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Budget 2012: Conservative War of Attrition on the Young

Friday March 30, 2012

Well, they did one thing right: they ditched the penny.  Good riddance, it’s expensive and largely pointless.  Phasing it out is long overdue.

Beyond that, the Conservatives’ 2012 Federal Budget is all bad news.

It’s not as extreme as it could have been but that shouldn’t be as big a surprise as it seems to be to some. Stephen Harper has been busy trying to convince everyone that he’s a moderate Conservative and positioning the Conservatives has Canada’s natural governing party.  Incrementalism is an important tool towards that end.

Slow Boat to Conservative Nirvana

It’s been obvious that the Conservatives were adopting an incrementalist approach almost from day one of their election to a weak minority in 2006.  Over a long period of time this will take us to their Conservative nirvana of a small Federal government, low taxes, few benefits and unrestrained businesses.

That they plan to largely place the costs on the people who will likely never be able to access existing benefits isn’t exactly news either.  The older cohorts who tend to vote for the Conservatives will continue to receive all the benefits that they have always had.

The young will pick up the transition costs and then have to spend their later years living in the Conservatives’ small government nirvana.

Blatant Generational Warfare

By now, it should be obvious to all that I’m opposed to the Conservatives economic principles and that I don’t buy into the “small government” nonsense that they spout.  However, they have won a majority government so I’m not really all that shocked that they’re going to govern from that philosophy, discredited as it is.

What’s really appalling is that with this budget, Generational Warfare is now the policy of this Government.

While it is incremental, everything about this budget adds up to a pattern of expecting young people to pay for their elders existing benefits, receive less benefits themselves, have less security that programs will exist and have to also save more for their own retirements.  This represents a massive financial squeeze on cohorts already facing heavy economic burdens.

For example, the OAS adjustments will only affect everyone 54 and younger.  Almost the entire boomer cohort will therefore have access to the existing benefits, despite lifespans much longer then their parents, while younger people pay the tab.  They will not have to bear any of the costs of transitioning to a higher retirement age.  This is being done to insure the program is “sustainable,” even though the evidence shows the program is sustainable as is.

Deferring Expenses to the Next Generation

In a similar vein, public service pensions are going to be restructured to “defined contribution” plans, again primarily affecting young people joining the civil service, while leaving existing civil servants with their defined benefits plans.

The previously announced changes to the Health Transfers are also set to occur not long after Boomers begin to retire, setting the stage for tax increases, particularly in have not provinces, that will largely fall upon younger cohorts.

As for the environment, the current “plan” appears to be based on the naive belief that the resource boom will continue indefinitely.  This belief, as many Albertans will tell you, easily catches on with politicians and usually has catastrophic consequences for the public.  Moreover, the budget sets the country on the course of rapidly exploiting natural resources now and in the near future to continue to sustain boomer benefits and entitlements.

This will leave younger cohorts to pay for the environmental clean up as they reach their senior years.

Where’s the Money Going?

Even though I disagree with their governing philosophy, it could be argued that things like raising the retirement age are not unreasonable with people living healthier, longer lives.  Similarly, attempting to contain health care costs is a reasonably policy objective.

However, instead of asking all generations to share in the costs of this, they have decided to simply pass them onto the young.

The Conservatives seem intent on withdrawing the Federal Government from social responsibilities, therefore in cannot be expected that the savings are going to be used to defray the social costs of these cuts.  Most likely the savings will be used to further reduce taxes and regulation on business, facilitating transfers to the top earners, and increasing inequality.

Easing the Burden?

If we’re going to be transitioning to this new society of low taxes and personal responsibility and fewer government supports, it would be logical to think that the Conservatives might want to address some of the problems facing those who are going to have to live in it.  Chronic youth unemployment and under-employment has been epidemic.

Yet what are young people getting out of this budget?  Not a damn thing.

There is one program to address youth unemployment that $50M adds up virtually nothing.  EI premiums are being increased, impacting those young people who have a job.  The Katimavik program is being cancelled outright.  There is no new funding for city infrastructure, where younger cohorts are more likely to live.  There is nothing to  address the mortgage and affordable housing crises which are disproportionately affecting the young.

There is no plan to begin creating a savings from our natural resource industries to provide long term financial security for our country.

Almost everything that has been cut disproportionately affects younger people, with the younger you are the more affected you are.  The environmental attacks are going to leave younger Canadians facing the clean up bills, in many cases just as they reach retirement ages themselves.  All of this will constrain the Federal Government from being able to respond to a possible social crisis of massive proportions in the future.

Youth Sold Down the River

The didn’t start this but they have accelerated it.  They don’t intend to deliver their own voters to their small government nirvana, but their children and grand children. Young people already pressed by difficult job markets, exorbitant housing costs and enormous student debt.  Already forced defer marriage and family life, many will now simply never have the opportunity for those significant stages in life.

Our elders will get to enjoy our quasi social democratic state, lowered taxes, and vote Conservative who will ensure their children will pay for it.  We will get to live without these benefits, paying higher taxes and costs to sustain them for others.  We will bear the costs of repairing the environmental damage and trying to save for our own retirements.

In Conservative land supposedly self responsibility is paramount.  With this budget, the Conservatives continue to commit the biggest sin of modern Conservatism: responsibility for thee but not for me.  Conservative supporters, largely found in older cohorts, will continue to receive almost all the benefits while passing the costs onto those most opposed to their discredited philosophy.

Canada’s children and grandchildren are losing this war of attrition, unable to gain meaningful employment, start families, have secure homes and secure futures.

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