Tomorrow's Budget
The Conservatives bring down their budget tomorrow and on Wednesday we will find out the fate of the minority government. While it is almost a certainty the NDP and Bloc Quebecois will vote against the budget, the Liberal position is far from certain. The burden falls on them to make the right judgment. Having another election, forming a coalition, or letting the budget pass all contain risks and so I am glad to see the Liberals will take a wait and see attitude and not make a decision without putting some careful thought into it. The stakes are too high to play games. As for what should be in the budget, below is what I personally would like to see in the budget.
We are in a recession and so government's primary job should be trying to find a way to kick start the economy and at the very least minimizing the impact of the recession. Although, I normally oppose deficits, I believe that right now running a deficit is appropriate, however it should be a modest, not large one and one that will return to a balanced budget once the economy recovers. Otherwise, it should be a cyclical deficit, not a structural deficit. Some government spending is needed to kick start the economy, but overdoing it can carry many risks too so it is important to spend wisely and spend in areas that will have the greatest impact. Our infrastructure is in bad need of repair so I believe more funding for infrastructure should be a top priority as this will create jobs and also deal with areas that needed to be dealt with anyways. The main problem here is that in the past, there has been too much bureaucracy and it has taken way too long for the projects to get going, so by the time they get started the recession would be over. It is important the shovels are in the ground in the shortest time possible. I support loosening the EI rules as unemployment rises, but to ensure this doesn't cause a permanent drain on the treasury, I would support imposing a sunset clause of 2-5 years at which point it would revert back to the old EI rules unless renewed. More money for training and skills as many of the job losses are in dying industries so now is the time to help re-train workers so they can find jobs in new industries as when one industry goes under, new ones develop. A modest tax cut should also be offered but it should be aimed at low income Canadians and should be one that encourages spending not saving. Any tax cuts to the middle income and wealthy should be done in the form of tax credits for large purchases (i.e. homes and cars) as encouraging people to make more large purchases also stimulates the economy. Likewise business tax cuts should be for capital so that it encourages businesses to expand not save. Major tax cuts that lead to structural deficits should be avoided. Likewise another GST cut is a bad idea since had the Tories left the GST at 7%, our deficit would be much smaller than it is now. Bailouts for firms should be done sparingly and should have strings attached to them and only if firms comply with conditions should the money be available. In normal conditions, I would oppose bailouts under any circumstance, but under today's economy I suppor them in limited circumstances, but with conditions. In the case of the auto industry, they should bring wages in line with the Japanese automakers and be required to make more green cars and smaller compact cars, not more SUVs.
As for how the Liberals should vote, I believe they should consider one of three options depending on what is in the budget.
1. If the budget is totally unacceptable and does little to deal with the sliding economy, then vote against it and take the chance of an election or coalition (my preference is an election, although a coalition may be acceptable as an absolute last resort, although it should be no more than a year without going back to the public)
2. If the budget heads in the right direction, but needs some improvement, introduce an amendment to deal with its deficiencies and if the Tories support the amendment, the Liberals should support the budget, if they oppose it, they should oppose it.
3. If it is very similiar to the Liberals own planned budget, the vote for it without amendments.
In the case of the Bloc Quebecois, I cannot see them getting what they want. They only were able to vote in favour of the first two budgets as Harper dumped loads of money towards Quebec as the Tories believed their majority came through Quebec. If the last election showed the Tories anything, any future possible majority will come through Ontario, not Quebec. Finally for the NDP, the ideological difference between them and the Tories is so large that it would be next to impossible to support the same budget without one party caving on their principles. I am aware that grand coalitions between Conservatives and Social Democrats are quite common in Europe (i.e. Germany today) but usually both the Conservatives and Social Democrats are more centrist than their counterparts here in Canada, thus making it possible. Besides the NDP is a perennial opposition party that is about promoting a certain ideology and pulling the country in their direction, not about actually forming government, whereas the Liberals are about actually forming government, so they play a different role.
We are in a recession and so government's primary job should be trying to find a way to kick start the economy and at the very least minimizing the impact of the recession. Although, I normally oppose deficits, I believe that right now running a deficit is appropriate, however it should be a modest, not large one and one that will return to a balanced budget once the economy recovers. Otherwise, it should be a cyclical deficit, not a structural deficit. Some government spending is needed to kick start the economy, but overdoing it can carry many risks too so it is important to spend wisely and spend in areas that will have the greatest impact. Our infrastructure is in bad need of repair so I believe more funding for infrastructure should be a top priority as this will create jobs and also deal with areas that needed to be dealt with anyways. The main problem here is that in the past, there has been too much bureaucracy and it has taken way too long for the projects to get going, so by the time they get started the recession would be over. It is important the shovels are in the ground in the shortest time possible. I support loosening the EI rules as unemployment rises, but to ensure this doesn't cause a permanent drain on the treasury, I would support imposing a sunset clause of 2-5 years at which point it would revert back to the old EI rules unless renewed. More money for training and skills as many of the job losses are in dying industries so now is the time to help re-train workers so they can find jobs in new industries as when one industry goes under, new ones develop. A modest tax cut should also be offered but it should be aimed at low income Canadians and should be one that encourages spending not saving. Any tax cuts to the middle income and wealthy should be done in the form of tax credits for large purchases (i.e. homes and cars) as encouraging people to make more large purchases also stimulates the economy. Likewise business tax cuts should be for capital so that it encourages businesses to expand not save. Major tax cuts that lead to structural deficits should be avoided. Likewise another GST cut is a bad idea since had the Tories left the GST at 7%, our deficit would be much smaller than it is now. Bailouts for firms should be done sparingly and should have strings attached to them and only if firms comply with conditions should the money be available. In normal conditions, I would oppose bailouts under any circumstance, but under today's economy I suppor them in limited circumstances, but with conditions. In the case of the auto industry, they should bring wages in line with the Japanese automakers and be required to make more green cars and smaller compact cars, not more SUVs.
As for how the Liberals should vote, I believe they should consider one of three options depending on what is in the budget.
1. If the budget is totally unacceptable and does little to deal with the sliding economy, then vote against it and take the chance of an election or coalition (my preference is an election, although a coalition may be acceptable as an absolute last resort, although it should be no more than a year without going back to the public)
2. If the budget heads in the right direction, but needs some improvement, introduce an amendment to deal with its deficiencies and if the Tories support the amendment, the Liberals should support the budget, if they oppose it, they should oppose it.
3. If it is very similiar to the Liberals own planned budget, the vote for it without amendments.
In the case of the Bloc Quebecois, I cannot see them getting what they want. They only were able to vote in favour of the first two budgets as Harper dumped loads of money towards Quebec as the Tories believed their majority came through Quebec. If the last election showed the Tories anything, any future possible majority will come through Ontario, not Quebec. Finally for the NDP, the ideological difference between them and the Tories is so large that it would be next to impossible to support the same budget without one party caving on their principles. I am aware that grand coalitions between Conservatives and Social Democrats are quite common in Europe (i.e. Germany today) but usually both the Conservatives and Social Democrats are more centrist than their counterparts here in Canada, thus making it possible. Besides the NDP is a perennial opposition party that is about promoting a certain ideology and pulling the country in their direction, not about actually forming government, whereas the Liberals are about actually forming government, so they play a different role.
posted by Monkey Loves to Fight at 4:20 PM
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