Upcoming Budget

With the Coronavirus causing many businesses to lose customers and many people not able to work, the government will need to take action here.  I have been very critical of their decisions to run deficits during good times and I think what we have now shows why you should run surpluses during good times so you can respond during bad times.  Nonetheless unlike a year ago, now is not time to balance the budget and is an appropriate time to run a deficit.  As for how big, as big as it takes to get the economy going.  Nonetheless I believe deficits should focus on temporary measures to help us get through these tough times and will be pared back once the virus settles and economy recovers.  I would focus on helping industries hit hard, small businesses, self-employed, contract workers, and those in the gig economy.  Many due to virus won’t be able to work and don’t have the option of working from home thus will be out of a job.  As such EI rules should be loosened while those hardest hit given direct cash.  This would help us get through the tough times and unlike creating new programs, is a temporary measure not permanent so it won’t lead to a massive deficit we have trouble getting out of once this ends.  Infrastructure spending should only be done if strong economic benefits as so far the current government’s track record on infrastructure is not too good and by the time the money gets out the door, the recession will probably be over.  Likewise it is absolutely the wrong time to create new government programs which will just create a permanent hole.  On taxes, I think those who due to job losses or businesses that go under should be able to get a waiver on paying 2019 taxes.  Otherwise those who are still able to pay them should, but those who cannot should have it forgiven or at least a reduced rate.  This is absolutely the wrong time to be hiking taxes while for tax reform, I think that will become more essential once this ends, but at the moment lets deal with the more urgent issues and worry about that after this is over.

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