Quote:
Originally Posted by Iowa_Flames_Fan
Further to that last point, here is Paul Krugman's take on fiscal policy and the economy. He's talking about the U.S., but our economic fortunes are tied to theirs, like it or not:
http://www.nytimes.com/2008/12/01/op...gman.html?_r=1
Krugman is a pretty well-respected economist. He won one of those Nobel Prize thingies. My inclination is to think he knows what he's talking about. Note in particular the historical argument:
"The idea that tight fiscal policy when the economy is depressed actually reduces private investment isn’t just a hypothetical argument: it’s exactly what happened in two important episodes in history.
The first took place in 1937, when Franklin Roosevelt mistakenly heeded the advice of his own era’s deficit worriers. He sharply reduced government spending, among other things cutting the Works Progress Administration in half, and also raised taxes. The result was a severe recession, and a steep fall in private investment.
The second episode took place 60 years later, in Japan. In 1996-97 the Japanese government tried to balance its budget, cutting spending and raising taxes. And again the recession that followed led to a steep fall in private investment." |
A bit late to the fray... but the commonalities I see are:
RAISED TAXES
Now take Bob Rae's background. As Ontario Premier:
"The Rae government's first budget, introduced in 1991, increased social spending to mitigate the economic slowdown and projected a record deficit of $9.1 billion. Finance Minister Floyd Laughren argued that Ontario made a decision to target the effects of the recession rather than the deficit, and said that the budget would create or protect 70,000 jobs. It targeted more money to social assistance, social housing and child benefits, and
raised taxes for high-income earners while lowering rates for 700,000 low-income Ontarians.[44]
A few years later, journalist Thomas Walkom described the budget as following a Keynesian orthodoxy, spending money in the public sector to stimulate employment and productivity. Unfortunately, it did not achieve its stated purpose. The recession was still severe. Walkom described the budget as
"the worst of both worlds", angering the business community but not doing enough to provide for public relief." (
Wikipedia)
(Bold emphasis mine, first Google link I came across)
Taxes, to me, are the key. We've seen failures when cutting spending and increasing spending. The commonality is raising taxes.
I look at the whole situation as this:
- If the Liberal party was really serious about this whole spending package, they'd elect Rae as party leader and join forces with the NDP. With all of the support for Ignatieff, who I see as much more right-wing fiscally, there is obviously a lot less support for a massive bailout than thought
- To those that say the Conservatives aren't compromising, consider this:
(a) Compromising isn't a one way street. Both sides have to give in a bit in order for a compromise to happen
(b) The Conservatives have been spending a lot of money - surely this is somewhat of a compromise in some areas.