For Neo-Liberals, a deficit is more than a negative number. It is a moral failure -- a sin. That conviction drives Stephen Harper's economic policy. And that conviction, Scott Clark and Peter DeVries write, is a perversion of economics. Until recently, Canadian governments have understood that fixation on deficits is detrimental to the nation:
By that reasoning, most governments in Canada since Confederation were unethical — because they ran deficits. They borrowed to finance the transcontinental railways which built our country, the St. Lawrence Seaway which connected our western provinces to global markets. In fact, the only post-Second World War governments which didn’t fall into that category were the administrations of Jean Chretien and Paul Martin.
Harper’s own government appears to be a late convert to [Joe] Oliver’s peculiar brand of fiscal ‘ethics’. After inheriting a surplus of $14 billion, it quickly turned it into a deficit by cutting two points off the GST. The Conservative government, for all its fiscal ethics, has run a deficit since 2008-09 — saddling future generations of Canadians with an additional debt load of more than $150 billion.
Like Puritans focused on the sins of others, neo-liberals see themselves as missionaries, whose job it is to convert the world. In Canada, they have converted the three major political parties:
The New Democrats’ top policy priority is a national childcare program — not a bad idea, actually, but not an economic growth strategy. They’re also allergic to any talk of deficits and debt financing; they’d to raise corporate taxes — not a good idea, actually. They have made a number of small tax announcements to support innovation and small business, but they hardly constitute an economic growth strategy.
The Liberals, meanwhile, have made increased infrastructure spending their top priority. But they too have an aversion to deficits and debt financing. In a well-written article in the National Post last week, Liberal Finance critic Scott Bryson set out the arguments for a national infrastructure program. The words “deficit” and “debt financing” do not appear anywhere in the article. Instead, the Liberals are looking at “innovative” ways to get private and public pension funds to undertake infrastructure investments. Whether any of these would be up to the challenge remains an open question.
And, until the false morality of Neo-Liberalism is overthrown, the future is austere. Our children will be right to be furious with us:
What Harper and Oliver can’t get into their heads is that burdening future generations with crumbling infrastructure — and the attendant costs — is unethical. But it can be ignored, because most of us, including Harper and Oliver, will not be around to accept the responsibility.
Until Neo-Liberalism is vanquished, the sins of the fathers will be visited upon their children.