A guaranteed solution to the deficit problem

CHARLES GORDON February 22 1993

A guaranteed solution to the deficit problem

CHARLES GORDON February 22 1993

A guaranteed solution to the deficit problem




Since the onset of the 1980s, politicians have been running on the theory that the only thing government has to fear is government itself. Now that the 1980s are over, it is possible to assess the impact of that philosophy. The net effect has been less government and less of everything else too, except unemployment, of which there is lots more.

In the Canada of the 1990s, our next government won’t have an easy time solving the problems handed down by the present one. Part of this is because the problems are difficult. But the difficulty is compounded by the fact that government is no longer seen as being capable of solving problems. In fact, many Canadians think government has no business even trying.

If our next government is Conservative, it will run into a wall of irony (an irony curtain?) as it tries to create more jobs and greater prosperity. The irony will come from the public distrust of government. Having labored long and hard to convince the public that government is part of the problem, rather than part of the solution, 1980s governments have made it almost impossible for 1990s governments to take the kind of leading role that they played in more cheerful times.

If it were only Conservatives who were affected by the message they put out in the 1980s, the answer would be simple: throw out the Conservatives and never let them in again. But all parties have been affected. They are frightened and demoralized, afraid to act. The notion of the deficit, an economic monster movie produced and directed by Reaganites, Thatcherites and Mulroneyites, has troubled the sleeping and waking hours of even Liberals and New Democrats. And the notion of taxation, a possible weapon with which to attack the deficit, seems equally frightening to all of them.

A smart government

would measure the deficit in some new way that makes it seem lower when looked at from the proper angle The consequences, as projected by the lib-

eral American historian Arthur Schlesinger, Jr., are not encouraging: “Having designated government as the en-

emy and having produced a deficit so large as to block further social spending, Reagan had also persuaded voters of the wickedness of reducing the deficit by raising taxes,” Schlesinger wrote in an analysis of the U.S. presidential election. “By maldng the advocacy of tax increases a formula for political suicide, Reagan may have succeeded in depriving his successors of some of the tools needed to do their job.” Fear of offending government-hating and

tax-loathing electors has caused all manner of strange political behavior. While the deficit grows and cutbacks choke social services across the country, otherwise sensible politicians preside, with nary a moral qualm, over a booming lottery business. Lotteries were once considered, in more innocent times, a tax on the poor. Now, the proceeds of the lotteries go to support hospitals, which would not need lotteries to support them if governments had not been conditioned to believe that the words “tax” and “spend” were dirty. To give you an idea how far the fever has

spread, the Ontario government of Bob Rae, successor to several generations of Baptist, Presbyterian and Methodist preachers of the social gospel, is about to establish gambling casinos. The justification: they will create jobs and attract tourists. To be fair to the Ontario New Democrats,

the idea has caused a split in the party. Fittingly enough, the attack on the casinos is led by an NDP backbencher who happens to be a clergyman, AN an Anglican. Outrage from within the party may yet

convince Rae to try something else and, to give him credit, he is able occasionally to summon outrage from other than members of his own party, as when he put a 40-percent tax on wine imported by independent buyers. People can argue the rights and wrongs of this one, but it at least achieves what should be one of the objectives of NDP policy—it annoys the well-to-do. In this, Rae and other political leaders may

take comfort from the United States, where annoying the well-to-do seems to have been adopted as a tactic by the new President, Bill Clinton. Clinton told a radio audience early this month that “the privileged few” paid lower taxes on higher real incomes in the Reagan-Bush years, and that “we’re going to ask them now to pay their fair share, along with corporations whose tax burden has been dramatically reduced in the past 12 years.” If Clinton gets away with that, it may in-

spire political leaders in this country not to be such babies. They will gain further courage if the deficit can be made somewhat less frightening to them and to the voters. That will not be impossible. First, it is necessary to recognize that the deficit will never go down. That is one of the lessons of the Conservative governments of the 1980s. If people who hate the deficit more than anything—more than poverty, more than unemployment—can’t make the deficit go down, then the deficit won’t go down. Further, as we have seen, serious attempts to make it go down, through cutbacks and downsizing, only irritate the voters. Since the deficit will not go away, a smart

1990s government’s only course of action is to seem to attack it. It can do this by using creative statistics-keeping to measure the deficit in some new way that causes it to seem lower when looked at from the proper angle. Failing that, the government can stop talking about the deficit altogether. The people will not object to that. The peo-

ple are tired of hearing about the deficit. In due time, after the deficit has not been talked about for a few years, some future finance minister can step forward and declare the battle won—just as the United States announced that it had won the Vietnam War, when it got tired of fighting it. Once that’s done, governments can put

the 1980s behind them and make at least an honest attempt to help people who need it. It could be a slogan for the 1990s: take care of people, not casinos. Chañes Gordon is a columnist with The Ottawa Citizen.