Ivison: New book by former central banker Mark Carney reveals him as a man on a mission
Ivison: New book by former central banker Mark Carney reveals him as a man on a mission
The book is a meticulous examination of one central question: why are things that are clearly valuable, such as essential workers, undervalued by the market?
Author of the article: John Ivison, Ottawa Citizen
Publishing date: Mar 13, 2021 • Last Updated 15 hours ago •
https://ottawacitizen.com/news/politics/john-ivison-new-book-by-former-central-banker-mark-carney-reveals-him-as-a-man-on-a-mission/wcm/8b65a586-76eb-4f15-8d5c-d7b16d087d08/amp/?utm_term=Autofeed&utm_medium=Social&utm_source=Twitter&__twitter_impression=true
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He said the advice he has offered governments is to divide their expenditures into three categories: COVID (emergency), current (ongoing programs like child care benefit and defence) and capital (measures to boost long-term productive capacity in the economy). “Their task is to move from the first category of spending to the last category of investment as quickly and transparently as possible,” he writes.
Carney advocates a plan for reform that includes setting limits on spending and borrowing that brings the economy back into balance in the medium term, and a new debt service to revenue test that allow governments to utilize low interest rates but ensures they aren’t seduced by them. “Just because something is possible doesn’t make it optimal,” he writes. “Simple debt dynamics must be respected. With time, living beyond our means is unsustainable, even if the exact moment when higher interest rates crystallize and drive brutal spending cuts is uncertain.”
Emergency support measures should taper and transition to retraining programs. “Support for companies should be targeted at regenerating the most affected industries, rather than provided as expensive blanket support for all,” he writes.
New budget measures should be focused on green activities that are job heavy and capital intensive. One fear expressed in the book is that rapid changes in technology have historically destroyed jobs.
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