The value of public spending

For the second time in as many weeks, major news stories have featured relatively small budgetary cuts made by the Harper government.

First we were told a famous freshwater research facility in northwestern Ontario would be closed as part of a $79-million saving in the Fisheries Department. Scientists have deplored the government decision and have praised the facility as being unique. Closer to home is the news of cuts to Parks Canada and the resultant decrease in services that will take place at Riel House. The horror story of this cut is that some historical artifacts will have to be stored in, of all places, the province of Quebec.

That these cuts have received such prominent attention proves two things. First, the government knowing it would be subject to criticism, is determined to proceed with its program of reducing spending. Second, it proves government spending is not such a bad thing after all, and the promises made by all political parties to cut spending can do more harm than good. But the politicians who call for reduced spending will protest they are referring to "wasteful spending."

One has to have sat around a table, scrutinizing billions of dollars in expenditures to know how difficult it is to come across expenditures that are easily identified as "wasteful."

Certainly the auditor general will identify savings that could have been made if abuses of one kind or another had not taken place. But these abuses do not really affect the global expenditures of the government or do so only marginally.

In order to materially affect government spending, you really have to get down to the level of actual government programming and, if you do, stories such as Riel House are inevitable.

As long as the prevailing philosophy is government spending is bad and the cause of our economic woes there will be no escaping continued efforts by governments wedded to these propositions from doing what they have done and will continue to do. The sad result is some worthwhile activities will be discontinued with no economic benefit. Indeed, the economy will suffer.

In order to stop stories like these, we would have to dramatically revise our philosophy of government. We would have to say the greatest loss to our economy occurs not by government spending but rather the lack of employment of able-bodied citizens who are capable of producing useful goods and services but have not found jobs to take advantage of their potential.

Second, we must stop downgrading people employed in the public sector and acting as if the only wealth-producing work is in the private sector. We must adopt the maxim anyone who is performing a useful service contributes to the commonweal and this is true for people paid by the public as well as by those privately employed.

Making employment available to everybody, even at government expense, can only enhance the economy provided the work is useful. Nobody argues the fisheries and parks programs that are being cut are not useful. They are being discontinued ostensibly because it will save money. It will not save money. If those who are put out of work do not find new jobs it will cost money.

We have already proved that when we employ people to do useful things at government expense, we improve the economy. Between 1939 and 1945, we trained, housed, clothed, fed, and transported to Europe hundreds of thousands of Canadians who were put to work, and who didn't produce things consumers could buy. On the contrary, much of their labours were directed at destroying things. Did these efforts result in economic distress? To the contrary, they ended the Great Depression.

The late Rubin Bellan, an economist who lectured at the University of Manitoba, wrote a splendid essay entitled Let's declare war on Great Britain. The theme was that given the fact war improved the economy, the solution to our problems was to have a war. But, said Bellan, since war would also help the economies of our enemies, it would make sense to go to war against our friends. Nobody need get hurt. Ninety per cent of our missiles missed their target in the last world war and it would not be hard to up that to 100 per cent.

We would need a political party with the courage to make drastic changes. Along with government spending, one would have to be willing to have concomitant taxation. You would need a man like Tommy Douglas. The present political scene does not look promising.

Sidney Green is a Winnipeg lawyer and former NDP cabinet minister.

Republished from the Winnipeg Free Press print edition June 16, 2012 A17