Ottawa has no plan to pay for budget
By Letter to the Editor on April 28, 2021.
The British politician Nigel Lawson once said: “To govern is to choose – to appear to be unable to choose is to appear to be unable to govern.”
If Lawson is correct, then the only conclusion to be drawn from Finance Minister Chrystia Freeland’s federal budget is that the Trudeau Liberals appear to be unable to govern.
That’s because the budget isn’t really much of a budget, in the sense that it engages with difficult questions of prioritizing spending and weighing the trade-offs. Those may be necessary exercises in a world of scarce resources, but apparently Freeland does not inhabit such a world. Instead, the only difficult choice she appeared to face in crafting this astonishing document was how to cram in as many different spending promises as possible into its 724(!) pages.
In a world where the having and eating of one’s cakes are not mutually exclusive, the sky’s the limit. So, in addition to the well-telegraphed centerpiece commitment of $30 billion for government daycare (not to be confused with the existing $25 billion in direct payments to parents), there’s also money for businesses, employees, students, seniors, green tech, border security, cyber security, infrastructure, farmers, housing, research, transit, climate change and for empowering communities, among dozens of other things.
Of course, there isn’t actually money for all of these things: that’s why the deficit came in at $354 billion, pushing the federal debt past $1 trillion.
Critics will protest that the pandemic is a temporary phenomenon and that if associated measures are wound down as planned, the deficit will drop to a mere(!) $154 billion next year.
The only problem with this claim is total spending isn’t being wound down. Quite the opposite: budget projections show that by 2026, total spending will be $466 billion.
That’s up a whopping 29 per cent from the $362 billion spent in the Liberals’ last pre-pandemic budget in 2019. Even assuming they can hold the line on spending for the next five years – hardly a safe bet given their pre-pandemic track record – the deficit will still be at $30 billion, debt interest payments will cost taxpayers $39 billion annually, and the federal debt will have ballooned to an eye-watering $1.4 trillion.
Canadians understand that this math doesn’t add up. A recent survey revealed that fully 82 per cent of Canadians agreed that to earn their vote in the next election, a party must “have a reasonable plan to get back to balanced budgets in a timely manner.”
Apparently, the Trudeau Liberals are among the other 18 per cent.
After nearly six years in office, the Trudeau crew has demonstrated time and again, in budget after budget, that they only have one weapon in their policy arsenal: borrow and spend more money.
It was their approach before the pandemic, so it will be their approach (but more so) after the pandemic.
When the economy has been weak, they have spent because they must; when they economy has been strong, they have spent because they can. No matter the context, their response is always the same: spend; spend some more; and then spend even more.
This approach to governing has finally culminated in a budget that sets Canada on a path to fiscal danger, with its plunge into permanent, unfunded spending increases and structural deficits. Future generations will pay a heavy price.
Aaron Wudrick is a Spokesperson and Franco Terrazzano is the Federal Director with the Canadian Taxpayers Federation
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Perhaps, what needs to be addressed are $multibillion tax loopholes, $multibillion/trillion offshore tax loopholes, more fair taxation, perhaps a better luxury tax on high end items, “tax foreign-based E-commerce companies to level the playing field”…..
http://www.taxfairness.ca/en/page/how-raise-more-revenue-bolder-policy-initiatives
We’ve had years, and years, of back and forth federal Conservative and Liberal governments who have not tended to this, and it appears, never will. Perhaps we need different politics in Canada who would have the guts to ‘do these bolder policies’ with regard to revenue.
While my senior friends and I all consider ourselves to be conservatives yet we can’t believe what a farce the conservatives have become all across Canada letting these reformers gain control of their parties was the dumbest thing they could have done. While they try to blame everyone else for the mess we are in it was them who created it.
We haven’t forgotten what Harper, Klein, Stelmach, and Redford did to us and while businesses are praising Trudeau for the help they have been receiving during this pandemic apparently some of these small businesses have been too lazy to apply for government help and these MLAs have been too lazy to help them. They would rather use it to try to bash their opposition. Talk about shooting yourselves in the foot.
The Canadian Tax Federation can whine all they want, but why don’t they offer some solutions like Alberta collecting proper royalties and taxes instead of just giving it all away and Southern Albertans suggests stop the loopholes?
It’s become all about blaming others and not trying to fix it. We know this wouldn’t be happening under a Lougheed government.
missing in the letter is an understanding of reality, even though the writer has the textbook part down well. here is the reality: money is transient; it has no real basis or measure anymore, and not nearly as it might have under the gold standard. the move away from that standard, and thus, any standard really, has made money/currencies simply a matter of trust.
so long as we trust a number on a bill has value that will remain “reasonably” stable relative to goods, there is no issue. the issue is when we have very high inflation, which has affected numerous nations (but typically, only those nations that have opposed the takeover of their economies by the multinational). but that reality is for another day. if all or most major economies rack up unimaginable debt simultaneously, there is little chance of hyper inflation ruining us because the process is then, roughly, uniform/normalised.
with money off any standard, (other than the standard of manipulation of currencies, and manipulation of economies and the consequent effects on cultures, environments, health and in general, the dire effects on the quality of life of peoples affected by the heavy handed manipulations), currencies can be printed on an as need or ad hoc basis. this is why cryptocurrencies are hot – there is just too much money out there without basis, and moreover, without legitimacy. the buy into crypto is because of increasing concern over the legitimacy of currencies.
without basis, the ultra wealthy have been able to rake in wealth – and power – like never before since “democracy” (hard to even utter that word anymore with its intended meaning) came to the fore. the ultra wealthy are impervious to inflation, if only because they just keep taking in the vast amount of any new money printed. how this works is difficult to explain here, but here is the skinny on the process.
1) debt: under the gold standard, nations used to “borrow” from themselves. print more money, but the money becomes watered down relative to one’s gold stores. either up the gold stores, or reduce money in circulation, in order to shore up the value of one’s dollar. either way, the wealth remained in the hands of the govt (and, for the most part, the people).
however, under the present system, private entities – the ultra wealthy – hold an awful lot of the debt out there. they charge interest well above the govt’s set rate (which seems a joke in its own right, because lender rates are always so ridiculously well above the govt rate); moreover, the lender compounds the interest on the loans. wealth thus pours into the lender coffers…a kind of hyper welfare, bread and butter income for these special people. the more debt they cover, the more they rake in. what is compounded interest? interest on the interest as well as the principle amount! what savage beauty!
2) without the gold standard, there is hardly much holding back the creation of “wealth”. what do the lenders require in order to lend money at compounded interest? a measly 10% of what they wish to lend. wealth can be created quite furiously under this guise. imagine each of us being allowed to lend just a $100k with only as little as $10k in the bank, so to speak. we could be rich, very rich, very quickly. in no time one could be lending millions… with compounded interest padding the loan. sublime. the only thing is, the vast most of us are not the chosen ones – we do not get to lend money out of thin air, and rake in piles on the returns ever after. only the chosen ones get to lend 10X what they actually have to lend.
3) govt debts: the more money that leaves the commons via high interest compounded loans, the less that remains to pay for necessities that make our society better for all, including trying to cover the enormous costs of infrastructures and govt itself. hence, we in turn must pay more of our earnings to taxes, and/or, suffer in terms of reduced services, and reduced quality of life, when our govts carry more of a debt load. but never do the wealthiest suffer under this construct – always on top of the heap and always making the most of a booming economy, and from misery! win win – if you are one of the chosen few. why is it so hard to get out of debt? because compounded interest makes it so.
4) industrial military complex: the more strife, the more easily insecurity can be sold to the masses – although it is always sold. hence, the massive industrial military complex. we are essentially held captive to massive sums of public money pour into the mining, transportation, manufacture, and sales of arms. it is the robbing of the poor to further enrich the wealthiest. huge scores of wealth being compiled from the “failure” of govts to produce peace.
there is too little money in peace, it seems. so, we are always on the brink of something; there are always “small” wars ongoing; the masses are always being maimed, tortured and killed somewhere. and behind most of the mess are the ultra wealthy, who “benefit” from the use of the world’s war machines and “secret services” so as to determine the leaders of various lands – so as to manipulate who those leaders will serve foremost. whether a “democracy” or not, the centralised power structures most everywhere are bought and sold bobble heads that dangle on golden strings held by the chosen ones that get to lend what they do not have.
the reality of it all requires much more space to share out, but it is a reality. back to the letter – it really does not matter how much money gets printed anymore, so long as massive debt is the norm for the wealthiest economies. what is the current debt of the usa…trick question, because as one ponders a response their debt hurdles up ever further! they could never pay back what they owe right now…er, just a second ago. they do not have the economy to do so, and not remotely near enough gold…in fact, there is question as to where, how much, and even what may have happened to their gold stores. they are the currency standard for the planet! haha! and what a standard they are: about 59 people in all of the usa own more wealth than the bottom half of the nation…not too long ago it took 90 of the wealthiest to hold more than half of all wealth there.
enough about money – it is a ruse that allows the ownership and control of the masses by the few. feudalism at its most sublime. the only issue i have with govt debt – printing more money – is where the 90+% of it always ends up.