Thinking Poor or Poor Thinking?

HYPED-UP GROWTH & CONCEALED WOES
When that fantastic wave of economic growth came, the Third World seems to have been sucked down by the undertow rather than being lifted. Floating comfortably above sea level, our analytical and critical perspectives have been blindsided by staggering economic growth. Today, we believe the neo-liberal theory of trickle down economics so deeply that we often fail to internalize clear signs of its potential to create dependency and poverty.

In Ecuador – a small Third World Andean country in South America – 33.1% of people live below the poverty line, according to the CIA Factbook. Claiming that the dollarization (U.S.) of the national currency has helped revitalize the “investment climate, reassured potential investors and potentially increased the capacity of the economy to create employment and reduce poverty,” the UN’s Report on the Assessment of Poverty in Ecuador and other promoters of neo-liberalism stand by this decision with their lives.

However, the same Report also explains that despite further subduing hyperinflation at home, families’ lifetime savings were “often swept away,” and the miniscule reduction in cost of the average consumption basket ended up helping mostly only the non-poor, considering the particular consumption patterns of the poor.

Right here in Industrialized Canada, Prime Minister Harper’s personal ideas have been that the best long-term strategy to combat poverty is “sustained employment of Canadians” – a noble idea to espouse would the unemployment rate not be about 3% higher than that of Ecuador’s. But it isn’t only that a country with a $1+ trillion GDP still finds 8% of people jobless; there are also 3+ million Canadians who are poor, of which 610,000 are children, as reported by an article in The Economist.

[pullquote]We believe the neo-liberal theory of trickle down economics so deeply that we often fail to internalize clear signs of its potential to create dependency and poverty.[/pullquote]

And Canada seems to have a poor record when it comes to children. As an article from Street Level Consulting Ltd. reports – a counseling and consulting company set in Calgary, Alberta:

Despite a period of unparalleled economic expansion in the mid 1990s, this decade was one of failed expectations and broken promises for children and their families…[A]t a time when governments had a growing capacity to invest in a long-term vision for children — as they had promised to do— they chose instead to cut taxes and dismantle much of the social system that protected families.

According to an activist group called Campaign 2000, in 2010 the rate of child poverty was as bad as two decades ago.

Public spending cuts have also been criticized by various circles. In Canada, part of the reason why child poverty was high through the ‘80s and ‘90s and why it remains there today, is because massive public spending cuts was the prescribed medicine for a sickly economy, which was being challenged in those decades by recessions.

The 1980s’ blow was mildly softened by government spending still covering some areas, but the ‘90s’ cuts went blood-deep: federal and provincial cuts to employment insurance and social assistance gutted the social safety net and it inflated the magnitude and duration of poverty. Today, after the brutal 2008 – 2010 recession, around 48% of the jobless continue to cope without jobless benefits.

The nature of the Canadian Social Welfare System also seems to be like a boulder weighing down people trying to come up for air. Apart from public spending cuts, ‘90s’ policy also required individuals to renounce most of their personal assets in order to qualify for welfare. Though the idea was to make the program available only for the most destitute, an article by the Ottawa Sun reports that “generally people looking for welfare have to spend their retirement savings before they qualify,” with small details varying from province to province.

In the same article, John Rook, Chairperson of the National Council of Welfare, argues that with low asset limits, low-earning exemptions and low welfare rates people become trapped and doomed to precarious financial situations, “especially…single people”. Adopting a program like Manitoba’s, where families can keep up to $16,000 in savings, is something Rook has recommended to other provinces.