Wednesday, January 28, 2009

No Stimulus should equal no support

Sorry Jim, No Thumbs up for you!

This budget was supposed to be about stimulus, about encouraging Canadians to spend. This budget was supposed to be a strong response to a crisis. This budget was a failure. The tax cuts should have been more targeted.

According to stats Canada, I am one of the middle class so often talked about. We make up a majority of the tax paying base. This budget will not encourage me to spend one extra cent. The tax credits for renovations are great, if you own and don't rent, if you have enough money to do the work to begin with ( you still pay for it, and wait and wait and wait until the give you the credit), and if you need renovations. Yes it will create some work, and needed work, but it won't do much if anything to actually stimulate economic growth.

Infrastructure spending will help, but not every dollar announced will be spent. Bureaucratic tie ups, non matching funds, and other cost and time delays will mean some of this money will take years to flow, or may not flow at all.

If every cent in this budget that was meant to stimulate actually was used in a stimulative way, it may have, note may have, fixed the problem, or at least stemmed the growing tide of crisis. The problem is, as structured now, not all the money will flow which means the full stimulus effect won't be felt.

Another point to be considered. These numbers could get worse. Harper and Flaherty are being very optimistic in their view of when things should recover. Any slight deviation from their expected course could cause disaster. This scares me because the nature of this crisis is uncertainty, no one really knows. To make assumptions like those Harper has made, could be catastrophic. Only a few weeks ago, Harper and Flaherty said no deficit, no recession, no way. They were dead wrong.

Can we trust them now?

Fool me once, shame on me, fool me twice and my countries economy collapses...wait that's not how it is supposed to end.

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