There is a great deal of concern over the Economy, both here in Canada, and definitely in the United States. Though frankly little attention is being paid up here, to some of the worrisome issues now confronting the Economic Giant to our South. In equal part, I think we can place the blame at both Paul Martin & Stephen Harper. Both leaders, during their tenure have ignored the needs of the Country, over getting Elected.

Just my personal opinion, but let us examine the whole mantra we are being faced with these days.

Martin proposed his ‘tax cuts‘ and it brought his minority Government down. Mind you, many so called pundits will claim it was more of a backlash against the Sponsorship Scandal & the desire to give the ‘new kid‘ a shot at things. Makes sense, as Harper’s Tax Cuts were actually dribs of the Martin Tax Cuts, so that he could spread them out over a couple of years, using them as potential election fodder.

The argument for ‘Tax Cuts‘ and ‘Tax Rebates‘ is that it creates a stimulus in the Economy. A quick shot in the arm, so to speak, but to begin with, does it? Seriously, just how much of a boost does tax cuts give an Economy or how much of a boost does Tax Rebates give retail sales?

I like to think I am not a stupid business person. I have been involved in retail sales since I was Eleven Years Old, and I am 52 now. That’s a pretty decent history, and I have had my failures. Man, have I had my failures, but they were failures due to stupidity on my part, on not paying attention to the needs of the business versus my personal ego. So I think I have a few insights into business.

The problem for me, is that all this talk about Tax Cuts, mostly by Conservative Politicians are for Big Business. Yes, they do mention the small business, but what is a small business in their mindset? Is it the Mom & Pop corner store? How about the family farm, I mean that is a small business or is it?

Both Politicians, Economists, and the Media play this up to the hilt. Yet, they talk with big fancy words, talk about Deficit Reduction, about Market Influences, about how Trade is essential to increase Employment, Economic Development, but they speak in a language that is hard to comprehend, to fathom. I mean look around, you cross over a bridge to work, see the potholes, feel them as you drive further and further to get to work, or you sit in a crowded bus as it spews diesel fumes into the air, reading about how we have nothing to worry about, our Economy isn’t in trouble, or that Global Warming is a myth.

How often have Americans heard that over the last Five Years?

I am no Economist like our Prime Minister claims to be. I am no CEO of a huge Corporate Enterprise as our former Prime Minister was, I am just a guy, taking care of his 90 year old mother, and 30 year old wife. We are a Three Income family, and frankly we manage okay. I mean we run it close some months, others are easier than some. Still, I feel the economic pressures, that increased fuel costs, that travel costs, that shelter costs, and let’s not forget food and health care.

I live in a country with National Health, yet I find the health pressures enormous. I mean Mom is 90, that alone means increased costs, whether covered or not. Then I am diabetic and there are those costs as well, all never dropping, always rising as we age. So when I hear about Tax Cuts, I shake my head, because in all honesty, it hasn’t squat to do with me, or my situation. Oh sure, the rate cuts helps, but it barely keeps up with all the increased costs our family is forced to keep up with.

Our Hydro is twice what it was, not because of rate increases, but usage. Okay, cut the electric use you say, but we made a decision to increase it for one simple reason. HEAT. Our home has an old furnace, and we rent. The Landlord isn’t interested in insuring it works properly, in maintaining it, and heating this home has always been expensive, even before the rising cost of home heating fuel. Fact is, using electric energy effecient space heaters, we are the warmest we have ever been since moving in here 10 years ago.

That meant an increase in Electric Use, one that works out to about Half of what our Heating Oil costs were, and we are Warmer. That is important, when you have a 90 year old living with you. So we cut other non essentials. Over time we have switched from ordinary light bulbs to the Energy Efficient ones, use Cold Water in place of Hot Water for laundry. Yet where are the TAX CUTS FOR THAT?

These are the decisions one has to make. It is always a trade off. Sure it would be nice to have this place properly insulated, but the Landlord isn’t about to spend that money, specially when THEY GET NO BENEFIT from it. Nor am I going to spend that money on someone else’s property. It isn’t going to get me a rent reduction.

Contractors aren’t building homes fully insulated, because the Code is the bare Minimum required. No one is really going to go a step more, because of the costs. Yet where are the Tax Cuts for them? Houses are already over priced, and yet we fail to meet the needs of people buying them. We offer Rebates to the Big Companies who supply the goods, who rush abroad to get their goods made, then sell them off, at no reduced price.

Goods made overseas cost the Importing Company less, Corporate Profits go up, but the Consumer doesn’t Pay Less.

So giving them a lower tax rate isn’t really going to impact the Economy. It simply means they’ll go buy more cheap, shoddy products overseas, filling the economic coffers of Foreign Countries, not ours. Tax Cuts don’t spur them to invest here, but to improve their profit line. Nice for them, but it doesn’t really impact me other than cost me more to live.

David and I made a decision some years back. We elected to not use Credit Cards, and let me say, it isn’t an easy task these days, to not have a credit card. 11 years ago it was an easy decision to make, because of stupid errors in our earlier lives, getting a credit card wasn’t a viable option. Today, it is a way of life, to do without, instead of Buying On Credit. I am glad that we took that negative of our earlier time together, and turned into a positive, because frankly, who the hell really wants to pay 24% Interest on dinner from KFC, or Boston Pizza?

Any one time rebates I get, aren’t going to needless purchases either. Now George Bush and his Conservatives, along with Stephen Harper & his band of USA mimics, all believe that rebates will stimulate economic sales. Okay, let’s be honest here. If you are faced with phone calls demanding payment on your overdue credit cards, if your mortgage payments are a bit behind, and the television you have is not HD, what are you going to do with a rebate cheque of say $ 600?

Why do I not believe you are going to rush out and spend that cash on a new television set? I have a sneaking hunch you are going to use it on the credit card debt, the behind mortgage payment, or maybe for FOOD?

When a Politician like Dion starts talking about Infrastructure, my ears perk up. I mean these are the things that provide employment, that is spread over years of work. It is a simple truth that if people are working, they are earning money, and will spend it on important needs. If they know that they have a job for the next few years, they might consider adding that new television to their list, or new car. In short, it gives them some sense of stability.

The other thing about such plans, is that the money stays here. Tax Cuts give corporations an incentive to spend more on their own infrastructure, is a true concept. However, when that infrastructure is overseas, it means they upgrade their factories, OVERSEAS, or they buy new equipment OVERSEAS. That money DOES NOT STAY IN OUR COUNTRY, for the most part. I say ‘most part‘ because not all companies are spread out overseas, but the big boys sure are. We don’t even produce our own steel anymore, it’s been sold off, so who benefits from the tax cuts? Stelco in Canada or US Steel that bought it?

Infrastructure building keeps the majority of money in our pockets, where it does the most good. It spurs local development, local industries such as independent contractors, independent truckers. More importantly, it keeps SKILLED PEOPLE working, and creates a DEMAND FOR THEM. These are the more high paying jobs, than working at McDonald’s creates.

Supporting replacement of worn out bridges, worn out sewer systems, does have other side benefits. It gives us a better sense of worth, and of health. It is always cheaper to fix things that are approaching break down, than it is to fix things after they break down. If a Bridge needs new supports, it is a lot cheaper to fix it now, then after it collapses and kills people.

Fixing pot holes in roads is cheaper than having to rebuild the entire highway. Not only is it cheaper, but it adds less expense to those using the roads. There is less suspension damage to cars, to trucks. So it is cheaper to do it now, than it is to build a brand new stretch of roadway.

There is also a cycle effect. By using surplus funds from our economy, to re invest it in to the Infrastructure, we spur real economic growth internally. We create a sense of stability, that increases consumer confidence, and that increases spending. It also spurs economic growth by keeping more of the money circulating within our own economy. That in turn spurs on industrial growth, spurs job creation, and that also spurs economic spending within the Country.

FDR recognized that, back in the Depression. Stephane Dion seems to also understand it. Somehow, listening to the shrieks from the Conservatives, they do not get it. They simply can’t see beyond serving the immediate needs of their Corporate Masters. Tax Cuts, are a cheap way to keep the campaign coffers full, rebates the cheap way to get people voting for them. Infrastructure spending, well that BUILDS A NATION.

Sphere: Related Content