Saturday, July 05, 2014

Wynne's Two Headed Beast


                                               http://community.businessfightspoverty.org

Kathleen Wynne's budget is a two headed beast. One head talks about investing in infrastructure and training. The other head talks about spending restraint. As with all two headed beasts, when the heads quarrel, the animal is paralysed. Tom Walkom writes that the beast was born of a traditional Liberal strategy -- campaigning from the left, but governing from the right:

[Jean] Chrétien was elected on a centre-left platform that made no mention of cuts to public services. Yet once in power, he and finance minister Paul Martin took an axe to the pillars of the welfare state — including employment insurance, welfare and medicare.

And Moody's -- by lowering Ontario's credit rating -- is suggesting that Wynne follow that path. But Moody's was part of the economic boondoggle six years ago. Walkom hopes that Wynne doesn't take her cues from either Moody's or Chretien:

The current slowdown has pushed Ontario’s net debt to GDP ratio to about 40 per cent. That’s higher than the ratio faced by other provinces, save Quebec. It’s also higher than Ottawa’s.
But that doesn’t necessarily mean it is too high. Throughout its boom years, Japan’s government debt to GDP ratio exceeded 100 per cent. But creditors never stopped lending to Tokyo because — then at least — the money was used for productive purposes.

And that really is the point: the money must be spent productively:

When Wynne speaks of governing from the “activist centre,” she is speaking directly to that tradition. Ontarians disapprove of governments that waste money. But they don’t mind seeing their tax dollars spent on useful endeavours.

It's all about which head does most of the talking.


6 comments:

Anonymous said...

Saskatchewan NDP did it for years, not hard at all.

Owen Gray said...

True, Anon. Tommy Douglas was very good at balancing budgets.

ffd said...

I'm not convinced we're so poor we can't afford social programmes or maintenance of infrastructure. There's always money available for things like the Olympics or
"Camelot", the new huge and very opulent CSEC headquarters now being built outside Ottawa. We spend a fortune on surveillance and police without a word of objection from those who insist we can't afford even basic programmes. As an oil nation, we should be rolling in dough.

Owen Gray said...

It seems to me that those who complain about spending have a record of not pending productively, ffd. Apparently Harper's bill for personal security has skyrocketed.

You'd think that Harper would see the connection between spending on infrastructure and making the economy competitive.

liberalandlovingit said...

Harper & Flaherty did in what was left of EI, hurting way too many families- especially the EAST.
And Findlay, Kenney, etc.

Also, I'd want PM Chretien on my
side in any kind of battle, but
team-building? No.

Owen Gray said...

There are a number of possible approaches, Loving It. Unfortunately, this government suffers from tunnel vision.