AltAusterity Digest #116 October 17-23, 2019

Central banks and governments are preparing for the world economy’s slowest growth in a decade in 2019. This week, the International Monetary Fund (IMF) recommended governments use fiscal policies, including investments in labour market skills and infrastructure, to help offset the slow growth that is expected. Bank of England Governor Mark Carney has stated that the world economy is close to a liquidity trap – where interest rates are at all time historical lows – making monetary policy relatively ineffective. However, if fiscal policy is to be the policy lever to manage the next economic downturn, it remains unclear where additional revenues will come from as raising taxes may be politically unpopular and debt financing for many states may being with it the threat of debt default.

Premier Jason Kenney has told Albertans to prepare themselves for major cuts as the United Conservative government prepares to unveil its budget. The budget will include a corporate tax cut that will lower the rate from 12% to 8% over four years. Overall government spending will also be reduced by 2.8% over this time. Funding for health and education will be frozen. Due to the fact that health and education together make up 55% of the provincial budget, economists have pointed out that a 2.8% overall spending cut will mean deep cuts elsewhere. Potential targets include postsecondary education and climate change initiatives.

Writing for The Conversation, Oz Gore examined how austerity has bolstered the British state’s ability to counter the disruptive tactics of Extinction Rebellion protestors. Extinction Rebellion’s “Autumn Uprising,” resulted in more than 1,800 arrests and according to Gore, reflects the transition of the London Metropolitan police (Met) as it has been restructured to be “an agile justice system.” While the underfunding and reorganizing of the Met has meant that it is not equipped to meet all its former responsibilities, it has been adapted so that limited resources can be redirected quickly to address changing political priorities.

A 30 pesos hike in subway fares has set off mass protests in Chile against austerity policies. The Chilean government of Sebastían Piñera’s has responded with mass repression deploying armed forces and tanks to the streets. Despite of declaration of martial law, trade unions, students, feminists, Indigenous communities and environmentalists are calling for a general strike along with a host of demands. According to Jacobin, the demands include Piñera’s resignation, an increase to wages and cheaper public services, a forty-hour week, a restoration of union rights and sectoral collective bargaining, the nationalization of public services and the energy sector, student-debt forgiveness the cancellation of the odious free market “water codes”, progressive tax reform, a new migration policy, and a new constitution.

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