a_majoor said:
Money diverted from the general economy to fund "social programs" (using the polite term) is money diverted from savings and investment.
Broadly yes, but as your prof should have told you things never work out how they are supposed to. Ie, as in this example, the profits were going to foreign investors, which does sucessfully develop THEIR economy (and we may get some of that back in foreign direct investment), but in reality does very little to help develop OUR economy.
Furthermore, even if we assume that these profits are going to Canadian investors, one can be almost 100% sure that the vast, vast majority of it are going to the top 5% rich of society. How this is SUPPOSED (in some strange theoretical construct which has not, and cannot be proven) to help us is by increased reinvestment in the economy, leading to job creation.... but in reality they tend to use the money to create more shell companies to buy other companies for inflated prices, which results in the profits from the sale, once again, going into the pockets of the very wealthy, and, once again, being used to make more and more holding companies to buy other companies, effectively creating a big circle of increasing wealth for the wealthy in society (which is a trend, which, unlike theoretical job creation constructs, is actually playing itself out around us and can be demonstrated by looking at economic stratification rates in Canada, and especially the US, over the last few decades).
In the end, the average Joe gets nothing but questions as to why he isn't being more "productive" despite having a near stagnant standard of living for the last 10 years while the top 10% of Canadian society's weath mushrooms. Of course, economists blame it on a lack of tax cuts for the weathy so that they can reinvest in the economy..... and the cycle continues
(different topic, but very enlightening, a while ago I had a Liberal canidate for my riding over for a few drinks (don't worry guys, I really, really pushed the need for defence spending on him), and we got onto the topic of productivity. Being a former accountant in the corporate world he agreed with my view, saying that we could spend hundreds of billions in tax cuts for the corporations but all we would see is it being eaten up with no real effect; and that the key was greater education, especially post secondary, to increase productivity. This makes sense, as someone who is highly trained in what they do (and he was actualyl clear on this, not just university, but skilled trades as well) will usually "produce" more efficiently and effectively than a relatively untrained person (think of how a skilled master carpenter is a lot more productive (in terms of the value of goods he can produce in any given time) than an untrained laborourer trying to do the same thing. ))