Hub Podcasts Carney’s One Big Beautiful Tax Cut, and fresh budget lessons from the U.K.
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Jul 5, 2025 Explore the impact of recent tax cuts by leaders like Mark Carney and Donald Trump as they navigate the tricky waters of fiscal borrowing. The discussion highlights the growing deficits and sustainability concerns tied to these policies. Delve into the fiscal challenges Canada and the UK face, balancing government spending with economic growth while politicians shy away from tough decisions. Plus, gain insights into trade and housing trends in Canada, revealing the intricate web of modern economics.
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Debt-Financed Tax Cuts Rise
- Debt-financed tax cuts are politically popular but economically questionable.
- Both Mark Carney in Canada and Donald Trump in the U.S. recently implemented large tax cuts funded by borrowing.
Fiscal Wishful Thinking Emerges
- Governments are pushing permanent borrowing as normal policy despite weak economic growth.
- Political pressures drive simultaneous goals: more spending, low taxes, and controlled debt, which is very hard to achieve.
UK Fiscal Discipline Challenges
- The UK government struggles to maintain fiscal discipline amid market doubts.
- Labour's promise to avoid tax hikes on workers limits tools to balance the budget, raising borrowing costs and market concerns.