Thursday, October 15, 2015

Why are Harper Cons So Nasty?

During the course of this election, I have never read more negative comments by whiny nasty  Harperites ever.  Cons seem to open their mouths and venom comes out.  They bash, they belittle they insult and pretty much outright slander anyone who opposes their god Stephen Harper. Wow!.  Do none of you ever have anything positive to say?  Facts stare you in the face but its water off a ducks back.  Now that's indoctrination.  We'll have more on that front in another post.  At the same time you have proponents of the other two major candidates who seem to be rather civilized when compared to the Harper Cons.  Has the Harper party been reduced to nothing but illiterate rednecks?   Are Progressive thinking people more intelligent and less reactionary than the average Harper Con?  Some studies seem to indicate that to be the case.

This arose from Facebook comments regarding Justin Trudeau.  The slagging was over Justin's proposal to run a deficit in order to fund infrastructure projects which would subsequently create an impressive number of jobs.  To be honest I don't know what to think of young Justin, but his ideas aren't dumb by any stretch.

Anyway my two cents worth:  No one can deny that infrastructure across Canada is in dismal condition and in desperate need of rebuilding before more bridges fall on cars.  We need roads that we don't have, we need flood control projects built (Calgary two years ago), we are in need of transportation projects so that people can get to work without spending four hours a day in idling autos.  That might equate to high speed rail in Alberta since Rachel Notley is studying expansion of the QEII - why not a train instead?  Schools need to be built.  Hospitals need to be built.  The list is long. 

The most interesting aspect of this is how similar this all is to the situation that FDR found himself in in 1933. Roosevelt's New Deal that was also opposed by the conservatives of the day.  There is no denying that it created jobs, jobs that built projects that made the USA great. 

Harper's disciples can't figure this out.  Harper will never put a dime into any of these things and somehow that makes them happy.  I find it reminiscent the times I have driven through towns in the southern USA where they have dirt streets (not even gravel), no street lights, and everyone has their own septic tank and water deliveries. Asking about it at the local diner, I was told that no one would vote for the improvements to be made.  It wasn't that it was a poor district, but no one wanted anyone else in town to benefit from their dollars.  It has apparently been an impasse for over fifty years. 

Harper Cons are starting to look like those stingy stubborn folks who never wanted anyone else to have the benefit of a penny of their tax dollars. There is a comfortable middle point where we all get to enjoy the benefits of everyone giving a little to make things better for all. 

Trudeau is saying he will make the improvements that have been long needed.  The deficit he is talking about is no worse than what Harper has already created during his ten years in office. After starting off with a surplus in 2007-08 of $9.6 billion, the Harper government delivered a deficit of $5.8 billion in 2008-09 during the global recession.

In subsequent years, his Conservative governments generated shortfalls of $55.6 billion in 2009-10; $33.4 billion in 2010-11; $26.3 billion in 2011-12; $18.4 billion for 2012-13; and $5.2 billion for 2013-14.

To summarize, Harper-led governments ran a string of six straight deficits between 2008-09 and 2013-14.

But looking beyond 2013-14, the numbers have yet to be released, which means it’s difficult to predict the final results with absolute certainty.

In July, the parliamentary budget officer crunched numbers based on the Bank of Canada’s downgraded economic growth forecast. It found the federal government was actually on track to run a $1-billion deficit in 2015-16.

But with the 2015-16 fiscal year barely five months old, it’s still early to pin down what the final figure will be.

In fact, Canadians won’t know whether their government delivered an eighth consecutive shortfall until about a year from now – or roughly 11 months past the Oct. 19 election date.

Justin Trudeau says a Liberal government won't balance the books for three straight years but will double spending on infrastructure to jump-start economic growth.

The Liberal fiscal plan would see "a modest short-term deficit" of less than $10 billion for each of the first three years  and then a balanced budget by the 2019-2020 fiscal year.

This is a very Keynsian approach and has its supporters and detractors. Stephen Harper defended his government’s 2010 economic stimulus package in response to a recent Fraser Institute report claiming the stimulus had no effect on GDP.

"We’re not going to act on the basis of ideology, we’re going to act on the basis of what the economy needs.  And that is what we have done." – Stephen Harper

That indicates that Harper does believe in economic stimulus packages, but only when he does it.

So how does it all happen? The places a government can get its money from are: taxes, debt, income (royalties on resources), fines, or inflation.

Taxes are pretty obvious.  The government demands money from every citizen who worked or earned money in any way during the previous year.

Debt is money the government borrows.  It is the favorite instrument of governments big and small to get money by promising to tax later to pay.  Problem is by borrowing, they shrink the debt market. Thereby leaving less money for businesses and people to borrow for things like expanding their businesses or buying a house on credit.

Income is money that government earns by participating in the free market.  This can be anything from contracted services to royalties on natural resource exploitation.

Fines are pretty self explanatory, being money collected as punishment for crimes committed by individuals or corporations.

Inflation is the last way that government can raise money. This is what happens when government simply prints new money and issues it. The inflation is a sort of invisible tax. It’s a tax because it reduces the value of all the money everywhere at the same time.

If government prints money at a rate that keeps the value of money constant, then they can raise money without hurting anyone. This is the “secret” that the US Founding Fathers discovered a couple of centuries ago. It’s why they didn’t want the banks to be allowed to expand the currency through fractional reserve banking. It’s why they resisted creating a Federal Central Bank until 1913. President Lincoln paid for the Civil War without collecting a single penny in taxes using this method. It’s how the Continental Congress paid the soldiers in the Revolutionary War without borrowing a penny. Inflation at a proper rate will create money without causing any harm to the people.  This is the reason that governments push countries along in a constant state of inflation, except that now, they don't get the benefit of the currency expansion because both the US and Canada (as well as most of the world) have allowed the banks to be the key issuer of new currency. In Canada this happened in 1973.

All this to say that I don't see Trudeau's spending plans as dumb or foolish.  They are projects that we need, they have to be paid for sometime, somehow.  We may as well do it now and make jobs out of it rather than give the top 1% of rich folks tax breaks that they will never spend to build anything or to hire anyone.

Rich folks find places to hide their money, poor folks have to spend every dime to get though the month. 

At his inauguration in March 1933, Roosevelt declared in his lilting style, "Let me assert my firm belief that the only thing we have to fear is, fear itself — needless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."

Harper is in full economic retreat.

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