Time to change the conversation on austerity

Posted on February 26, 2013 in Equality Debates

OttawaCitizen.com – opinion
February 24, 2013. By Sid Ryan and Alex Himelfarb, Ottawa Citizen

There is an absence of confidence in politics these days. Each new government budget offers a new austerity menu of what we cannot do, what we must cut and who must tighten their belts. This agenda, frantically pursued by so many western-world governments, continues to have devastating consequences for economies and citizens.

Yet Ontario’s political discourse today offers no alternative to this agenda, no attempt to define the common good or tap into what is best about the province — our optimism, compassion and prudence. We hear too little from the voices of hope and reason so essential to building a fair and prosperous society.

The next Ontario budget presents an opportunity for the new premier, and all MPPs, to change the conversation on austerity and choose a responsible approach to fiscal policy, one that will stimulate economic growth, create sustainable job opportunities and help struggling, hard working Ontario families and those most in need.

To date, austerity has been sold as a panacea, indeed the only cure for what ails government. But what, exactly, is the Ontario government ailing from?

It is certainly not from overspending on public services. Ontario now provides less funding for public programs and services — from health care to housing — than any other province in Canada, and we are living with the consequences of this underfunding.

While growing inequality is not unique to Ontario, our poverty rates are rising faster than almost every other province. According to the Centre for the Study of Living Standards, over the period stretching from 1981 to 2012, Ontario experienced the largest change in income equality anywhere in Canada.

In fact, austerity budgets only worsen social conditions while seriously undermining the economy — from the added public-service costs that poverty creates to the untapped potential of single parents unable to access affordable day care, dispirited and heavily indebted students or new Canadians unable to find employment in their field — contributing to the very deficit problem the agenda purports to resolve.

But do not just take our word on the negative impact of austerity on economic growth; consider the recent, unprecedented mea culpa from officials with the International Monetary Fund who concluded that the negative impact of austerity on economic growth is much greater than they anticipated.

Cutting our way to growth failed as a budget strategy in the 1930s and it will not work now. As economist Paul Krugman notes, government deficits are a symptom of a greater economic disease, not the disease itself. It follows then, that if we zealously tackle the symptom and ignore the disease, we risk making the situation much worse.

We need to understand how we got into deficit if we are to develop sensible, prudent policies. The evidence here is clear: loss of revenue and increased spending after the financial meltdown (although spending was not our problem before the recession and it isn’t now) and years of tax cuts that mostly benefited wealthy citizens and corporations to the tune of $15 billion while never delivering on their promise of growth and jobs.

Budgets that eliminate waste and reduce debt in good times are prudent budgets. Budgets that cut programs and services, lower wages, and maintain unaffordable tax cuts, especially when the economy is struggling, are neither prudent nor responsible.

It’s time to change the conversation on austerity, to talk about getting Ontarians back to work in jobs that pay a living wage, to talk about revenues and not just cuts, to talk about building a better future together.

To that end, the Ontario Federation of Labour will be holding community consultations across the province over the next several weeks to discuss ideas for a new approach to addressing our economic, social, and fiscal challenges. This feedback will be shared with the government in the hopes it will contribute to the creation of a budget that recaptures Ontario’s progressive spirit and puts people first.

The conversation begins now.

Sid Ryan is President of the Ontario Federation of Labour. Alex Himelfarb is the Director of the Glendon School of Public and International Affairs and a former Clerk of the Privy Council.

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