Flashback: ‘New world order’ needs better economic grounding: Carney | Harper lays out stimulus spending in progress report | ‘Reduced pace of deterioration’ indicates economy on the mend: Flaherty | Federal deficit to top $50B
Derek DeCloet, The Globe and Mail
June 12, 2009
“We’re not in the pothole business in the government of Canada,” said the Finance Minister, just 19 months ago. Indeed not. Potholes are for the pikers in lower levels of public life. Our national government is preoccupied with more serious things.
Like the storm sewer business, for example. A new one is being installed along a street in St. Thomas, Ont. Back when Tories were Tories, that was known as “somebody else’s problem.” Now it’s part of Canada’s recovery plan, worthy of $1-million to $5-million in federal money. James Flaherty Stimulus Enterprises Corp. is also pleased to announce its expansion into roofing business, the bike lane business, the outdoor pool business, the rifle-range business (federal cash is going into a new one in Rossland, B.C.), the bridge business and the road repair business, including — among many similar projects — the repaving of a stretch of highway near Truro, N.S. (Are there any potholes along Route 212? Inquiring minds want to know.)
In the battle to persuade the public that the government is in firm control in the Great Recession, there’s no project too small, no idea too petty that it can’t be touted as stimulus for a weak economy. Time was when Ottawa could update the wiring in some ancient federal office building without making a big fuss about it. But now you can find out exactly where the plumbers will be plumbing and the painters will be rolling on the taxpayers’ dime. Even a project of $1-million — that’s the equivalent of 0.00007 per cent of gross domestic product, folks — earns its own spot on the official website of the government’s Economic Action Plan (look for the map with the little white shovels on it).
It’s all very silly, yet also understandable. If you’re going to thoroughly trash one of the central planks on which you were elected — no deficits, prudent management of the budget — you’re going to bloody well make sure the voters know that they got something for it. Even if that something is as meaningless as new drywall in the local community centre, it’s far more important to the Prime Minister that he can stand up and say, as he did this week, that 3,000 stimulus projects are under way. It’s the best way for him to insulate himself from criticism, given how the debate has been shaped so far — a sterile argument about how much spending there ought to be and how quickly , as though the only thing that matters is heaving money out the door as quickly as possible. What you don’t see is a real conversation about what it’s being spent on.
This isn’t only the government’s fault. The opposition parties have veered from bashing Mr. Harper for not doing enough to combat the recession (the heartless, miserly Tories) to bashing him for fiscal recklessness (the irresponsible, spendthrift Tories), as though a Liberal-NDP coalition wouldn’t also be running a $50-billion deficit, or something close to it. But again, all the focus is on the numbers, not on the substance.
So, speaking of numbers, let’s examine Mr. Harper’s claim that 80 per cent of the recovery package from the January budget is set “and is being implemented across the country.” Roughly speaking, the government says it has planned nearly $30-billion in tax cuts and spending (mostly the latter) for this fiscal year. About $24-billion is “committed” — ergo, 80 per cent. But what’s it committed to?
The first $10-billion is easy. That’s the federal portion of the auto bailout and other industry aid programs. Another $2.6-billion is for the unemployed, including training programs and a modest improvement to unemployment benefits. A grab-bag of minor tax moves, such as the ballyhooed tax credit for home renos, consumes $2.4-billion.
So far we’re up to $15-billion and we’ve saved a few jobs (temporarily, at least) assembling minivans at Chrysler, helped the jobless, and patched up some driveways. Fine. Where’s the rest going? The vast majority falls under the sweeping category of “infrastructure” — which, as defined in 2009, appears to include every maintenance project short of installing energy-efficient light bulbs at 24 Sussex Drive. By far the smallest part of the package (just $1.9-billion, of which $1.1-billion is gone) is devoted to science or research or venture capital. The Harper government grandly calls this “creating the economy of the tomorrow,” but is apparently more fixated on saving the economy of yesterday.
It’s unfair to blame Messrs. Harper or Flaherty too harshly for failing to predict last September’s financial meltdown, the economic crisis, or for the swing from surplus to a $50-billion deficit in one year. Almost no one foresaw a recession this virulent. The question is not whether the Conservatives could have prevented it, but rather, two years from now, when we have nearly $100-billion in new debt on the books — what will we have to show for the money?
Source | See also under Economics: ‘New world order’ needs better economic grounding: Carney | Harper lays out stimulus spending in progress report | Fiat closes Chrysler deal | Elitist Confab in Montreal: ‘Adapting to a New World Order’ — Day 1 | Bullion and Bandits: The Improbable Rise and Fall of E-Gold | No one talking about dumping dollar: China minister | U.S. top court delays Chrysler sale | ‘Reduced pace of deterioration’ indicates economy on the mend: Flaherty | Protests against Putin sweep Russia as factories go broke | China explores buying $50bn in IMF bonds | $100 Billion Bailout For IMF Tagged On To War Funding Bill | Harper ‘not counting on’ recouping billions loaned to GM | Government to acquire ’substantial’ stake in Citigroup | ‘New GM’ to emerge from bankruptcy | Chinese economists deem huge holding of US bonds “risky” as Geithner visits | Germany OKs Magna bid to acquire GM’s Opel | Soaring loonie adds to anxiety over economy | Auto bailout costs soar, contribute to $50B deficit | Ontario Liberals pressing to hide new ‘harmonized’ tax in prices | US could own 69% of GM as bankruptcy looms | Economist Warns Fed Will Bring About Zimbabwe Style Hyperinflation | Federal deficit to top $50B | Ranks of EI recipients jump by 10% in March: StatsCan | Canadian households $1.3-trillion in debt | Autoworkers accept GM deal in 86% vote | Economic stabilization may rely on carbon economy, economist says | Crisis spurs spike in ’suburban survivalists’ | Digital Money Forum Pushes For Electronic Currency | Report from the 2009 Bilderberg Conference | GM, CAW reach new labour deal | Canada eyes arms sales to Pakistan | CNBC analyst echoes warning of ’sucker’s rally’ | GM Canada plans to cut 40% of its dealer network | Oshawa truck plant closes | Geithner To Take Orders From Global Elite At Bilderberg | Quebec pension fund managers boosted derivatives holdings despite warnings | GM execs dump stock, shares plummet | The rich, shadowy Bilderberg group | Recovery within sight, central bankers say | Leaked 1955 Bilderberg Docs Outline Plan For Single European Currency | GM bankruptcy likely, CAW says | 10 U.S. banks fail stress test, but regulators confident | Leaked Agenda: Bilderberg Group Plans Economic Depression | Fiat aims to be global powerhouse by acquiring Chrysler, Opel | Chrysler Canada assembly plants shut down | Banker at heart of credit crisis leads plan to buoy auto sales | With interest rates at zero, Fed looks at going negative | Almost 80,000 jobs lost in February | US Economy Shrank 6.1% in First Quarter | Ontario mulls equity stake in GM | US government may take controlling share of General Motors | EU approves free-trade talks with Canada | Fed says U.S. banks breezed through stress tests | Will recession spark global food crisis? | Bank of Canada poised to print money to buy bonds | Credit companies seek to avoid regulation, create global debit system | After Three Amigos rendezvous, White House confirms there’s no plan to reopen NAFTA | Stocks in triple-digit losses on Bay, Wall streets | A Bigger, Bolder Role Is Imagined For the IMF | US govt considers becoming bank shareholder | US to put conditions on bank bailout repayments | Harper Pledges to Double Funding to International Bank at Americas Summit | NRTEE Carbon Market Panel is ‘Round Table on Socialist Planning’ | TSX moves up for 6th week | Climate panel presses for federal cap-and-trade system | Congressman: Reckless Spending And Taxation Prolonged Great Depression | Barclays, Lloyd’s, RBS join Goldman-Sachs in the black | U.S. retail sales fall unexpectedly | Goldman-Sachs to repay TARP loan, resume private operations, bonuses, at “earliest time” possible | Which Banks Will Rule? | Ontario can’t cover GM pensions, premier says | GM chief says company is preparing in case it files for bankruptcy | Another 663,000 jobs lost in March in U.S. | G20 deal part of ‘unprecedented’ response to crisis: Harper | UK PM reveals G20 plan to boost IMF by $1 trillion, hails new world order (again) | Global stock markets surge | World Bank President Admits Agenda For Global Government | Financial Rescue Nears US GDP as Pledges Top $12.8 Trillion | Gordon Brown chooses pulpit as latest platform to push New World Order | Whitehouse fires General Motors CEO | Will U.S. financial woes lead to new world order? | U.N. ‘Climate Change’ Plan Would Likely Shift Trillions to Form New World Economy | US backing for world currency stuns markets | UN & IMF Back Agenda For Global Financial Dictatorship | Geithner wants a bigger stick | Geithner Plan Will Rob US Taxpayers: Stiglitz | Ontario to merge GST, PST in ‘harmonized’ tax hike | EI, individual bankruptcies spiked in January | US unveils P3 plan to monetize debt, nationalize banks | G20 warned unrest will sweep globe | Bank crisis spawns new kind of gold rush | Wall Street’s Big Takeover | U.N. 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