Claeren, there are a couple of points to consider here though:
A) Carney came out today and says that the risk of deflation is not very high. I have held that view as well, and think that the chances are that we avoid this.
B) I'm confused as to how you see large spending things like infrastructure without a larger deficit than $6-8 Billion.
C) Inflation will no doubt be a product of this spending, but when you consider the alternative that is an outcome that we can tolerate. Yes interest rates will rise; however that is a foregone conclusion when we are at historic lows at this point. Inflation would be a good thing in the short term actually as the consumer confidence that would spur would be far greater than any stimulus package.
D) Part of my issue comes with the whole "fiscal conservative" label. I consider myself a fiscal conservative as well, but governments have gotten something entirely wrong. In the private sector every business carries some debt for capital projects; but in Alberta specifically there is a mania without financing anything at the government level that defies logic. If we are going to build a hospital today it should be financed for years to come as we will use it for years to come. Does that mean that the government is in debt? Sure. The alternative though is like trying to buy a home without a mortgage because you never want to have a negative balance sheet...its just foolish!
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