Wednesday, March 24, 2010

Politics: That Sounds Familiar

TORONTO, ONTARIO - When Toronto Mayor David Miller made his "significant announcement" earlier this month, revising the city's budget projections, he followed up with verbiage about how the city was trying to dig itself out of deficit. The plan involved three basic elements, raising taxes by a modest amount (his announcement that day meant property taxes would rise less than expected), restraining growth in spending, and then hoping for economic growth to kick in and start raising tax revenues.

That sounded quite familiar. Just the day before, I had heard Washington state governor Chris Gregoire say almost exactly the same thing. Washington state, while in far better shape than most states fiscally, still is having trouble balancing its budget, and the state legislature actually suspended a citizen's initiative requiring a two-thirds majority to pass new taxes in order to make it easier for the majority Democrats to pass a budget including some tax increases. Governor Gregoire explained the general budget balancing strategy, saying that there would necessarily be spending cuts in some areas and restrained growth in other areas, that some taxes would be raised (mostly eliminating exemptions and the imposition of "sin" taxes), and then the "third leg" to return to surpluses would involve economic growth.

That politicians at different levels of government most of a continent apart seemed to be reading from the same playbook seemed significant. Indeed, what they are arguing makes sense. Raising taxes too much discourages growth, but so does slashing spending, as jobs are inevitably eliminated in the process. Doing a little of both and hoping that the economy recovers enough to grow out of the hole that has been dug does seem a reasonable strategy, and both Miller and Gregoire could point to a list of economists saying that was the right strategy to take.

The three-pronged strategy certainly seems to make more sense than the alternative offered by those to these leaders' political right. If Republicans had their way in Washington state, there would be slashed budgets including the end to the state's Basic Health system that more than 100,000 rely on as their only way to purchase health insurance because of pre-existing conditions or because they are self-employed or employed by a small business that does not offer insurance. The strategy of simply lowering taxes and hoping for growth to make up the difference certainly didn't seem to work in the second term of the Bush administration.

Yet, there's a certain similarity in the rhetoric from the conservative opposition across the continent as well. Listen to a TEA party activist being asked about policy and every other word out of their mouth is "no." They want to say "no" to taxes, any additional government programs, and even existing government benefits. Meanwhile, while she is normally quite eloquent in explaining her policy positions, Wildrose Alliance Party leader Danielle Smith in the province of Alberta was asked a series of questions by CBC comedian Rick Mercer (see about 3:15) and was reduced to just saying "no" to every permutation of energy and climate policy proposal that Mercer could offer until he got to recycling. For the first time, the ideological similarity between the Wilrose Alliance and TEA party was somewhat revealed, since normally they come across quite differently.

These correlations can only go so far. Somehow, I have a hard time seeing Jim Flaherty telling Stephen Harper that he was about to talk about a "big f*#@ing deal"... (or, if we insist on correlating the Liberals with the Democrats, Bob Rae saying that to Michael Ignatieff...)

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