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Wednesday, April 07, 2010

Stimulus spending and the intelligence of the Canadian people

In late March there was a rather spiteful back and forth between the free market think tank Fraser Institute and the Conservative government. The Fraser Institute published a study that demonstrated government stimulus has not significantly helped the economic recovery. The government replied in an attempt to discredit the Fraser Institute that left them looking rather silly.

They look even sillier this week as it is revealed that approximately 75% of the stimulus spending has not actually been spent. Even if the concept of ‘stimulus’ was economically solid, it is clear that government action still would have been pointless. Even Keynes would agree that an unspent stimulus does not bring a country out of recession.

You have to give Canadians credit; they realize what is going on. According to a study sponsored by a Toronto advertisement firm, the Canadian people do not blame the government for the recession. At the same time they do not credit the Conservatives with ending the recession. Both conclusions are clearly true, which has delighted my usual cynical attitude towards public opinion. Despite the spin Canadians have spotted the truth.

It is too bad that Stephen Harper didn’t trust Canadian people. He brought in this budget not because he thought it would work, considering his background he had to know it wouldn’t work, but because he thought it was demanded of him by the Canadian people. If Mr. Harper had stuck to his lifelong convictions regarding the role of the government, perhaps he would be on the way to a majority by now.

Posted by Hugh MacIntyre on April 7, 2010 | Permalink

Comments

So, does this mean that the forecasted budget deficits would be substantially reduced if we stopped all stimulus spending now in the pipeline? Wouldn't that be a winning strategy in the next election?

Posted by: h2o273kk9 | 2010-04-09 5:53:23 PM



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