Wednesday, October 08, 2008

Dion's Voodoo Economics, or taking the "progress" out of "progressive"

While the lazy and brazen shills for Dion over at the CBC and the Star prepare to cheerlead Dion's plan for the economy today, thought I'd post some information on Dion's economics that you'll never hear from them, but you nevertheless should know. It vexes me to think that Canadians are heading into polling stations for such an important vote so completely swindled and uninformed, owing in some measure to their own apathy and lack of interest, but in large measure to a negligent and partisan media. Actually, what "progressive" voters REALLY need to understand is that the LIBERALS ARE NOT "PROGRESSIVE."

I believe most would agree that the ballot issue in this election is fiscal responsibility and the economy.  Now I'm not especially trained in economics, thus I have to rely on people who know much more in this area than I do. 

re: Fiscal Responsibility
The old canard that NDP governments are not fiscally responsible is simply NOT TRUE. A government financial report tracking the performance of provincial and territorial governments for the past 21 years reveals that when it comes to balancing budgets NDP governments are the most fiscally responsible governments and that Liberal governments are the most fiscally irresponsible governments. NDP governments have posted surpluses 48% of the time, while Liberal governments have posted surpluses only 23% of the time.

re: corporate taxes

I've previously noted the study by economist Jim Stanford at Canadian Centre for Policy Alternatives which argues that slashing corporate taxes in Canada has served only to widen the gap between oil producing provinces and the rest of Canada, not to mention that they've had NO measured beneficial impacts on business investment and R & D.

Erin Weir at The Progressive Economics Forum (which brings together over 125 progressive economists) challenges the Liberals' claim that not only have previous Liberal corporate tax cuts NOT contributed to the current economic crisis, but those cuts actually raised government revenues and helped balance our country’s budget.  The Liberal claim is simply "voodoo economics" not supported by theory ("the notion that lower corporate tax rates increased corporate tax revenue is reminiscent of Ronald Reagan") nor by the chronology of events.  Erin concludes:
corporate tax cuts have not achieved their stated goals of attracting more investment or reported profits to Canada. Certainly, they have not increased corporate tax revenues.
p.s. If you link to PEF article please note the comments section where we see what a healthy and intelligent debate might sound like.

re: costing of Liberal platform

According to Andrew Jackson of the PEF the costing of the Liberal platform "is dubious at best" (a nice way of saying cynical and disingenuous at worst):
I stand by my earlier argument that they [the Liberals] can’t balance the Budget, deeply cut corporate taxes, oppose new taxes (outside the internally consistent green shift package) AND make major new spending promises outside the green shift - all in the context of a slumping economy.

The costing here is dubious at best.

We get four year spending and tax reduction totals with little or no detail on timing. No adjustment is really made for slowing growth and rising unemployment.

Clearly a lot of the good new stuff outside the green shift is shunted off to the future. As a key case in point, last week the Liberals promised to bring in a $1.25 Billion per year national child care program. Today, that program is costed at $1.5 Billion over 4 years. That’s a slow phase in, to say the least. Another case in point is municipal infrastructure spending, which barely increases over the status quo for the next four years.

We get a modest dose of Reaganomics and supply-side tax cut magic. Cutting the tax rate on income trusts will supposedly raise $1 Billion in new revenues.

The Liberals actually raise the ante on balanced budgets, promising Martin era determination to run surpluses to pay down debt. They promise to restore the $3 Billion Contingency Reserve - to my mind implying spending cuts “come hell or high water” even if we go into recession.

That’s bad enough, What is worse is that their fiscal plan depends on unspecificed cuts of $12 Billion over 4 years - a not inconsiderable sum after continuing rounds of “program review.”

Last but not least, they say they will borrow $25 Billion to fund post secondary education, but this will somehow be done outside the Government of Canada spending envelope and promised debt reduction.
Dion is practicing voodoo "regressive" economics supported by a dubiously costed platform. And he has the gall to dismiss the NDP plan as "socialist" and a "job killer".  I wonder how the electorate become so misinformed when leaders like Dion resort to old canards, fear mongering, and Red baiting. Dion is the WRONG leader! Otherwise Liberals would be staring at a majority right now, instead of same old same old.

p.s. I welcome debate and rebuttals of these assertions, for otherwise I can only assume they are accurate.

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