Excellent analysis, relevant not just to Canada. The point about the merits of deficit spending in a period where rates lower than inflation is crucial.
"Gov't of Canada can now issue 30-year bonds for well below 1% annual interest. That is negative in real terms (ie. lower than inflation). So quite literally, the government will SAVE money by borrowing more (paying back less in real terms, after 30 years, than they borrowed)"
One big problem is that Keynesian economics, although obviously true, goes against the intuitive common sense view many people have of economics (that debt is bad). It's incumbent on policy makers and analysts to fight against this cloudy thinking.
