Here we go. This coming Tuesday you and thousands of other Canadians will trudge to the polls. By the evening of October 14, we will see what the outcome of our latest federal election is.
It has been a different election than most. There have been no real passionate causes on the part of any of the parties. The election that the pundits said would be fought over the environment ended up mired in worries over the declining western economies. Other than Harper and his Conservative crew, everyone had to suddenly shift their battle plan to discuss the economic climate that we are headed into.
All the effort that the various parties made to have a green platform went to waste, as financial chaos broke out in the United States. As green and environmentally caring as we like to think we are, the prospect of having our investments and jobs on the block is more important and more immediate. What is surprising is that the financial problems of the western economies seem to have taken most people and most politicians by surprise. Members of the European Common Market countries have been showing signs of stress for several months. In Canada, we seem to only pay attention to what is happening south of us.
Most of the G8 countries have been operating with deficit budgets for some time. As always, the hopes of their leaders were that a miracle would happen and the mess would go away. They hoped that they could spend their way out of their problems. It’s a common plan of governments at times like this, but it never works. Canada alone was operating on surplus budgets, reducing taxes and slowly paying down debt.
By nature, we Canadians are conservative. Generally we tend to save a bit for a rainy day, and select safety over earning in our investments. We also have far more effective controls over our banking system and money markets. At times like this, it is kind of nice to be a bit stodgy. It is not exciting but it does leave us in a far more solid economy than some of our friends.
Those party leaders hoping to move out of opposition and into government have re-written their book of promises. Some of those promises illustrate a high level of fantasy, a fundamental ignorance of economics or just outright fibbing. Countries, like individuals and families, can overspend sometimes but have to haul back at other times. If they don’t, they soon become bankrupt. Looking at some of the promises made, perhaps there is a little more fibbing than misunderstanding. You cannot promise many things and also promise not to raise taxes. If the government does something for us, we pay for it one way or another.
The global economy is moving into a period of adjustment. Once the money doesn’t move from one part of the economy to another, we have a slowdown. When the news is bad, we all tend to take a little better care of our money. When we worry about our jobs, we tend to save rather than spend. The cumulative result is that we buy less, demand falls, and manufacturers and distributors have less business. Less business means fewer jobs. Fewer jobs mean less spending and down we go. That is the very time when governments should leave more money in everybody’s pockets. Increasing taxes to fund subsidies and other like programs is economically foolish. Unfortunately, it may make for good politics if we are foolish enough to support those who espouse the philosophy of taxing and giving.
Victor Bowman was born in Vanderhoof and raised in Prince George. He returned to this city to live 32 years ago and currently operates a consulting business. Please direct comments c/o firstname.lastname@example.org