Friday, June 24, 2005

It's not working! Let's do more of it!

You know it's a bad article on the economy when King Ralph is the relatively progressive voice. Goodale makes some effort to point out that reducing corporate income taxes won't instantly cure all that ails Canada:
And many of the government's other spending promises have a strong and direct impact on productivity, from spending on education and skills training to infrastructure and technology, he added.

"All of those things contribute to productivity growth as well as competitive taxes, as well as fiscal responsibility, as well as strengthening the economic union and reducing internal trade barriers."

Naturally, neither big business, nor the Senate, nor the Canadian Press wants to listen:
"We're in a decline . . . and the government, what is it doing? It isn't walking the talk," said Conservative Senator David Angus.

A flurry of reports in recent months has highlighted Canada's sluggish productivity record.

One of the most striking was a study by Don Drummond, TD Bank chief economist, which concluded that Canadians have seen almost no improvement in their living standards in the last 15 years and prospects don't look good for gains any time soon.

Now, I don't buy the premise that Canada's economy is doing poorly in the first place; over the last five years labour productivity has been the lone down side, while employment, education and economic growth have been at the top of the G8. And of course the quotes feature massive jumps in topics, ranging from labour productivity to standards of living to...well, we don't even get told where Angus thinks a decline is happening.

But if one accepts that Canada's current productivity and competitiveness are in decline, shouldn't the article at least mention that past massive tax cuts couldn't have done any good?


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