Tuesday, November 12, 2013

Flaherty's (mis)Adventures In Balanced Budget Land

Flaherty is expected to deliver an "optimistic" fiscal update report today, which will show the government tracking to achieve a "balanced budget" by 2015.  
Unlike last year's update which went down like a spoonful of cod-liver oil — tastes awful, but good for you — Flaherty has signalled he expects to report a better-than-projected deficit this fiscal year and a bigger surplus in 2015.As it turned out, last year's doom and gloom update, with its warning of a $6 billion hole in revenue intake and elevated global risks, never did pan out. Last month the government reported that it had beat its low bar for a $25.9 billion deficit by a tidy $7 billion — mostly because of government cost-cutting and stable revenues.
Hmmm...there's only one way that the government can reduce its deficit at the same time that it has taken billions out of the government's revenue stream in the form of tax cuts (2% reduction in the GST amounts to some $14 billion in revenues the government has forsaken, and who knows how much the Harperites have doled out in corporate welfare tax cuts - at least some $20 billion since 2006 ), and that's by making cuts which hurt the middle class in this country.

Make no mistake about it, not one of Harper's changes to Canada's tax system has benefited middle income Canadians.  There has been a very careful shell-game going on where the burden has been subtly shifted.  Sure, he throws you a bone - a few hundred dollars of GST per year, but then turns around and opens up the corporate tax system so that even more large corporations pay little or no tax.  What little money the government has left today is being funnelled into a massive military spending program at the expense of Canadian citizens.  (I don't need to point out that every one of those enormous purchases (F-35 fighter jets, new ships, Arctic bases etc.) is mired in difficulties because the military wasn't ready for the money and could not set up the programs to make these acquisitions fast enough.

Harper talks a good game (sort of) on tax cuts.  Riding on the coattails of Bush I and Reagan, he plays the "taxes are evil" card on a regular basis in his speeches.  He talks about "austerity" (which always ends up hurting the middle classes the most) as if it is some kind of magic pill.  It's not.  We know it's not.  When it comes down to it, Harper's economic policies are nothing more than Reaganomics re-imagined and cloaked in the justification of "economic crisis" that he has crafted by blithely shackling the government's ability to address issues by removing its funding.







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