On the (Canadian) budget
Earlier, I linked to a blog post which analysed the Canadian budget. The more I think about it, the clearer it becomes: As much as that post may hit the nail on the head, it has also missed it entirely in failing to recognise who wrote the budget, and what they were trying to achieve with it.
The analysis is largely based on the idea that the budget should be directed at those near or below the poverty line, and/or those who are hard-hit by the recession, and find themselves out of work.
While I have not really given much thought to how I would target the budget, were it in my power to do so, I can tell you this — nobody in their right mind would have thought that the Conservative Party of Canada would write a budget aimed at helping the unemployed, under-employed and poor. Hence, as good as the arguments may be, they are missing the reason why the budget is not a strong one.
Let’s dispense with the poverty rhetoric, then, and look at the goals that the budget’s authors might have for the budget. To judge this budget, we need to ask ourselves: Are these goals good? Is the budget one that will achieve these?
The goal of the budget is, ostensibly, to guide Canada through the recession. Not necessarily what you or I may consider Canada, but Canada’s economy. Canada’s businesses. It is to get the rich back to money-making, where they belong. This isn’t bad, because it will benefit everybody, though. Nobody really benefits from a recession (other than politicians in the Opposition).
The size of the recession is due to a lack of capital in the economy at large — access to credit has been restricted, which means that businesses cannot properly finance their business plans and consumers cannot buy products unless they have cash at hand to do so. Because of the prior easy access to credit, businesses and consumers do not, because they were accustomed to it being safe not having the cash themselves. Those businesses and consumers are having trouble simply raising the money by selling things or calling in debts, because the situation is pervasive across the entire economy.
So businesses close and jobs are lost, et cetera. Budget measures to counter this should be pumping money back into the economy — either by creating jobs, or putting more money into the pockets of those who will spend it and help to prop up businesses that are otherwise sound.
The measures Mark goes through one-by-one and bashes for being directed to the rich when they should go to the poor deserve to be bashed … but not for some sort of social justice reasoning — that card is hard to play when so many in the country recently voted for the party whose ethos is reflected in the budget at hand — but because most of these are directed straight at the middle class. These are people who do not need to spend the extra money, but are not secure in the current economic climate. For all they know, their employers may announce layoffs tomorrow. So they’ll save it, not spend it. The capital will not re-enter the economy and get spread around.
So the cuts are useless, when it comes to the Conservative party’s goal.
That’s not to say that there aren’t good things in there that will help to create jobs, pump money into the economy, and leave a positive legacy — the plan to extend broadband coverage to new communities, for example.
I haven’t really looked through the budget at these things to see how much is really there, and how much is smoke and mirrors, where the government will only conditionally spend the money. If anybody can point me towards one, I think it would be most interesting.
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