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By :Claudia

I don't endorse Harper's overall economic package, but the budget officer is wrong. The plan of throwing extra billions of dollars at the provinces and cutting taxes kept Canada out of recession far longer than any other developed country.If not for problems in the US financial system finally leading to a global credit crunch in September, Harper's moves would have likely kept Canada out of a recession. i.e. Harper moves provided continued stimulus for the last two years which delayed the effects of the slowing economies in the developed world impacting Canada.We are in the midst of a deflationary scare at the moment, and the only way to prevent a deflationary depression in Western economies will be for Western governments to spend massively on infrastructure, and next generation technological infrastructure.The private sector is seizing up in fear, and money velocity is slowing down as individuals hunker down. If fear is allowed to take hold, there will be no way to prevent a deflationary depression, perhaps as bad as the thirties. This is where individuals acting collectively led by their government have to overcome the fear and be willing to create aggregate demand with government spending if necessary to get private money and wealth moving again.

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