"Our government," Jim Flaherty announced yesterday, "has chosen prosperity." He then announced that the government would be slashing expenses by $5.2 billion and laying off 19,200 civil servants. In an interview with CTV's Graham Richardson, John Baird heaped scorn on those who had predicted 60,000 job losses.
Baird, like the man he answers to, is a master of the half truth. The 60,000 jobs figure included the cascading effect of cutting almost 20,000 public service positions. Over at The Progressive Economic Forum, Andrew Jackson wrote:
Each $1 billion of cuts to spending represents about 10,000 lost jobs, about evenly divided between direct federal government jobs and private and not-for-profit sector jobs supported by federal government purchases of goods and services. So, the overall negative impact of the Budget on jobs will be about 50,000 when the measures are fully implemented.
President Obama's rescue of GM and Chrysler was motivated by the horrendous job loss the bankruptcy of both companies would have caused. Economics 101 teaches that jobs have a multiplier effect. Creating jobs creates more jobs. Cutting jobs cuts more jobs.
Over on the other side of the political spectrum, Andrew Coyne was also unhappy with the federal job cuts -- but for different reasons:
All that the Tories are proposing to do is to roll back some of the increased spending that they themselves introduced. The public service from which the Tories pledge to trim 19,000 employees is the same one to which they added more than 30,000.
But Coyne went beyond the jobs numbers. The Conservatives, he implied, are phonies:
You fiscal conservatives who hung on all this time, while the Harper Conservatives ran up spending to levels no previous government had ever dreamt of — you who stood by the party through the years of minority government while it discarded every principle it had ever held and every commitment it had ever made — you who swallowed all of this in the belief that, one day, the Conservatives would win their long-sought majority, and all your compromises would prove to have been worthwhile: you, ladies and gentlemen, have been had.
Coyne does conclude, however, that the government is headed in the right direction. It has adopted the European solution. Prosperity, Mr Flaherty says, is just around the corner.