"We don’t have any money!"

I hear this all the time, especially in this era of austerity in which governments are trying to limit their expenses. We get told over and over again that there’s no money, and so there’s nothing we can do about issues like homelessness.

There are a bunch of reasons why this excuse doesn’t hold up. Here are two of them:

(Note: This is incomplete and simplistic because, well, I’m not an economist.)


- It’s cheaper to house someone than for them to be homeless. Seriously.

I didn’t know this until recently, but the statistics speak for themselves. The Blueprint To End Homelessness In Toronto published by the Wellesley Institute points out that:
Poor housing, and homelessness, is costly for taxpayers. Thousands of homeless people are forced to sleep in homeless shelters. Hundreds of homeless people end up in jails. Homeless people and those poorly housed have a higher rate of illness. The average monthly costs of housing and homelessness are:
social housing ($199.92);
shelter bed ($1,932);
provincial jail ($4,333);
hospital bed ($10,900).
(emphasis mine)

Providing social housing is by far the best and most cost-effective solution.

If governments are so obsessed with saving money, why don’t they give housing a go? I don’t have all the answers to this myself, though helping marginalized people never seems to be very high up on most politicians’ priority lists. There are three others reasons I’ve heard about, all from a lecture Michael Shapcott from the Wellesley Institute gave in a class I’m taking.

First, an investment in housing would cost a lot at the start and it would take a while to see the pay off.  In a world obsessed with short-term economic success, it’s harder to take on these kinds of long-term projects.

Second, relating to the first point, governments want to be re-elected. They don’t want to be seen as a government that spends lots of money, especially given that the results of that spending probably won’t be seen during their term in office and given that saving money is what’s fashionable right now.

Third, government departments don’t like cooperating with each other. (This is often referred to as “siloing”.) Mr. Shapcott spoke about how the Wellesley Institute presented the Ministry of Health with their findings that providing housing would dramatically reduce healthcare costs. The Ministry of Health thought this was a great idea. However, it was up to the Ministry of Municipal Affairs and Housing to approve the housing projects. The Ministry of Municipal Affairs and Housing weren’t so keen on the idea because their department would increase its spending and the Ministry of Health would see the benefit. Yay bureaucracies!
 

- Governments could have the money they need for social services if they really wanted to. In this age of austerity, we keep hearing about government debt. Governments tend to blame spending on social services for their debt, which makes it easier to cut them in the name of austerity.

In theory, this makes sense. If governments are spending tons of money on interest payments and on paying off their debt, that’s bad because that’s money that could be better spent elsewhere.

We hear a lot about what governments spend, but we don’t hear much about what they make through taxes even though the connection between the two is obvious: the more money governments make through taxes, the more money they can spend.

Here’s the thing: at the same time we’ve been complaining about debt and cutting services, we’ve also been cutting taxes.

Here’s an example from the 2012 Ontario Budget Speech. Our finance minister talked about our provincial deficit and said: “Over three years, the plan includes $17.7 billion of savings and actions to contain cost increases.” How does he say we can accomplish this? Things like “extending the pay freeze for executives at our hospitals, colleges, universities, school boards and agencies for another two years”.

Then, not a few minutes later, he brags: “In total, we have reduced taxes for Ontario businesses by over $8 billion a year.”

I’m no mathematician, but even I’m beginning to see why there’s a fiscal shortfall and how it has as much to do with tax cuts than it does what we spend on social services.

So why the preoccupation with tax cuts? In theory, tax cuts are to attract businesses and keep them in Ontario. This is a huge government concern. If businesses leave, the economy won’t do well and people will be unhappy with the government and won’t re-elect them. The government sees it to be in their best interest to keep businesses happy.

And governments feel like they have to do this because of neoliberalism — those changes in the way the economy is run that I keep bringing up. For instance, when you have free trade, corporations are freer to go wherever they want to produce products. Since corporations want to chase higher and higher profits, they want to produce stuff as cheaply as possible. Where they can get cheaper labour or, say, a good tax deal is where the want to be.

However, in this kind of system, most people lose. If corporations are always trying to find the cheapest places to produce stuff, governments are under constant pressure to do things like lower taxes and reduce labour and environmental regulations. (This is what is often called the “race to the bottom”.)

Thus, this issue of budgeting goes a lot deeper than just “we have no money”. Why we don’t have any money is just as an important question to ask, and the answer to that links to the logic of neoliberal economic restructuring.


So basically, the “we have no money” excuse doesn’t hold up. If nothing else, because we could save money by providing housing. Governments could do something if they really wanted to. Also, I think this kind of analysis is useful because it shows us how the logic of austerity and neoliberalism is key to making sense of why governments think they can’t or shouldn’t provide social housing.

When we give little money and even cut money going to poverty reduction and housing, but are able to hand out billions in corporate tax cuts, that sends a message. There’s an economic logic embedded in this that tells us that what’s good for corporations and for the market is deserving of funding, and that things like housing are social supports are not nearly as important. It also suggests what’s good for marginalized people isn’t as important as what’s good for the economy. In a world where the economy is the priority, it’s easy to see why housing doesn’t make it to the top of the priority list.

All this also contributes to the notion those experiencing homeless are undeserving of housing. Because they’re not the priority. The money that could go to housing is something we should sacrifice for the good of the economy.

And all this ultimately contributes to the message that if you’re not linked to or important to the market, then you’re not seen as important or as deserving of basic human rights.




Sources: The Blueprint To End Homelessness In Toronto, the lecture Michael Shapcott from the Wellesley Institute gave to my INT908 class on September 19, 2012, ye old Budget Speech, “Changing Politics of Canadian Social Policy” by James J. Rice and Michael J. Prince, “If you’re in my way, I’m walking: the assault on working people since 1970” by Tom Workman, and “A Brief History of Neoliberalism” by David Harvey

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