Thursday, April 26, 2012

This Isn't About Jobs and Growth

Jim Flaherty claims that his budget is about "jobs and growth."  Parliamentary Budget Officer Kevin Page  makes a much stronger counter claim. He reports that, while the Harper government's cutbacks will result in a balanced budget, they will create significant drag on the economy:

The spending restraints and cutbacks will reduce economic output by 0.3 per cent this year, climbing to 0.88 per cent in 2014.

Canada’s economy, subsequently, will grow by only 1.6 per cent in 2013, eight tenths of a point less than forecast by the Bank of Canada and the private sector consensus.

On the jobs front, restraint will result in about 18,000 fewer jobs this year than had there been no restraint, climbing to 108,000 fewer jobs in 2015. Most of the losses are due to Ottawa’s actions — including a reduction of 43,000 stemming directly from March’s spending reductions — although provincial restraint is also a factor.

Unemployment, currently at 7.2 per cent, will climb to 7.9 per cent in 2013, the report predicts.

Mr. Flaherty and  Mr. Harper have been urging Europe to do as they do. But on the subject of European economic management, Paul Krugman wrote last week:

This is, not to mince words, just insane. Europe has had several years of experience with harsh austerity programs, and the results are exactly what students of history told you would happen: such programs push depressed economies even deeper into depression. And because investors look at the state of a nation’s economy when assessing its ability to repay debt, austerity programs haven’t even worked as a way to reduce borrowing costs. 

Meanwhile, David Cameron -- who recently visited Ottawa and praised Stephen Harper for his economic wisdom -- admitted yesterday that Britain, for the second time, is in a recession.

The Flaherty budget was never about jobs and growth. It was about getting rid of government agencies which the Harperites cannot abide.


Saddened said...

Perhaps Harper's budget is about eliminating unpopular sections of government, or at least shrinking some sections of it while threatening civil servants in general, muzzling them Soviet Union-style as it did in the recent world environmental forum (a tactic I'm surprised you haven't so far made the subject of a post). That oppressive act obviously favoured the "fossil fuel crew", represented one more attack on our democracy, was an embarrassment to our country, and illustrated how Harper seems to think the environment does not belong to all of us, but to a select few who plan to make money from its destruction.
The budget is another, lesser example of Harper's high-handed stinginess. If the budget is eventually balanced at the expense of tens of thousands of Canadians, who profits? Who will put the most money into his pockets? Whose country is this, anyway?

Owen Gray said...

You're right. I should have written more about the muzzling of civil servants.

But my fellow blogger, The Disaffected Lib, has had a lot to say on that subject. I recommend reading his posts.

Your question,"Whose country is it?" goes to the heart of the matter.

It's pretty clear whose interests Mr. Harper is serving.

kirbycairo said...

Everything neo-liberals in developed countries do is aimed essentially at one basic goal and that is turning the Western democracies into "third-world" nations in which 99% of the wealth is owned and controlled by a handful of rich families who live in unfathomable wealth and function as virtual slave keepers over the rest of the population. Under such conditions education is the privilege of the rich, controlling the population is easy, and democracy has no real meaning. That is what they want, that is what they have always wanted, and only a real uprising of the people will stop it.

Owen Gray said...

I can't help but think, Kirby, that we're closer to that uprising than the powers-that-be believe.