Dear Editor
Once again Conservative apologists, by giving only half of the story (Liberals and NDP called for deficit-backed stimulus spending, Regional Optimist, Jan. 29), are giving Canadians a dangerous impression of Stephen Harper's ability to handle the economy.
While it is true that both the Liberals and the NDP called for significant deficit spending on a stimulus package after the crash of 2008 it is not true that Prime Minister Harper can be held blameless for the ultimate size of the debt. Parliament worked out that it needed about $85 billion in extra spending just after Harper cut $60 billion in tax revenue. He had also just hurriedly eliminated the $10 billion surplus left to him by the previous government.
Harper's instinctive reaction to the economic crisis was, as Zinchuk correctly stated, austerity. Fortunately for the nation he was in a minority position at the time and the opposition was able to force in stimulus spending. As we can tell by looking at the various recovering economies in Europe, stimulus spending works much better than austerity. The “paradox of thrift” shows us you cannot save your way out of a recession. If nobody spends money, nobody makes money. It is a pity the Calgary school of economics Harper attended didn't teach him that.
Stimulus spending is a must for a speedier recovery. It is fantastic if you can spend out of reserves, but even if you must go into debt the wealth generated is greater than the cost of borrowing. Spending something is definitely better than the cost to the economy of doing nothing.
Stephen Harper's penchant for tax breaks for the very rich and the massively corporate exacerbates the problem. One quarter to one third of Harper's tax cuts go to the famous “one per cent” ostensibly to promote job creation. The opposite has happened. Investment in people and machines has declined at about the same rate as the tax bill. Tax breaks for the rich inevitably result in corporate hoarding, in piles of “dead money.” One should note that the most efficient use of stimulus spending in the United States has been shown to be the little old food stamp.
Thanks to the opposition we kept the economic engines running as best we could during difficult times. Thanks to Harper we had to mortgage the house to buy enough gas.
Glenn Tait
Meota
