Note: I've always had nothing but contempt for finance minister Jim Flaherty.
I'm leery about joining in on all the hyperbole about $50 billion. The pathetic stock market rally aside ("Wow! It's possible the government will bail out all of our mistakes! Let it ride!!") this is still a huge economic slowdown in the USA our main trading partner. We don't have as many people losing their homes here in Canada, but we have a lot of unemployment.
I'm fine with trashing Flaherty for his idiotic projections (from small surpluses to a $50 billion deficit within half a year) and for trashing the herpercons for their incompetence and callousness ("stimulus" that requires cash-strapped municipalities to pony-up half the dough, funding projects primarily in "Conservative" ridings, telling everyone that we're poised for a speedy recovery so everybody shut the hell up).
This scare-mongering about deficits is very dangerous though. If we need them, we need them. End of story.
Subscribe to:
Post Comments (Atom)
4 comments:
I agree about deficits in that if we need them and they're beneficial, we need them. I also tend to agree $50B is relatively not that bad, assuming it's short term or temporary.
However, the constant changing of numbers undermines confidence in Canada, and I attribute that to Jim. Do you really believe it's now ONLY $50B? Or might it later turn out to be higher? $75B next?
I read in Paul Martin's bio that he recognized missed estimates as confidence-busters, and that's why to changed to pessimistically padded estimates. If he was off by, say, $3B but he had $5B padding, then he didn't have to change his estimate.
However I admit it might be difficult for Jim to pad his estimates down as far as this. He might not have been believed it would be so bad anyway. I think many people are unaccustomed to this speed of deterioration.
But my sympathy for Jim was lost last November; that wasn't any accounting mistake.
I think Martin downplayed his estimates so as to not have to refund the welfare state. He'd have these "surprise" surpluses which he'd give away in tax-cuts.
As I said at the time, the CCPA at policy alternatives seemed to have no problem with forecasting government revenues.
Flaherty doesn't have Martin's smarts. He underestimates deficits because he's dreaming in technicolour. He doesn't have a clue what's going on and that's what's scary (as you say).
It's pretty clear that the CPC is engaging in a Reaganesque, neo-liberal "starve-the-beast" rape of the treasury. They're not running up the debt in order to stimulate the economy or maintain a decent level of social services. They're running up the debt in order to cripple the federal government's discretionary spending power.
Expect them to pimp out hordes of public assets at garage-sale prices. They're already cutting up Atomic Energy of Canada in order to whore it to private investors.
You know Sir Francis,
Part of me knows that you're right. I've got a post on this blog somewhere applauding those progressive economists who predicted that was what Flaherty was doing at the time.
But another part of me sees Flaherty as just too bone-stupid to act in such a deliberate fashion.
Which isn't to say that such scheming is beyond stephen herper.
Post a Comment