As Canadian politics heats up, I’ve been taking a look back on the economic policy that the government is so proud of.  Last year the federal government apparently spend $78.5 million on ads for various things.  Of that, $21 million was for the economic action plan.  And it’s not normal, the ad spending was up 72% in the four years since the 2008 recession when compared to the five years previous.  Now I have to say I find it annoying.  I find it annoying because when Stephen Harper was the opposition leader he showed integrity by pointing out that the Liberal government was spending tax dollars on partisan advertising.  Now his government is spending way more tax dollars telling Canadians that we’re in a good position because the government acted fast.

But are we in a good position?  In short, no.  They used to say that we were fairing better than other industrialized nations.  Now the IMF is warning Canada about it’s poor growth rates.  So, compared to other nations, our economic action plan has not done very well at all.  Yet the commercials continue.  I for one think that the government that promised not to run a deficit and then ran a huge deficit can find a better use for tax dollars than telling us everything is great when it’s not!

When I talk to people about politics, they often will cite economic policy as a point in favour of the Conservative government.  Whose economy are you looking at?  Every available report says we’re not in very good shape at all.  That may not be the fault of the government at all but it certainly doesn’t look good that the Concentrative party leaders denied that there was a recession while opposition parties demanded stimulus.  Now they take credit for the whole thing.

BEFORE ELECTION

“This country will not go into recession next year and will lead the G7 countries.”
– Prime Minister Stephen Harper Oct. 10, 2008

“If you don’t want a carbon tax and tax increases and a deficit and recession, the only way to ensure that is the case is to vote for the Conservative party.”
– Prime Minister Stephen Harper Oct. 12, 2008

AFTER ELECTION

“The most recent private-sector forecasts suggest the strong possibility of a technical recession at the end of this year and beginning of next.”
– Prime Minister Stephen Harper Nov. 23, 2008

Well it would seem that it was prudent at the time to tell Canadians that there was no recession, though there in fact was, and now it is prudent to tell Canadians that Canada is doing great, though it is not.

The other reason that it bothers me when the government pats itself on the back while our economy struggles is that they keep saying the same stupid thing: cutting taxes will grow the economy.  This is a line that’s repeated by politicians constantly.  Obama says it twice a week.  Unfortunately it’s just two things that people want to hear placed side by side in a sentence.  I learned it in first-year economics: during recession, lower taxes do not increase economic growth because vulnerable individuals save instead of spending.  Now I’m not saying that the government should raise taxes, I’m saying that they are lying when they say that tax cuts lead to growth.  Here’s a 65 year study showing that there is no correlation and here’s a statistical breakdown of US tax rates and economic growth.  Here’s Bloomberg on the same point.

Many critics claim that the government stimulus was and is far too little.  I tried to find numbers to confirm the accusation that the the stimulus portion of the Economic Action Plan has ceased, but the government hasn’t really published budget numbers for the last two years.

All I really want is honesty.  I know people make mistakes but this is shameless and embarrassing.  We were told that there will be no recession, Canada will lead the G7, there will be no deficit and that tax cuts lead to economic growth.  Instead we are in a recession, trying to keep up with other G7 nations, we have lower taxes and a much bigger deficit and tax cuts still don’t lead to economic growth.  And the government’s response is to do TV spots about how great everything is?  It just goes to show that if you say something with confidence and you repeat it enough times, people will think it’s really true.  They rely on Canadians without the initiative to google it believing what they’re told.

Please stop using my money to lie to me.  I googled it.  I know what you’re doing and $21 million worth of TV commercials won’t convince me otherwise.

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