Without CERB program, lockdowns would have resulted in societal chaos
Re: Time for the feds to set an end date to
COVID spending, July 16
Modern monetary theory explains that a deficit is the only way a government can inject money into the private side of the balance sheet. Of course, you can lower taxes or refuse to raise taxes, as columnist Franco Terrazzano’s predecessor at the Canadian Taxpayers Federation, Stephen Harper, did when he became prime minister. But to replace lost tax revenue and maintain government services Harper had to run a deficit.
However, money is, in reality, just a medium of exchange. The real wealth is in the tillage, the industry, the thrift, the natural and human resources, both on the government and private side of the nation, However, it does not occur to Mr. Terrazzano that the increased growth in aggregate demand, the multiplier effect of capital investment and real wealth creation on the private side is the result of the red ink on the government side of the ledger.
The tyranny of the masses is an expression which came out of the revolution in France. It describes the total chaos, the breakdown of order which occurs when the bonds that hold societies together are loosened. It does not occur to Mr. Terrazzano that by focusing on the government side we fail to appreciate the total breakdown of order, the total chaos which would have occurred if the government legislated lockdown had not been subsidized with CERB payments. James Macinnis Welland