Monday, August 31, 2015

Game Over -- Turns out Mulcair is simply wrong about even today's NDP and deficits

As we are all no doubt aware, lately NDP leader Tom Mulcair has been on something of a rampage against the very idea of short-term deficit financing. He has gone to the extent of describing this as "immoral" and. ludicrously, invoking the memory of Tommy Douglas in his defense.

Part of this new found embrace by the NDP of the entirely destructive and reactionary idea that government should have a fetishistic embrace of balanced budgets is predicated on the notion that it is somehow historically true that the NDP have been "sound fiscal managers" who have always eschewed deficits.

When Bob Rae is brought up to counter this, the NDP Premier who made the entirely correct decision to fight the Ontario deficit of the early 90's not through massive cutbacks but by deficit spending, NDP leaders now actually will disavow or mock Rae from the right on this front even though, while there are many things to criticize the Rae government about, this is not one of them.

And, it turns out, the NDP " balanced budget" narrative is false for another reason.

The NDP have two elected provincial governments right now and both are not only running deficits but they are not actually trying to balance the budget as a primary economic or fiscal goal.

Take most recently Rachel Notley's newly elected NDP government in Alberta which is now forecast to run a near $6 billion deficit and that, as it has made clear, has no intention of implementing deep cutbacks to change this.

Apparently, not wanting to run Alberta's economy and social infrastructure completely into the ground, she must not have got the memo that Economics 101 and standard progressive economic thinking are not allowed when certain folks in the NDP want to talk nonsense because of a federal election.

However, no doubt the partisans of the NDP will cry, she has just come to power. She inherited this deficit. Even though there is no excuse for any other deficit surely we all understand this one?

And that line might work, were it not for the fact that Canada has another NDP government that has run a deficit since 2009 and that not only continues to do so but that acknowledges that it is "fiscally prudent" to do so.

An NDP government that, like the Trudeau Liberals are saying they will, invested in infrastructure despite the fact that this helped to ensure a deficit.

Manitoba's government. And an NDP government that has been in power for a generation. There is no way to claim they have "inherited" anything related to debt.

To begin:
The Manitoba NDP’s latest delay in balancing the provincial budget is actually an example of fiscal prudence, according to Premier Greg Selinger. 
Blaming falling oil prices, reduced federal funding transfers and the overall Canadian economy, Selinger said the NDP decision to postpone getting back in the black from the 2016/17 fiscal year to 2018/19 was actually part of a “balanced” economic approach 
“We’re taking a balanced approach where we don’t cut core services to people, where we provide opportunities for young people to get good jobs, and we also act with fiscal prudence in terms of dealing with the deficit and we will continue to do that in this budget,” said Selinger.
Selinger, for all his many faults, is correct here.

And it seems he, despite the deficit, is supported by progressive economists and union leaders.

Hence from Kelly Moist:
The president of CUPE Manitoba says the 2015 provincial budget reflects the needs of Manitobans and invests in core services.
Moist said she's glad to hear the government is making investments rather than cutting services or staff.
"What I'm used to seeing and hearing from my counterparts is cuts in many of the provinces," she said.
"We're seeing investments here — investments in core services, health care, education — priorities for Manitobans and obviously for our members as well." 
And from Molly McCracken:
The director of the Canadian Centre for Policy Alternatives' Manitoba office says she's pleased to see rent relief for low-income families. The budget proposes increasing the Rent Assist program to 75 per cent of the median market rent.
McCracken also gave the budget top marks for no announced cuts to services or staff.
"I think this is a responsible approach," she said.
"It's an investment in social services that we depend on through the infrastructure spending. It's a measured approach and, yeah, it's a good budget."

Shockingly neither of them felt it was immoral for Selinger to continue Manitoba's deficit. Neither of them thought it would burden "future generations".

But do you know who did?:
 The prairie director of the Canadian Taxpayers Federation says deficit spending is the wrong way to go, as well as the government's plan to draw from its rainy day fund once again.
"Oh, this is an F. This is a reckless budget. This is an irresponsible budget," MacKay said.
"They promised to have the budget balanced by now. They're racking up $422 million in deficit. You know, future generations are going to have to pay for this; it's completely reckless."
And from PC Manitoba leader Pallister:
The Progressive Conservative leader accused the NDP government of "[throwing] fiscal management in the ditch" with its deficit spending, especially after Finance Minister Greg Dewar said the government won't present a balanced budget until 2018. 
"They are making promises with money they are taking from our children and our grandchildren here," Pallister said, adding that the future of front-line services will be at greater risk. 
"Every program they promise to expand today, every vote they promise to buy today, is going to come at the expense of the future security of the people whose vote they are trying to buy."​
Sound familiar? It should:
“Governing is about priorities and we’ve watched the Conservatives run up eight deficits in a row, the Liberals are now telling us that they want to run several years of deficits,” Mulcair said. “I’m tired of watching governments put that debt on the back of future generations.”

Thomas Mulcair made his second visit to Eglinton-Lawrence in midtown Toronto, where his candidate Andrew Thomson, the former Saskatchewan finance minister, opened his campaign office. Mulcair reiterated his pledge to balance the budget during his first year in office. During a wide-ranging, free-wheeling scrum, I asked Mulcair why he thought it was so imperative to be even a tougher deficit hawk than the prime minister. He said it was immoral to go further into debt today, and pass on the responsibility of repaying those debts to our children and grandchildren. 
Mulcair is straight up repeating right wing lies and lines about deficit financing and is actually also repudiating the only two existing NDP governments and their fiscal policy.

So which side are you on?

Rachel Notley's and Selinger's or Tom Mulcair's and Pallister's.

Because federal election or no federal election, you cannot be on both.


  1. I trust Tom Mulcair to manage the economy while being respectful of the democratic rights & freedoms. I wouldn't consider giving up one for the other which Harper obviously has.

  2. I trust Tom Mulcair to manage the economy while being respectful of the democratic rights & freedoms. I wouldn't consider giving up one for the other which Harper obviously has.