John Maynard Keynes has left the building

Tax cuts, social housing, and tired old thinking

The Straight Goods Cyber Forum
with Larry Solway

Commentary:

  In Toronto (and for all I know right across the country) developers are in such dire need of skilled construction traders they are recruiting them from overseas!
  We are in the midst of a building boom. More and more farmland is gobbled up. More and more highways will have to be built. More and more 50-foot-lot wannabes will complain they can't get their sports utes through traffic to get to work. Same old same old. Many of those people vote the straight tax-cut platform and hate social change or government "intrusion".
  Same old same old?
  It gets worse. Ottawa can hardly wait to overheat the already overheated building industry. They announced a $500 million federal-provincial commitment for affordable housing in Ontario.
  All at once I think of those suburban SUV guys and the total folly of tax-cut economics and the even more absurd folly of spending money during boom times.
  We never learn. We never listen. We never change. We are stuck on hold.
  When will the light start to dawn? Will anyone wake up? Have we become so absorbed in the politics of taxation that we sow the seeds of our own economic destruction?
  John Maynard Keynes is a "turn-off" to trickle down economists, but it makes sense in the context of the Liberal promise of money for housing. His principles, derived from the Biblical "fat years and lean years", make better sense today than ever. It makes better sense in the global context because the U.S.-triggered recession plus September 11 created a downturn in the economy, which has pushed America (and many of us) into a deficit. In the U.S. there is money for the WOT (War on Terrorism) and for tax cuts. Canada, quick to suck up to our allies, has pledged troops we don't have, security we can't afford, and we brag that we beat Americans with tax cuts before they got them. Same old same old.
  I found myself harking back to the bad old days when Bob Rae thought he could spend his way out of recession, and Pink Floyd thought casinos would be a windfall and would at least stop the exit of millions to Las Vegas. That they may have been right makes no difference. They spent money they didn't have.

The time to do that is when the economy needs the push. It's called job creation. It's called the government as the last resort employer

  Does anyone else remember that the building trades, begging for work during the 1991-92 recession, said that were it not for the public housing and co-op incentives by the Rae government there would have been no work at all?
  But the present tax-cut and cut-social-programs government wants to open the coffers and spend more money on building when building trades and materials are at a premium. Keynes is spinning in his grave. The time to do that is when the economy needs the push. It's called job creation. It's called the government as the last resort employer.
  It's not going to happen and any dedicated lefty politicians know it would be political suicide to demand tax increases during good times and increased public spending during bad times. They have been so spooked by failure that they get on the neo-liberal bandwagon. They cheer for Tony Blair who was a big friend of Bill Clinton who predicted surpluses well into the 21st century and that America had entered into the golden age of tax cuts, surplus financing, and reduction of the national debt.
  I believe that social housing is imperative. I only wonder why it takes people who vote so long to catch on.
  Same old same old?

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