It enhances both military and foreign-disaster relief capability, and if carried out intelligently, will raise national pride and morale. It is the best stimulus, and the most successful form of adult education. We have not thought this through, and we should.Īnd, for a combination of reasons, I think we should increase defence spending. It is, as many have observed, illogical for us to rush to divest a Canadian government-controlled oil company (PetroCanada), while acquiescing in a Chinese government-controlled one (Nexen). The failure to do so has been an opportunity missed, though it is not too late for a Canadian-controlled automobile industry. I have, at intervals, been one of those who advocated taking a joint public-private Canadian interest in Chrysler Corporation when it was financially vulnerable. This was what built Canada, from the Canadian Pacific and (eventually) Canadian National Railways to atomic energy to the Trans-Canada pipeline. Nor should we be afraid to revive the joint public-private sector initiative. (The gold standard alone would put too much power in the hands of mining engineers and precious metals speculators.) Some such yardstick as this would be adequately flexible, sufficiently broadly based to be impossible to manipulate, would be a discipline on currency, an immense confidence-builder, which other aspirant hard currency countries now addicted to sloppy fiscal habits would have to follow, and it would be advantageous to Canada as a country generously endowed with all the ingredients of the composite standard. John Maynard Keynes was correct that it is appropriate to run deficits during recessions, but almost everything else he wrote was mistaken (including the flimsy canard that reparations after the First World War generated Nazism).Ĭanada should take the lead in restoring some value to currencies with a composite standard of measurement of currency value: One third the price of gold, one third the basic crude oil price and one third the cost of a representative consumer price index range of goods. They have usually piled up the debt whether times were prosperous or not, as I lamented in this space last week. Of course, a perfect balance would rarely be found, but one of the many failures in Keynesianism was the notion that governments could pile up debt to fight recession and could be relied upon to reduce debt in prosperous times. The ideal would be no inflation: That supply and demand would always be in balance and prices would decline and volumes increase as non-inflationary prosperity increased. It is a myth of modern economics that the preferred condition is constant, moderate inflation.
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