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The dangerous myth of
Conservative fiscal discipline
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CCPA
assesses political party platforms for Canada's June 28
election: |
 •
Stephen Harper's
Conservatives would run up
DEFICITS totalling $11.4 billion.
•
Paul Martin Liberals would
book SURPLUSES of $24.2 billion.
•
NDP would retain $14.6
billion in SURPLUSES.
•
Harper advocates the
same reckless spending and tax cut formula that became the
hallmark of leaders like Brian Mulroney, Margaret Thatcher,
Ronald Reagan, George Bush Sr. and George Bush Jr.
•
All of these so-called
fiscal conservatives left their
countries awash with red ink
- and all of them tragically undermined public
services. |
|
Ottawa - Conservative parties everywhere preach the myth of
fiscal discipline, but it's only that - a myth. The reality died
long ago. In fact, they have proven themselves to be dangerous
spendthrifts, once elected to office.
Experience over the past 25 years has shown repeatedly that
conservatives cannot be relied upon to protect the public purse.
Again and again, they have raided their national treasuries for the
benefit of the wealthy and left public finances in tatters.
The truth is that conservative leaders have an unmatched record of fiscal mismanagement in Canada, the United States, Britain
and beyond.
Balanced budgets, historically a conservative hallmark, have drowned
in a vast tide of red ink generated by profligate neo-conservative spenders
and tax cutters like Ronald
Reagan, Margaret Thatcher and Brian Mulroney, not to mention each of the
war-mongering George Bushes.
In Canada, another Conservative icon who spouted endless rhetoric
about fiscal prudence while wrecking public finances and services was Ontario Premier Mike Harris (and his successor Ernie
Eves). When the Harris/Eves Tories were finally tossed out last fall
in
Canada's largest and most populous province, it was revealed that they
had simply lied to voters about balancing their budgets. The province had a
deficit of more than $6 billion.
No accident
What Harris did in Ontario was merely a carbon copy of what
conservatives have done for a generation in Canada and abroad. And
none of it has been an accident.
In all cases, they have acted willfully and with abandon to implement
a shared free market ideology, their goal reaching well beyond the
immediate spoils they have heaped upon their friends through tax cuts
and the privatization of public services.
Each has been motivated by a larger vision which, simply put, has been
to cripple the role of government itself - thus leaving their
successors impotent, and the economic playing field as unfettered as possible for
their private sector comrades.
|
'It has
been the liberal, and left, political leaders of the past
generation who have put into practice the policies of fiscal
discipline that conservatives now
only talk about.' |
|
All of these leaders succeeded beyond their wildest expectations,
causing so much havoc that the pre-occupation of their political
successors
has, of necessity, been focused primarily on undoing the damage they
created.
The ability to serve ordinary citizens by improving services
and programs, or introducing new ones, has been severely compromised. |
Role
reversal
In the
process the historical reputations of major political parties has
been reversed. It has been the liberal, and left, political
leaders of the past generation who have put into practice the
policies of fiscal discipline that conservatives now only talk
about.
For example:
•
Democrat Bill Clinton
was left to mop up the mess that Republicans Ronald Reagan and George Bush Sr.
created in the United States;
•
Labour
leader Tony Blair was called upon to balance the battered books that
Margaret Thatcher left behind in Britain;
•
And Liberal Jean Chretien,
along with then
finance minister Paul Martin, was forced to deal with the historic deficits run up by Brian Mulroney. |
Meanwhile, it will be Democrat John Kerry's challenge, if he wins the
U.S. presidency in November, to
cope with the even greater deficits - more than half a trillion dollars
($500 billion) this
year alone - that George Bush Jr. is running in the United States, a
truly frightful figure to contemplate. (When he took office Bush
inherited a $300 billion surplus.)
CCPA study
Now, with polls pointing to a likely return to Conservative government, and Stephen Harper as the next
Canadian prime minister, the return
of red ink budgets is imminent in Canada. And this time the "new"
neo-conservative party Harper heads is so brazen about its intent that
it is scarcely bothering to hide its intention in advance.
A new study by the Canadian Centre for Policy Alternatives (CCPA) in
Ottawa says
the Conservatives will (again largely because of tax cuts aimed
disproportionately at the wealthy) immediately squander all of the
financial cushion that Canada has built up in recent years and return the
country to deficit budgets.
The study was carried out by economists Ellen Russell and Sheila
Block. It assesses the ability of all Canadian political parties to
balance their budgets and deliver on their promises, using revenue
estimates accepted by each of the three parties, as presented in the
2004 Federal Budget.
The authors have also adopted realistic assumptions for program
expenses and public debt charges to come up with a status-quo
cumulative budget surplus of $78 billion between 2004/05 and 2008/09.
Key findings include:
• When
the impacts of the Conservative platform are added to the
status-quo base case, the party would run a cumulative deficit
of $11.4 billion over five years. In implementing their platform
promises, the Conservatives would run annual deficits of $0.7,
$3, $4 and $5.6 billion.
•
Between 2004/05 and 2008/09 the Liberal platform would produce a
cumulative surplus of $24.2 billion - consistent with the Liberal
government's practice of generating large surpluses and using
them to pay down the debt.
•
The NDP platform would result in a cumulative surplus of $14.6
billion, which is considerably more than the $5.3 billion in
cumulative surpluses that the party claims in its platform.
"Once again the Liberals underestimate fiscal capacity for
program spending. This is likely to result in diverting
'surprise' surpluses to debt repayment," says CCPA Research
Economist Ellen Russell.
|
"Furthermore, higher than expected surpluses for the NDP provide
extra capacity to enact further spending increases, reduce tax
increases, or absorb any unanticipated revenue shortfalls," author
Block wrotes.
"The Conservatives cannot pay for what they say. Their cumulative
budget deficit of $11.4 billion obliges them to explain how they
intend to deal with this shortfall--by either cutting spending or
increasing the federal debt," concludes Russell.
More information:
•
CCPA news release - Canadian election platform analysis
•
CCPA analysis of Canadian political party platforms
pdf
Web posted by NUPGE:
12 June 2004
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