(The following article is from the June 16-30, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)

By Peter Ewart and Dawn Hemingway

The news is pretty grim. In what appears to be another fit of confusion and disarray, the federal government has announced that it has recalculated the deficit figure for this year. Instead of the original $34 billion predicted just four months ago, the deficit is expected to climb to $50 billion, which, in total dollars, will amount to the largest deficit in Canadian history.

     There is one detail that is particularly interesting. According to Finance Minister Jim Flaherty, a large part of this deficit has been caused by the rising number of Employment Insurance claims being submitted by laid-off Canadians.

     But in his "analysis" of the cause of the deficit, Flaherty is keeping a certain fact hidden. However, just like a "bad penny," that "certain fact" will keep coming back to haunt him and his government.

     What is this "fact"? Contrary to what Mr. Flaherty says, unemployed workers and their EI payments have not plunged this government into deficit. Rather the opposite is the case. Over a number of years, a huge surplus amounting to $55 billion was built up in the EI fund by contributions from both workers and employers. However, instead of saving this money for a "rainy day" - as any responsible financial planner could have told them - both Flaherty's Conservative government, and the Liberal government that preceded it, looted the fund and used it for other purposes to make themselves look good.

     Flaherty and his government are like the banker who gambles away all the deposits in his bank and then argues that the bank is failing because too many people want their money back. "If you pesky unemployed people wouldn't be demanding your money back, then there wouldn't be such a bad problem," he appears to be saying.

There is a name when bankers do such things, and it is called embezzlement.

     However, now that the EI fund of $55 billion has disappeared down the government "memory hole," Flaherty believes he can get up on his pulpit and point fingers.

     Implicit in his statements about the cause of the deficit is the idea that somehow unemployed people are a big part of the problem. This is part of a disturbing trend by governments and big business to blame the wages, pensions, and other benefits of workers as being the cause of much of the current economic difficulty and a main obstacle in the way of economic recovery.

     The problem is not the reckless behavior of the banks and financial institutions that have destroyed the livelihoods of millions all over North America. It is not the lack of reinvestment and the stubborn refusal to innovate by the auto and forest company giants. It is not the hollowing out of the manufacturing sector in North America as a result of government and corporate policy. It is not the handing over by government of the country's resources to a piratical elite of international financiers who care less about people and communities.

     No. According to the logic of Flaherty and his ilk, the problem is the wages and pensions of that auto worker or that mill worker. The problem is that unemployed worker living "high off the hog" on EI payments or that family forced onto welfare. The problem is the great mass of ordinary Canadians who have too many demands and expectations for health, education and social services. In short, the problem with Canada is its people.

     The irony in all of this, of course, is that the wealth of the country and the revenue of government ultimately derives from the labour of millions of Canadian workers acting on nature, a fact about which Mr. Flaherty appears to be completely and abysmally ignorant.

     Back when the financial crisis was just beginning, Flaherty made the claim that the Canadian economy was as rock solid as the "Canadian Shield" mountain range and that the crisis would only have a "modest" effect.

     Well, the Canadian Shield has been crumbling for the last few hundred million years - something that Mr. Flaherty should know about given that he lives in that part of the country. Far more alarming, of course, is that the Canadian economy appears to be crumbling as each day goes by.

     Indeed, it appears that the only thing that may stay truly rock solid in the midst of this growing crisis is Mr. Flaherty's head.

     (This article has appeared on several websites. Peter Ewart is a college instructor, and Dawn Hemingway is a university professor and writer. Both are based in Prince George, British Columbia.)