Highlighting Corporate Failure

There are two lead letters in today's Star that bear reproducing. Expect no admission of a flawed ideology on the part of the neoliberals among us, however:

Re: House of Harper quickly crumbling, Feb. 22

Suddenly a lot of people from banks and corporations are in favour of the Liberals running infrastructure-investment-driven deficits from $30 billion to as high as $50 billion. In other words, they want government to do the really heavy lifting in stimulating the economy along with assuming, on behalf of the Canadian taxpayer, all of the financial as well as political risk.

This is the same group that for years has said governments really don’t create jobs, but rather are responsible for creating the right “environment and supports for investment,” by which they usually mean taxes.

Over the last decade, Canada’s corporations were given some of the deepest tax discounts in the world, and yet they have utterly failed to do anything other than mostly pocket the rewards.

We need to remember that those same corporations also failed to reinvest their tax windfalls in new Canadian jobs (ex-Bank of Canada governor Mark Carney’s “dead money”). Recent data from Statistics Canada also suggests many of the corporations were in fact investing their tax windfalls outside of the country.

Canada’s books for 2013–14 show personal taxes accounted for 48 per cent of total federal revenues, while corporate taxes accounted for a mere 13.5 per cent of that total.

So yes, Canada should indeed invest heavily in infrastructure investment in the coming years, but the question remains: Why can’t those corporations assume a larger financial input and responsibility in the country’s job and economic future?

Edward Carson, Toronto

In response to the CBC Power & Politics Ballot Box question, “How big should the deficit be?” 77 per cent responded “whatever is needed.” These voters understand that the deficit should be judged by results and not by arbitrary targets such as budget balances or debt-to-GDP limits.

The practical limit on spending for a sovereign country with a floating currency is the availability of domestic resources unused by the private sector. A reasonable measure of these resources is unemployment. When infrastructure, program spending and direct job creation measures result in jobs for all Canadians who want one, then government must either limit expenditures or increase taxes so as to prevent inflation.

But the Canadian economy is far from experiencing inflation, and there are 1.3 million Canadians who could be doing productive work. The federal government must challenge the conventional wisdom and spend whatever is needed.

There is no question it can do so, because it owns the Bank of Canada, which allows the federal government to run deficits of any size for as long as required.

Larry Kazdan, Vancouver