Quote:
Originally Posted by Iowa_Flames_Fan
I could see what you were saying if Canada had billions of dollars in unfunded obligations and mountains of debt creating pressure on interest rates and currency values, much as the U.S. does. But really--how does government spending hurt the economy by itself?
I could see the argument that government stimulus would be temporary in its effects--or that in the long term deficit spending might be harmful. But the notion that spending money in the short term is going to harm the economy isn't really consistent with current economic theory.
|
Exactly, this is an economic stimulus without a plan. Throw money at the problem and hope it goes away.
It makes no sense to throw money at the auto industry until we know what their plans are, and what the U.S. government is going to do about it. We could end up throwing money at Ford/GM etc and they could still close the Canadian plants down throwing workers out on their ass. Its useless to throw money into forestry and mining when purchasing is down across the board. Whats this Stimulus basically going to be? Lets pay the workers to stay home. Plus I can tell you now, if you take away the corporate tax breaks in a shaky environment, how many international companies with offices in Canada are going to just shut thier doors because there's no advantage to operating up here any more.
In what looks like a long term economic problem, throwing money at it is not going to make it go away.
Compared to other G20 countries, Canada is ahead of the curve. we don't have the banking problems that these other nations are going through. We have a stable or slightly growing GNP, we don't have run away unemployment. and the government will have a small surplus at the end of the year.