Joseph C. Ben-Ami

Audio Commentary - Why the Harper deficit will not end the recession
Wednesday, 28 January 2009

With its 2009 budget, the Harper government has embraced the belief that it can buy its way out of a recession by spending tax dollars. In this short, 4 minute commentary, Joseph explains in simple terms why this policy will fail, just as it has in the past.



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Comments (7)add comment
George Attrill: ...
I agree with your view on government spending, or should I say a convert to your perspective!
1

January 29, 2009
Michelle: ...
Well explained. It should be required listening for our politicians.
2

January 29, 2009
John Schmitt: ...
Bravo!! I really don't think that the Prime Minister is naive enough to believe that this spending spree he's embarked upon will work. He's just afraid that the opposition parties will oust him and his party if he doesn't bow to their demands. Actually, I don't believe that Mr. Ignatieff is that naive either. (Mssrs. Layton and Duceppe may be) There's some kind of political monkey business going on in Ottawa right now. Parliament is being run by fear, not economic reality or even common sense.
3

January 29, 2009
Steve: ...
Hey Joseph. I heard you on CFRA's lunch show in Ottawa. You really gave it to that lady who kept saying that nobody knows what to do about the economy. Good for you! Like you said, of course we know what to do, or more accurately, we know what not to do, which is spend huge amount of public money in an effort to buy or way out of recession. We know that doesn't work because that's what we tried, not just here in Canada, but in every western country in the world, during the 1970s and early 1980s. Those who don't know just haven't learned about that time and they arrogantly assume that if they don't know it it couldn't have happened. Your explanation why stimulus can't do what it's intended is basic, but just what's needed for the average person who is being bamboozled by "experts" with an ideological agenda.

Keep it up!
4

January 30, 2009
Bruce Broderick: ...
You should be in Government and I agree with your commentary. I also agree with the comments made by
John Scmitt as noted above.
Canada has a debt of 453.3 billion dollars which attracts interest payments of 32.4 billion annnually.
By 2012-13, the debt is forcast to be 542.4 billion dollars which again will attract 39.2 billion dollars in interest payments.
Question--where is the additional 60billion dollars going to come from--print more money--borrow the money and if so from whom and at what interest. Previous rate paid on debt is running around 7%.
Tax payers will eventually be on the hook for the excess spending. Attracting more debt is not the way to go,
What has the government done to reduce their costs? Since Harper was elected, he has increased the employees in Ottawa by 145. Cost is running around 200 billion $ annually.
Why is Canada so far in debt? Where did the money go? I suggest the government of the day now and in the past bought votes by bribing the taxpayers who did not have the sense to see what was happening.
Politicians work for themselves and their parties and not for the good of the Canadian taxpayer.
5

January 30, 2009
Bruce Broderick: ...
The increase in government employees is 14%. Sorry about the error in my above comments.
6

January 30, 2009
anonymous: ...
Bruce:

You hit the nail on the head on two important points.

First, lost in all the broohaha over the current budget is the fact that the Harper-Flaherty team actually increased real public spending by almost 15% their first two years in office. This spending spree went by largely unnoticed by conservatives who were giddy with the idea that they were finally in office after so many years, or at least, they thought they were. Seasoned conservatives like Joseph Ben-Ami at the Centre for Policy Studies, John Williamson and the Taxpayers Federation, and Gerry Nicholls at the National Citizens Coalition were sounding the alarm then, bt they were doing it more quietly out of a desire to not unduly harm the government. When Nicholls started to push for a more independent aggressive response from the NCC, he was fired. Meanwhile John Williamson has left the Taxpayers Federation and is now at the London School of Economics in England. THe only one still in the arena is Joseph, although Nicholls is still fighting the good fight as a solitary voice for principled conservatism.

The second great point you make is about buying votes. As Joseph says in his short talk, public spending does create jobs, but only when and where the money is being spent. Overall, it has little effect. The goal of the government then is to prop up its political support in regions where it is weak, or where it wants to make inroads, at the expense of other regions deemed not so important politically. Why else would they dedicate infrastructure money to making Toronto's train station nicer?

As for Joseph being in government, the youngsters running the show don't want him. If you ever have the chance to meet him you'll understand why. Let's just say he's gregarious, he likes to laugh, but he's obviously pretty tough and doesn't suffer fools or foolishness easily. He'd actually make a prett good chief of staff to Harper, but as I say, the gate keepers around Harper don't want him.
7

January 30, 2009

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