Canada’s former prime minister Stephen Harper warned last month that numerous governments around the world appear to be heading towards a debt crisis. According to Harper, the difference between the current impending financial crisis and the crisis his government successfully managed in 2008 has to do with how governments handle stimulus.
“The result was that the government mandated the recession and government’s intervention in this recession for the most part has been not to spark economic activity – so called stimulus – not to stimulate economic activity, but merely to provide liquidity in the absence of economic activity. That’s completely different than what we were trying to do in 2008-2009 [and] I should add, much more dangerous in the long term,” said Harper.
During Harper’s first term as prime minister, his government managed to weather the storm through the financial crisis in 2008. At the time the Conservatives introduced the Economic Action plan which included up to $12 billion in infrastructure spending, $20 billion in income tax relief and other stimulus initiatives.
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