Monday, February 2, 2009

Harper's 'Stimulus' Budget Will Not Stimulate The Canadian Economy

There is nothing even remotely pragmatic about a 'stimulus package' that will fail to stimulate the economy.

So, ask yourselves: which camp in the Canadian conservative movement is truly practical?

The Western Standard:

Whether or not we can agree that the disaster that is the 2009 Canadian budget is necessary politically is up for discussion. More to the point is whether or not the budget will be anywhere near successful in achieving its stated goal of cushioning Canadians in the face of recession and coaxing the economy into recovery.

Tasha Kheirridin, with whom I've disagreed often over the past few years, has a great article over at the National Post's Full Comment.

One line in particular, which appears at the top of the article, is important to understanding what a disaster this budget will be for Canada:

The government cannot put money into the economy without taking it out of the economy first. Thus activity does not increase overall - it is simply redirected.

I can never get over the fact that people don't seem to get this. The government does not create wealth. It can take wealth from Canadians and direct it towards goals that Canadians wouldn't have pursued otherwise (though doesn't that seem odd?) or it can borrow against the taxes of future Canadians (thanks, kids!) to do the same thing.

Essentially, what any "bailout"-themed budget or bill is going to do is take money from the parts of the Canadian economy that have been productive and will continue to grow, or at least recover quickly, in the face of this recession and move that money to parts of the Canadian economy that have been failing or will not recover quickly. Further, intelligent, persuasive, and productive people will become lobbyists as the pot of government handouts becomes larger and work at redirecting wealth and economic activity rather than creating it -- deepening the effects of this redistribution.

How will increasing the proportion of the economy that isn't self-sustaining help us recover from a recession quickly? You've got me. But at least some conservatives and libertarian Conservatives are shaken enough by the budget to start bringing these questions to Canadians' attention.

This article points to one of the most basic flaws in the Keynesian economic scheme. Wealth is produced by private citizens and not by the government. Accordingly, when the state confiscates money from these producers and distributes it to failing industries that couldn't have survived independently of government hand-outs, we are, in fact, doing a great deal of infrastructural damage to the economy in the long-term.

Practical? Try self-destructive and immoral.


Conservative Party Policy: 20 Minutes Fresh -- Always

I can't claim to like Rick Mercer but this video certainly rings true post-budget 2009.

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