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Liberals release fiscal plan that seeks to avoid austerity with unicorns and fairy dust

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Last week, for what it was worth, the NDP released their "costing" document seeking to show how an NDP government would make good on its election promises while also, as they have committed to, balancing the books no matter what (because, you know, this is what Tommy would do!).

Fraser Needham said of the NDP "plan" that "Quite frankly, this document isn't worth the paper its printed on."

And he is right. It is either simply nonsense aimed at getting elected or guaranteed to result in austerity.

Not to be outdone, however, the Liberals have released a "fiscal plan" that utterly belies their newly minted attempts to don the "anti-austerity" cloak and that shows what a farce and sham "mainstream" bourgeois politics has become in Canada.

The Liberal plan seemingly starts well -- and unlike the other two neoliberal programs on offer from the Conservatives  and NDP accepts the reality that the Conservative "surplus" is a phony one, that we are heading into a recession and that the government should start stimulus spending -- but ultimately it too returns to a fixation on balanced books and does so at such a rapid arc, and with so few meaningful details as to how it intends to do this, that cuts to programs are inevitable.

So, the plan states:

Our plan includes measures that, according to Department of Finance multiplier projections, will have positive impacts on economic growth, particularly infrastructure investment and measures for lower-income Canadians. 

This is unquestionably positive as a general economic idea within a very limited neo-Keynesian capitalist context, but the plan then depends on a variety of "new revenues" to arbitrarily achieve a surplus by 2019 (not coincidentally what would be a re-election year were they to win a majority). Some of these, like the Liberal proposal to tax the wealthiest Canadians more, actually do make sense, though they are being framed in a way that plays into the context of the Liberal pandering to the "middle class" narrative.

They are also offset by totally unnecessary tax cuts for "small business" and the "middle class". 

While the plan does offer other new revenue sources it also hinges greatly to get where it wants to be by 2019 on what can only be described as unicorn fairy dust and this is even partly, though unintentionally, acknowledged as such. 

Under the column "Tax expenditure and Harper spending review" the Liberal fiscal outline suddenly becomes truly, absurdly vague.

Here the "numbers" are farcically inexact. As if they are grade school kids making up the math as they go along, the Liberals project essentially pulling out of thin air a lockstep progression of neatly flat rated "savings" that go from $500 million in the first year, to $1 Billion in the second, to $2 Billion in the third and finally to $3 billion in the fourth, 

How do they arrive at these numbers? Who knows? Pretty much because they say they do.

Yet, given that in 2019 they promise a very small surplus significantly lower than $3 billion, these "savings" are essential to meet the target even if all their other math adds up exactly.

This is reminiscent of the Ontario NDP's Andrea Horwath's inane promise to find hundreds of millions of dollars in unspecified "inefficiencies" during to the 2014 Ontario election to make her plan "work", or of Rob Ford's nonsense about "gravy trains".

In practice it means cuts to services. 

Despite the phrasing the Liberals will not find all these "savings" by cutting alleged "waste" or closing loopholes.

So, in the end, the Liberal plan depends either on an economic revival that will bring in unspecified revenues or meeting these "efficiency" targets.

Given the past history of Liberal governments, especially the vicious austerity Chretien/Martin regime, I think it is clear how this is likely to play out.


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