I’ve never understood the notion that job cuts and austerity are the keys to economic salvation. Governments the world over have told us that we just need to expect less of them: the only way they can keep our economy humming is to provide fewer services at greater cost, while employing fewer people and paying them less.
On the surface, it’s a tempting argument. Politicians point out that people try to run their household finances that way. They share lots of old saws like “You can’t spend money that you don’t have.”
The homey justifications for austerity don’t stand up to much scrutiny, though. When good middle-class jobs disappear, ordinary Nova Scotians are out of work. They pay less income tax and rely more on already-stressed social programs. They don’t buy new homes. They don’t buy cars. And in many cases they move away because private-sector jobs rarely, if ever, offset government cuts. A short-term cut in government spending is pointless if it does long-term harm to the province and its people.
And that’s why the austerity philosophy Premier McNeil and Nova Scotia’s Liberal government embrace seems so dumb to me. Cutting the film-tax credit destroyed an industry that was growing in Nova Scotia for years. It’s impossible to see how the government saved more money than it lost in spin-offs and tax revenues. (And that credit wasn’t a cash giveaway, it was a credit to encourage out-of-town companies to come here and spend money that they’d otherwise spend elsewhere.)
That always seems to be how austerity works. A lot of people suffer, and a few people, usually rich people, enjoy some short-term gain. I defy anyone to explain how embracing merciless austerity has improved Greece’s lot in any way, for example.
As a bunch of angry letter writers are about to observe, I’m not an economist, so maybe I’m way off base with this. If anyone can cite a single example where austerity has saved an economy and made people’s lives better, I’d be happy to hear it. Write in and let me know. But I won’t hold my breath.