Public Underwriting of Private Debt: The Prospect of Industry Targeting
AbstractThis paper ascertains the nature and foreseeable effectiveness of some of stimulus measures introduced by Canada's federal government to stem the 2008 financial crisis. To that end, the paper considers three distinct elements which form one logical continuum. Starting with the identification of components of the overall economic stimulus package, the consideration then shifts to the least invulnerable stimulus measure, i.e. support to the auto industry. This is followed with a discussion of the possible implications of stimulus measures and other selected factors on the level of federal debt. The analysis shows that there is reason to doubt that the financial support to the auto industry was commensurate with its relative size or its comparative importance to the Canadian economy. Moreover, the combination of economic uncertainty and the already existing fiscal pressures of an aging population may exacerbate significantly the actual levels of federal deficit and debt. As such, a balanced approach to planned federal deficit reduction and federal debt stabilization may once again be desirable.
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Bibliographic InfoPaper provided by Certified General Accountants Association of Canada in its series Working Papers with number 091206.
Length: 86 pages
Date of creation: Dec 2009
Date of revision:
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Postal: Suite 100, 4200 North Fraser Way, Burnaby, British Columbia V5J 5K7, Canada
Web page: http://www.cga-canada.org
More information through EDIRC
national budget; budget deficit; national debt; automobile industry; economic crisis; stimulus measures; industry targeting;
Find related papers by JEL classification:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
- L5 - Industrial Organization - - Regulation and Industrial Policy
- L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-16 (All new papers)
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