XPost: can.politics, bc.politics, ab.politics   
   XPost: sk.politics, man.politics, mtl.general   
   From: Panca@nyet.ca   
      
   As I read this article, I thought: ' what a gentile writer this is; not knowing   
   how to say outright:  "the Harper government shows itself up for a fuck-up once   
   again". '   
      
   Yep, same government that was telling us all not too long ago: you don't spend   
   what you don't have.   I guess they forgot to consult Alberta on just exactly   
   what they DID have in the way of oil supplies and ready customers.  And a way   
   of getting it all from point A to point B.     ^ω^   
   _____________________________________________________   
   CBC News Posted: Dec 04, 2014   
      
      
   Oil free-fall a plus for drivers, but it has a downside   
      
      
   The price of oil is down, and filling up the car at the gas station has   
   suddenly become a cheaper and more pleasant experience. At current prices,   
   right now sitting at a seven-year low, we could expect to save on average more   
   than $60 a month, which consumers will happily spend.   
      
   And prices will surely fall even more.  So what’s not to like?   
      
   Indeed, most Canadians are smiling from ear to ear at the recent fall in   
   prices.  But celebrating may be premature.  Anything this good must have a   
   downside.  And it does.   
      
   First, the fall in oil prices means lost revenues for the federal government   
   (and some provincial governments as well).  Estimated between $2 and $3 billion   
   at current prices, the government faces some hard decisions in the very near   
   future, indeed for the upcoming budget.   
   Having been on a recent spending spree, the Harper government has left bare the   
   federal coffers.         <<=== No !?   
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   Obsessed with balancing the federal budget, the government will have to come up   
   with ways to make up the revenue shortfall.   
   If it does not succeed, Harper will face accusations of mismanagement: it would   
   have spent all this money with total disregard of the impact of falling oil   
   prices. <<== No !?   
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   So imagine if the price of oil falls in the short-term to $40 a barrel, as some   
   are predicting.  It will translate into even bigger revenue losses, which the   
   Harper government will have to make up somehow by either raising taxes or   
   cutting spending, or a combination of both.  So while Finance Minister Joe   
   Oliver vowed recently to fulfill promises to cut taxes despite the drop in the   
   price of oil, this just does not seem plausible any longer.   
      
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   Second, the free fall in oil prices will certainly have implications for   
   economic growth in Alberta, as oil producers cut back exploration, production   
   and investment in the short run.   
      
   Last month, the governor of the Bank of Canada, Stephen Poloz, stated that   
   falling crude prices could shave a quarter of a percentage point off expected   
   economic growth rates in Canada.  That many not seem like a lot, but at low and   
   very fragile current levels, it is considerable.   And as oil prices fall   
   further, expect a bigger hit.   This is enough to postpone any decisions to   
   raise interest rates in the foreseeable future.   
      
   Finally, the oil collapse can wreak havoc on the world economy.   
      
   I believe we are on the verge of another world crisis, and the collapse in oil   
   prices can be another ingredient that pushes us even further into crisis.  The   
   oil plunge creates uncertainty in several countries, like Russia and in the   
   Middle East, and this can translate into political instability.  Geo-political   
   forces are already fragile in those parts of the world, and the oil collapse   
   can be a tipping point.   
      
   There is possibly a silver lining.  The fall in oil prices will drag down the   
   Canadian dollar, which will translate into cheaper exports, benefiting Ontario   
   manufacturing.  This is the flip side of Dutch Disease: if it benefits Alberta,   
   it hurts Ontario, but now, it will hurt Alberta and benefit Ontario.   
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   In fact, the Ontario government estimated in its last budget that when the   
   price of oil falls by $10, this can potentially translate into between 0.1 and   
   0.3 per cent increase in the Ontario economy.         <<== you go, Ontario !   
      
   So while the fall in oil prices carries both positive and negative effects, it   
   is often difficult to measure the precise and overall macroeconomic impact of   
   such a scenario on the short, medium and longer terms.  I would lean toward an   
   overall negative impact.   One thing is clear, however: after all is said and   
   done, suddenly saving $60 at the pumps this month doesn’t seem to be such a   
   great deal after all.      <<== especially if you're an Albertan or in the   
   Harper government   (#^.^#)   
   __________________________________   
      
   Louis-Philippe Rochon is an associate professor at Laurentian University and   
   co-editor of the Review of Keynesian Economics.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)