Jim Flaherty likes to wag his finger. Two days ago, he wagged it at the business community for sitting on $500 billion. It was the private sector's time, he said, to step up to the plate. However, "at a certain point, it’s not up to government to stimulate the economy.” The truth is that -- only when it faced its imminent execution, in 2008 -- did Flaherty and his boss deem it appropriate for the government to give the economy a boost.
Tom Walkom writes in the Toronto Star that, as with Stephen Harper's claim that science will determine the fate of the Northern Gateway pipeline, the government is working at cross purposes. Science will do nothing, if those who do the science have been cashiered.
Fiscally, Ottawa began to pull back on spending. Instead, it focused on reducing corporate taxes.
The assumption here was that if businesses were allowed to keep more of their profits they would invest them productively.
But in the real world, corporations don’t invest when the economic outlook looks gloomy. Why hire workers if you’re not sure you can sell what they produce?
Instead, corporations took the extra profits provided by government and sat on them — either in the form of cash or short-term cash equivalents.
Businesses won't invest if consumers don't have money to spend. And without jobs, they have no way to buy what business is selling. Harper government policy has put more money into the hands of those who already have it -- and less into the pockets of those who don't have it.
The myth has been circulating for some time that this is smart policy. The truth is that it is monumental stupidity.