Right-wing conservative budgeting

Edmund Pries, Opinion, The Toronto Star:

The headlines have been apocalyptic and relentless. Unless the U.S. cuts trillions in social spending, it will go bankrupt. Unless Canada cuts billions in federal spending, our economy will go bust. Unless Toronto cuts more than $700 million in program spending, the city will collapse. We live in an age of apocalyptic crisis budgeting. Unless the most drastic social spending cuts are implemented, the world as we know it will sink into the quicksand of debt, never to reappear again. How could this happen?

During the Reagan era, a friend and former colleague, a professor of American history, was invited to the deliberations of a Washington think-tank that provided policy direction for the Republican Party. As they discussed growing the debt and increasing the deficit, he was flabbergasted: “Are you not the party of balanced budgets and debt elimination?” The reply was unequivocal, “Our goal is to grow the deficit as much as possible in order to create political space to eliminate government-funded programming. Until then, we want high deficits while lobbying for a balanced budget — and promoting social program cuts as the only solution.”

To create this useful deficit, tax cuts to wealthy individuals and corporate sectors would be dramatically increased, especially to the banking, energy and military segments. In short, one would implement a transfer of the state’s revenue supply obligations from the wealthiest to the poor and middle classes in order to permit an even greater transfer of wealth from the middle classes to the rich thereafter.

The only trick was to convince the poor and middle classes to “buy in” via a mixture of patriotism and structural necessity so that they would vote in favour of cutting the very programs that benefitted them.

Like Clinton in the U.S., the federal Liberals left office with a budgetary surplus. The Conservatives created the largest deficit in Canadian history and, unbelievably, ran an election campaign on financial management savvy! Of course, they created the deficit in part by implementing tax cuts and engaging in discretionary spending designed to produce the deficit which, we are told, now needs to be eliminated by cutting programs.

The same approach has now come to Toronto and is being mimicked by Rob Ford. He, too, was left a surplus by his predecessor. Nevertheless, the agenda marches on. First, create the crisis by reducing the revenue base through tax cuts and then take the budget knife to Toronto’s city-wide programs. Instead of articulating a vision for building a great city, it is simply a slash and burn approach to a manufactured crisis.

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