The worst of both worlds: Harper's Trojan Horse

Cross-posted from my website and to canpolitik. It will also be the lead story in tomorrow's True North Perspective.

Harper's budget both incompetent and dishonest
Ignatief gives a pass to Harper's not-so hidden agenda

The front page of Wednesday's Globe and Mail said it all:

$12-billion in new infrastructure spending, $20-billion in income tax cuts.

If the recent, panic-driven consensus of both liberal and conservative economists around the world is true — that what is needed to stave off the worst financial disaster since the Great Depression is a massive and concerted boost in spending by governments around the world, then the Harper government has just delivered a budget that almost completely contradicts that consensus.

In the midst of bank failures, an international real-estate crash, bankruptcies and layoffs, deficit spending is supposed to provide immediate and concentrated stimulation of the economy. In other words, to create jobs and services that private money is currently unable or unwilling to do, and to do it now.

Canadians all over the country know all too well the results of cut-backs in government spending since the Chrétien government slew the deficit in the 1990s: crowded hospitals, pot-hole riddled streets and collapsing bridges. With or without the current economic shambles, it is glaringly obvious the someone needs to start spending money on the literal and figurative arteries that knit our country together.

Estimating the amount of money it would take to maintain and repair the physical backbone of this country is not easy task, but there is a general agreement that far too much work has been put off for far too long. A CBC news report as far back as 2007 suggested we need to spend $123 billion just to maintain what we have now, never mind building for the future.

In other words, in a time of economic distress, when even the Harper Tories who, only a couple of months back claimed their next budget would see the government narrowly in the black, have accepted the need for a return to deficit-spending, spending a good chunk of that borrowed money on infrastructure seems a no-brainer.

But what does the budget offer?

I repeat: $12-billion in infrastructure spending and $20-billion in income tax cuts! (Which, even worse and as the Globe and Mail's John Barber has pointed out, in this case comes with all kinds of red-tape when what is needed is money spent now.)

Maybe a politically smart move, "giving" tax-payers a $20-billion gift in borrowed money is the Great Stimulus That Isn't. $20-billion sounds like a lot of money — it is a lot of money — but spread out over the entire population it isn't going to repair any roads or sewers, build new transit lines or replace aging buses; it isn't going to stop more bridges from falling down or hire more doctors and nurses.

It will knock $417.00 off your tax bill next year if you're a two-income family with two kids. Enough, maybe to buy a new flat-screen television set, but not enough to fund a librarian at your local public school.

And remember, that tax "saving" is borrowed money. We, citizens and tax-payers, are going to have to pay it back.

This is trickle-down Reaganomics in Keynesian clothing. And since Steven Harper is an economist, he has to know it.

So what is it really all about?

It's the neo-conservative agenda, hidden in plain sight, an ideology-driven attempt to capitalize on the current panic to ensure that, when the recession is over, there still won't be any money to spend on the public good — on the services and infrastructure that even the wealthy need whether they know it or not.

After all, what politician will have the courage to run a campaign two or three or four years down the line saying, in effect, Remember those tax-cuts we gave you at the start of the recession? Well, we need that money to pay that money back — with interest!

No, whatever government comes after this one will find its hands politically tied and Harper knows it. This is his chance to cripple the federal government for a generation.

And what about the Official Opposition? What does Michael Ignatief have to say about it?

Quite a lot, as it turns out. The budget is "far from perfect," it "threatens pay equity for women," it "breaks [the Conservative's] promise to every province from only two years ago on equalization." Ignatief's statement goes on to blame the crisis on "choices made by a government that has systematically mismanaged our public finances for the last three years."

That's quite an indictment. What are the Liberals going to do about it?

Nothing at all, as it turns out.

They're going to propose an amendment to the budget which will, "include a requirement that the Government report back to the House of Commons repeatedly, with the first report being required within 60 days on their progress. Mr. Harper must accept these accountability measures or his Government will fall."

And that's it. A regular "accountability report" to the House of Commons.

Choosing political expediency over the common good, the Liberals are going to go along to get along, preferring a dream of impotent power a year or two down the line to taking a principled stand now.

P.S. A tip 'o the hat to deweyintoronto, from whom I've shamelessly snagged that lovely photo.