I have been saying for a number of years the reason New Brunswick needs a solid economic growth rate is to induce organic growth in tax revenues. Over time, GDP growth and tax revenue growth is highly correlated. If you don’t have economic growth and you want to significantly expand public spending, you will need to squeeze out more taxes as a share of the total economy either by raising tax rates or some other means. Or, you can run deficits in perpetuity too.
It's difficult to see a single solution for economic disparity and stagnation—perhaps we are approaching a sustainable balance, but I doubt it. The Trump administration placed tariffs on Chinese goods, hailed by world economists as a terrible mistake, but the Biden administration hasn't removed them, opting instead to broaden the policy to the 'America First' cries that preceded WW2. The ideal might be borders open to immigration and trade, no inflation and perfectly distributed wealth, but ideals are not, and likely won't become reality. We must work with what we have, and with change we as a society can accept. That involves immigration, the environment, productivity, and affordability—hopefully all within a reasoned context. Unfortunately, we are confined to taking one step at a time... on the road you have so eloquently described.
Should economic growth match your public spending ambition?
It's difficult to see a single solution for economic disparity and stagnation—perhaps we are approaching a sustainable balance, but I doubt it. The Trump administration placed tariffs on Chinese goods, hailed by world economists as a terrible mistake, but the Biden administration hasn't removed them, opting instead to broaden the policy to the 'America First' cries that preceded WW2. The ideal might be borders open to immigration and trade, no inflation and perfectly distributed wealth, but ideals are not, and likely won't become reality. We must work with what we have, and with change we as a society can accept. That involves immigration, the environment, productivity, and affordability—hopefully all within a reasoned context. Unfortunately, we are confined to taking one step at a time... on the road you have so eloquently described.
Well done. Several pauses for thoughts.