Tuesday, April 18, 2006

Government Economist proves Spending Cuts help the Poor

The Poverty-Advocacy Industry will hate this one. Communism had failed for all to see, and the western liberal governments were publicly disavowing big government spending... (only temporarily, of course) Always quick to sway with public opinion in order to stay in power, the Canadian Liberal government cut government spending (with great fanfare) in an attempt to rein in it's deficit. Big Government Labour Unions, Social spending advocates, and their fellow travelers predicted dire consequences for the nation's poor.

But according to a study by Finance Ministry Ec0nomist Dagmar Dyck, there's a surprise ending. Writing in the Canadian Tax Journal Dyck showed that rather than hurting the lowest rungs of society, as unions and poverty activists angrily predicted, Canada's economy actually became more equitably distributed in the nineties. That kind of information could be dangerous to a lot of special interest groups.

Ben Stanley's column in the April 10th Western Standard has more:
"But those lean years are just a memory. Last year, Ottawa increased program spending by a stunning 15.1 per cent and the new Conservative government was elected promising to tack on another $22.7 billion in spending. Combined with $45 billion in tax cuts, the Tories are headed for deficits if they don't start making "heroic" cuts, according to a February report by Don Drummond, the TD Bank's chief economist. At least this time, when the feds are compelled to start cutting, they can claim they're doing it to help the poor, and use the Canadian Tax Journal as proof--that is, presuming some of us have actually read it."

No comments: