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. The Germans tend to be more prudent and frugal like Canadians tend to be.First, Flaherty doesn't seem to understand that managing the size of the public debt is actually his job, and not the job of the central bank. Central banks may indeed be venturing into the traditional territory of the fiscal authority by engaging in QE, as QE looks more like debt management (altering the maturity structure of the outstanding government debt) than traditional monetary intervention. But QE cannot change the total quantity of consolidated government debt outstanding, only the composition of the debt, except perhaps indirectly. Further, in present circumstances in the U.S., QE is not "printing money." QE consists (in the QE3 operation currently underway) of swaps of interest-bearing reserves for long-maturity government debt and mortgage-backed securities. The reserves in question currently look more like short-maturity government debt than they look like anything we might want to call "money."
The really funny part of the quote above involves Flaherty's unflattering view of profligate Americans. Apparently he hasn't been talking to the Americans who think of their government as ridiculously austere. Somehow Flaherty thinks that Canadians are more like Germans. I just don't see it. This reminds me of a joke, which goes something like this: Canada could have had American technology, British government, and French culture. Instead it got French government, British technology, and American culture.
at least they didnt get the British or American healthcare systems.....ReplyDelete
and they do have the most beautiful city in North America.....
Yes, I agree, though in fact there are several excellent Canadian cities. I quite like Canada, though I choose to live in the US. The joke in the last paragraph has some small element of truth in it, but it's not accurate. Canada in fact has American technology, British government, and French culture, but it's an entirely different kind of French culture - a culture that includes ice rinks and living with the cold, for example.Delete
Better British technology than British food.ReplyDelete
Actually there's a version of the joke where Canada could have got French food, but got British food instead. As a description of what we ate in English Canada in the 1960s, that's pretty accurate - meat pies, fish and chips, etc.Delete