Federal Conservatives seek to justify selfishness

Lana
Lana Payne
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Jim Flaherty's economics are decidedly lacking, especially for someone in charge of the country's books.
But what he lacks in economic sense he makes up for in the bravado department.
Flaherty was on full steam last week when he warned he was not about to "throw money around" in the upcoming budget or place the country back into a deficit after 10 years of consecutive surpluses.
He might have thought of that before last fall's $60-billion giveaway, handing out tax cuts as if there were no tomorrow, emptying the cupboard in order to fulfil his boss's real goal - a nation with a weakened federal government and a diminished role in the lives of Canadians.
Now the finance minister has a problem. His poor grasp of economics has left the federal government in a somewhat precarious position.
Many economists warned that the two per cent cut in the GST, combined with massive across-the-board corporate tax cuts, was not exactly the brightest fiscal decision. Certainly, if the objective was to help Canadian families, there were plenty other areas in which to invest the surpluses.
A few months after that fatalistic fall mini-budget, the finance minister is staring at a possible U.S. slowdown and is trying to convince us that what he announced in October was, in fact, an economic stimulus package.
As they say in the political arena, that is a blatant misrepresentation of the facts. When in October did Flaherty refer to the $60-billion giveaway as an economic stimulus package? This revisionist version of events is his attempt to get out of the big hole he has dug for himself.
The truth is, the government has blown it - billions in surpluses have gone down the drain and Canadians have little to show for it.
Infrastructure is crumbling, manufacturing jobs are disappearing, parents still have no child care, municipalities can barely keep the wolf from the door and Canadian families are struggling with more and more debt.
While Flaherty was squirming his way out from under a giant fiscal mess last week, a report from the Vanier Institute of the Family contained a stack of gloomy news.
"The Current State of Canadian Family Finances" by Roger Sauve finds that Canadians are juggling more debt than ever; they are spending more than they are making because their earnings are virtually stagnant and they are saving next to nothing.
It is this spending that keeps the economy chugging along, but it is coming at a cost to Canadian families.
Interestingly, Sauve found that it's not frivolous things like big-screen televisions or other expensive toys that are pushing families into the red, but rather it is what most of us consider essential or basic items.
For example, between 1999 and 2004, the amount Canadians spent on educational items, such as tuition, textbooks and supplies, increased by a whopping 45 per cent. Health-care expenses increased by 32 per cent over the same period.
Sauve points out that it is need, and not greed, that is driving much of the extra spending.
Yet while Canadians spend more to cover the basics, their incomes have remained virtually flat. And for women the picture is particularly bleak. Women working full time still earn just 70 per cent of what men earn, and just 64 per cent when everyone who works, including part-timers, are considered.
Debtloads, according to the report, now stand at 127 per cent of incomes - a 42 per cent increase since 1990. During the same time, real earnings increased by a mere 4.8 per cent.
Canadians are making up for some of the difference by working longer hours. But sooner or later they will run out of time.
Today, Flaherty is trying to paint himself as a cautious finance minister, saying this will be reflected in the budget at the end of the month. This is a dramatic switch from the Flaherty of last October, who was anything but cautious, blowing billions on tax cuts in hopes that this poorly thought out fiscal policy will lead to a coveted majority.
It appears, at least from the polls, that Canadians are not prepared or ready to reward their vision of Canada. Maybe it's because, despite hundreds of billions of dollars in tax cuts, Canadians are not feeling any more secure.
And with good reason - despite unprecedented economic growth and wealth, more and more families are declaring bankruptcy. In 2005 and 2006, personal bankruptcies were at, or close to, record levels - and this during boom times.
And to no one's surprise, inequality is growing, with the richest 20 per cent getting more and more of the economic pie. In fact, according to the Vanier report, the increase achieved by the richest 20 per cent of families between 1990 and 2004 surpassed the "actual" entire income of the poorest 20 per cent of families in 2004.
One of the greatest economists and independent thinkers of our time, John Kenneth Galbraith, was relentless in his opinion that government could act to improve the lot of the least fortunate. One might argue that this is indeed the most important role a government can play.
Yet it is one job the current federal government has shed as they pander to those who need government the least.
Galbraith once said that "the modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."
Flaherty may have a short memory when it comes to his selfish and damaging mini-budget of last October, but let's hope Canadians do not.

Lana Payne is a former journalist who is active in the labour movement. She can be reached by e-mail at lanapayne@nl.rogers.com.Her column returns March 2.

Organizations: Vanier Institute of the Family, Canadian Family Finances, Vanier

Geographic location: U.S., Current, Canada

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