Tag Archives: austerity

Austerity: The High Cost of Tax Cuts

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Austerity.

For me, the word is synonymous with cowardice.  And stupidity.  And cruelty.

Austerity is an abhorrent philosophy, but a necessary evil in the age of tax cuts and giving everything away to the corporations that run this planet.

Austerity in Canada amounts to more foulness than I can possibly imagine.

I would accept elements of reduction as they address the vast waste that’s been created, but overall, Canada is a rich nation.

Austerity should not be in our lexicon.

However, since Stephen Harper’s coup of Ottawa politics in 2006, we’ve seen tens of billions in potential revenue slashed from federal finances both in terms of corporate tax cuts and the reduction of the GST (now HST).

These cuts continue a Liberal trend, where corporate taxes were cut from the range of 50% down to the 15% level (and beyond?) that the Conservatives have proposed.

Despite these cuts, we know that corporate tax cuts don’t work.

Guesstimates of the impact of corporate tax cuts are likely in the hundreds of billions of dollars.  They have failed to create jobs in Ontario and elsewhere, although many argue that the explosion in growth in resource-rich areas like Newfoundland, Saskatchewan and Alberta are related.  They’re not:  the boom they’re experiencing is simple cause and effect in relation to ever-increasing commodity prices.

And the GST (now HST).  Have you seen any benefit of ‘saving’ $0.02 when you buy your Tim’s or you go shopping for clothes and other services?  As financial matters get worse because of the structural fiscal deficit that’s been created by Jim Flaherty and the Conservatives, it’s likely that they’ll expand the coverage of the HST to include food items and other basic consumables (eg. hydro bills for basic services), expanding the regressive nature of what should be a potent economic tool for moderating excessive materialism.

So … here we are, hundreds of billions of dollars short, few new jobs to show as a result, and facing the prospect of more taxes (direct or indirect) and we enter the ‘age of austerity’.

Austerity is a philosophy.  It is an affront to human dignity and basic rights for children, in the workplace and in retirement.

All levels of government suffer as a result of these measures.  The provinces slash services and municipalities tow the line by eliminating basic wage increases.

Canadians should be going mad with rage because we’ve given so much away and we’re still VERY RICH.  We need to ask ourselves why are we picking on seniors and the sick and the poor in order to make up for billions on boondoggles like F-35s, mad spending sprees like the ‘Action Plan’ and prisons to house grandmothers caught downloading a song or two?

Because we’re now being lead by a group of hostile and cruel self-absorbed government of crooks, that’s why.

Follow the Money Behind Europe’s Debt Crisis

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This link offers an insightful look into the roots of the European debt crisis.

It offers some refreshing reminders as to why fake fiscal emergencies and resulting ‘austerity measures’ are nothing but a sham.

Worse, just as they did in 2008-09, governments are rushing to rescue rickety banks with public funds. That’s why the European Central Bank, the IMF and Europe’s leading powers keep bailing out ailing states like Greece, Ireland and Portugal.

Again: follow the money. When debt-strapped governments receive hundreds of billions in new loans, that money is immediately sent into the coffers of private banks as payments on past loans. The whole situation, observes one writer in the Financial Times, “resembles a pyramid or Ponzi scheme” in which original lenders are paid back with new loans.

The difference is that the new loans are coming from public funds, which is another way of saying that private banks are being rescued once more by the people. Just as in the global bank crisis of 2008-09, bank profits are private, but their losses are public. Not exactly the free market. But it’s a nice deal for profligate bankers.

Any finance minister – including Jim Flaherty – that pretends there are different and more pressing issues behind this building crisis risks their credibility as people wake up to the reality that the big transfer – shifting our funds to the big banks – has to come to a quick end.

It’s important that we all resist austerity measures – fake fiscal emergencies designed to crush public services and public service – in the wake of this knowledge.