Sometimes, Williams said, we are “using the government as a surrogate conscience–we can’t discipline ourselves, so we get the government to do it.” He added that Christian faith “speaks to our desires and self-control. The church liturgy is about shaping us to desire what God wants, to be satisfied with God and what God provides.” The economic crisis, therefore, is “a deeply spiritual problem” that cannot be easily solved by the government.
What should the government do?
All the experts agreed that the Canadian government needs to do some things to ease the current crisis, but what should it do.
For one thing, the government needs to “bolster consumer confidence,” said Boersema, because if people lack confidence, they will stop spending, and this will make the downturn in the economy worse. “Expectations are as important as what the economy is really doing,” added Paul Rowe, Associate Professor of Political and International Studies at Trinity Western University in Langley, B.C.
“Governments also have to do something to protect the vulnerable,” Hennings said.
Gunn suggested that those unemployed need better access to Employment Insurance.
Even more important than providing a stimulus is for governments to not do anything that would make the crisis worse, said Rowe. What made the Great Depression of the 1930s so bad was not just that governments cut spending (the opposite of a stimulus) but that they also followed isolationist and protectionist policies that tried to export the problem. This attempt to “beggar thy neighbour,” devastated worldwide trade and made everyone poorer
Should governments bail out financial institutions?
Corkery and Dillon pointed out that the $10.6 trillion bailout for banks in the US and Europe is over a hundred times the amount spent on development assistance to the global south last year.
Bailing out companies that got into trouble for making risky financial decisions will encourage them to make more risky decisions in future, said Boersema.
However, “we all need a dependable banking system,” said Hennings. “Individual businesses can take risks, but banks shouldn’t because we all rely on them.”
Should the government bail out the big three automakers?
“One of the things the market does very well is to discipline poorly run companies,” Hennings said. If the automakers can’t become competitive and produce good products at a good price, it would be better to “let the market perform its discipline.”
“Monopolies are inefficient,” said Rowe, and unless the North American automakers make very significant changes, bailing them out will be futile. “The more subsidies they get, the more they will become Lada (the nationalized Russian automaker).”
But, Boersema added, “from a Christian perspective, if we look at the jobs losses and spin-off effects,” the automakers are “too big to be allowed to fail.” Therefore, guiding “an orderly run-down” of inefficient companies might be preferable.
Should the government stimulate the economy and how?
Boersema stated that the government should stimulate the economy as long as whatever it does has an immediate effect. Stimulus is needed now, but creating programs that wilkl continue into the long term will only create long-term debt. He also warned that money be spent wisely, on already approved infrastructure projects and highways, and not wasted on “things not crucial.”
Boersema also noted that what is needed in one part of the country may not be needed somewhere else–a slowdown may actually help Alberta by making labour and housing more affordable there, while the slowdown causes real problems in the Ontario heartland and Newfoundland.
While recognizing the need for governments to spend to stimulate the economy and get it out of the current recession, Williams said a financial stimulus will solve the short-term problem but make the long-term problem worse. It will deepen the debt that is the cause of the long-term problem. Therefore, a short-term government deficit could be a good thing, but it is important that it does not become permanent.
How any stimulus package is spent is also crucial. “From a Christian perspective, we want to put more emphasis on employment,” said Boersema.
“The most effective use” of deficit spending, said Hennings, would be to build “large-scale infrastructure, things that have lasting value. It would create jobs and leave something behind.” Rowe said this is why the New Deal, which hired the unemployed to build parks and roads during the Great Depression, was a wise policy. Gunn also suggested that now would be the time to spend money on “visionary things” that would help the environment–retrofitting houses, building fuel-efficient cars, expanding public transit. Dillon noted that investing a million dollars will create 37 jobs in the renewable energy sector but only 7 jobs in the oil and gas sector. This would be good because, with the current focus on the economy, “there is a significant danger that the environmental issue is going to be shelved,” warned Rowe.
Gunn also suggested that the stimulus should be directed to projects that help the most vulnerable, such as building social housing. He also suggested that now would be a good time to put a billion dollars into a national childcare program, which would create 20,000 jobs and allow parents to look for other work. He observed that the best economic stimulus is to help the poor. If government gives money to the poor, they spend it locally, while the middle and upper classes are more likely to save it or spend it elsewhere.
Corkery added that it is also important not to neglect the global south. The global south has been experiencing for decades much of the same economic dislocation the West is experiencing now, and for much the same reason–excessive debt foisted on the poor countries in the name of development aid. And the situation there is much worse–“they would be happy to have our problems.”