Bottom line on the budget

You know, they're not fools, these Liberals. If the Conservatives thought they could just ride into power on a wave of public revulsion at Adscam and related scandals, they should think again. There's a reason why the Grits have won all those elections. What Ralph Goodale's budget signals, with its raft of management reforms tacked onto an unapologetically activist approach to government -- no tax cuts, no firm commitment to debt repayment, and a nearly 40% increase in spending in the last five years -- is an attempt on the Liberals' part to reframe the ballot question as "what should government do," rather than "what has this government done." The reforms are meant to neutralize the scandal issue, to cauterize it as a matter of lax controls. Then they can engage the Conservatives on the broader question of how big or how small government should be, ground on which the latter are clearly uncomfortable. The "new" Martin government will present themselves as prudent managers of big government. ("It's not about cutting," Goodale said, in the budget's most telling line, "it's about finding the money to do something new.") The Conservatives will then have a choice: either to say "so are we," or to present a different view of the role of government itself. Either way, the scandals are no longer the issue. If the Conservatives want to keep them an issue, then, they have to connect them to the role-of-government issue. One or the other won't do. They can use the scandals as a route to discussing the role of government, yes. But they have to be willing to discuss the role of government to give the scandals any traction. That means they have to stop running away, in their apparently morbid fear of being labelled "extreme," from any suggestion that they intend to change much of anything -- Harper disavowing meaningful spending cuts, the caucus paper promising only to "depoliticize" regional development, Sen. Pierre Nolin declaring the CBC untouchable. (And please don't say anything about health care, referendums, abortion, multiculturalism, Triple E Senate reform, supply management, etc. etc. etc.) The Martin approach is to say: the scandals happened because of some bad guys in the previous government, but we've fired the bad buys and put in place measures to stop them from doing it again. The Conservatives have to say: No, the scandals were an inevitable outgrowth of the Liberal way of governing. Indeed, they are the Liberal way of governing. The rot extends far beyond a mere $100-million skimmed by a few advertising firms. And it covers much more than mere criminality. It's more insidious than that. It is the whole system of discretionary dispensations -- a billion for farmers here, a billion for fishermen there, and so forth, until you have assembled a large enough coalition to get back into office -- that is corrupt, and corrupting. It depletes the treasury, distorts the economy, incites envy, encourages special pleading, and rewards friends -- of the regime, if not of individuals within it. As I wrote two years ago, "Liberal ethics is Liberal politics is Liberal economics." They are all of a piece. To improve the ethics, to clean up the politics, you have to change the economics. You have to remove the sources of temptation. You have to take away the moneypots. You have to snip the wires through which money and influence, or money and votes, or money and money, are exchanged. You have to get as much as you can out of reach of the politicians altogether, and keep the rest under lock and key. Unless you do, the system will carry on much as before, occasionally erupting into view to scandalized headlines, but mostly escaping notice, precisely because it is so widespread. All the comptrollers in the world can't change that. BONUS GRAPH: Just so people don't get carried away with how 'prudent' this budget is, here's a little review of spending and revenue over the last four decades, adjusted for inflation and population growth. That is, it shows federal program spending and revenue in real per capita terms, the only appropriate measure (no change in spending in RPC terms means no change in the real volume of government goods and services provided to each person, whereas no change in spending as a proportion of GDP, the common alternative measure, means spending has actually increased, sometimes by a substantial margin: spending goes up, not because it needs to, but because it can.) The blue line is spending; the red is revenue. There are five distinct phases: 1965-75, when spending and revenues both climb rapidly; 1975-85, when revenues fall off, but spending doesn't, only to shoot up to new highs in the later years; 1985-95, when the Mulroney Tories attempted to come to grips with the resulting deficits by raising taxes, while maintaining spending at record levels; 1995-2000, when the first two Chretien governments sharply cut spending, while maintaining taxes at near-record levels; and 2000 to the present, when as Don Drummond, the former Finance department boffin and now chief economist at TD Bank, puts it, "they let 'er rip." That's the period we're now in, if you're wondering. Message tracks: Goodale: "It's not about cutting, it's about finding the money to do something new." Harper: "There's more to good financial management than just balancing a budget at excessive spending levels." Layton: "It's like paying down the mortgage faster when you've got a leaky roof, a sick grandma and your child is trying to go to university." For the usual cavalcade of the self-interested ("Budget falls short in providing Canadians with timely access to needed health services; however, Canadian Healthcare Association welcomes public health investments" ... "Physical activity community cautiously optimistic following federal budget" ... "Quebec Coalition for the Renewal of Infrastructure - A Step in the Right Direction, but More Needs to Be Done and It Needs to Be Better Targeted") go here.