Did the bags full of money the government threw around to help us from the world’s economic collapse last year help us? Did big government manage us through dire straits?
A new study by The Fraser Institute suggests not. Here’s the lead from today’s CanWest news story:
Canada‘s economic fortunes have seen a dramatic turnaround in the last year, but according to a new study by one of the country’s leading think-tanks, despite what the federal government has said, it had little to do with its $47.2 billion Economic Action Plan.
The Fraser Institute released a study Tuesday that found that government stimulus packages contributed only 0.2 percentage points to the rise in GDP between the second and third quarter of 2009 and nothing between the third and fourth quarter.
The group found that it was private-sector investment and increased exports that were the driving forces behind the change in GDP growth.
“Although the federal government has repeatedly claimed credit for Canada’s improved economic performance in the second half of 2009, Statistics Canada data show that government spending and investment in infrastructure had a negligible effect on the country’s improved economic growth,” said the Fraser Institute’s senior economist, Niels Veldhuis.
Read the news article here:
Read the news release from The Fraser Institute here:
http://www.fraserinstitute.org/newsandevents/news/7217.aspx
There’s mucho sense made by Tom Brodbeck’s Sun column of Aug 9, 2010:
Debt equals big hole
If only a quarter of the federal Tories’ so-called stimulus spending on infrastructure has been spent now that we’re out of recession, it’s pretty clear the Harper government’s decision to plunge Canada into record debt levels was a huge mistake.
Canada’s budget officer Kevin Page released a report Monday that shows only about 25% of a $4-billion stimulus spending package has actually been spent.
While the remaining $3 billion has been committed to various infrastructure projects, the money has not been released.
Which means Canada’s economic recovery had less to do with government “stimulus” spending and far more to do with private industry climbing back out of a hole after a global recession.
Prime Minister Stephen Harper has long insisted that plunging Canadians deep into debt by posting successive years of multi-billion deficits was necessary for Canada to dig its way out of recession.
Nonsense.
Markets dig themselves out of recessions when industry responds to growing demands for goods and services locally and around the world.
A Statistics Canada report released earlier this year also cited factors such as growing consumer spending in 2008 and 2009, a strong banking sector and continued demand for Canada’s natural resources as chief reasons for Canada’s economic recovery.
Government spending had very little to do with it.
Full Article Here:
http://www.winnipegsun.com/news/columnists/tom_brodbeck/2010/08/09/14974006.html