You think we have a debt crisis now? You should have seen the one Canada had in 1993!!! And just like this one, it was phony, designed to scare people into cutting and privatizing government so the rich can get even richer. The Shock Doctrine, Naomi Klein, Pages 324-326. Published before the financial collapse and subsequent "debt crisis."
In February 1993, Canada was in the midst of financial catastrophe, or so one would have concluded by reading the newspapers and watching TV. “Debt Crisis Looms,” screamed a banner front-page headline in … the Globe and Mail. The only solution was to radically cut spending on such programs as unemployment insurance and health care. The governing Liberal Party did just that.
Two years after the deficit hysteria peaked, the investigative journalist Linda McQuaig definitively exposed that a sense of crisis had been carefully stoked and manipulated by a handful of think tanks funded by the largest banks and corporations in Canada; C. D. Howe Institute and the Fraser Institute (which Milton Friedman strongly supported). Canada did have a deficit problem, but it wasn’t caused by spending on unemployment insurance and other social programs … it was caused by high interest rates, which exploded the worth of the debt.
McQuaig went to Moody’s Wall Street head office and spoke with Vincent Truglia, the senior analyst in charge of issuing Canada’s credit rating. He told her something remarkable: that he had come under constant pressure from Canadian corporate executives and bankers to issue damning reports about the country’s finances, something he refused to do because he considered Canada an excellent, stable investment … for the Canadian financial community, the “deficit crisis” was a critical weapon in a pitched political battle … a major campaign was afoot to push the government to lower taxes by cutting spending on social programs such as health and education. Since these programs are supported by an overwhelming majority of Canadians, the only way the cuts could be justified was if the alternative was national economic collapse – a full blown crisis.
Truglia got so fed up he issu(ed) a “special commentary” clarifying that Canada’s spending was “not out of control,” … when he put out the commentary, “one Canadian… from a very large financial institution in Canada called me up literally screaming at me. That was unique.” By the time Canadians learned that the “deficit crisis” had been grossly manipulated by the corporate-funded think tanks, it hardly mattered – the budget cuts had already been made and locked in. As a direct result, social programs for the country’s unemployed were radically eroded and have never recovered, despite many subsequent surplus budgets.
In September 1995, a video was leaked to the Canadian press of John Snobelen, Ontario’s minister of education, telling a closed-door meeting of civil servants that before cuts to education and other unpopular reforms could be announced, a climate of panic needed to be created by leaking information that painted a more dire picture than he “would be inclined to talk about”. He called it “creating a useful crisis.”From Seeingtheforest: