Fiscal Conservatism

Via the Toronto Star:

OTTAWA—As Conservatives prepare to recall Parliament, Finance Minister Jim Flaherty is setting the stage for a clampdown on federal government spending under the newly elected government, that would include cutting the public service by 80,000 — or one-third.

The Conservatives now have the power to cut spending to bring down the deficit, says Flaherty, a message that could foreshadow a round of deep cuts to services and programs in coming years.

I've made my own opinions clear on the causes of Canada's current fiscal deficit; a combination of tax cuts and the recession has pushed Canada into a sea of red ink.  Not surprising the Tories' solution to fixing this rather fixable problem is to choose austerity by axing a third of the entire civil service.  The Tories are arguing that they want to concentrate on the economy by focusing specifically on the deficit; yet spending reductions, especially the kind of hardcore austerity that results from hacking apart a third of the civil service, are only going to add further downward pressure on the Canadian economy.  Precisely as the British Conservatives have done and experienced across the pond.  This increases the likelihood of a double dip recession and will only serve to depress revenues and increase outlays through social spending programs such as EI, widening the deficit in the process.

The Conservatives aren't stupid, they know that this is the case.  Which leads us to another matter, which is the intentional underfunding of the public sector with the purpose of undermining the welfare state.  If you can't simply destroy the Canadian Pension Plan, Medicare or Employment Insurance through direct legislation (this would be political suicide), then why not underfund and under-staff them so they are indirectly denied the ability to preform the services to which they are intended?

Quoting Mrs. Ducharme, national executive vice-president of the Public Service Alliance of Canada:

“If we went back to the 1990s, the federal government cut around 45,000 jobs, and they realized pretty quickly that they didn’t have the people to actually do the work that Canadians expect.”

She said the people who suffer in this scenario are those most dependent on government services such as immigrants, the unemployed, pensioners and military veterans.

“I think this government really needs to stop and think through some of their ideas before they, quite honestly, destroy the public service and services that are expected, needed and delivered as part of everyone’s day-to-day lives,” Ducharme said.

 They did think it through, which is why they're doing what they're doing.

Serious People having a Serious Debate

Paul Krugman, who has been on a serious tear as of late, wrote a post on a speech by Alan Simpson; the co-chair of American President Obama's debt commission,

Actually, the rude gesture (more detail, please?) was the least of it. If you follow the link, you’ll find Simpson repeating a whole series of zombie lies about Social Security. He repeats the idea that nobody collected benefits in the beginning because life expectancy at birth was only 63 (life expectancy at age 65, which is what matters, was almost 80 for women and 78 for men). He claims that nobody saw the future burden of the baby boomers, when the Greenspan commission reforms in the 1980s were all about precisely that. And on and on.

And when confronted with contrary numbers taken straight from the Social Security Administration, he claims that they’re left-wing fabrications.

He goes on to ask whether we should take the advice of people who apparently understand nothing about the subject in which they speak seriously.

There's two ways you can interpret Simpson's comments.  Either he actually doesn't understand anything about Social Security in the United States, or that he's simply lying to his audience on purpose.  Given that Simpson used to be a Senator from Wyoming I expect that he's simply lying about the subject, but you never know.  Regardless, this kind of strategy is classic strategy for attacks on the welfare state.  Parts of the American welfare state are in trouble, but it isn't Social Security, it's Medicare, which was the target of last year's land mark expansion of health care access.  In fact, if nothing is done about the Social Security 'crisis' in the United States, the program will be able to pay out all of its benefits until 2037; when it'll be forced to cut pay outs to 78% declining to 75% of pay outs after 2084.

Since there is no actual crisis in the American Social Security system, people like Simpson and other individuals/groups interested in destroying the welfare state have worked at inventing a crisis instead.  The manufacturing of the 'crisis' of Social Security is enabled by another manufactured 'crisis' with the spiraling of American public debt, which structurally is more a result of elite-driven tax cuts, rather than an actual problem with expenditures of the American government, even while waging two wars overseas.