Monetary And Fiscal Policy Is Wrong

[Craig Read]

Canada has 2 full % points higher interest rates than the US which accounts for a surging loonie [coupled with rising gold prices and lowering foreign direct investment in the US which equals a lower US$ and rising commodity prices]. Compare what the Americans have done vs. the Bank of Canada with Mr. Laughing Boy David Dodge who never ceases to break into massive guffaws for the camera.

US:

-M1 supply is up, liquidity is up and rates are 1 %

-Investment, personal, and dividend tax credits and reductions

-Economic growth is current 8 % and productivity an astounding 5+%

-150.000 jobs per month are being created

Canada:

-M1 is barely up, liquidity is up but at about 30% only of the comparable US level, rates are 2.25 % higher than US rates

-No reduction in taxes [Martin's $100 B 5 year plan is offset by rising CPP and payroll taxes, the actuall decline in taxes is $8 b per year, more than offset by rising spending and unfunded liabilities federally and by for instance Ontario's recent tax increases].

-Canada has at best 2 % GDP growth this year, and a productivity rate of 1 -1.5 %.

Net Result: Lowered living standards of Canadians vs. the US, Cdn businesses howling that a 76 cent loonie is too dear because our productivity is so bad, capital investment is not taking place due to higher taxes which only compounds the productivity and profit issue and businesses are reluctant to hire workers - except in the government of course !!!

Wonder why people head south for opportunity ?

Monetary and fiscal policy that is why.

Let's get busy with some reforms and dynamism up here. Martin can start by firing Laughing boy Dodge, get a guy to lower rates, increase the M1 and then push through the tax cuts he is promising - without offset tax increases somewhere else thank you very much.

And oh, stop taxing capital and assets. This kills jobs.