Now everything is a “stimuli”

Several community activist groups in Ontario are calling upon the provincial government to increase social assistance payments by $100.00 a month per person. They are asking for this increase as a “Healthy Food Supplement” on the basis that people on welfare must sometimes choose between paying rent and eating properly. This proposal has the support of Dr. David McKeown, Toronto’s Medical Officer of Health.

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These activists may have a point; it is no doubt difficult for many welfare recipients to eat properly while being able to pay for the basics that are needed to survive. What is interesting about this and other proposals to increase spending during the recession is the justification for it; it will stimulate the economy. Suddenly everyone is a little Obama, justifying increased government spending on the theory that all spending stimulates the economy. Janet Gasparini, a Sudbury city councilor was quoted in a city of Toronto press release as saying, “The government must do what is right in providing stimulus to the economy in protecting people during hard times. The Healthy Food Supplement will be spent in local communities and will help people live with dignity.”           The notion that increased spending is good for the economy is not limited to Ms. Gasparini. A press release put out by the group, 25in5: Network for Poverty Reduction concerning the proposed Healthy Food Supplement was entitled, A Blueprint for Economic Stimulus and Poverty Reduction in Ontario. In addition to suggesting infrastructure spending, the release promotes the $100 Healthy Food Supplement as a way to stimulate the economy.           Governments in Canada at all levels have never been wary of spending and running deficits. If all of this spending stimulates the economy it is hard to believe how we ever ended up in a recession in the first place. If all government spending is stimulative, the city of Toronto would surely rank as one of the greatest economies in the world. The proposal to redistribute income from those who have it to those that do not in the form of a $100 a month supplement will do nothing to aid the economy. All that will be accomplished is the cementing of a permanent class of welfare recipients as more spending will require higher taxes that will stifle job creation.           There perhaps would be some stimulative effect if welfare recipients were given $100 vouchers that could only be spent in local food stores and for the purchase of healthy foods. But, that’s a no no. Nick Saul, a spokesperson for 25in5 stated, “We’re not suggesting anything like a voucher system. We don’t want to be paternalistic about it.”. Kudos to Mr. Saul for his honesty. If helping the poor get proper nutrition was the prime directive, it could be better achieved by vouchers that would limit the new spending to healthy foods. But it is really all about income redistribution. Local businesses will receive some stimulus but so will Colombian drug dealers if welfare recipients are handed another $100.00 a month. Vouchers are seen as robbing those on social assistance of their dignity. So much for seeing that local businesses are “stimulated”.           Ontario premier Dalton McGuinty recently announced that despite the current economic conditions his government intends to proceed with the scheduled increase in the province’s minimum wage. That wage will increase on March 31 from $8.75 to $9.50. According to NDP critic Cheri DiNovo, yep, you guessed it; that increase will be good for the economy. (Note to Dalton: why don’t you really stimulate the economy and increase the minimum wage to $45 an hour?).            This is the new normal. All kinds of government spending is now being justified on the basis that it all will stimulate the economy. The reality is that spending our way out of a recession will not work; if it did we never would have been in a recession in the first place. The theory seems to be that the more people we can put on social assistance and the more money that we give them; the more the economy will be stimulated. If welfare recipients really need an additional $100 in order to eat healthy, then fine. But let’s not hear that the extra spending is necessary in order to stimulate the economy.           Barack Obama was right about one thing; this here recession really is a catastrophe.

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