Wednesday, September 24, 2008

Dion switches emphasis to economy

After being largely unsuccessful at explaining and selling his Green Shift carbon tax, Liberal Stéphane Dion is switching his election campaign emphasis to the economy.

On Tuesday night in Calgary, Dion told a crowd of about 500 people that placing their faith in the Conservatives to better manage the economy is misplaced.

"Some people think that the Conservatives will be prudent, will manage the economy and not take any risks and we are okay with them….

"Who has put out the mess that Mr. Mulroney gave the country with a $42-billion deficit, it was Chrétien and Martin."

Mr. Dion conveniently ignores the historical fact that in 1984 the Tory government themselves inherited a horrible financial situation from the Grits. Jean Chrétien once admitted this when he said, "We left the cupboard bare."

Let's review some of the 1984 data:

  1. The Tories inherited a deficit of $38.5 billion, which was nearly nine per cent of GDP—the largest Canadian deficit ever, in terms of percentage of GDP.
  2. The federal debt had increased by 1,100 per cent under the Liberals (ouch).
  3. Interest rates had reached double digits at 22.75 per cent, crippling the pensions of the elderly.
  4. The federal government was spending $1.23 for every $1.00 collected in tax, a disaster waiting to happen.

By 1993 when the Grits took office there had been a tremendous turnaround, as follows:

  1. The GST replaced the terrible FST—a manufacturing sales tax that for years had been condemned by economists.
  2. Free Trade between Canada and the US had been negotiated. The Liberals understood this to be of great benefit to Canada, and broke their own campaign promise to scrap it.
  3. The federal government had an operating surplus (before interest on the national debt created by the Liberals).
  4. The deficit as a percentage of GDP had been reduced by one-third, despite the worldwide recession of 1990-91.
  5. Given that we had an operating surplus, were it not for the interest payments on the debt the Liberals had created up to 1984, the Tories would have been able to leave a balanced budget.
  6. The Mulroney government had cut program spending so that instead of spending $1.23 for every one dollar collected in taxes, the Tories were spending 97 cents for every dollar of tax.
  7. Interest rates went from 22.75 per cent to six per cent, the lowest in 20 years, and the inflation rate was 1.5 per cent, the lowest in 30 years.

This is how some others viewed the Mulroney years:

  1. In 2000, McGill University's North American Studies Institute determined that Mulroney had the best economic record of any PM since the Second World War.
  2. In 2003, the Institute for Research on Public Policy ranked Mulroney the second-best PM of the previous 50 years.
  3. In 2006, environmental groups, led by Green Party leader Elizabeth May, selected Mulroney as the greenest prime minister in Canadian history.

The facts show that the Mulroney years of Tory government were not nearly as bad as is painted by the Grits. And the Grits inherited a much better situation than they let on.

And about that "$42-billion deficit" Mr. Dion claims Chrétien and Martin inherited from Mulroney? Take the $38.5 billion debt Mulroney inherited from the Trudeau and Chrétien Liberals, add interest for the eight years while the Liberals were out of office, and it's not so difficult to see they inherited their own deficit. Dion is so disingenuous!

With the Grits crowing about how wonderful it was that they eliminated the federal deficit (and it was), we marvel that apparently such was not their view during the campaign in which they unseated the Conservatives. During that campaign, Jean Chrétien was quoted as saying: "zero deficit equals zero hope."

Now the Johnny-come-lately Grits take credit for the groundwork that had been laid for them by the good governance of the Tories. Funny old world that.

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