balancebudget_thumb-1.png
balancebudget_thumb-1.png This article is more than 5 years old

79 economists who think balanced budget laws are bad economics

So much for balanced budget laws being a good idea.

So much for balanced budget laws being a good idea.

Not only do a staggering majority of Canadians disagree with Prime Minister Stephen Harper’s obsession with balancing the budget at all costs:

Now, 79 economists on the world stage — including some high-profile names like Thomas Piketty and Mariana Mazzucato — have blown the logic behind balanced budget laws to smithereens, just as Harper’s government is set to ram through balanced budget legislation this week.

In a letter published in The Guardian, this is what some of the world’s leading economists now say about balanced budget laws:

“They have no basis in economics.”

“[The] proposals are not fit for the complexity of a modern 21st-century economy, and, as such, they risk a liquidity crisis that could also trigger banking problems, a fall in GDP, a crash, or all three.”

“The plan actually takes away one of the central purposes of modern government: to deliver a stable economy in which all can prosper.”

The economists were responding to the British Conservative government’s “permanent surpluses” law, but the Canadian version has similar aims, with promises to freeze departmental spending before they run a deficit, and only allows for governments to dip into the red during wars, natural disasters, and other “exceptional circumstances.”

Canadian economists have already made the case against balanced budget laws, as have provincial governments: after seven provincial and two territorial governments passed similar legislation during a similar “austerity” movement in the early 1990s, they’ve been largely panned.

Photo: Finance Canada.

Help us protect Canadians by holding the powerful accountable.

Journalism is an important public service. That’s why PressProgress is prioritizing stories aimed at keeping Canadians safe and holding the powerful accountable during the coronavirus pandemic.

Please consider supporting our award-winning non-profit news organization so we can keep making a positive impact for Canadians.

 

Support Our Journalism
PressProgress
PressProgress is an award-winning non-profit news organization focused on uncovering and unpacking the news through original investigative and explanatory journalism.

Most Shared

thumb-2021-05-010 News

Police Departments Across Ontario Are Issuing Statements Rejecting Use of Doug Ford’s Controversial New Police Powers

Related Stories

News

Doug Ford’s Government Wants TVO to ‘Commercialize’ Online Learning Content Designed for Ontario Schools

View the post
News

Jason Kenney’s Over Budget Anti-Alberta Inquiry Won’t Say If It Will Meet Its Third Deadline Extension

View the post
New

Heritage Minister Promotes Claim That Tech Companies, Academics are Behind a ‘Deliberate Campaign of Misinformation’ to Stop Bill C-10

View the post

Explainers

Politics & strategy

Tom Parkin

How Federal Leadership Can Help Establish Important Social Programs and Health Reforms

View the post
Power and democracy

Andrea Reimer

Why Powerful People Do Stupid Things

View the post
Work & rights

Liz Walker and Shanice Regis-Wilkins

What Anti-Worker Businesses Don’t Want You To Know About the Value of Unions

View the post