Vicious circle

Cutting too deeply in the name of austerity can backfire in a big way

There are likely few people who would argue with the need to take care of the public purse and to ensure that waste and duplication are eliminated as much as possible when a government is making spending decisions. It’s just prudent and makes a lot of sense.

However, as we watch the latest round of job cuts in the federal government — a whopping 3,872 of them this time around — we have to wonder if perhaps the budgetary knife is perhaps slicing just a little too close to the bone.

As governments are quickly discovering in European countries right now, austerity is a poor choice for revitalizing a sputtering economy, as the people who were employed in relatively well-paying jobs find themselves no longer able to purchase the goods and services that are needed to keep the economy ticking along.

As those workers hit the streets in search of another position, you can bet they won’t be buying any luxury goods and will likely cut back on any other discretionary spending.

Cuts of this nature — if they are deep enough — have the potential to start a vicious circle of less spending in the local economy leading to fewer jobs in the local economy and at least the perception of the need for more cuts. That circle, if it gets bad enough, can turn into a whirlpool that sucks everybody down with it.

Of course, these people didn’t sit twiddling their fingers until closing time either. They provided services to the public that will be missed at best and at worst will seriously jeopardize the government’s ability to carry out its day-to-day business.

Don’t kid yourself. We all use government services, even if we may not be aware of it at the time. Those services could be severely curtailed, despite reassuring words about efficiencies and the elimination of duplication.

Has the federal government crossed the line between fat and bone in its cuts? That remains to be seen, but the indications at this point are troubling.                                 — editorial by Neil Horner

 

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