PAP 1301 Lecture Notes - Lecture 13: Canadian Dollar, Mexican Peso

• School: University of Ottawa
• Department: Public Administration
• Course: PAP 1301
• Professor: Joseph Roman

Document Summary

Turn to deficits and debt: only started in the 90s, deficit: gap between revenues and expenditures i. Fill in 3 ways: raise taxes, cut spending, borrow: became a regular feature since 1970s (end of golden age post war period) Combo of economic slum and more people were making claims on i. governments on social requirements (ex. social assistance) Problem of developed countries: deficit problematic because: Take on debt to finance them, to service debt draw money away form i. other programs ii. i. away i. Deficits act as drag on economy (government spending leads to inflation, take inflation through rising interest rates: debts are sustainable as long as they don"t surpass 100% gdp, never owe more than you can take out. Eliminating the deficit: started with mulroney, was most of his platform, but abandons it later, stabilized it to ensure that it didn"t outgrow gdp growth.