Friday, February 01, 2013

Friday Morning Links

Assorted content for your Friday reading.

- In response to the Fraser Institute's latest attempt to foment panic (to be used as an excuse to attack public programs and hand yet more free money to corporations), Trish Hennessy explains the province's choices in terms anybody should be able to understand:
The austerity experiment has been waged in several European Union countries: Massive cuts in government spending for four years drove Greece, Spain, Portugal and Ireland into full-scale economic depression. Meanwhile, the U.K. is struggling to get off its austerity treadmill, despite the less than stellar results there.

Ontario could pretend that more of the same – cutbacks – will yield different results than it has already in Europe. But even the chief economist of the International Monetary Fund (IMF), Oliver Blanchard, has come out saying Europe went too far with austerity measures.

As for California, CCPA Economist Hugh Mackenzie says: “It’s suffering primarily from the kind of policies the Fraser Institute advocates: cutting and freezing taxes when it doesn’t make any sense to do so. Even the most superficial reading of the California experience points to the role that tax freezes, tax cuts and various propositions designed to limit the ability of California to meet its obligations.”

Austerity poses a similar threat in Ontario, where more government cutbacks could lead to higher unemployment – including youth unemployment, which is already unacceptably high in Ontario.

Yes, Ontario did incur a deficit during the worst of the global economic crisis – due in part to dropping tax revenues, which always occurs during a recession, and aided by stimulus spending that helped prevent even more job losses.

The province launched into spending cuts before the economy had fully recovered, which hasn’t helped matters.

That said, Ontario’s deficit is on the mend more rapidly than expected. The Finance Minister says it’s already almost $3 billion less than his Fall 2012 prediction. Barring another economic downturn, Ontario’s deficit will be balanced by 2017 – quite possibly earlier, without needing to lay off workers, axe services and dangle more tax cuts in front of corporations.
- Meanwhile, Miles Corak explains that the most privileged 1% wants to avoid any talk of inequality by pointing out how it's getting worse. And Andrew Jackson breaks that group down even further to find our wealthiest citizens are paying far less than they did a decade ago even as their incomes have skyrocketed:
The top 0.1 per cent paid income tax at an average effective rate of 35.4 per cent in 2010. While much higher than the effective tax rate paid by the bottom 99 per cent, that is only slightly higher than the effective income tax rate of 33.3 per cent, which was paid by the top 1 per cent as a whole.

The effective income tax rate paid by the top 0.1 per cent has fallen very sharply, from 41.6 per cent to 35.4 per cent since 2000. This compares to a fall in the effective rate from 39.4 per cent to 33.3 per cent for the top 1 per cent as a whole, and a fall from 18.0 per cent to 14.8 per cent for the bottom 99 per cent.

One has to question why federal and provincial governments have chosen to cut effective top tax rates by so much while the income share of the super-affluent has been rising so rapidly.
- It's better than nothing to see that the Cons have been forced to walk back their commitment to secret loans. But perhaps the more important evidence of warped priorities (which don't seem to have changed) can be found in the original story - where Glen McGregor notes that the Cons set up the system to ensure a steady flow of photo ops rather but not any public accountability whatsoever:
The loan agreements with the businesses that get the money requires them to accept public disclosure, but the contribution agreement between the government and the development organizations does not provide for public disclosure.

It does, however, require the development organization to “participate in and assist with the co-ordination of a public announcement by the minister in the form of an event,” and “co-ordinate a mutually agreement on venue, date and time in light of the availability of the minister for public media events outlining project achievements.”
- And the Cons are also pushing the envelope in trying to silence civil servants who have the ability to point out where political directions are leading them astray - with CIDA's loyalty oath serving as the latest example. And of course, that inclination toward perpetual cover-ups only figures to encourage waste and other harmful outcomes.

- Finally, and speaking of waste: yes, the Canadian public was billed $1 million to ship Stephen Harper's limousines across the Pacific. No wonder the Cons are trying to stop the opposition parties from asking order paper questions like the one that revealed that sad reality.

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