The deficit deceit and the scare tactic of austerity: We are being lied to

Posted on January 12, 2013 in Governance Debates – opinion/columns –   Definition of AUSTERITY: aus-ter-i-ty (noun) Enforced or extreme economy (Merriam-Webster Dictionary)
Jan 12 2013.   Deirdre Pike

Each year, the Merriam-Webster online dictionary makes known its Word of the Year based on the number of searches for particular words. It’s one way to get a sense of the topics that sparked the interest of people over the past 365 days.

In 2010, the word was austerity. By then, two years after the recession had started, governments in Europe and North America had probably used the word thousands of times, likely in the same sentence as deficit. Deficit didn’t make the list so more people must be aware of its definition as, “an excess of expenditure over revenue.”

The message we keep hearing in mainstream media, planted by governments in power and the corporate heads who support and direct them, is that due to an excess of expenditure in the past we now have a deficit that is so big we must move to an economy of austerity and cut back the public services we offer through wage freezes, layoffs and service reduction.

As a province, Ontario came on a little later in the austerity game but, like most converts, they’re better at practising this religion than those born into it.

I know this will seem hard for you to believe, but the Government of Ontario, supported by unofficial “finance minister” Don Drummond, has lied to us. It has consistently been exaggerating the amount of deficit we face in Ontario.

I’m not making this up. It comes from many economists, but last week I heard it from Hugh Mackenzie, an economist from the Canadian Centre for Policy Alternatives. Jim Stanford, economist with the Canadian Auto Workers supported the analysis.

According to Mackenzie, Drummond’s projection for 2017-18 is a deficit of over $30 billion. “That frightening figure is driven entirely by his choice of exaggerated assumptions about the growth of revenue and expenditures. Using assumptions that are more consistent with our experience and with his own estimate of future economic growth, the projected deficit drops to $6 billion.”

Why would the government accept his projected deficit of five times what you would get using more reasonable assumptions?

It’s a scare tactic meant to convince us that we just can’t afford the good public sector that we have, nor can we afford to help people at the bottom of the economic ladder as much as we used to. But we’re not so badly off that we can’t make a few corporate tax cuts here and there. Whenever someone questions why the government is allowing the growing number of people on social assistance in our communities to live in such deep poverty the word deficit will most certainly appear in the response, along with its offspring, austerity.

It’s not true. First of all, as Stanford reminded us, the recession caused the deficit, not overspending. In fact, in the decade up until 2008, Ontario had balanced its budget every year except one.

Second, the way to end a recession is not through cutting services (and thereby, jobs) but by putting people back to work. This province needs a creative and robust employment strategy and sadly, the attempt with the Jobs and Prosperity Council failed miserably at that task.

Go to the website of the Canadian Centre for Policy Alternatives ( Educate yourself on the lies that we are being told.

When I left the Towards a Post-Austerity conference last week it was difficult not to be angry learning about the deficit deceit and the scare tactic of austerity, but I had one glimmer of hope when Trish Hennessy, the director of CCPA’s Ontario office, told us the Word of the Year for 2012.

It was a tie between capitalism and socialism. Maybe people are finally starting to understand the need to step back from our adoration of capitalism, which can only thrive when individual rights are paramount, and are taking a step toward socialism, which can only thrive when collective rights are paramount.

That step forward could help us have the progressive conversations that are needed in our province including one about our “taxaphobia.” We have to pay for the public sector services we need, and that means services others need not just ourselves. May the Word of the Year for 2013 be “common good.”

Deirdre Pike is a social planner and community activist who lives with her partner in downtown Hamilton.

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