Dec 12
21
Dashing Through the Snow Job—Deficit-Slashing 2012: Rod Taylor
While snows deepen on northern fields and our now-unnavigable rivers still course slowly toward the sea, the sea of red ink continues to rise in Ottawa. Our Finance Minister, though, has a jolly way of expounding on how much worse it could have been if Canada had not—with a grim determination and an eye to a prosperous future—faced the economic vicissitudes of recent years with the pragmatic and “flexible” response of borrowing billions of dollars.
In fact, Canada’s national debt has just crossed the $600 billion dollar line, an eye-popping increase of over 30% since 2008. Finance Minister Jim Flaherty likes to talk about taming the deficit but talk is all you get. In a recent interview with Sun News correspondent, David Akin, Mr. Flaherty seemed very pleased with himself, said he was “glad” that he borrowed money to prop up the job sector (not all agree that it even achieved its intended purpose) and suggested he would like to “stay on and get the job done”. He claims that he will “see it through” and get Canada back in the black.
There is so much wrong with this rhetoric that it needs to be challenged.
- First, everybody knows that getting out of debt is way harder than getting in. When Mr. Flaherty claims that they were following a plan and a strategy, he’s not being honest. Like so many, they tried to spend their way out of debt but discovered that it couldn’t be done. Federal program spending is up by 37% since they took office.
- Secondly, to focus only on the deficit is nothing but wishful prestidigitation (sleight-of-hand). The bigger issue is the debt, which has grown as a result of wildly uncontrolled government spending. Mr. Flaherty boasts that the Conservatives continued to pay down the debt in their first two years in office, claiming to have reduced the debt by $38 billion. Fine. But then they borrowed it back in the following years PLUS more than $100 billion in additional debt. When he says he plans to get Canada back in the black (by no means a fait accompli, as his track record is 100% headed in the wrong direction, with failed predictions, broken promises and levels of both debt and deficit unseen in Canadian history), he only means that he hopes to balance an annual budget before he leaves office. Then he will claim victory. What about the $145 billion + that’s gone missing since 2007-2008? He has not promised to replace that and leave Canada in at least the same shape he found it. That’s not a legacy of success; that’s a legacy of failure.
- Thirdly, the $30 billion we pay in annual interest on our federal debt is money Canadians would be much happier to see going to purchase, much-needed infrastructure improvements or even to purchase, say, some F-35s. It is money our children and grandchildren could use. We are currently in a low-interest world but when that changes, our ability to pay even the interest on this growing albatross of public debt may be taken away. We are already dangerously close to that tipping point.
Mr. Flaherty may want to stay on and “get the job done” but I don’t think Canadians can afford that. We need real budget cuts and that involves serious and sustained cuts to the bureaucracy, program spending and spendthrift politics. We need politicians of all stripes to stop buying votes with taxpayers’ money and when they mess up they should ‘fess up. No more candy-coating the blunders of an arrogant government, intent on getting its own way, no matter what the cost.