The B.C. Libs' big fib

There's no lie like a Big Lie. And as happens so often in politics in thiscountry, the big lies — those repeated over and over again — pay bigdividends. This has seldom been more true than the current election and thefact that the B.C. Liberal's whole campaign rests on the lie that 1) theyinherited a huge deficit from the NDP and 2) that through tax cuts andexcellent economic management Gordon Campbell turned things around and savedthe province.

First, the foundation for all of the Liberal's propaganda: the NDP deficitmyth. Rather than hand the Liberals a huge deficit requiring severe cuts topublic services, the NDP in its last year in office, 2000-2001, racked upthe largest surplus in B.C. history to that date — a total of $1.56 billion.The previous year, the NDP had a surplus of $150 million.

When he won in 2001, Gordon Campbell faced a problem: that pesky surpluswould put pressure on him to spend on social programs. Better, in the oddlogic of right-wing neo-liberals, to face a fiscal crisis, a deficit crisis.What better way to rationalize the most vicious cuts to social spending andenvironmental protection the province had ever seen?

How do you create a fiscal crisis? Simple. Take over $2 billion dollars ofgovernment revenue and burn it — or, even better, give it away in tax cutsto your friends. B.C.'s largest corporations got a huge whack of tax cuts andso did B.C.'s wealthiest residents.

Campbell's cuts were some of the most unfair ever seen in Canada with thewealthiest 11,000 British Columbians (those making over $250,000) takinghome 15.2 percent of the total tax cut pie, about as much as the millionpeople who make up bottom half of all tax payers earning $30,000 or less.

The made-to-order deficit crisis set the province up for the enormous cutsto services. Campbell had actually campaigned on such cuts in the 1996election, deluding himself that British Columbians actually wanted to seetheir schools and hospitals closed and bathrooms taken out of theircampgrounds. This time around he simply lied: the agenda hadn't changed, buthis election strategy had.

While the economic cycle would have led to a deficit regardless of Liberalcuts, because of the tax cuts and the devastating economic impact of thespending cuts, the deficit in the Liberals' first year in office was astaggering $2.6 billion — dwarfing the highest NDP deficit in 1998-99 ofjust under one billion dollars. The next year was even worse — $2.68 billionin the red. In the third year — a third huge deficit in a row. By anyaccounting, this was the most fiscally incompetent and economically recklessgovernment the province had ever had.

But going by the headlines, it was almost a non-event. The pundits,editorialists and the Fraser Institute who were in a constant state ofagitation and near hysteria over NDP deficits were suddenly mute. Deficit?What deficit? In fact, this is always the response of the right — deficitsracked up by giving tax breaks to the wealthy are okay; those created byspending on social programs (that is, on working people and the poor) are tobe demonized.

By this convenient theory, tax cuts drive investment and economic growth.And while you don't hear the Liberals repeating their earlier line that thetax cuts would “ pay for themselves” you do hear that we now have bigsurpluses because the Liberals are such good economic managers. Neitherclaim stands up to even the most cursory examination.

This past year personal income tax revenue, which was supposed to go up asa result of the tax cut economic stimulus, was actually below what wastaken in the last year the NDP was in power — $883 million less. Revenuefrom corporate taxes have not returned to their pre-cut levels either.

So where did the $1.74 billion surplus come from? Brilliant economicmanagement by the Liberals? Well, no, actually — it came from the federalgovernment in increased “ transfer payments,” the money B.C. gets for medicareand education plus federal equalization payments, due to B.C.'s current statusas a “ have-not” province. This last fiscal year saw the province get awhopping $2.1 billion more from Ottawa than they did in 2000-2001.

If the Liberals hadn't received that extra two billion, and had not cutspending, their surplus would instead have been a deficit of $360 million.

But it gets worse. If Campbell hadn't increased tuition fees and MSPpremiums they would have had a deficit a billion dollars higher yet. Nowwe're up to $1.4 billion in the red, giving the Liberals the dubiousdistinction of being able to claim four of the highest deficits in B.C.history — in four years of governing.

Maybe you knew all this stuff. But if you think you are immune from theLiberal's feel good messages on the economy, answer this question: whichgovernment in the last year of its term had the highest economic growthrate? Answer: The NDP with a rate of 4.6 per cent in 2000-2001, compared tothe Liberals, last year, at 3.9 per cent. Who would have thunk it?

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