[Claeren]

I still think the misguided GST cuts have a lot to do with this massive short fall.

(Along with military spending that I agree with but that was too much too fast.)

There were plenty of people (who rightly) protested those cuts saying they were purely political (which they were) and that a cut in income taxes made more sense than a cut in consumption taxes 10 times out of 10.

Consuming beyond our means has been a national (1st world?) problem for far too long and not saving enough has been the otherside of that same problem. Nothing like cutting the tax that encourages consumption!! Yeish.

The 2% in GST is worth what, $12-$14 Billion per year?


That $12 Billion should have gone to cutting income taxes back then and we should not be sutting taxes at all right now (saving that part of the current deficit).


Tax cuts for business and/or individuals is EXACTLY what Japan tried to do with no effect. Why is it a bad idea that has no effect? Because in a deflationary economy all you are doing is taking money that the government could spend on stimulus and giving it to people/businesses who are up to their eyeballs in debt and worried about their jobs, which means they horde it and spend it on reducing that debt which further reduces spending which further shrinks the economy which further shrinks tax receipts which creates bigger deficits and an even more fearful populace in a vicious cycle until you have racked up one of the biggest debts in the world (as Japan has) all with nothing to show for it.

You have to do everything possible to keep the budget balanced (or close to balance, I would be okay with a $6-$8 Billion deficit for a year or two) while spending BIG on direct stimulus on things like roads, bridges, transit, education, etc. Each of those dollars has a much much much larger multiplier effect in the economy than each dollar of tax cuts.

Also note that when this all does finally turn around super high interest rates will make ever new dollar of debt in to three or four (or more) dollars of debt.


I can see how a minority government might have made the total amount of deficit larger but I still think the Conservatives would be doing the wrong thing and cutting taxes (because that seems to be their only tool, and it is not always a tool that works -- ask George Bush and his trillions in deficits) so it is not the coalition stimulus problem that people should be concerned about, it is the pointless tax cuts that will have to be paid back later by future generations that should concern us and that is ALL conservative party spending.

I am fiscally conservative and hate silly social spending when it becomes wastefull but the Conservatives are not handling this as well as they should and I just do not buy that it is because of the evil liberals/NDP (< for whom I have no love either).



Claeren.