government right now.

  5. But how long will that continue Rick? What safeguards are there to prepare and protect us for the future? I am not referring to TODAY. I mean TOMORROW, for our children and grandchildren.

    I really don’t see that the government is taking measures to look after the future and what is inevitable if we continue on this path. Right now we are ok, but a few years ago the US was ok as well. And we are too tied to them to ignore what is happening.

    I still maintain we need some real leaders with real leadership qualities and abilities.

  6. Consider this, Rick.

    Beginning in the 1997-8 budget year, the Liberals maintained a budgetary surplus every year, right up until parliament was dissolved in 2006. This was unprecedented in Canadian history. They also implemented the lowest debt-to-GDP ratio in nearly 30 years.

    When the CPC took over in 2006, they inherited a surplus of over $13 billion from the Liberals.

    In the last 2.5 years, they have spent it all. In fact, this summer they posted the country’s first deficit in 10 years.

    Additionally, inflation is at its highest rate in over 5 years.

    While I do agree with you in that we need to stay fiscally responsible, I am unconvinced the previous government will accomplish this.

  7. I think we have to be very careful when we associate things like inflation with government. Yes I agree that government can influence inflation but they do not have absolute control over it. There are far too many factors in the economy to expect that government can control the economy.

    My question is are we tighter in our budget because spending went up or taxation went down. I am being taxed less now than I have ever been. I am always in favour of less involvement by the government because to be quite frank we don’t pay them enough to get the real quality people we need to solve social and economic problems. The best we can hope for is that the ones that get voted into power won’t screw it up too bad. If we really wanted proper governance we would pay them more and get a better than 50% voter turn out.

  8. If I were a supporter of the NDP, Greens or Libs, and I lived in this area, I might be a bit lazy about voting too. It’s a bit like spitting into the wind around here; at least federally.

  9. True, but in the last five federal elections, NDP have gained in popular support in Lethbridge. They increased by 71% in the last election alone.

    I don’t know if that trend will continue, but if it did, maybe we’d have some options here and some attention.

  10. Tyler

    I too want less government involvement. I am not advocating more control, I am talking about effective leadership where the government is managing it’s role, more correctly. In my current governmental studies, I am coming to understand what we as citizens need to do, and what our government needs to do. Not more control, but more awareness and involvement on our part, less regulation and control from the government and more real leadership. We do need effective leaders, if we don’t, we lose control of what we as citizens can do. I am not talking about ‘blaming’ the gov’t, but expecting them to do their job, which I feel is to protect our rights and property…no not do or give us everything, but to offer protection. And frankly, if they don’t fill THEIR role, it makes it much more difficult for us, who have less power in these matters, to do what we need to do. If my bank fails (and I know, that is worst case scenario, but it has happened in the US) how am I protected? Can I pay my mortgage, my bills? Will I have access to my money, or is it all lost? What happens if the interest rates skyrocket? Can I personally control that? No, I don’t see how I can (unless you have insight as an accountant about this, I am still learning).

  11. You make some very good points Mary, I am just pessimistic about the influence that goverment can have on protection of property. I am confident with protection of rights and while in this country the judiciary branch seems to have more control over the rights of the people than the legislative branch I feel that the people do have a voice and for the most part are heard. I am not questioning the vision or hope that government will have the capability of creating an economic environment that is free to ebb and flow as needs be without becoming abusive because sectors in the market are not competitive enough dictate proper contols. I am just questioning whether we should hope that government can create this environment or whether we should accept reality that we are dealing with unqualified individuals who if given too much power will create an economic environment that will not allow competition to create proper efficiencies.

    I realize I am probably not making my point very clear. I will tell you this we may not care enough to vote but we sure care where we spend our next dollar, and that is where we have real power in the economy.

  12. Tyler

    I do agree, I don’t know how much protection they can have, but I believe they should. I think this has been years in coming. We have relied too much on the government for things we shouldn’t rely on them for, and not for the things we should. And the government have made promises over the years on things that seem nice in the short run (tax rebates, extra child tax money, etc) but in the long run cause more problems and damage.

    I really don’t want to give into the idea that we have unqualified individuals who have too much power (and I know this is what we have), as I think there have to be some out there who can rise above this. Where are they though?

    Yes, very true, where we spend our money is where we can have the best control over the economy and if enough of us do this wisely (I don’t know though, if I make the best choices entirely, when spending my money, I hope I do) we can make a difference.

    Part of the key is to stand up when we see too much control coming in, and do what we can to change and stop it. But enough of us have to do it to make a real difference. Education and awareness is really the key, I think.

  13. As far as protecting yourself against increasing interest rates I think if you are really concerned you should lock your rate in now for as long as they will let you. It will give you the comfort of knowing that you are secure.

    I will tell you that from a Macroeconomic prospective that it is often necessary for interest rates to sky rocket and while it is painful the alternative, which is mass inflation and currency devaluation are worse. I spent quite a bit of time in University studying economics because it opened my eyes to the reason why people make the decisions they do and economies move the way they do. I think one of the more interesting concepts is the non inflationary line of operations and how interest rates, unemployment and inflation are linked. You should look it up I think you would find it enlightening.

  14. I think we are locked in…or hmmm, have to check, Kim knows.

    Good idea, I will, thanks.

  15. Yes, we are already locked in. They wouldn’t give us our equity loan without extending our term or locking in our rate. I chose to lock in the rate. It’s only about 0.4% or so above the rate we had previously, so we’re still in good shape.

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