We are watching Greece being put into receivership for debts which, almost certainly, it will be unable to pay. We are watching the City of Chicago sink into a morass of unfunded pension liabilities and a school system which is effectively bankrupt. Ontario has had its credit rating downgraded with one economist noting “Ontario’s debt ratio “has risen by more than any other province” since the Great Recession.”
It is an endless refrain of crazed right wingers like myself that governments spending more than they take in is a bad idea. Oh sure, it can be a good idea for a year or two to keep the wolves from the door, but as soon as possible a government needs to put its budget in mild surplus.
We are about to enter the federal election season in Canada in earnest. At the moment we have a mild surplus in the last federal budget but that is almost certainly gone with the collapse in oil prices and thus tax revenue. And you don’t have to be much of a cynic to think that finding a billion dollar surplus six months before the election was pretty much a sure thing.
Now, the dangerous thing about elections is that the political class from all parties likes to run on a platform of “doing things”. Increasing the child tax benefit, going green, “child care, health care, job creation, renewable energy and investments in infrastructure” all cost money.
With a slowing economy, declining tax revenues, a tanking Canadian dollar, a rising trade deficit promising more spending looks more than a little nuts.
Promising to do more with less, to reduce non-essential federal programs, to reduce the overall percentage of GDP the federal government takes, reducing the size of government in real terms would all seem to make more sense in a shrinking economy.
But a really clever party would pay attention to the structural changes which are coming to the Canadian and the world economy. We have an aging population and we have a birth rate which is below replacement. We have housing prices which disrupt family formation. We have an immigration rate – from countries which have populations with little to offer Canada – which is hitting 300,000 new Canadians a year. We have an oil economy which makes very little sense at current oil prices. And, around the corner, we have everything from driverless trucks to robotic fast food. Add to this a legal, First Nations, environmentalist veto over critical resource infrastructure and projects and you have a nation which is fast running out of runway.
I have very little time for any of the three leaders or their parties; but I would be willing to vote for anyone of them which was willing to embrace policies which grew the real economy. A litmus test is looking at what Whynn is doing in Ontario and doing the exact opposite.
Canada has the capacity to use its abundant energy and other resources to create well paying jobs and thriving businesses. We have a stable society – for the moment – with sound banks and a legal/regulatory system which has avoided a good deal of the corruption which plagues our friend to the South. We should, by rights, be thriving. But we are not. A party or a leader who asks why we are not is on the right track.
A government committed to growing the Canadian economy will, in a short while, have the money to pursue its spending priorities. Before you slice the pie you have to bake it.
Wish there was one around.