Another Excellent Posting by Murray Dobbin on Flaherty's Roulette Wheel of Our Finances

Several days ago I posted a tongue in cheek piece on Jim Flaherty's playing fast and loose with our money.

Our biggest concern of course is his inviting sub-prime mortgages into Canada to destabilize our once sound banking system.

And while Flaherty and Harper are loudly suggesting that Canada did not have to bail out our banks, we very much did, by having to buy back an enormous amount of "high-risk" debt.

According to journalist Murray Dobbin:

First, we put up $70 billion to buy up iffy mortgages from the big five banks, through the Canadian Mortgage and Housing Corporation, taking them off the banks’ balance sheets. That is almost the exact equivalent the US bailout – it spent ten times as much, $700 billion, and its economy is about 10 times as large.

Secondly, the Harper government established a fund of $200 billion to backstop the banks – money they could borrow if they needed it. The government had to borrow billions – mostly from the banks! – to do it. ..

Third, the government now insures 100% of virtually all mortgages through CMHC eliminating risk for the banks – and opening the door to the ridiculous flood of housing loans we have seen over the past few years. The result: housing has become unaffordable for tens of thousands of Canadians and new rental housing has dried up.

Yet after loading us with this extra debt and risk, they are fighting tooth and nail against the "Robin Hood" tax, which might help to stabilize our economy.

I know that neoconservatism means starving the beast, but this hungry beast could devour us, as we have been left vulnerable, without the protection we mistakenly believed was there.