More Destruction From Our Good Friend Jim
On Friday January 2nd, 2008, Finance Minister Jim Flaherty hinted at more tax cuts to “stimulate” the economy. He is trying, yet again, to fool Canadians who do not understand the details of how the economy works. For example, the people who need economic relief the most are those who are very poor or who are out of a job. How will a tax cut benefit someone who doesn’t have enough money in the first place to even pay taxes? Furthermore, lower and middle income earners will only receive a couple hundred dollars at most as a result of this tax cut. Will this really stimulate the economy? I don’t think so.
When Canadians get tax cuts, the only way that it can stimulate the economy is if people choose to spend their extra money on Canadian products. However, in times like these, Canadians are more likely to use the money to pay off their own debts, or if they do choose to spend it, they will likely spend it on cheap imported products from places like China. This means that much of the savings that Flaherty thinks will go into the economy will actually never do so.
The real story is that these tax cuts are not very significant to Canadian citizens, but are costing the government billions in tax revenues. The lost dollars in revenue mean that the government is forced to resort to borrowing money, which further increases our national debt. As this debt increases, the government cuts spending on things such as infrastructure and community programs. These government spending cuts mean that they are not funding projects that should have created jobs for Canadians. Instead, they are going further into deficit and perpetuating the crisis.
The bottom line is that the government needs to take the money and pour it into the economy by creating jobs, not cutting taxes. The more jobs we have, the more people there are who have money to spend. The more people who are spending money, the more times money changes hands and stimulates the economy. Money needs to be spent on infrastructure so that jobs are created, and money is paid to Canadian companies who do the work.
The only thing these tax cuts do is fool those Canadians who do not understand the economy. This makes Jim look good in the short run, but it hurts all of us in the long run. Way to go Jim.
Related posts:
- Harper Talks Budget and Stimulus Plan Prime Minister Stephen Harper announced some preliminary information on the...
- Jobless Rate Increases – 34,400 Jobs Lost in December Statistics Canada announced on Friday that 34,400 jobs were lost...
- Canada’s Democracy to Destruction: The Right To Secede Imagine small communities in Canada’s northern wilderness making unanimous and...
- Conservatives Unveil Budget, Pump Money into Economy Today, the federal government revealed its highly anticipated budget and...
- Finance Minister Jim Flaherty’s Economic Policy of Deficit Reduction is Not What it Seems Let’s get straight to the point. The deficit is an...
Loading ...
January 4th, 2009 at 1:17 pm
A fine example of a continuation of “bush-like” trickle down economics, which simply hasn’t worked for the past 8 years.
It’s about time we find ourselves a new paradigm for stimulating economic growth, especially in times like these.
January 5th, 2009 at 3:53 pm
While I agree that most of the tax cuts are inconsequential to individual Canadians, yet cripple the government, I’m not certain that infrastructure is the magic bullet.
Infrastructure is great in the short term, but what happens when all those nice roads and buildings are built? Unless we have industries building things that people want to buy, there won’t be any long-term jobs.
I think that one of the fatal flaws of our economies is that they’re predicated on massive consumption. A sustainable economy should be able to trundle along providing a steady standard of living to citizens while producing just enough to meet the needs of the community. I’ll have to think on this a bit, but we need to come up with something of a paradigm shift that allows an economy to prosper without constantly needing to expand.