Total Bust



As our 42nd General Election picks up steam, I keep hearing that tired old tale about the opposition parties being hypocrites for slamming Mr. Harper’s many years of deficits and massive growth in public debt.

“They forced poor Mr. Harper into it,” goes the sad refrain, so “it’s really not his fault!

At the onset of recession it is important, of course, to bolster public confidence so people who fear for their jobs or their businesses know they have some fallback — and a timely, well-placed stimulus can help kick the economy back into gear, limiting the depth and duration of the damage.  By keeping public confidence high they will continue to spend, keeping the economy rolling — not hoarding their cash for a rainy day, leading to cascading layoffs and business failures.

That’s what the opposition demanded, accepting that if in doing this it meant a deficit, so be it, it would be justified for the purpose.  But nowhere was it ever proposed:  “Just go into deficit, no matter what!”  Nowhere was it ever said:  “What we need is a big deficit, so go to it!”

But the Harper government put so many strings upon their vaunted largesse that they did not actually bolster public confidence nor offer any economic intervention timely enough to do the job.  With their bureaucratic machinations, including making sure there was always a gigantic “Action Plan” sign or two in the deal, no stimulus money actually flowed until the recession was over.  As a confidence builder, as an economic stimulus, it was a total bust.

It was just “spend like drunken sailors” and blame the opposition — ’cause “they made us do it!”

By dithering and delaying the stimulus we were left to fend for ourselves, to bear on our own the full brunt of the recession, with spiraling losses of businesses and jobs, even more erosion of our tax base and increased costs for things like EI payouts.  All in all this deepened the deficit and the debt well beyond what a prudent, well placed stimulus would have entailed.

Notwithstanding any of this, however, the Harper government was already in deficit as early as August, 2008, well before the 2008 election, and well before the call to stimulate the economy that came after.  Right from the beginning of his reign Mr. Harper blindly cut taxes while failing to curtail expenditures, which grew significantly — leaving us out-of-pocket regardless of the recession and with no fiscal cushion left to absorb the blow.

We entered the recession in better shape than any G-8 country — due to the robust fiscal framework inherited from Mr. Martin, but due to the hapless bungling of the Harper government we under-performed all of them in coming out of it, and in getting past it.

No.  The long sorry deficit from which Mr. Harper has been so ineptly trying to extricate us, and the on-going sluggish, underperforming economy — leading into the now-anticipated new recession! — are due simply to his heavy-handed mismanagement.  They cannot legitimately be laid at the feet of any of the opposition parties.

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