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The austerity insanity. Coming soon to your Ontario.

So, it's official. No matter what happens, Ontario is getting austerity.

The "brinkmanship" around the McGuinty budget has made this clear.

There is the Hudak slash and burn version that seeks to implement the full Drummond Report; a virtually guaranteed way to greatly exacerbate inequality and to drive Ontario back into recession.

There is the McGuinty version, which seeks to balance the books directly on the backs of labour, workers and the poor, while, perhaps intentionally from the start, trying to appear moderate by not bringing, for now, the full Drummond Report apocalypse that they themselves commissioned.

And then there is Horwath "populism" that confuses a miniscule tax increase on the extremely wealthy (and that, by the way, would not effect the pocketbooks of her or her caucus colleagues, despite their rather generous incomes relative to those of the "ordinary" citizens that they constantly ramble on about) and cutting the HST on the home heating of Bridal Path mansions with real progressive taxation. Instead of the reversal of the Harris era tax cuts, they offer an "austerity lite" that would presumably sing Kumbayah and Sixties protest songs while balancing the budget on the backs of, you guessed it, labour, workers and the poor.

Given that there is no reason to believe that anything will change, in terms of the positions of the parties on these issues in the event of an election, we can safely assume that Ontario, whether the budget is defeated or not and regardless of who is elected, will get an austerity budget either now, or just after the next election.

Both myself and others have pointed out that the alleged need for austerity is due, almost entirely, to a generation of reckless, irresponsible and immoral personal and corporate tax cuts that have fueled the massive growth in social inequality and have depleted the coffers of government to such an extent that their reversal alone, in-and-of itself, would balance the budget.

In addition to this, the Liberal government refused to allow Drummond, in the unlikely event that he would have, to even discuss tax increases. Horwath's farcically minor increase on the incomes of the ultra wealthy aside (an increase that would ONLY apply to income ABOVE $500,000...it would not even increase taxes on the first $500,000 of income), no party in Ontario's parliament is willing to even float the idea of genuine progressive tax increases and the reversal of the Harris era personal and corporate income tax cuts. Given that fact, there is no other way to balance the budget, if this is your priority, other than through program and public sector wage freezes and cuts. It is a self-fulfilling set of policy priorities.

And what it amounts to is that every mainstream political party in Ontario has consciously chosen to place the maintenance and continuance of these personal and corporate tax cuts ahead of the social benefits, youth programs, anti-poverty and housing programs, welfare and disability benefit increases, public sector wages and public sector services, and so many other government efforts that their reversal would fund.

It is that simple.

Beyond the immorality of this choice, one might note, despite all the pathetic preening of the parties to appear to be the most "fiscally responsible" managers of the economy, it is also pure idiocy as economic policy.

As Nobel Prize winning economist Paul Krugman has pointed out, the "Austerity Delusion" consists of the manifestly false idea that, emerging from the 2008 economic crisis that was both caused by and showed the bankruptcy of neo-conservative free market ideas and forced even right wing governments back to Keynesian interventionist, stimulus based spending models, somehow now is the time to reduce the budget deficits nominally "caused" by this stimulus through spending cuts. The same stimulus that saved capitalism itself in North America from a broad collapse into a long term depression. He has framed the appallingly self-destructive increasing austerity agendas of, for example, European governments in these terms: "This is, not to mince words, just insane".

And it is insane. Greece style insane. It is insane because the cuts proposed remove billions of dollars that stimulate economic activity through not only jobs, but also the direct impact that the personal spending of those who will be hit by austerity has on the economy. Just as the Ontario economy appears to be recovering, you begin to remove the reason it was recovering; government spending.

Instead of, as the right wing pundits would have it, preventing a Greek style debacle and social collapse, you start to engineer it. And that is due to the fact that what happened in Greece, for example, was not a result of irresponsible public spending, but rather of irresponsible activity by the European banking sector.

In Ontario, any "crisis" is also not a result of irresponsible spending (and the corporations had no trouble lining up for the spending when it was coming their way), it was due to irresponsible tax cuts and, as in Greece, the effects of the near collapse of a socially irresponsible unregulated capitalist model due to the actions of corporations themselves. Even in spite of the tax cuts, the Liberals were balancing the books until the crisis of 2008. Had it not been for the failure of the the "free market" capitalist economy and the need to bail-out corporations for their own reckless activity, there would have been no deficit.

It was not the fault of government or government spending, it was the fault of the neo-conservative corporate capitalist model.

And worse, of course, is that once austerity and its negative impacts have begun, they become self-perpetuating. The cuts will hurt the economy, depressing economic activity by removing the stimulus effect of government spending, thereby reducing revenue further, necessitating further cuts, etc.

We now know, thanks to a twenty year public policy detour, that tax cuts do not stimulate the economy, result in direct investment, or prevent capital flight. This has been proven repeatedly and the 2008 crisis should have, but did not, put an end to the entire neo-liberal fantasy that everyone from the NDP to the Tories continues to read as a bedtime story to the restive citizens of the province. But further, we know that they do not even stimulate personal spending to replace the lost stimulus of government spending due to the demonstrable and rather obvious fact that the vast bulk of the transfer of wealth that occurs due to these cuts is a transfer from direct stimulus in the form of spending by both government and the citizens that government spending most benefits to the massive and increasingly disproportionate amassing of non-productive and non-economically stimulating paper empires of personal wealth concentration.

Simplistically put, the proportion that one spends directly on products and services due to what one receives from personal tax cuts is in inverse proportion to one's wealth. The wealthiest, to whom by far the most wealth and revenue has been transferred by the tax cuts spend a far smaller proportion of it on goods and services as they have the least reason to.

Conversely, of course, a transfer of wealth, with tax increases, from upper income brackets to the bulk of the population through social programs, higher wages, government spending and so on is almost entirely used by those citizens in ways that have an obviously beneficial, direct, and even community centered economic impact.

If the goal is to be fiscally and economically responsible, then it is obvious that to do so there should be progressive tax increases on, at the least, the top thirty percent of income earners and that the revenue that this generates should be put into job creation programs, social spending and infrastructure expenditure.

That the media will howl with accusations of "class warfare" is irrelevant. The tax cuts were class warfare. They were the assault of the upper-middle class, the wealthy and the professional classes on everyone else. They successfully created an economic "policy" and political ideology centered around the transfer of wealth and social power from society as a whole to them.

Until we reverse these ideas, in terms of the economic and social equality impact of the policies of the various parties, no matter who you elect you will get the same basic economic and income equality result.

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