Liberals propose progressive major investments in infrastructure financed by appropriate temporary deficit spending

Finally there has been an important Keynesian proposal that breaks with the  obsessive misguided fiscal orthodoxy of the other two leading parties in Canada’s federal election.Both the Conservatives and the NDP insist they will not in any circumstances run deficits to finance important job creating and growth sustaining investments in infrastructure in the coming year.

They take this position despite there being considerable evidence of slow and possibly even negative growth in the Canadian economy over the past six months. The Liberals led by Justin Trudeau have now courageously committed themselves to be ready to undertake major investments, some 10 billion dollars over the next three years on transit improvements in Canadian cities and social and green infrastructure across the country. The Liberals plan to increase infrastructure spending by 60 billion over the next decade and expect to be able to balance the budget over a longer term cycle . Now given that the Canadian economy has a GDP of $ 2.o trillion, 60 billion over ten years is still a very modest amount of money out of the Federal government’s annual spending budget of $289 billion.

Nevertheless it is a step in the right direction and far more sensible than the dogmatic insistence of  both Mr. Harper and Mr. Mulcair that deficits are out of the question. Intergenerational burdens that Mr.Mulcair speaks about are an illusion since future generations inherit all the non consumed assets of previous generations like stocks, bonds and real estate as well as the public assets created by investments in infrastructure.They are also harmed by any neglect in infrastructure spending and environmental damage brought about by this neglect and social problems that flow from higher unemployment and  social capital investment neglect. It is quite false to argue otherwise.

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About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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