Bad reasons to delay a stimulus package
Over at Worthwhile Canadian Initiaitive, Stephen and Nick have been making the point that “Canada is not the United States, we are not in recession (although the odds that we will be soon are much better than even), and there’s no reason to rush into a program of public works”.
To some extent, they are right, and that go-slow approach would seem at the heart of the Conservatives’ economic plans. But it is a cute technical point that in proper context is wrong.
It does take some time to get infrastructure projects up and running. It requires cooperation with provincial governments and municipalities, and time for planning processes to get underway. That is the knock against infrastructure projects in normal recessions. But our times are not normal. There is every reason to believe that 2009 is going to get ugly, and so we need a signal to other levels of government to get going. Every other country in the world has recognized this, and is acting accordingly. Canada needs to play its part not free ride off the effort of other countries.
The rest is a matter of reinforcing the automatic stabilizers, primarily EI, so that as the downturn happens they kick in. The feds should immediately make changes that open up accessibility, increase benefits and lengthen the time for which they can be claimed.
These things should not wait until late-January 2009.