Happy labour day everyone!

If you live in Manitoba, sorry that you'll all be facing more austerity from a supposedly centre-left government for working people.

[Disclosure - for readers who don’t know, I was the Leader of the Manitoba Liberal Party and a member of the Manitoba Legislature until I was defeated in last year’s election.

I’ve been making the point for more than a decade that the New Democratic Party (NDP) does not govern from the left, and that its economic policies have been fiscally conservative since before Tommy Douglas was first elected CCF Premier of Saskatchewan.

In various debates and interviews last year, I made the point that I was “to the left” of the NDP because their platform committed to austerity, cuts, and keeping huge tax cuts that had just been introduced by the previous Progressive Conservative government, which was one of the furthest right in the country.

People think if a person who belongs to a party that claims to be socialist or progressive, that if they have far-right economic views, that the two extremes will somehow meet in the middle and make them a moderate, a centrist or a liberal.

It has to be said, the reason the Government of Manitoba is facing a fiscal crunch is because the NDP decided to keep the PCs' unfunded property tax cuts and added others, which are costing the government hundreds of millions of dollars in debt.

Manitoba's federal transfers have more than doubled since 2016, going up on average $500-million a year for seven years, to over $7-billion a year.

The PCs could have used that money to fix roads, train doctors or nurses, add beds and seniors housing, lift people out of poverty - or even balancing the budget. There were lots of cuts that never had to be made.

Instead, the PCs kept running a deficit, selling off public assets while borrowing to deliver massive regressive tax cuts that have cost Manitoba's treasury and have added billions in debt, with massive benefits for a few and more debt for the rest of us.

There are better ways to provide targeted relief to the people who need it. If you're going to do something that is going to cost the public billions of dollars in new debt, there are actually investments you can put that into that will do a better job of providing relief, and of providing long-term return on investment, so the investment can pay off the debt, not our "children and grandchildren."

When you cut property taxes, as far as banks & lenders are concerned, it just means the next buyer can service an even bigger mortgage. It drives up property and housing prices without adding new value. It does exactly the opposite of what the move is supposed to do - it continues to drive up, (or prop up) the price for first-time home buyers.

It's the favoured tax cut of the FIRE industry - finance, insurance and real estate - because it means higher returns without any investment in new value or work on their part.

If you think about how a few cycles of doing that will inevitably break down, you can clearly see how and why property bubbles and debt-driven speculation will inevitably break down.

If you want to confirm this with an economist, I recommend asking one from a school of thought that actually includes banks and loans, which neoclassical (currently mainstream) economics does not.

There is an assumption that if a government is running a deficit, they are somehow being moderate. Deficits are associated with progressives, liberals and Keynes - for the purpose of effective investments in stimulating the economy.

What's happening is not progressive, it's not centre-left or even centrist and it wouldn't qualify as Keynesian stimulus. It's not fiscally conservative. It's not fiscally responsible.

This is a really important bait-and-switch, because lots of economically conservative governments do this, and they have a whole line to make you think they're not.

They pretend the reason there's a deficit is because they're spending more than the last government did, which is to say the budget increase this year was greater than $0.00.

Then they flat-out blamed the federal government for the cuts they were doing themselves. The entire Premiers' campaign to demand more health funds from the feds was so they could blame their own cuts on the federal government.

The total combined budgets of the provinces is greater than the federal budget.

For anyone who is surprised that the NDP is keeping PC tax cuts and pursuing more austerity, after already cancelling many projects and imposing freezes across the province, the NDP have always been economically conservative - right-wing, and pro-austerity.

That is true of provincial governments and federal leaders.

One of the reasons for why people say "extremes meet" of the right and left is that they have the same economics, which is fiscally conservative and pro-austerity. They never bought into Keynes and the New Deal, which was liberal.

The left didn't like FDR for what they saw as saving capitalism, the right didn't like him for using government to do it.

The actual economic policies that Marx proposed and that were used in the Soviet Union and China were trickle-down policies.

In the UK, Labour pursued strict austerity for years after the Second World War.

In Saskatchewan, Manitoba and BC the NDP have all run economically fiscally conservative parties and governments, and the social results, including terrible child poverty, speak for themselves.

Manitoba is one of many jurisdictions that has passed "balanced budget laws" and others that effectively outlaw or punish Keynesian policies. The EU's Maastricht Treaty does as well.

For some reason, it was considered reasonable, and not extreme, for people to outlaw an economic theory that not only helped Canada and the U.S. recover from the Depression and win the Second World War, but was responsible for what is known as "the golden age of capitalism."

There are a lot that people get wrong about Keynes and liberalism. Part of it is about what to do to get out of a crisis, and they there's what you need to do for "maintenance".

That is because almost no one is a Keynesian anymore.

And one of the biggest myths about Keynesian stimulus is that it means uncontrolled spending. That is not it, at all. What Keynes does say is that if we can do it, we can afford it.

If we have the people, and the materials, and the knowhow, and they are all idle and the only thing that is missing is the money to make a project happen, then the project can happen. It doesn't mean anything and everything can be achieved.

The biggest mistake governments in developed countries are making is pursuing austerity - fiscal and monetary - when what people need, especially after the pandemic, is investment and relief.

Central banks and fiscally conservative policies from parties across the political spectrum are driving extremism from economic desperation.

Everyone wants to talk about divisions based on collective identity, and they don't want to accept the collective experience of drowing in debt, because it's supposed to be each borrower's fault.

There are actually liberal and progressive economists who understand that running a government does not have to be an exercise in human sacrifice.

Their math is sound, and their predictions are better than central banks and fiscal conservatives.

Some are "Post-Keynesians" which means they understand that democratic government and the private sector can co-exist together in a complentary mixed economy.

The world doesn't need any more austerity, which is tipping people over the brink.

As Keynes said, "If it can be done, it can be paid for."

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