Commentary:
There simply can't be any real economists hiding out in the halls of power, except the ones compromised by politicians looking for public applause. The President, cheered on by the huzzahs from the newly-toadying Congress, has unveiled another economic "rescue" plan. Cut taxes. Whoopee.
Mike Harris, in his pseudo-serious I'm-going-back-to-my-wife look on TV announced that he will fast track all those planned tax cuts for individuals, for small and large business. Put more money back into the economy. Sure. Sure.
The facts about tax cuts and interest rate drops. While the latter may have some stimulative effect on the stock market, the reality is that that extra money doesn't go into spending.
A few weeks ago the American financial press reported a record-breaking rush of new bond issues. The new issues are to pay down old debt. It has left the economists with egg on their faces because it is not going into new capital spending, which would create jobs. Spend money in hard times? Are you daft? And tax cuts are used by the people who get most of the benefit (do I have to identify them?) to reduce their own debt and get ready for more forays into the stock market buying bargains.
If government wants to make sure money gets into the economy spend it. Don't depend on big shots and hard-pressed consumers to spend it. I ask you? Would you go out and buy a new car tomorrow just because you got a few extra bucks? Or would you put it aside for a rainy day. And it's raining cats, and dogs right now.
Hands up anyone who does not believe Mike Harris is already into his next election campaign? And in the U.S. George Dubya is at 90%! Dammit we're such nitwits.
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Posted: October 08, 2001
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