Brian Lee Crowley

Of deficits and infrastructure

One of the signature policies of the Liberals in the last election was their promise to increase substantially infrastructure spending and to run a deficit solely for this purpose. As Sean Speer and I argued in this 19 April 2018 piece for Inside Policy their policy has failed on both counts. Not only have they proven woefully ineffective at spending infrastructure dollars, they have nonetheless run up deficits on a host of other spending.  Ottawa’s approach to infrastructure badly needs a rethink.

Avoiding China’s infrastructure mistakes

Prime Minister Justin Trudeau makes no bones about his admiration for China. He is also a great advocate of infrastructure spending to stimulate the economy. In my latest column for the Globe I explore the intersection of these two ideas, for the real Great Wall of China is the massive wall of debt they have accumulated to build infrastructure that, in the vast majority of cases, has destroyed value, not created it. This makes China (along with Japan, another nation addicted to high-cost but low-value infrastructure) an object lesson in the limits of infrastructure spending. Sure you might get a little bump of activity around the construction, but if the infrastructure itself doesn’t improve the productivity of workers and businesses you get stuck with the debt but not the increased economic activity to pay for it.

Brian Lee Crowley
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