The cuts are happening for a simple reason. When the G20 met in London in 2009, at the height of the financial crisis, the leaders failed to band together to regulate the financial sector so that this type of crisis would never happen again. All we got was empty rhetoric, and an agreement to put trillions of dollars in public monies on the table to shore up banks around the world. Meanwhile the US government did little to keep people in their homes and jobs, so in addition to haemorrhaging public money to save the banks, the tax base collapsed, creating an entirely predictable debt and deficit crisis.
At this weekend\’s summit the Canadian prime minister, Stephen Harper, convinced his fellow leaders that it simply wouldn\’t be fair to punish those banks that behaved well and did not create the crisis (despite the fact that Canada\’s highly protected banks are consistently profitable and could easily absorb a tax).
If banks make losses and fall over they should pay more in taxes. If banks make profits and don\’t fall over they should pay more in taxes.