Next Mayor of Toronto?

[Electrify]

Conspiracy theory:

Do you think it is possible that another candidate (coughsmithermancough) is conducting thrown polls to make Ford look more popular than he really is? Not necessarily faking the results, but maybe polling an overwhelming majority of voters with conservative councilors or people who have known alliances with the Conservative party.

Since so many from all political stripes see Ford as a fatal threat, this may convince many people to give up support for their preferred candidate and push for the person who has the best chance of beating him. I'm not normally one for conspiracy theories, but I still don't understand how such a Liberal and NDP stronghold can consider voting for such a radically conservative mayor.

 

[MetroMan]

The polls released aren't conducted by Smitherman's or any other candidates' campaign. They're independent polls. The latest one is by Nanos Research.

 

[Coltaine79]

Conspiracy theory:

Do you think it is possible that another candidate (coughsmithermancough) is conducting thrown polls to make Ford look more popular than he really is? Not necessarily faking the results, but maybe polling an overwhelming majority of voters with conservative councilors or people who have known alliances with the Conservative party.

Since so many from all political stripes see Ford as a fatal threat, this may convince many people to give up support for their preferred candidate and push for the person who has the best chance of beating him. I'm not normally one for conspiracy theories, but I still don't understand how such a Liberal and NDP stronghold can consider voting for such a radically conservative mayor.

You guys need to drop the silliness! This is getting worse than the G20 thread.

There is no conspiracy. People are just throwing their lot in with Ford because they've become overly infatuated with the need to penny-pinch at all levels outside their own household (note that Canadians' level of household debt is higher than any other country in the G8).

 

[Juan_Lennon416]

You guys need to drop the silliness! This is getting worse than the G20 thread.

Wow...that thread is still open?

 

[denfromoakvillemilton]

You guys need to drop the silliness! This is getting worse than the G20 thread.

There is no conspiracy. People are just throwing their lot in with Ford because they've become overly infatuated with the need to penny-pinch at all levels outside their own household (note that Canadians' level of household debt is higher than any other country in the G8).

Thanks Coltaine, did not know that.

I guess people need to look in their backyards before criticizing the so called tax and spend or Rob Ford.

 

[GraphicMatt]

Personal finance is very different than government. Cities and nations carry debt because it's actually a useful tool. Toronto's current debt level is not out of the ordinary nor is it cause for alarm.

 

[hbl33]

Personal finance is very different than government. Cities and nations carry debt because it's actually a useful tool. Toronto's current debt level is not out of the ordinary nor is it cause for alarm.

And how so is governmental "debt" an actually useful tool? Care to elaborate please?

 

[ian]

And how so is governmental "debt" an actually useful tool? Care to elaborate please?

Debt is not a universally bad thing, for individuals, corporations or governments. In particular, taking on a debt is worthwhile if the returns from whatever the money is used for outweighs the costs incurred by the debt.

Here are some over-simplified examples to give you an idea:

Let's say you have $300,000 to buy a house, and you do not take out a mortgage. You sell the house 10 years later for $450,000 and make a $150,000 profit. But what if instead you took out a $200,000 mortgage to pay for a $500,000 house. You sell the house 10 years later for $800,000, and you pay $100,000 in interest over those 10 years. Then you would make $200,000 in profit (and you'd be living in a nicer house in the meantime!).

Similarly, let's say the city can afford to spend $1B to build new transit. The completed project causes property values to rise, and the city increases its annual property tax revenue base by $0.2B, so the city makes back the investment 10 years after the project is complete. Or the city could borrow $2B (for $3B total) to build more transit, which would increase property taxes by $0.5B. Assuming the city pays $0.5B total in interest, the city would make its money back in 7 years after the project is complete (and presumably have a bigger transit system!).

These examples omit important details, such as inflation and opportunity costs, which should be considered in real studies. Also, these numbers are obviously made up, whereas ideally would be based on some research, and have a proper risk assessment to plan contingencies if things don't go according to plan.

For example, changing interest rates can make a good plan a bad one. Taking on more debt that can be handled is also dangerous (sometimes called having a "low debt service coverage ratio" or "being highly leveraged").

When used carefully, though, debt and leverage can enable a person, company or government to do more with less.

For more information, Wikipedia is always a good place to start: http://en.wikipedia.org/wiki/Debt

 

[Coltaine79]

Personal finance is very different than government. Cities and nations carry debt because it's actually a useful tool. Toronto's current debt level is not out of the ordinary nor is it cause for alarm.

Well, that's sorta my point. People are busy maxxing out their credit cards, LoCs, HELOCs, etc. - to buy the latest X5, ML550, iphone4, LED TV, and whatnot... but they all have the nerve to blather on about waste in the government.

How about waste in your HOME? Or does that not count for some reason?

I'll stop now as this is off-topic...

 

[Northern Magus]

Building on what Ian has said, debt is a useful wealth creation tool in both the public and private sectors.

The important thing to look at when assessing a government's debt load is its credit rating. The city's is actually quite excellent.

My point is that if the private sector credit rating agencies feel this way, the folks who are telling you that the sky is falling are completely out to lunch.

 

[TrickyRicky]

Glen, I don't want to turn this into another tax thread but the issue of residential rates is important because financial considerations are at the core of the argument being made by voters during this election. As someone who is greatly interested in this subject I think your "Rosedale mansion paying a few hundred in taxes" is a little dramatic and you must fully understand it as a misrepresentative of the true tax revenue picture in the city.

MPAC valuations have been rising the fastest in Old City of Toronto Neighbourhoods along with house prices. Sure a lot of properties are still "catching up" to the taxes paid being equivalent to the value they should be under CVA (as you allude to in your "Rosdale Mansion" comment. But the reality is that a city fully "caught up" is one where inner city residents subsidize the suburbs. Properties throughout the Old City of Toronto have seen their property taxes increase above the city average every year of Miller's term. This is not just about Rosedale, this is about the taxes paid by hundreds of thousands of inner city residents. The implication is that tax payers throughout some areas of the suburbs must be experiencing a comparable decline in property tax burden. And yet these voters, who are shouldering a shrinking piece of property tax pie, are the ones waving the pitchforks.

 

[archanfel]

Personal finance is very different than government. Cities and nations carry debt because it's actually a useful tool. Toronto's current debt level is not out of the ordinary nor is it cause for alarm.

Right, the US is doing such a great job carrying debt. How about Greece, Ireland, Spain? I am sure their debt levels are not causes for alarm because you know what? "Personal finance is very different than government." and "Cities and nations carry debt because it's actually a useful tool."

 

[Coltaine79]

Right, the US is doing such a great job carrying debt. How about Greece, Ireland, Spain? I am sure their debt levels are not causes for alarm because you know what? "Personal finance is very different than government." and "Cities and nations carry debt because it's actually a useful tool."

You are being purposely obtuse. I think you already know that national debt is effective UP TO A CERTAIN LEVEL ...

 

[archanfel]

Building on what Ian has said, debt is a useful wealth creation tool in both the public and private sectors.

The important thing to look at when assessing a government's debt load is its credit rating. The city's is actually quite excellent.

My point is that if the private sector credit rating agencies feel this way, the folks who are telling you that the sky is falling are completely out to lunch.

Do you mean the same credit rating agencies that gave AAA to securities backed by subprime mortgages?

Having said that, I am so glad Toronto has to balance its budget every year. If there's one thing I hate more than higher taxes is lower taxes without cutting spending. Toronto is doing ok because the politicians do not have the power to spend uncontrollably. The US would have been in a much better place if they didn't abolish the PAYGO system. Unfortunately, the same can't be said about our provincial and federal governments.

 

[archanfel]

You are being purposely obtuse. I think you already know that national debt is effective UP TO A CERTAIN LEVEL ...

And Bush and Obama were still arguing that their national debt were well below that level. For some reason, I don't believe either of them.

Personal debts are useful because human has a finite life. Young people haven't had enough years to accumulate wealth. Government has no such excuse. If they had saved during the good times, they would not have debts. And every cent spent on interests is a cent that is not spent for the people.

Having said that, I am not worried about Toronto's debt load. I do think it's dangerous to generalize it to other government who are not bound by law, including the provincial and federal governments.