By Ryan McGreal
Published March 02, 2009
Like Saul blinded on the road to Damascus, Prime Minister Stephen Harper has seen the light and converted to the One True Cross of Keynesian counter-cyclical spending.
Last week, in unveiling his Government's plan to accelerate stimulus spending on capital projects, Harper was quoted making some very strange noises for a self-described neoclassical economist:
Harper agreed there are some long-term risks associated with the stimulus package, but he cited a famous economist to argue that the short-term danger is greater.
"Of course there's all kinds of risks of inefficient, expanded government policies that will continue into the future," Harper told a news conference in British Columbia.
"I'm not suggesting there aren't long-term risks.
"But I was taught early in economics classes, the famous economist John Maynard Keynes said that, 'At times like this, we remember that in the long run, we're all dead.'
"So right now, we worry about the short term. We are worried about the short term, and we've got to get things right now."
A major criticism of the Government's stimulus budget was the fact that capital spending funds would flow (or, more accurately, seep) through the Building Canada Fund, a slow, cumbersome process that would require separate business cases and matching provincial and municipal funds.
In short, most of the money would never get where it's needed in time to do any good at stimulating the economy.
The Big City Mayors Caucus of the Federation of Canadian Municipalities recommended channeling the money through the existing gas tax transfer, a process that would be simple, fast, and transparent.
But this government has always been more interested in politics than in policy.
So in response to criticism of the Building Canada Fund, the Harper Government decided to create what amounts to a partisan slush fund: $3 billion to be doled out between April 1 and June 30 of this year, with, er, oversight by the Treasury Board.
Who will get the money? Who knows, but we are assured that the Government will report back to Parliament after spending it. (Thanks, Iggy.)
In other words, this is compromise, Harper-style: stubbornly partisan, relentlessly political, and characteristically unaccountable.