Thursday, January 22, 2015

EEEK! A Deficit!!!!

So, there's talk that the falling price of oil, the damage it'll do to Alberta's economy, etc., etc., will prevent the harpercons from meeting their promised surplus in this, an election year.


Thanks to the failure of the unregulated, neo-liberal economic model, since 2008 the economy of the world has been teetering between stagnation and austerity. The opposition wisely forced dim-bulb harpercon finance minister Jim Flaherty, to launch a round of stimulus spending to help Canada avoid a recessionary spiral. They've now spent, what? $100 million? Advertising this piss-poor stimulus program as "Canada's Action-Plan."

The US stock market has been kept on an upward course by massive infusions of taxpayers' dollars. It's all a scam. 93% of the economic growth since 2009 went to the wealthiest 1%. And less and less of that is taxed. So that the rich can keep more of the wealth they've scraped out of the skins of workers, the environment, and the consumers (who are those very same workers suffering with job insecurity and stagnating or declining wages). And, the government gets less revenue.

My only problem with these deficits is that they're partially caused by round after round of income and corporate (and then sales) tax cuts. Tax cuts for people who demonstrably have more money than they know what to productively do with. I wasn't a fan of Paul Martin's ruinous austerity policies and I'm not a fan of harper's cretinous obsession with surpluses either. harper made a stupid promise, and now the falling price of oil is making it difficult for him to keep it.

harper has always been afraid of facts. (Among other things. harper is a shuddering, fearful wreak most of the time.) Facts tend to have a liberal bias. So it's only natural that harper try to dismiss the facts about the government's finances until after he's stolen the next election. Hence delaying the budget until April. And musings about further cuts to public services. Because, oh my god! We can't have a country with a GDP larger than $1,000,000,000,000.00 have a $1,600,000.00 deficit! The earth would swallow us faster than a falling sky could crush us!

Sadly though, even after 70 years of knowing that deficits are necessary during economic downturns, we still hear crapola about bloated government budgets and corrupt unions and chiselers on welfare.

Now, what would happen if, because of some bad news, everyone curtailed their spending? It's been known since the Great Depression that the simultaneous reining in of spending by business and consumers means a recession, which means lower revenues for government, which used to mean cut-backs by the public sector, which would create a downward recessionary spiral.

What the government is supposed to do during times like these is to perform counter-cyclical public spending, to halt the downward spiral and attempt to re-start the economy. Now, obviously, it would help to have had surpluses in good times. And in this day and age, reversing the tax-cuts to the wealthiest (simply because they haven't produced the economic growth that we were promised they would) is necessary to maintain surpluses in good times. The harpercons (and the Liberals) didn't do that. But just because they fucked-up then, doesn't mean that they have to fuck-up now. Austerity in the face of a tanking economy will still make things worse, even if you think the deficits up to now have been harper's fault.

Austerity would, actually, DESTROY the Canadian economy. We've been trundling along with single-minded determination to promote the Tar-Sands, ... buoyed by a real-estate bubble and corresponding construction boom, ... but really it hasn't been all that spectacular. Because to keep things at this anemic pace, Canadian households have now got a household debt-to-income ratio of 162%. Imagine if the feds, and the provinces, decide to slash spending under these conditions!

In all honesty, it's going to take YEARS of reversing the neo-liberal bullshit spewed by economists, to get the economy back on track. To get society back on track. It will take pro-union legislation, and rising wages for workers, and investing in the green, zero-growth economy, and puncturing the real-estate and stock-market bubbles and preventing them from ever inflating again, and closing tax-loopholes and ramping down wasteful spending on imperialist wars.

Don't be sucked-in, yet again, by this stupid deficit hysteria.


greg said...

An information supplement by a credit card company said we could cut spending by giving up cigarettes and going with basic cable. I'm giving up toilet tissue and going back to those hard squares in the metal boxes you got public school.

thwap said...


You missed my point. And now Scott Paper Products is going to shut-down.

greg said...

I'm sure you're right.

I've been confused also about what constituted household debt. Does that include mortgages and student loans, car payments?

The commentators chastising us for spending too much seem to say we need to cut down on buying 300 dollar jeans.

I didn't want Scott Paper to go under. I had no idea one comment could do so much damage.

thwap said...


Yep. Homes, cars, education, ... everything and anything.

But those three are the big ones. And it's supposedly our fault because we can't live within our means. With skyrocketing tuition and stagnant incomes and poor labour markets when we graduate.

Even if it was $300 jeans, ... who is making them and marketing them, and hoping, hoping, hoping that we keep buying stuff we don't need?

what would happen if Canadians decided to take these stern warnings to heart and restrain their spending?

The economy would tank of course.

That's what I mean, with even by their own standards, their system is failing.

greg said...

Ignore this comment if the other one got through.

Basically said I agree.

thwap said...


<a href=">The other one didn't get through</a>

greg said...

Jesus, I can't type that in. I'll bet it's the best thing I've ever seen. Do I have to type in the whole thing or can I just go to youtube and type "the other one didn't get through" cause I can't find anything. Wait,...... I'm on a manual typewriter anyway so I'm gonna have to mail you this. Are stamps still 49 cents?

thwap said...

if you type computer language on a manual typewriter your page starts to pulsate.

stamps are 60 cents now. and i'll have to walk four blocks in the cold to get it because there's no home delivery anymore.

greg said...