Puzzling. How could it be that a government headed by an economist could be so out of step with economic authorities around the world? As Heather Scoffield lays out nicely in the Globe this morning, every other major economy in the world is being flooded with cash and other goodies from their governments and central banks. But Canada has opted for austerity and funding cuts.
Perhaps it’s that Harper and Flaherty, like Andrew Coyne, have no time for Keynesian economics. But if that were the case, why would they hold out the carrot of possible stimulus down the road. If it’s bad policy now, if the key objective is to maintain a surplus in 2008, why would deficits and increased spending suddenly become okay later in 2009?
Perhaps the cynics are right that Harper is trying to trigger a political crisis of some sort, forcing a snap election or trying to shift blame for the inevitable economic pain onto his opponents. I can’t quite bring myself to believe he’d be that cynical and reckless. But then again, I live in Toronto and have a bad habit of underestimating the pettiness of professional politicians in Ottawa.