Quote:
Originally Posted by CaptainCrunch
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.
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Fair enough--I agree that bailing out the auto industry immediately is a little shortsighted. However, that's not the only form "stimulus" can take. I'd personally like to see a stimulus take two forms: modest tax cuts, and some spending--with the latter focused on infrastructure programs that create jobs, and some enhanced entitlements for the poorest Canadians to stimulate consumer spending. In other words, the objective of a stimulus should be to increase employment and put more money in the pockets of consumers.
I actually don't favour bailing out the auto industry unless there are massive strings attached--that is--the money goes to preferred shares, or is a loan--and is contingent on development of energy efficient vehicles, and based on a sound fiscal plan demonstrating that the manufacturers are solvent through this crisis and in the future--and will keep their factories in Canada open. Otherwise, there's no percentage in a bailout. Auto companies in North America have themselves to blame for their woes in large part--they need to show that they have changed their strategic outlook before they get a single cent of government money in my view.