For all their bluster, we learn today, that Canada's economic recovery is not going as well as the 'Harper' government would like to have us believe. In terms of economic gains:
The projected Top Five in 2010 include Sweden, Switzerland, Belgium, Australia and Norway. All get “A” grades. Also ahead of Canada with “B” grades are Norway, Denmark, Germany, the United States and Austria. Last on the list of 17 is Italy. In 2011, the Conference Board projects Australia will leapfrog Sweden to take the top spot on its list.What happened? The taxpayer funded ads suggest that we are leading the pack.
Maybe part of the problem is all those taxpayer funded ads, clearly the focus of the Harper team. Or maybe it was targeting stimulus money to Conservative ridings instead of places that needed it the most. Or maybe they simply lied.
All of the above?
Let's take a look at some of those countries that are outpacing us.
Australia. How did they direct their stimulus? They gave money to those who needed it, and those who needed it put that money back into the economy. (Their corporate tax rate is 30%)
Their 42 billion stimulus package, included:
- Free ceiling insulation for around 2.7 million Australian homes
- Build or upgrade a building in every one of Australia’s 9,540 schools
- Build more than 20,000 new social and defence homes
- $950 one off cash payments to eligible families, single workers, students, drought effected farmers and others.
- A temporary business investment tax break for small and general businesses buying eligible assets
- Significantly increase funding for local community infrastructure and local road projects
The money went to home insulation, upgrades to schools, social housing and those in need. Not libraries for private religious schools, and certainly not on signs.
And they provided an additional $4.2 billion to pensioners:
- $1,400 to single pensioners
-$2,100 to pensioner couples
-Benefits were extended to Age Pensioners; Disability Support Pensioners and Carer Payment recipients
The money went to the people. How about that? And Australia is expected to lead the pack in terms of economic recovery. (1)
Sweden: They did reduce their corporate tax rate from 28% to 26.3%, but are offsetting the costs by closing loopholes to the system.
The Swedish government also bailed out their banks, but unlike Jim Flaherty who bought up all the toxic paper (sub-prime mortgages that he let into the country), on behalf of the Canadian taxpayer, to the tune of $125 billion, with no strings attached; they passed the losses onto the shareholders.
Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government. That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well. (1)Norway: Was able to do better by using their reserves:
The Norwegian authorities have met the financial crisis with an expansionary fiscal policy, primarily by spending more of the government’s oil and gas revenues than it would otherwise have done. Normally, the use of oil revenues through the state budget is not to exceed the returns of the state oil fund, a principle supported by a broad political majority. In the present economic situation, however, there is a general consensus that a larger share of the oil revenues may be spent to avoid high unemployment and long-term recession. (2)Their corporate tax rate in 28%
These economies are doing better than ours, because their governments put their people first. Ours continued to pander to the corporate elite, while an alarming number of our middle class joined the ranks of the working poor. Our actual unemployment rate is still high, since most recent gains have been in the temporary and part-time work.
Corporate profits still climb and despite getting $125 billion from us, the banks continue to shell out billions in bonuses to their executives.
And none of the governments of the countries who have passed us by, spent money to promote themselves. I guess they felt it wouldn't be right when so many are suffering.
Our corporate tax rate will be 15%.
Yet another election issue.
1. Stopping a Financial Crisis, the Swedish Way, By Carter Dougherty, New York Times, September 22, 2008
2. More optimistic forecast for Norwegian labour market, Eiroline