Overspending can’t continue forever

By Letter to the Editor on August 28, 2021.

Editor:
The debt problem is pervasive across various levels of government and households. Federal debt is now more than $1 trillion and combined federal and provincial net debt will likely reach $2 trillion this year. When looking at total indebtedness, Canada’s gross debt to GDP is about 118 per cent, which is the fifth highest among 29 industrialised countries. Ontario is the most indebted subnational government in the world and after having been debt free, Alberta now has more than $100 billion in debt. Alberta’s government spending is 16 per cent higher than in British Columbia. The average amount each Canadian will owe in provincial and federal government debt by the end of the year is $57,000. Canadian households owe $1.71 for every dollar of disposable income. Canada’s first world lifestyle is in jeopardy.
Chronic government overspending and massive deficits cannot continue for ever. Public services and social programs are funded by taxpayers and more than 50 per cent of this money is used to pay wages. If this can only be funded through excessive government borrowing, then cutbacks are needed. Low interest rates also do not justify reckless spending. With inflation rising in many countries, economists are predicting interest rate increases. Since COVID – 19 started, 520,400 private sector jobs have been lost while government jobs across the country have increased by 180,000. Canadian taxpayers have also had to pay for salary raises for politicians including the prime minister, and thousands of civil servants during the pandemic. Another source of concern is under funded public sector pension funds.
An affordable public service requires increased productivity and realistic wages. These measures apply to all workers paid with taxpayers’ money eg. physicians, other health care professionals, teachers, public servants, politicians etc. New federal government spending eg. $500 to all seniors over 75, “universal daycare for preschool children, should only be directed at those in the lowest income brackets.”
In summary, balanced federal and provincial budgets and reduced wage costs are essential to control government spending. An economy based on debt will eventually collapse and Canada will then become an indebted has been middle – income country.
Michael P. Greeff
Lethbridge