$50 Billion and Counting

In Barbara Yaffe’s column in the Vancouver Sun, June 2, 2009, regarding Liberal complaints about the Harper Government’s $50 billion  (and counting)  projected deficit for the year, she remarks that   “… Stephen Harper is fighting back, asserting with some justification that Ignatieff is a hypocrite.  …  Liberals, after all were urging the government, at the time the budget was being prepared, to spend robustly on stimulus measures to address the recession.  …”

Of course, we did not ever say  “just spend, spend, spend, or you’re out of here,  Oh — and if you can manage to stimulate the economy in the process that’d be swell, too!”

No.   We succinctly said to this government:  “Recognize that there really is a recession.   Recognize that it is a serious problem.   Deal with it.   Stimulate the economy to reduce the impact of the recession, to address the crises of confidence that inflame the problem, and in doing so, mitigate our long term losses and help our economy recover sooner.   Do it soon.”

We further counselled that, while we abhor budget deficits, given the extent and gravity, and the emergency nature of the situation:  “if you do have to go into deficit to achieve this, if the plan looks reasonable, we’ll back you, but we will be watching carefully.“   We also counselled that if we do end up with a budget deficit, if we can offset this toward resolving some of our infrastructure deficit, so much the better!

But we’re not seeing any of that, and it is, frankly, the job of the Official Opposition, when the Government is not meeting its obligations or promises, to say so.   There is no “justification” whatever, as Ms. Yaffe claims, to allege any degree of hypocrisy to Mr. Ignatieff in particular nor to Liberals in general for this.

We do see from this government a great many announcements, re-announcements, and re-announcements again of how much good they are ‘going to’ do for us.   And as unemployment blossoms we hear that the increased unemployment payments are proof that they’re getting the job done, getting the money out there, that the (EI) system works!

But with one delay after another, with one excuse after another, and with one scapegoat after another, stimulus funding is still not flowing in any significant way, and particularly not in a timely way.   It seems that they’re hoping to save money by delaying expenditures as long as possible.   If it’s not applied in a timely manner, however, it’s not stimulus;   it’s just profligate spending, no matter how well-intentioned.

Trying to be frugal by delaying stimulus spending is like waiting to buy cheaper pumps next week while the water’s pouring-in the port-holes today  —  by the time the pumps arrive, the boat’s on the bottom, and you still need to pay the bill.   While the boat is sinking, bringing-in pumps to keep it afloat is not splurging.   Delaying may entail even bigger pumps and more of them, at greater cost; but when it’s too late, it’s just too late;  it’s just squandering money.

The ballooning deficit also isn’t only about spending;  it is also about cascading losses of government revenues as Canadian companies fail and Canadians lose their jobs and even their homes.   These are harms that the stimulus was intended to mitigate, and a clear case where delayed and deficient stimulus spending is no savings at all  —  it means catastrophic economic loss for many Canadians, and plummeting government revenues.   And even as revenues decay, additional consequential costs (such as unemployment payments) soar, which further compounds the deficit.

Added to three years (and counting) of Conservative failed fiscal policy, increasing our vulnerability in the first place and leaving our cupboard bare of contingency funds, we see an on-going intractable inability of this Government to grasp the reality of the recession and get a plausible grip on financial management, to which each successive budget update firmly attests.

In three short years, Harper’s Government has dismantled the robust, sustainable, fiscal framework that we left in their care.   And, while taking credit these past years for the surpluses and debt repayments that are also our legacy (and about which they so shrilly objected while in opposition!),  by the time the dust settles here they will have erased every bit of the debt paid down over the last dozen years, and then some, and will leave the Canadian economy reeling, government finances in tatters, and with the worst deficit than ever seen before  —  even worse than last time they held government!   But, “Wait!”  you say, “It’s the global economic climate  —  it’s not their fault!”   How unfortunate they are indeed that we get a major global economic downturn every time they get into government!

Not only will we have to pay the bills the Harper Government has run up, for which we’ve gotten so little and that will cost us so much more in lost opportunity for many years to come, in the end they’ve left us exposed to the full brunt of the recession anyway.

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