The Globe and Mail wrote that Canadians are telling the government to spend. Who are these Canadians and why are they telling the government to spend?
Now is a time for fiscal competence. If the government wants to spend their way out of trouble economic times, they should do so very carefully. I'll even suggest they look into where they can eek out a little more money in taxes to cover the bill. Why not increase the price of gasoline a tad, or increase the GST back to competent levels.
In a typical year, Canadian citizens pay billions in capital gains taxes. In a typical year, the stock market increases 5-10%.
In 2008, the stock market fell about 35%.
Instead of capital gains boosting incomes, which translates to higher income taxes, you'll probably see limited gains in 2008, while 2009 could see some huge losses dragging Canadian's income tax payments down.
Which is why we need higher GST, and why we need higher gas taxes. They are two areas where a few cents can be taken without too much pain.
The government should act competently and not try to spend our way out of trouble like the Americans are doing. If Canada wants to spend, do it on things we need and that provide longer term assets such as infrastructure and development.
As a person searching for a job and in financial trouble, the greedy self-seeking side of me hopes the government spends and gives me some stability. However the logical side of me says be frugal. We are already paying 25 billion a year in interest, predominately from our last incompetent Conservative government spending spree. I don't want that to jump to fifty billion a year as a burden for the next generation of Canadians to bear.