Terence Corcoran
Debt is good, even for governments. But it depends on the kind of debt, what it's used for and what the financial plan is for getting out of debt. Finance Minister Jim Flaherty's latest revelations on the future of Ottawa's annual deficits do not fill one with confidence that the federal government has a firm grip on the floodgates that control the level of debt in Canada, not all of which is going to be doing much good for the economy.
By 2015, said Mr. Flaherty in his surprise fiscal update on Thursday, Ottawa will have pretty well tamed the beast. He said the annual deficit in 2015 will be only be about $5-billion, "a very modest number to deal with."
The trouble with very modest numbers in the $5-billion range is that they tend to pop up without notice on a regular basis in government operations and then quickly, like gurgling slimy creatures in the movies, turn into gigantic long-term problems that are not so easy to handle. The next thing you know, you're dealing with real money.
For instance, the federal deficit for this year, originally estimated at $50-billion, is now a modest 10% higher at $55-billion. Going forward, Mr. Flaherty laid out a slightly revised series of deficits that would still, under the best of circumstances, run the national debt up by $170-billion by 2015. That would bring Ottawa's total net debt to $628-billion, a record in nominal dollars and about $19,000 per capita — compared with $608-billion or $20,000 per capital in 1997, the peak year for federal debt in current dollars. The numbers are different in constant deflated dollars, but not that different. The 1997 figure would be equivalent to $24,000 today. For taxpayers, having to carry a debt burden of $20,000 today isn't a whole lot better than $24,000 in 1997.
That's not progress, especially from a government that in 2006 boldly committed to "eliminating total government net debt."
James Morton
1100-5255 Yonge Street
Toronto, Ontario
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4 comments:
Don't go after the Tories on deficits. It will be the Liberals' undoing.
- the Liberals have repeatedly called for increased stimulus spending, and would have created an even larger deficit
- Harper has not in fact spent the money being attributed as the source of the current deficit, and will come back in the election with a much lower deficit than is currently being projected
Don't say you weren't warned.
The Liberals know how to balance budgets. They ARE competent. LK
If I am not mistaken, Ignatieff said, when he found out the new deficit.. I think it was around 12 billion once. and when it got to 25 or so billion, he said he couldn't support that. Regardless, I do not believe it was all spending for Stimulus,...the GST and everything they have done ,has ballooned the Deficit.
.... This summer, dolling out money like the world was going to end, and it all adds up.
Nothing but lies and accusations going back and forth. Just a bunch of babies fighting for the lolly pop. I would like to see someone act like an informed, educated and intelligent person for once talking sense. I'm afraid it's not going to come from that lot in Ottawa. Read Eugene Forsey's latest blog....absolute truth. Morris
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