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We Need Budget Cuts, Not Trims

03/21/2013 09:03 EDT | Updated 05/22/2013 05:12 EDT
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In his much-maligned and oft-misquoted "Malaise Speech" of 1979, Jimmy Carter opened with what was intended to be a withering bout of self-criticism.

"Mr. President," he said, repeating the supposedly damning words of a disappointed fellow politician, "you are not leading this nation -- you're just managing the government."

That such a statement would even be scandalous says a lot about the distance of the 1970s. By the standards of this nameless decade, inspired leadership is positively passe, while bloodless managerial competence is trendier than Tie-Die Lite-Brite. Gone are the days when drab technocrats like Angela Merkel or Mark Carney would be considered uninspired seat-warmers; in 2013 we clamor for them to run our countries.

Thursday's federal budget is very much a product of this zeitgeist; it manages, but it does not lead. Through closing tax loopholes and busting tax cheats, the feds estimate we'll generate $6.8 billion in new revenue over five years, while some cautious "spending restraint and transformation of government" will yield little over a half-billion in the same frame. Previously scheduled (though still mysterious) cuts will take another $4 billion bite of overall expenditures.

New spending, after adjusting for this crackdown and all the new revenue that will supposedly be generated by a few rejiggered manufacturing subsidies and curling rock tariff cuts and whatnot, will add only $400 million to the deficit this year, setting the stage for a balanced budget by the politically convenient date of 2015.

Few didn't see this coming. The optimal moment for a leadership budget was last year, the first year of the Tory majority, and the first year of the Harper reign in which the PM could take it for granted that any figures he put to be paper would be uncritically passed by the House of Commons unmolested by tri-partisan negotiation or compromise.

It would have been the perfect moment to begin a substantial retooling of state spending for a new generation, a time to lay the cleaver to enemies of the small-government future Conservatives supposedly wished to build (tariffs, subsides, civil service wages, crown corporations, the CBC, etc) and herald the beginning of the end of problems the Tories were supposedly elected to solve (the omnipresent burden of debt and taxes).

Instead, we got a budget that made only the mildest steps in this direction, with dainty cuts, still-substantial spending and a decided absence of vision. And the steps continue today.

It's a tired cliche to bitch that the Conservatives have lost their way when it comes to fiscal conservatism, and lord knows the world does not need, to quote Paul Wells, another Andrew Coyne column complaining that "we are governed by drunken sailors on shore leave." A more interesting whine would be whether the western world has given up on using budgets as a tool of political leadership altogether.

The US has not passed a budget of any sort since 2009. Though Paul Ryan can dream up fantastical what-ifs in his pretty head all he wants, America's seemingly endless era of split-party government has resulted in a country that now funds itself through a daisy chain of emergency spending resolutions offering no ambition beyond managing (a ha!) to keep Washington's creaky bureaucracy from toppling over altogether.

In Europe, austerity budgets are all the rage, but its a fad of necessity, not choice. When debt consumes over 125 per cent of GDP, as it does in Italy, or 175 per cent, as it does in Greece, one slashes spending and hikes taxes not to make a statement, but because it would be suicidal to do otherwise. The fact that the Italian government is currently run by an unelected receiver (as was Greece too, until recently) only puts the point in starker relief: such budgets are the acts of civil servants running a country, not statesmen leading one.

Canada, as we've all grown tired of hearing, has Weathered the Recession Better than Most, a status that's been credited to our caution in the past and, it's presumed, can only be guaranteed by maintaining caution in the future. The result has been an absence of crisis, but also creativity. With GDP growth expected to remain at its lowest point since the start of the recession, it's an open question if this is what success looks like.

Sure, all things being equal, the Tories would probably like to see lower spending than higher, and fewer crazy initiatives than more (for examples of the latter, kindly see the un-costed NDP alterna-budget). But keeping all things equal has proven challenge enough.

They can't touch entitlements. The old folks would get cranky. And the public sector unions certainly won't permit any unilateral salary cuts. And god help Ottawa if they mess around with provincial transfer payments -- Mr. Harper, are you trying to tear this country apart?

Accept this as the common sense of a good manager and there's not a left to work with. The holy trinity of entitlements-wages-and-transfers represent the bulk of federal expenditures, which leaves little to do but the sort of thing this government's already been doing -- a gentle haircut for a couple obscure federal programs and a beautiful bouquet of boutique tax credits that may or may not wind up getting used. The bulk of federal expenditures, which is to say, the bulk of what government does in our lives, has long ceased to be the stuff of debate or discussion.

That sounds like a dogmatic point, but it's really more of a strategic one. If we're satisfied with merely having unemployment numbers lower than Europe and America, a GDP that's (barely) growing rather than shrinking and an oil-centric economy that can make peace with, in the words of Tom Mulcair, having "all our eggs in the extraction basket" then that's great. We'll survive with manager-government.

But if we want something more, it'll take leadership of the sort neither this, nor any recent federal budget has offered.

What we've got right now is not quite malaise, but not quite the opposite.

Budget Highlights 2013