Federal FinMin Tiny Jim Flaherty seems to be breaking ranks with his American and European cousins and says that the federal government would consider another round of stimulus spending if Canada slips back into recession. Give credit where it's due, Flaherty's announcement is a breath of fresh air.
Only if we are to have a second stimulus programme, let's hope the Harper government doesn't screw it up as badly as the first round.
A follow-up stimulus initiative should be money spent by the federal government itself. The money should be invested, that is to say it should be used to purchase badly needed infrastructure that will pay for itself in the long run. You want assets that will be producing a return for the public in the years ahead when that public will have to fork over taxes to repay the stimulus borrowings.
Harper couldn't handle the first round of stimulus spending. He was willing to have the government borrow the money but he was too cowardly, too small a man to take responsibility for spending it. Instead he doled it out to other levels of government and to taxpayers to hire someone to put a new deck on the cottage. That did two things. It allowed junior levels of government to avoid having to raise their own taxes and it enabled those with spare cash on hand to do a spruce up at home. Neither of these generated long-term returns for the Canadian public. Worse yet, the money wasn't distributed equitably. It was like a Pinata - the kids at the front scooped up all the candy, the rest did without. When it was all over we were simply left with a massive, long-term debt obligation for money squandered.
Let's hope they don't screw it up yet again.