Thursday, April 28, 2011

Stephen Harper's less than impressive Economic Record

1) It was not that Canada performed particularly well; it was that the other G-8 countries were particularly hard it. Compare us against other OCED countries and the picture is not nearly as Rosy. For example, we rank 18th out 30 in terms of unemployment. Umemployment is 25% higher than it was 5 years ago.

2) The Conservatives do not deserve credit for 10% growth in China and more than anything else that is what has kept the Canadian economy strong relative to the other G8 countries. It has kept the price of commodities up.

3) The opposition parties forced the Conservatives into passing The stimulas package. They were able to do that because Michael Igantieff was at 36% in the Spring 2009. Ever since the Conservatives have spent tens of millions of dollars celebrating "Canada's action plan".

4) The Conservatives have shown a similar degree of chutzpah in celebrating a conservative lending culture in Canada that they had begun to undermine prior to the downturn.

5) The cost of housing gone through the roof since 2006 and the main reason for that is the Conservative government decided pour fuel on an already red hot real estate market. The Conservatives extended the mortgage amortization period from 25 years to 30 years in February 2006, extended it to 35 years in July of 2006 and extended it yet again to 40 years in November 2006 During this period they also reduced the needed down payment on second properties from 20% to 5% and allowed for 0 down on one's primary residence. Ever since the down turn, Jim Flaherty has been scrabbling to undo the damage his past actions have done. Flaherty first reduced amortization period from 40 years to 35 and again mandated a 20% down payment on secondary properties and 5% on primary properties in October 2008 and on March 18th he reduced the maximum amortization period to 30 years. Never once acknowledging that it was he who raised the amortization period to begin with, Jim Flaherty has repeatedly over the course of the last 2 and half years that reducing the amortization and increasing the minimum downplayment was the right thing to do. "In 2008 and again in 2010, our government acted to protect and strengthen the Canadian housing market," The problem is it is too little too late. The best Flaherty and Conservatives can do is prevent further damage. Weather it be Bloomberg, Paul Krugman and, if you read between the lines, Mark Carney many are worried that Canada is headed for a crash that would drive Canada deep into debt. For one thing, since 2006 Canadian mortgage and housing corporations liabilities have gone from 100 billion to 500 hundred billion. If the housing bubble bursts and Canadians start defaulting on their mortgages, the Canadian tax payer will be picking up the tab. The Canadian government guarantees all that debt.

6) Stephen Harper inherited a 13 billion surplus and in 4 years turned it into a 56 billion deficit. He also ran a deficit before the down turn.

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