Tuesday, March 4, 2008

End of Big Social Spending?

If the Liberals already didn't have reason enough to not support the Harper government (Prime Minister Harper attempting to bribe the incorruptible Chuck Cadman shortly before his death) they very well might now.

According to Conservative guru Tom Flannagan, Stephen Harper's Conservatives are tightening the screws on the federal government, leaving more money in taxpayers' pockets and making it harder for Ottawa to spend.

How did they do it? With three consecutive budgets that have gradually eaten away at the budgetary surplus and have made it nearly impossible for any government to afford big ticket items without either driving the country back into the days of deficit spending, or by increasing taxes.

Neither of these are likely to happen in today's political climate.

More money in the pocket is never a bad thing but tax cuts are not always the best way of doing that. Take for example Canada's Universal Health care. This program costs the federal and provincial governments mega bucks and forces us to have higher levels of taxation than the United States, but in reality it is far more cost effective than the U.S system.

It wasn't long ago that Chrysler sold for a mere $7.4 billion dollars. A sale that amounts to pocket change for a company that in 2007 alone sold $62.2 billion worth of cares and has been selling similar numbers for much of it's history.

Why did it sell for so cheap? Well, a big part of that is the health care dues that the companies owes ($17.5 billion dollars owed) increase the cost of business by so much.

I would bet that the executives at Chrysler would far rather be in a situation where the government funds the health care needs of its workers, rather than the company. That alone would take care of a great chunk of their operating loss.

Now, turning to the future of Canada's social programs, there would simply be no money today to pay for programs like universal day care. Another issue that eats up corporate and personal wealth and makes our economy less competitive. Where did the money go? Nickel and dime corporate tax cuts that these companies will spend in the same way that the people at Chrysler spent it...providing the social programs that their employees require but the government won't provide leadership on.

Make no mistake about it, Stephan Harper's mark on Canada will last a good many years indeed. It will certainly take a great deal of leadership from the left to begin undoing what he has already done.

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