Canadian Politics IV
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03-09-2013, 03:18 AM
Join Date: Jun 2003
Originally Posted by
I'm actually more mad about the corporate tax cuts that both Harper and Martin before him have made. Encouraging investment is a worthy goal, but at what cost? Most studies I've seen show that there is either no increase in investment when corporate taxes are cut, or a small enough increase that questions whether a tax cut is really worth it. I really don't have much faith in neo-liberal economic policies.
The GST at least you can say is a regressive tax, which (in percentage terms) burdens the poor more than it does the wealthy.
I don't think you're using the word "stimulus" properly. The point of stimulus spending isn't to create a deficit, it's a temporary measure to get the economy going during a recession, and once the economy is strong again the stimulus disappears and the budget is balanced again. If you're spending so much (or lowering taxes so much) that you go bankrupt, that's not stimulus, that's reckless policy.
However, I do think Flaherty gets too much criticism for his handling of the economy. He actually hasn't been that bad, he just hasn't been that great either. People like to talk about him creating "record deficit" and "record debt", which is only true in nominal terms (and thus is very misleading).
Paul Martin followed the same neo-liberal course but did so more carefully and after reducing the deficit like Reform wanted, he lowered corporate taxes from 27 to 21%, but kept a buffer in the budget in case of a downturn. It's this buffer that Harper used to lower the GST and corporate taxes more, in a hurry. By the time the financial crisis hit the fan in a big way, Harper was already running a structural deficit. It wasn't reported by the 2008 election because the budget hadn't been tabled yet. He was more reckless than Martin but never paid a political price for that, the world recession got the blame. And people like tax cuts. People wanted Keynesian stimulus by 2009 and Harper grudgingly agreed. The huge deficit then gave him the political leverage to propose more deep cuts in government programs. Harper has followed the US Republican playbook and it has done well for him.
I look at economic philosophy as a viewpoint on how the economic pie should be shared. Neo-liberal policies have favored the wealthy in the past decades. You just have listen to Kevin O'Leary on CBC to get the scoop on how that system works. The most surprising thing IMO is how they have convinced the poor and unwashed that they are right to a large degree.
Conservatives and Republicans in the US are the most aggressive in pursuing the raw deregulated investment model. Other parties are on the bandwagon too to some degree to compete, but aren't in the reckless hurry in the adoption process. I'm a bit surprised at how much pain and abuse the average working stiff has accepted during the post Reagan-Thatcher era. The neo-liberal economic transformation continues, but greed and corruption will eventually kill the pooch IMHO. We've already seen Act 1 of the crisis repair playbook in 2008, more chapters are surely on the way in the future. (and we've all seen who is expected to bear the brunt of the sacrifices to repair the damage, it isn't the ones on top). That has been the ongoing history of the world and that part hasn't changed in the 21st century. (The more things change, the more they stay the same.)
Last edited by Puck: 03-09-2013 at
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