No matter where you live, trickle-down economics and balanced budgets don't mix
When the Godfather of modern day conservatism was first elected back in 1980, he uttered those now famous words “Government is not a solution to our problem, government is the problem.” Eight years later, we awoke to find that the national debt of the United States had tripled and the size of the federal workforce had grown by about 324,000 people.
Since Saint Reagan’s Presidency, balanced budgets and smaller, responsible government are what conservatives have preached everywhere, but practiced nowhere. Republicans never learned to practice what Reagan taught. Instead, conservatives continued to practice what he practiced. After 35 years, few have learned you can’t mix trickle-down economics with balanced budgets.
The last Republican to balance the federal budget in the United States was Dwight Eisenhower in 1957 and he was not exactly a conservative by today’s standards (or Reagan’s for that matter). Similarly, in Canada, the last Conservative majority government to balance a federal budget was Robert Borden way back in 1912.
Canadian Prime Minister Stephen Harper has taken great pride in following in Reagan’s footsteps. Before Harper first came to power under a minority government in 2006, The Liberal Party had a straight decade of balanced budgets under their belt, most with a significant surplus. It took little time for Harper to turn that surplus into tax breaks that favored corporations and the wealthy.
By the 2008 recession, the Liberal surplus was gone, as was the string of ten consecutive balanced budgets. Stephen Harper has not balanced the budget since. That is, until now. He has made it a priority to balance the budget by 2015 (an election year) and it looks like he may have done it.
During his budget speech last week, Finance Minister Joe Oliver began by lying about how the Conservative Party paid down $37 billion in debt when it came into office (they used the previous year’s budget surplus of the Liberals.) When all was said and done though, Oliver did table a balanced budget. However, he did so by lowering this year’s contingency (emergency) fund by 66% and by selling off government stocks in GM at a significant loss.
With the next federal election roughly six months away, Harper is hoping Canadians have very short term memories. He is now championing his own Conservatives as the party of fiscal responsibility and to add injury to insult, the Conservative Party is tabling a “balanced budget” bill to force all future governments to balance the books.
If Canada’s Conservatives somehow win the upcoming election, don’t expect a balanced budget for too long regardless. As I stated earlier, trickle-down economics doesn’t mix with balanced budgets, primarily because trickle-down economics doesn’t work period.
By championing tax cuts on corporations and the wealthy, funds for healthcare, public schools and other social programs will dry up, just like it has in Republican controlled states throughout the US. It won’t take long for Canadians to feel the budgetary sting in their beloved social programs.
Because of the revenue shortfalls that Reaganomics creates, conservatives of all stripes will be faced eventually with the same old question; to raise taxes or go into deficit? We all know which option they choose, Reagan taught them all well (even though he raised taxes himself).
Too well in some cases, and Stephen Harper is one example. He has been allowed to get away with his tax/deficit policies for so long because he is slow and patient. He’s cut taxes a little to a lot in every one of his nine years in office.
Contrast Harper with the extremism of Kansas Governor Sam Brownback who cut taxes on everything at lighting speed during his first term. So much so that school districts are being forced to close ahead of time. If Harper tried what Brownback did, he would have been thrown out. Slow and steady wins the election… At least in Canada
The Conservative Party is now bragging that the tax burden on the average Canadian is the lowest it’s been in fifty years. What they don’t say is how, just like Cowboy Ronnie, Cowboy Stevie’s policies will be felt for generations to come.