Wednesday, March 28, 2012

The Wizard Of Austerity

Like Dorothy and her companions, Stephen Harper's Conservatives and Dalton McGuinty's Liberals are skipping down that yellow brick road, hoping that the Wizard of Austerity will take them back to the good old days. The Canadian Press reports this morning that Jim Flaherty will take $7 billion dollars out of this year's government spending:

Conservative sources say months of poring through the $80-billion discretionary spending envelope with a fine-tooth comb has led to about 8.5 per cent in savings worth around $7 billion. Discretionary spending is all of the money the government spends apart from transfers to the provinces and individuals for programs such as health care.

Flaherty will not detail how the cuts will be implemented in the budget, but the sources say most of the reductions will be front-loaded to realize the biggest savings.

It's not surprising that Flaherty will not provide details. The Conservatives never do -- on prisons, on fighter jets, on job cuts. But the job cuts will be significant:

Some have estimated the cuts could result in upwards of 60,000 public service jobs being eliminated, although government ministers say most of the losses will be through attrition.

Don't believe it. Back when Flaherty was Ontario's finance minister, he claimed that government spending reductions would be revenue neutral. That was code for downloading expenses to other levels of government. It is the same strategy being used in the omnibus crime bill.

And Ontario, knowing that it is under the gun, has vowed to take $17.7 billion out of government spending over the next three years. McGuinty plans to generate these savings primarily by freezing public sector wages, not cutting jobs.

The problem with both plans is that they assume that austerity will generate economic growth. That's precisely the same plan the Europeans have implemented. The Greeks, the Irish and the British will tell you how well things are going.

Paul Krugman has argued for years that you can't cut your way to prosperity. Herbert Hoover has risen from his grave and lives in Canada. The March of Folly continues.


thwap said...

At least Hoover had the excuse of ignorance because counter-cyclical public spending wasn't much known at the time.

McGuinty has a dull awareness that he's merely conducting class warfare on behalf of his masters.

Flaherty is a genuine ignoramus, but with him (as opposed to Hoover) it's based on pure stupidity. stephen harper though, he knows he's practicing class warfare and he relishes it.

Unfortunately for him (and us obviously), the results of this class warfare are not the vague notions of profit-driven prosperity that he harbours, but economic stagnation and financial sector collapse.

Owen Gray said...

And we've just recently experienced financial collapse. What's been deeply frustrating about all this, thwap, is that there should be lots of populist anger on the left.

But it's not there. It's the right that gets angrier and meaner -- and Stephen Harper continues to sit in the catbird seat.

Anonymous said...

"It’s Always Time For Austerity"
Paul Krugman, The New York Times

Owen Gray said...

Krugman's post is short and on target. Besides individual workers, the federal budget will target the provinces, downloading federal costs to them. They will argue they are simply downsizing government.

It's Mike Harris' "Common Sense Revolution" all over again. But there is not an ounce of common sense in the plan. It's merely a right wing pipe dream.

Anonymous said...

Harper has given billions of our tax dollars to, banks, mines, and oil and gas corporations. He also gives them huge tax reductions. This was seen on, the House of Commons TV channel. Harper steals from us, to give to the wealthiest outfits in the world. Harper of course now, has his secret meetings behind closed doors, to do his dastardly deeds

Harper and his ministers, outrageous expense accounts are obscene. $50 million for gazebos. Flaherty and MacKays outrageous, $1,300 per night luxury hotel suites. And probably, the other ministers do the same. $3 million on MacKays plane fares. Harper's astounding $47 million for security, $50 million on thieved campaign money. An $11,000 per hour jet, to take in a hockey game. AND, who can forget Harper's $1 billion, wasted on a, stupid fake lake.

Then there are, his asinine billions on wars, we have no right to be in, jets, armored vehicles, nuclear subs, ships, The most stupid of all, his utter billions, on his stalags.

This is the fool, we have governing this country. Since Harper's so called majority...Canada has lost thousands of jobs. There are thousand more job losses, on the way.

Owen Gray said...

Mr. Harper believes in rules. The problem is that there are two sets of them -- rules for ordinary folks and rules for his folks.

Because the rules aren't the same for everyone, that means the game is rigged.