Public services did not cause deficits and debt

Posted Feb 16, 2012 By Leigh Thomson

Dear Editor,

Rick Norlock says federally, "The deficit was $33.4 billion for 2010-11." Yet the Tax Justice Network notes we are losing more than $80 billion per year through tax havens and evasion.

Provincial revenues shrank in recent years through $18 billion in tax cuts by Liberals and Conservatives that benefited mostly the rich. Restoring the revenue through a more just tax system would eliminate the quoted $16.2 billion deficit provincially (Ontario Health Coalition).

Tax and other benefits for the wealthy are causes of deficits and debt.

In Canada, high interest rates in the 1980s and corporate tax cuts were responsible for 94 per cent of our public debt (StatsCan, Mimoto, '91). Public services accounted for less than six per cent, yet services were blamed for public debt and cut, while financiers were given more powers through Mulroney's so-called "free trade" deal.

We had already (unwisely) given private banks power to create money from nothing, through the Bank Act. Banks used this power to push for deregulation over the decades, to merge finance and insurance, and to lobby for more powers through "trade" agreements. Chretien's NAFTA and Harper's CETA, along with other deals, give fi-nance unprecedented rights over water, food, energy, and other services, at our expense (Trade Justice Network).

The National Farmers' Union January 2012 newsletter says, "Since 1988 when the Canada-US Free Trade Agreement was signed: agricultural exports have tripled, farm debt has tripled, farm input costs have risen and realized net farm incomes have dropped." Nonfarmer corporations and fi-nance/insurance/real estate conglomerates manipulate input and output prices globally, while undermining supply management, bankrupting small farmers and foreclosing on land.

Increased financial power and rights are now used by the most powerful in financial markets to bully targeted sectors or governments. The public "debt crisis" in Europe was cre-ated in the first place by the Wall-Street-dominated ECB, and financiers who targeted vulnerable countries by raising interest rates, then bet against the ability of targeted governments to meet payments (New Economics Perspectives, links). Rhetoric was then used to force austerity. Services, once cut, can then be offered by financiers' companies, at higher prices.

Through an array of policies, finance seeks more power over resources, services, and all our rights. It is dishonest to talk about defi-cits and debt while ignoring broader dynamics.

It is also dishonest to imply that we leave only debt to future generations. Economists at standupontario.org,remind us that debt is only a percentage of GDP or national income, currently, more debt can be accommodated. "By 2009/10 interest payments represented a mere 1.9% of GDP." (Resources, The Sky Is Not Falling, p. 11). Public services support the economy, enabling us to leave more jobs and provisions to our youth.

Public services should not be privatized.

For example, the Canada Health Act requires publicly administered healthcare. The federal government is legally bound to enforce public, not private, management.

Yet health, financial and personal data, through the Ontario Common Assessment of Need, are already being collected on software owned by private companies which are allowed to share that data with their private insurance and other partners. Already one for-profit global company manages OHIP billing for Community Care. Non-profit health centres outside OHIP can also allow "de-identified" aggregate electronic health records to be managed by partners which stand to profit from gutted public healthcare.

Control of private finance over our economy can be resisted at many levels. Tax and trade justice, with fi-nancial transactions taxes, is necessary. Banking itself could be reclaimed as a public service, and then localized, to control our own economy.

Leigh Thomson, Castleton