After days of leaks, we finally get to see the whole thing. The Government claims that stimulus spending of 1.5% and 1.1% of GDP in 2009 and 2010 respectively will lead to 1.9% and 1.4% in increased GDP for a total of 3.2% over two years (watch this space for 2009 and 2010 forecast updates) Based on a quick reading of the budget, here is how I would break it down:
Infrastructure spending: I can see Stephen Gordon's point - but I still think that infrastructure spending will provide some stimulus - and at least maintain demand for, if not create, construction jobs.
Access to Credit: $5 billion to the BDC, EDC to keep credit flowing to viable small businesss seems like money well spent. The additional $50 billion for the Insured Mortgage Purchase Program to purchase mortgage backed securities from banks is also a good idea.
Tax Cuts: meh - I'm sure I could find a lot of "middle-class" people that make over $80K. Hopefully the individuals targeted will spend the extra $200-500 instead of funneling it into TFSAs.
Retraining - not really stimulus, but I think necessary if Ontario is going to finally wise-up about the prospects of its Manufacturing industry.
Political Pandering Masquerading as Stimulus Policy:
Social Housing: This is not politically correct, but to me spending on social housing or housing on reserve land is simply pouring money into what Hernando de Soto termed "dead capital".
$7.5 billion for forestry, autos and manufacturing - rewarding failure and years of underinvestment. Not good use of taxpayer money.