Saturday, January 17, 2009

What is the right answer?

Choice #1 - Federal and Provincial Government: Spend our way out of this - possibly up to $40 billion federal deficit this year! (Don Martin, National Post)

Consultations with business leaders continued this week and the premiers came calling Friday armed with arguments for a shovel-ready share of $40-billion-plus in deficit spending that could, in one horrific act of recession-fighting desperation, neutralize all federal debt reduction since the Conservatives came to power in 2006.

The possibility this critical budget is still written in pencil appeared to pacify sober-faced premiers as they adjourned their gabfest on Friday, returning home to await what they hope will be unconditional funding for construction, manufacturing and natural resource sectors.

Choice #2 Other prominent economists: cut wasteful spending, target tax cuts to middle class, no corporate 'bail-outs', help small business with more tax cuts...

Rather than forging ahead with “stimulus” initiatives, the federal government should reduce government spending and focus on tax relief aimed at improving incentives to work, invest, and engage in entrepreneurial activities.

To that end, the government should first reduce wasteful spending. A recent study led by economists at the European Central Bank found approximately 25-per-cent waste in Canada’s public sector. Government should follow the lead of many Canadian households: it’s time to trim the fat.

WHAT DO YOU THINK?

No comments: