Budget cuts, taxation, the 1% and populist governments

Lord Acton in 1887 penned the infamous quotation “power tends to corrupt, and absolute power corrupts absolutely”. 

With a US election being fought over the economy, and hidden Budget Act clauses that will, in the absence of a balanced budget, require all departments to accept a specified global budget reduction.   Canadian initiatives dependant on government funding, who were operating on a shoestring, are seeing those shoestrings being cut.  BC announcing that the price of natural gas will significantly compromise revenues and drastic cutting is required to balance the budget – and knowing full well that Alberta depends greatly on natural gas royalties and Saskatchewan has developed a more recent dependence – expect to see similar responses from all Western provinces soon.  All in all, governments are seeing revenues decline, and as a result are doing the only politically acceptable action – cutting all that spending that in the eyes of ratepayer organizations represents government waste.

It has become heresy to consider changes to the taxation system that would see even modest general tax revenue increase.  Albeit that some jurisdictions are toying with hitting the upper crust of income earners with a pittance of an increase.  It is fitting that the Occupy movement is "celebrating" its one year anniversary, and discouraging that the results have been far less than needed.  

Lacking in the debate is the link between the benefits of research, education, environment, social service etc. and sustainable civil societies.  We are cutting our feet out from under us and soon there will be very little to stand on.

The logical consequence, is what Lord Acton spoke to – that those in power will fall to those who have little to lose by fighting for the power.  It is Egypt, Syria, Afghanistan, and innumerable other countries that have gone before.  It is the Occupy movement with redoubled force.   Leaders of the underclass, the socially deprived, the underprivileged, and the oppressed will rise.   The followers are those that feel hopeless and are given a sense of hope, the helpless who are offered help.  Is it surprising that history is replete with examples of mutiny, civil upheaval, rebellion and revolt? 

Is it surprising that the political leadership has myopia? Any surprise to see the ruling Greek government overthrown?  Are there surprises in the dethroning of middle Eastern governments?

What will this look like in Canada and North America?  Probably too early to assess, but expect incumbent governments to slide out of power as have the Liberals in Quebec.  BC and Nova Scotia are due in 2013, and Ontario holds onto a precarious minority government. 

This is less about the political stripes of the incumbent governments, as it is about the disconnect between those living in middle and upper class settings from the realities that drive their sustainable future.  Few are like the Doctors for Fair Taxation that are openly pleading "tax me, tax me - Canada's worth it".    Equity and taxation blog

So here is the point for comment and debate.   How do we begin to shift the civil culture to regain the post-war social movements that of itself led to the development of a thriving middle class?  Do we hold out hope for another global technological marvel like the microwave, the Internet or the mobile smart phone?  Or do we depend upon the emerging economies like China, India and Korea to drive a global resurgence that will save the traditional developed countries that are breaking under burgeoning debt?

Governments listen to the populace, so how do we convince the populace of the need for reformation that does not indebt our future generation?  Please opine your thoughts, suggestions and questions as comments to this posting .