TD Bank economist Don Drummond told the Commons finance committee that the world is going to have a dandy hangover from the bailout/recovery spending binge now underway.
Drummond figures all those trillions of dollars will spark a wave of inflation that will have to be beaten down the old fashioned way - by raising interest rates. The good news from the former Finance Department official is that we're on track for a recovery in 2010. The bad news is that it's going to be a long and slow road back to what we understand as prosperity.
There's going to be an enormous amount of debt to get squared away and it will be in the course of dealing with it that we'll confront just what we did with that money, whether we got much value out of it.
My greatest criticism of the Harper-Ignatieff budget is its near total lack of vision. Yes it was important for the government to get billions of dollars flowing through the economy. Yes the budget seems to do that. But what's just as important is how that money is used, what we get for it.
The government that's just added those billions to our tax bills had a choice to either control where the money went, that is to spend the money itself, or it could simply give it away and lose control of it. The government chose to simply send cash-stuffed envelopes - to some. Some will get a hundred bucks or two to blow at WalMart. Some will get a subsidy to help put a deck on the cottage. Some cities and provinces will get money for infrastructure projects that were already scheduled on the books.
If I was going to build a new deck on the cottage anyway, the government "stimulus" is really just a give away. It didn't stimulate anything. If my city was going to pave some streets anyway, there's a handout without an associated stimulus. In those cases, the government is pledging our good credit and our kids' to borrow money to dole out to the lucky few for essentially nothing. There's no stimulus to that and, worse, there's probably little to no return either.
The government could have spent that money on brand, new projects, legitimate stimulus projects atop everything else that was already on the books. It could have designated projects that would spread the benefit equitably across the country. It could have identified programmes that would enhance our society, make it greener, more effective - thing that would have produced a return to the taxpayers for years to come. Hint - that deck on the cottage doesn't return a damned thing.
Obama's people knew what government spending was supposed to look like. Ours didn't have a clue - not the government of Stephen Harper nor the Opposition leader who supported the wastrel budget. In the result, we're not going to get the value out of all that gigantic debt that we should have. We're not going to get the basic stimulus value, the immediate objective, because a lot of this money won't wind up creating "new" activity. And we're not going to get the economic return that would offset the pain we'll all feel when we have to begin paying this off. There won't be a clean energy programme; or a modern, efficient rail system; or an electricity grid for the 21st Century. All those things that would have represented genuine investments (i.e. with tangible returns) were passed over when the prime minister and opposition leader signed off on this budget.
I'll bet it won't be a year before we wake up and realize just how badly our legislators on both sides of the House bungled this thing, how they let down Canada and her people. It's going to be a wild ride indeed, much wilder than it needed to be.