Politics today seems stuck. And voters are stuck with it.
Endless deficits, mounting public debt and the worries of credit rating agencies seem to argue for cutbacks in programs, cutbacks in government employment, along with other forms of austerity.
Meanwhile, crumbling infrastructure, stubborn unemployment, and a lack of economic growth seem to call out for stimulus programs and more government spending to get things moving again.
Just look at Europe. Europeans elect governments that promise to stimulate, and they get austerity instead. They elect governments that promise austerity, and the spending never reverses. And the problems just keep building.
It is the same for most of the world, but what about Canada?
Does Canada need to stop spending money it doesn't have? Of course it does. We could choose to tax ourselves to find the money – although increasing taxes will slow the economy. Or we could cut spending to get rid of the deficits – although that, too, will slow the economy.
Without growth, though, the rising debt becomes more of a burden. Ask Ontario, where making interest payments on the accumulated pile competes heavily with education for second place, behind health, in government spending. Ask the United States, where 100% of the operating budget (things that aren't interest payments or entitlements) now has to be borrowed each year (and what happens when the world doesn't want to lend $1.6 trillion a year to your country any longer or, even worse, doesn't have it to lend?)
But austerity versus stimulus isn't the real battle, despite what you'd think listening to politicians. It's about the dead weight of the past versus creating the future.
What's that dead weight?
It's regulations that preserve the existing players and make innovative newcomers a problem.
It's management practices – like supply management in Canada, or the common agricultural policy in Europe – designed to limit markets.
It's a tax code riddled with deductions, allowances and credits that preserve the status quo.
It's a tax scheme that taxes the wrong things, holding back tomorrow in the process.
It's redistribution schemes – equalization, welfare, etc. – that are a part of providing for the less well-off but are expensive to operate, don't deliver enough to those who need it for the money spent, and create perverse outcomes.
It's attempts to manage government costs by restricting supply – as we do in medical care, where we limit licences to practise, restrict where facilities will be built and how they'll be equipped.
We tend to focus on silly things, like the cost of expanding the House of Commons by 30 MPs (the cost of Parliament is 1/100 of 1% of the federal budget, including the gold-plated pension obligations) instead of on the serious matters of restructuring our public sector and services for the 21st century. Maybe it's time for a paradigm shift.Maybe, just maybe, we'd be better off with guaranteed annual incomes – they'd make it easier to be an entrepreneur, thus create our own work – while paying something toward our non-catastrophic health care. Maybe we'd be better off with less "free trade" between nations and more of it between provinces. Maybe we'd be better off with more consumption taxes and less taxing of incomes. Maybe we don't need lower corporate taxes per se, but a real difference between being big and being small in business.
In other words, getting a country that works for tomorrow isn't our politicians' responsibility – it's ours. It's time to get together with our neighbours and start telling the people we elect what to do.
If we don't, we'll get austerity and stimulus, no growth and less of a future. •
