Politics, Business & Culture in the Americas

Is Fiscal Conservatism The New Liberalism?

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In Canada, the Conservative party has had a majority government since May 2011, yet it never talks about dismantling the nation’s social safety net.  Both the opposition parties, the New Democratic Party (NDP) and the Liberals, have led governments in our federation—in the case of the NDP at the provincial level, and Liberals at both levels—that have produced balanced budgets and worked to reduce the public debt.  The one constant between parties of the Left and the Right in Canada since the mid-1990s has been the recognition given to three important tenets usually associated with fiscal conservatism:  the means to keep social programs viable and sustainable, or cuts must follow; the need to balance yearly budgets; and the obligation to address the debt burden as part of GDP.

With the political convention season ending in the United States, the Democrats and the Republicans are also presenting policies and making promises on how to deal with existing social programs, yearly government deficits and the increasing debt.  Unlike Canada, the thorny issue of eliminating taxes or bringing in new taxes, and the maintenance of existing social programs in order to deal with yearly deficits and long-term debt have been  the wedge issues between Democrats and Republicans since the Reagan days, and are at the center of the 2012 presidential debate.  Republicans want to balance budgets by reducing the size of government through lower taxes and cutting spending.  Democrats, taking a page from Bill Clinton’s playbook, want to balance budgets with a mixture of cuts and raising revenue.  Of the two, it is fair to say the Democrats resemble most of the Canadian approach.

The reality today is that the issues of social programs, deficits and debt must be addressed outside the prism of ideological purity and rigidity.  Undoubtedly, the social safety net in both countries, with its universal character which emerged in the post-depression years often out of necessity, and in the post-World War II period because of prosperity, will be hard to dislodge. In the United States, “Don’t touch my Medicare or my social security” is a more powerful force than “Lower taxes on the rich, cut spending, and reduce the size of government.” I am certain Canadians would have similar reflexes .

Does this mean that we are condemned to the status quo?  Must we be resigned to the fact that deficit and debt will eventually drive us over the cliff, and then it will be too late?  The debate should not be relegated to the Left-Right continuum of politics.  Nor should it be limited to one about the role of government, whether it should be active or limited.  It should be about the will to act, the need to rise above partisan concerns, and the desire to compromise.  In this regard, failure to endorse the Bowles-Simpson Commission Report on the Debt in the U.S. was likely a missed opportunity.

Many of today’s popular social programs, both north and south of the border, had their origins in the 1960s when post-war prosperity and opportunity, better education, and economic developments could provide us with the means to create wealth and find ways to achieve social justice. Universality without a means test became the norm for programs like Medicare in the United States (i.e., for those over 65 years) and in Canada (i.e., from cradle to grave). No one doubted that course then, and it was done to reduce inequalities and provide economic security. Now, however, baby boomers are beginning to retire; the age pyramid has inversed; and economic realities have changed. Can we realistically not address the viability of programs established in another era?

Today, it would be foolhardy to develop new universal, government- subsidized programs.  Deficits and public debt have become structural, and only get worse when there is an economic downturn.  Let’s face it: we are still feeling the effects of the Great Recession 2007-08.

This is not an argument against ideological and political differences in the political debate. Such differences are part of the democratic framework in both Canada and the U.S. It is more a realization that the tenets of fiscal conservatism—re-evaluating existing social programs, balancing budgets, reducing debt—are no longer the prerogative of conservative parties.  They are the new norm for economic security and social justice in our respective societies. And this applies to die-hard ideological liberals in both our countries. The differences in the politics of all this will surface when it comes to the solutions, the will to act and how we get there.

John Parisella is a contributing blogger to AQ Online. He is the former Québec delegate general in New York and currently an invited professor at University of Montréal’s International Relations Center. His Twitter account is ‏@JohnParisella


John Parisella is the former Québec delegate general in New York and currently a visiting professor at the University of Montréal’s International Relations Center. He is also a Member of the Board of Directors of The Montreal Council on Foreign Relations.

Tags: Canada, United States, United States Elections 2012
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