...but unlike the opposition we will take blame and will continue to support Harper and the party as opposed to the shrinking ship syndrome that is prevelant among that opposition and work to reduce the deficit.
Shrinking government won’t trim deficit
Doing unpopular things like hiking GST will
Canadians concerned about what kind of country we are leaving our children should check out the Taxpayers’ Federation online doomsday clock, a blur of numbers tracking a once shrinking national debt now soaring by $153 million a day.
The good news is Stockwell Day is soon coming to a town hall near you to engage the masses in much yak about returning to balanced budgets by cutting government spending.
The Conservatives have promised to eliminate the deficit within five years without tax increases or cuts to health care, education, old age pensions and other stuff considered politically sacred.
It is hard to find an economist who believes that is even possible, given the massive extent to which the government would have to shrink itself.
Finding excess
No matter. As of last week’s cabinet shuffle, Stock Day’s new job is presumably to travel the country in search of government excess, waste and lost paperclips.
Good luck with that. Canada’s history is littered with valiant attempts to curb government spending, an exercise once aptly described as “digging in quicksand.”
With statistical help from the taxpayers’ fed, we rewind to 1976 when an increase in the deficit from $2 billion to $6 billion prompted the auditor general to warn that Pierre Trudeau’s government was losing control of the public purse.
In response, Trudeau created a royal commission that spent three years studying financial management and accountability in government, during which time nothing changed.
The royal commission sure was a big success, though.
By the time Trudeau left office five years later, the $6-billion deficit that got the auditor general screaming was heading for $34 billion.
In 1984, Brian Mulroney and his Tory government took over the sea of red ink from the Liberals after a record sweep at the polls gave him a strong mandate to put the country’s finances back in order.
In the greatest flop since Trudeau’s royal commission, Mulroney created a special ministerial task force under then deputy prime minister Erik Nielsen to review over 1,000 government programs for possible savings.
The result filled 22 volumes of reports, recommended savings of $7 billion, and led to barely enough actual spending cuts to pay for the commission.
During the two years the task force was looking for ways to reduce the deficit, the annual budget shortfall increased to over $37 billion.
Next, Mulroney tapped his deputy prime minister, Don Mazankowski, to head a new “expenditure review committee” of cabinet, a star chamber through which all federal spending subsequently had to pass.
At the same time, the Tories slapped freezes on departmental budgets, hiring and wages, privatized some services, and killed off several agencies altogether.
For all Mulroney’s efforts to slash the $34-billion annual budget shortfall he inherited in 1984, he left office nine years later with a deficit of over $39 billion.
During that time, the accumulation of annual deficits had more than doubled the national debt.
Two years after Jean Chretien and the Liberals took over from Mulroney, then finance minister Paul Martin introduced his infamous 1995 federal budget that came to be known as simply the blood-bath.
Three years later, Martin had successfully turned a $36-billion deficit into a $3-billion surplus.
But the big myth of the day was it all happened from ruthless cost cutting.
A big part of the deficit was eliminated from raising taxes, raiding the Employment Insurance fund, and reducing federal payments to the provinces for health care and education — all the things the Harper government is now promising not to do.
In fact, less than a quarter of the deficit-to-surplus turnaround was actually from cutting government programs (and that included huge reductions in military spending unlikely today).
Inherited surplus
In 2006, the Harper government won power from the Liberals and inherited a healthy $13-billion annual surplus.
Three years later, the Conservatives posted a $5.6-billion deficit, in large measure created by politically popular cuts to the GST and other tax revenues, while increasing spending on government programs by $32 billion, or 18%.
If the Harper government were serious about rebalancing the nation’s books, it would start by reversing the GST cuts and other goodies the country clearly can’t afford.
Instead, poor Stock Day is being sent forth to convince Canadians the deficit can be cured by digging in quicksand.
The more things change ...
greg.weston@sunmedia.ca
2 comments:
what does, "take the blame mean" actually?
There is also a petition associated with the debt clock calling for balanced budget legislation. Anyone interested in that can click here.
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