Too spend or not is hot question

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Talk of some sort of stimulus for the economy has become a mantra across the country and demands are being made for such action. At the same time, some question the good it can do. That debate is certainly alive in Nova Scotia.
Last week, there remained some question of what Rodney MacDonald's Conservatives had planned. A report mid-week said the governing party was planning to temporarily put off payments toward the province's $12 billion debt and inject $100 million into road repair, bridges and other projects.
The Tories remained coy on the subject, however, and the following day said they would confirm no set spending figure. Finance Minister Michael Baker did confirm the government was considering postponing debt payment, but would balance the upcoming budget - good news if it can be managed.
Things should be more clear after the Dec. 16 fiscal update.
One interesting response to the suggestion of putting off debt payment came from NDP Leader Darrell Dexter. He pointed out that it would be unwise, since paying the principal means a reduction in interest owed - money that would then be available for government spending.
The criticism suggests the government is aiming for middle ground, a reassuring thought.
Not everyone agrees though.
Leanne Hachey of the Canadian Federation of Independent Business says tax relief is the best way to stimulate the economy. Greg MacKinnon, a professor at the Sobey School of Business at Saint Mary's University in Halifax, confirmed balancing the budget is the best thing Nova Scotia could do during the current economic crunch to provide stability. He also downplayed the stimulus approach, saying it's a process that takes a long time to filter through for any benefits to the economy.
But with the latest statistics showing Nova Scotia lost 4,400 jobs last month - a rate per capita worse only in Ontario - that middle approach would prove helpful. It would slow that loss until things begin to recover.

Organizations: Canadian Federation of Independent Business, Sobey School of Business, Saint Mary's University in Halifax

Geographic location: Nova Scotia, Ontario

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