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Friday, August 01, 2008
Jim Prentice vs. Jim Flaherty: the $4.25-billion tug-of-war
What should the Conservatives do with the $4.25-billion windfall from the wireless auction?
Industry Minister Jim Prentice said the cash might go to tax cuts, debt repayment or even spending programs. Of course, Jim Prentice is not the Finance Minister, as John Williamson reminds us in his latest column "Is Jim Prentice Canada's presumptive Finance Minister?"
As for what to do with the money, Williamson writes:
It is folly to suggest a one-time revenue gain -- such as the $4.25-billion generated by the wireless auction -- be used to increase spending. Whatever new program might be created will live long after the cash raised from the auction is spent. As Milton Friedman said, "Nothing is so permanent as a temporary government program."
Whenever a government sells an asset -- in this case wireless spectrum rights -- the additional income should be used to reduce the country's debt liability.
Williamson's column is a good mix of political intrigue and sound, taxpayer-friendly thinking. Read his column here and let us know whose side you're on.
Posted by Matthew Johnston on August 1, 2008 in Canadian Conservative Politics | Permalink
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Comments
"It is folly to suggest a one-time revenue gain ... be used to increase spending."
Absolutely right, but for the exact same reason it should be equally emphasized that it is folly to suggest a one-time revenue gain be used to decrease taxes. Those, too, live long after the cash from the one-time gain is spent. So that only leaves one option: "... the additional income should be used to reduce the country's debt liability." Absolutely right.
Posted by: Fact Check | 2008-08-01 2:06:27 PM
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