Conservatives, economics

Has our Conservative government learned anything?

First they deny the international economic crisis and predict a surplus in their budget update last November. Fine.  But to then tout tax cuts as economic stimulous after watching six years of tax cuts disable the US government’s ability to handle economic is pure idiocy. 

The tone of Flaherty’s statements today seem to indicate that this is a trial baloon before the budget statement on the 27th, but even as a test, I do not have any confidence that this government has managed to shed its ideological blinders against the important role government plays in economic affairs.  

And someone who, at their core, does not believe the government has an important role in the marketplace should not be left in charge of the government.

Please Mr. Ignatieff, bring these guys down as per the coalition plan. These are Keynesian times; we can’t afford Friedman thinking.

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10 thoughts on “Has our Conservative government learned anything?

  1. I read in the paper two days ago that Flaherty was consulting with the Canadian Taxpayers Federation (which, not unlike the National Citizens Coalition, is none of the three). That does not bode well, as the CTF’s only reason for existing is to implement Bush-style tax cuts. Iggy has plenty of reason to stay with the coalition and turf the clowns. I’m sure the ‘new’ budget will contain no real concessions or economic stimuli.

    Click here for a complete history of Neocons crippling the US economy. While all governing Republicans have had troubles balancing the books, Reagan, Bush, and Bush II really stand out as the worst fiscal managers in history. These are Harper’s and Flaherty’s role models.

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  2. The coalition may very well be why Flaherty is pushing tax cuts – if Harper’s facing the spectre of an election, then tax cuts are always a popular election ploy. I’m not sure I’m entirely in agreement with you guys here, I’ll point out that Obama is pushing cuts down in the States, and even Paul Krugman says that some cuts could be a good thing:

    http://krugman.blogs.nytimes.com/2009/01/05/is-obama-relying-too-much-on-tax-cuts/

    I think I’d have to see what kind of cuts Flaherty’s pushing for – if they’re simply cuts for the rich, that would indicate that they have indeed not learned their lesson, but if it’s cuts at the lower/middle levels, that might work, I’d even agree with some cuts in Business taxes for small businesses – there’s a lot of smaller retailers that are going to be feeling a pinch. That, in conjuction with some stimulus spending, especially on infrastructure, and some redirection to social programs such as EI, et al, might be good. I’ll agree that Bush-style tax cuts won’t solve the problem, but the story doesn’t go into enough detail to say that that’s what Flaherty has in mind, and certainly any possible solution is going to have to be broad-based and multi-tiered – not ‘tax-cuts, and nothing but tax-cuts’ but definitely a lot more nuanced than ‘Tax cuts are TEH EVIL’.

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  3. Obama is cutting taxes, but it’s seen by many as a way of playing too much to the centre. I don’t think it’s going to help economically, but politically it might bring more soft-middle types over to his side.

    If the private sector can’t be trusted with infrastructure development (and the can’t), and government-sponsored infrastructure development is seen as the main mechanism for forcing a rusting hulk of an economy to keep moving in tough times, then hamstringing the government’s ability to build infrastructure and provide social relief is not smart, particularly at this time. If the government has aknowledged (and it has, finally) that short-term deficits are necessary to provide a boost to the economy any tax cuts just get shovelled right onto the debt pile.

    Unless of course the government’s real agenda is to continue tearing away at social programs, in which case it can shrink the pile of money it has to deal with at the same time as throwing handfulls of cash at infrastructure and economic development and then shrug its shoulders and say “we have no choice but to cut here and here and here if we want to be responsible”. This is even true if the proposed tax cuts are distributed throughout the economic spectrum and not just to the rich, though cuts spread out across the economy have a better chance of at least not being immediately offshored. Although I bet the government departments trying to balance budgets have noticed the 2% GST cut a hell of a lot more than any individuals, or local economies for that matter, have.

    Tax cuts might help, a bit, but only if handled very carefully. Care is not something that this Conservative government appears to be afflicted with.

    I fear that this is part of a larger assault on the social safety net that has been put in place for times of need. That’s the real Conservative target. It’s a move that’s too easy to see coming to take sitting down.

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  4. Sorry, Dan, I should have specified that I was referring to Bush’s cuts. I’m in favour of raising the personal exemption up to $25K (or more, if warranted) and putting an extra 0.5% (or more) on the highest tax brackets. The solution, if there is one, has to be bottom-up and not trickle-down. I will be very surprised if Flaherty’s budget contains anything for us lower beings.

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  5. Bottom-up tax cuts are certainly better than the (more likely) alternative, but I don’t think now is the time. Hamstringing the government at exactly the time it needs to spend money is going to either limit what the government can do or provide fodder for cuts in social programs.

    Unless, of course, you trust these bastards.

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  6. Of course I don’t. The question is really if Iggy Thumbscrews trusts these bastards. Or maybe if we should trust Iggy Thumbscrews.

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  7. Considering that Iggy decided to kick off his ‘Cross-Canada’ tour in Halifax, I have to confess that as a Newfoundlander I’m not completely inamored with him at this moment….

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