Okay, here are some new revelations adding to what I've enumerated before.
This is probably no surprise given the misguided law and order agenda and the Harperites' fondness for locking people up whenever they can, but capital spending by the Correctional Services of Canada is up by 146% in the first six months of the current fiscal year; and, now that they are armed, the Canada Border Services Agency is up by a whopping 270%. Wow! Those guns sure do cost a lot, Tex.
Andrew Coyne points out that from 2006 to 2010 the Harper Regime increased program spending from $175 billion to $245 billion. Per person spending increased from $5,800 in constant 2010 dollars to $7,200. Yeah, these guys do like to spend.
Add to these woes the fact that the implementation of the U.S. Volcker rule is going to make borrowing by the federal government more costly and, as a report on Flaherty's boutique tax credits this week points out, those credits negatively affect federal tax revenue significantly.
Who's going to suffer for this spending and political targeting? Why we are of course, but at least we can say Huntsville is happy.
But it isn't just the Harper Regime that is mismanaging money. Mortgage credit is a staggering 1.8 trillion, and overall consumer debt is $48 billion. Credit card debt fell in the last quarter, and the overall pace of accumulating debt has slowed, but, get this, the overall private debt load still rose by 4.5% and lines of credit were tapped to pay down the credit cards - the usual Peter-Paul game that people deeply in debt unfortunately play. And here's the kicker: sales financing - that is, buy now and pay later schemes designed to suck you into debt - rose in the last quarter by an astounding 18.4%.
The pressure on the consummer to borrow will be intense from banks in 2012, I predict, since Canadian corporations are sitting on a pile of cash and have curtailed borrowing considerably. And if the housing market begins to wobble - and the condo scene in Vancouver and Toronto suggests it might - look out!
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Cuts for cash: it can only spur mangers to propose even deeper cuts. Only a nasty neoliberal would use the profit motive to conduct what is supposed to be a rational, considered appraisal of departmental services and staffing needs in the Public Service. And how much is the per diem fee for the consulting firm? $90,000, as I recall. Think about how smugly hypocrtical this exercise really is too: who cut the GST by 2%, obviating a simple source of tax revenue, who blew the Liberal surplus, and who ran up the PS by 33,000 employees and wages by $5 billion since 2006?
So now that we know who's really responsible for this mess and who's going to pay for it - us - consider the real, economic context for the cuts for cash program: the fact, for instance, that even many neoclassical economists are now saying - with the EU on the brink of disaster and the world economy slipping - that this is not the moment for austerity measures but for initiating reasonable stimulus combined with moderate debt reduction. And, finally, ask yourself who benefits from a program that reduces the federal deficit? Certainly not ordinary Canadians, several thousands of whom will now be added to the ranks of the unemployed, and certainly not the general, industrial economy, which really requires job initiating strategies from government. That's right - only the financial sector with whom the Harper Regime, like the Obama and Cameron administrations, is in bed ideologically.
We can look forward, it would seem, to prolonging the recession in which we are still enmeshed despite the spin out there that we're not, and if the Canadian housing market explodes, as some outside Canada are predicting for 2012, we may have much more than a recession.
Yes, it might be the end of the world in 2012.
The recent IMF Report on Canada prompts me to remind everyone of some startling figures about the Canadian economy:
1) The private and federal debt combined ratio to GDP is an astonishing 203%.
2) The jobless rate in November is 7.4%, the worst in 5 months.
3) Youth unemployment is 14% and even worse in Europe and the U.S. Expect much social unrest in 2012 - which may coalesce around the occupy movement.
4) Household debt to income ratio is a staggering 152%.The average Canadian household is $26,000 in debt over and above any mortgage debt.
5) Real wage gains continue to stagnate in November: 2.4% while inflation is 2.9, a -.5 net loss in real income.
As I and others - even a few neoclassical economists - have argued many times (see my other posts here), we need stimulus of some sort now, and both the IMF and Mark Carney are in agreement about both that and the problem of household debt. Such recognition by both the IMF and Carney is unusual since die-hard neoclassical economists tend to overlook household or private debt in their macroeconomic modelling. I'm beginning to think Carney may be the check we need against Flaherty and his misguided policies.
Where's Flaherty? It would seem all he can do is tinker with his beloved financial sector - banks and CHMC most recently. Does he even understand the real economy? Does he think it's only exports concentrated in oil and other natural resources? He might since that's the only sector apparently driving the economy, and that in itself is extremely worrisome.
