"If I Had $34 Billion Dollars"

This is the type of post that I usually start but never finish. When it comes to economics, I am a neophyte. Later this semester I have to give a presentation on some aspect of international political economy, and already I am dreading it.

If you are a follower of all things both Canadian and political, you will know that on Tuesday afternoon, federal Finance Minister Jim Flaherty will don a new pair of shoes (as is parliamentary tradition) and present the government’s budget for the 2009-2010 economic year. This is the earliest that a federal budget has ever been presented, which is supposed to make us believe that the Conservatives are taking the global recession seriously.

Really? Well let’s look at what our fearless leader, PM Stephen Harper, has had to say about economy since September (thanks to this article from The Canadian Press which rounds up all of Harper’s notable quotes from 2008):

Recession I, Sept. 15: “My own belief is if we were going to have some kind of crash or recession, we probably would have had it by now.”

Recession I, Sept. 16: “The Canadian economy’s fundamentals are solid.”

Recession II, Sept. 25: “The only way there is going to be a recession is if they’re (the Liberals) elected and that’s why they’re not going to be elected.”

Deficit I, Oct. 6: “There’s nothing on the horizon – notwithstanding the storm clouds, and they are significant – (that) indicates to me that we should immediately go into deficit.”

Market meltdown, Oct. 7: “I think there are probably some great buying opportunities emerging in the stock market as a consequence of all this panic.”

Deficit II, Oct. 11: “This is a ridiculous hypothetical scenario. What it really comes down to is you’re asking me to say what would Canada do if our economy went to hell in a handbasket. This government is running the economy so it can’t go to hell in a handbasket.”

Deficit III, Nov. 22: “These are, of course, the classic circumstances under which budgetary deficits are essential.”

Recession III, Nov. 29: “The financial crisis has become an economic crisis, and the world is entering an economic period unlike – and potentially as dangerous as – anything we have faced since 1929.”

Recession IV, Dec. 15: “The truth is, I’ve never seen such uncertainty in terms of looking forward to the future …. I’m very worried about the Canadian economy.”

But the CP forgot this little gem from Harper’s October 14th op-ed in the Toronto Star:

“We’ll never go back into deficit.”

To me, this quote, coupled with the farce that was the economic statement, sum up all of Harper’s economic messaging. It says that, despite being an economist (he has a BA and MA in economics), Harper really had/has no idea what to do with the ailing Canadian economy. For quite awhile there was talk of an eventual market meltdown, that the market had ballooned beyond anything imaginable and needed to be brought back down to reality. Throughout this growing economic mess he moved from “there’s nothing to worry about,” to “THE SKY IS FALLING!!!!”

It really is a testament to the lack of good Canadian political leadership that Harper has not been politically massacred because of his lack of movement on the economy and his mixed messaging. Remember how foolish John McCain looked when, way back in September, he said, “the fundamentals of our economy are still strong”? Why has Harper not suffered the same fate?

It’s rather obvious that I have no confidence in the Harper government’s ability to manage the economy. Not only do they put political gamesmanship above the needs of Canadians (see November economic statement), but, sorry to repeat myself, but the mixed messaging they’ve employed clearly shows that they didn’t know what to do at first. Why should you and I believe they do now?

One last reason why I don’t trust the Conservatives with my money: they’re not the ‘fiscal conservatives’ that they propose to be. In fact, the Conservatives have the dubious distinction of being the biggest spending government in Canadian history. And for what? I honestly cannot think of more than one new public policy program the Conservatives have implemented. The only program I can think of is the Canada First Defence Program. Well, woo hoo. That’s just great. They haven’t signed any agreements to send more money on health care, post-secondary education, Aboriginal people, or social programs in general. Where the hell has all of that money gone??

And THAT is the real reason why I’m not look forward to Tuesday’s budget. I fear that after the $34 billion is funnelled out, there will be nothing to show for it.

Michael Ignatieff made a good point the other day. This budget and this economic downturn has given us an opportunity to stimulate our economy (an idea I’m still not all that fond of) to refocus and build for the future. The Harper government spent the first three months of its new mandate pissing around and playing politics; only following its near-death experience did it finally ‘get serious.’ On Tuesday, I think you’re going to see a lot of money for ailing industries (like the auto sector), big tax cuts (bet they wish they hadn’t cut the GST by 2% now), and some, but not nearly enough, to build a greener economy or more low-income housing.

In other words: spending billions for the sake of pretending to ‘do something,’ with the end result being a big deficit and nothing that benefits Canadians.

UPDATE: Apparently the SK Party, too, has decided to flex its ‘fiscal conservative’ muscles. Too bad that it, too, is spending more money than its predecessor – a socialist government. You’ve gotta love hypocrisy.

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