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
-1
Of course, governments should do responsible spending, but there is also the responsibility to do responsible revenue flow as well. Here we go with taxes….for example, $hundreds of billions lost/year with tax evasion/loopholes is also a big problem, as is unfair taxation.
And, in Alberta right now, there is a huge risk with suppressing jobs and wages also suppressing the economy. It is a fine line. And the powers-that-be in Alberta have known for years, that oil and gas would fade, and did not move on it. Also, Alberta is the only province without a PST. Saskatchewan has a 6% PST. If Alberta had a 6% PST, it would generate about $11 billion/year. Both spending, and revenue, have to be balanced.
If these reformers hadn’t destroyed Lougheed’s tax and royalty structures none of us would need to pay any taxes today. Every time we turn around Albertans and Canadians are paying for the damage these reformers have created for us. Looking after their themselves and their rich friends is all they care about.
Their attitude seems to be .While we give away the people’s wealth and look after our rich friends , let’s make these stupid people pay with a lot more privatization. At least that’s what my senior friends and I see.
Also, two other factors that have negatively affected Alberta’s economy was the Getty regime splintering the Heritage Trust Fund off into other areas/revenues, and that Alberta has not had a PST.
Lawyers , accountants , bankers and oilmen know we don’t need a PST if our royalties had been managed properly.
It will take another 3-4 years before we see the impacts of all the cutbacks coming . . . why cutbacks? , . . . because of the massive debt this PM has put on the Canadian taxpayer!
From 2010 to 2020 the national debt was between $557 billion to $721 billion and experts now say we will soon see it doubled to $1.4 trillion.
Currently the national debt at 13:15 MDST August 28 is at $1 trillion, 142 billion, 423 million and rising over $424 million per day! That is not including the PM constantly blowing more everyday he is in office. Adding $700 billion in less than 2 years!
This massive increase happened in less than 2 years!
It is time that the Canadian taxpayer has a forensic accounting of where this Liberal government has put all of the $700 billion that has just been blown, considering the deviant acts of this sitting PM, which included attempts to manipulate that Canadian justice system by pressuring the Minister of Justice. . . . I for one want to know where all of those funds went!
Perhaps this is the reason the PM wanted an early election . . . before the country sees just how much he blew to buy votes to get into office again!
And it continues . . . he just announced another $1 billion for COVID passports! Not even Bill Gates can avoid this extravagance!
Think . . . less than 2 years the debt has been doubled after sitting below $721 billion in the last 50 years or since this country came to be!
Not that I would vote for the Liberals, but, it may appear that all is not lost. This:
“2021 economic outlook: Playing catch-up. Canadian entrepreneurs will see growth return in a weakened economy. Recovery depends on the course of the virus. Technology will be at the forefront. Limited outlook for Canadian oil. Global economy- time for protectionism? Growth depends on managing the pandemic.”
www/bdc.ca/en/articles-tools/blog/2021-economic-outlook-canada
Don’t ignore the fact that these phoney conservatives in Alberta have given away over $700 billion in oil royalties and taxes starting with Ralph Klein.
Oilmen have been saying that the figures the universities have been using in their studies are too low they don’t include natural gas royalties they also gave away. It’s likely closer to $900 billion that they have given away.
Mr. Greeff; Thank you for your excellent, important commentary. All so very true and so very relevant. The current Federal government has engaged in a spending spree of outrageous proportions since elected. I think their current agenda is to get as many people addicted to government money (our money) as possible. Once addicted, the government then has control over your life. They have done this definitely with the ever increasing tax free, child tax benefit, (yet conveniently neglect to even offer something as substantial to seniors… I know I am being abit hypocritical here)
Once they have control, they have got you. I find it hard to imagine many young families with children who are in the horrible position of having to pay $1500.00 – $2000.00 per month in mortgage payments without some form of government assistance today. Talk about being trapped!
And the government keeps on printing money out of thin air (presto … hocus pocus …poof ….. money raining down. Which then just decreases the value of money and increase inflation. That is better than any David Copperfield illusion ever. Government are the real masters of illusion and of course are masters at creating control and eventually slavery of the population.
You didn’t talk about the increase of personal debt. I have never seen as many trucks, trailers, and boats rolling down the highway each worth more than my first house, and each sooner or later going to depreciate.
I agree we are in a horrible situation; financially. Unless you are able to write debt off it is just a bad deal for everyone except the banks.
“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”.
” An economy based on debt will eventually collapse and Canada will then become an indebted has been middle – income country.”
We have danced this dance before. Cutbacks for public servants/professionals I mean. It didn’t work so well.. So why would anyone think a government can “fix this” when the real perpetrators is the government and big corporations which are allowed to go unpunished?
Perhaps it is time for real dramatic, drastic action to take place, something different than the usual blaming and penalizing the little guy No; rather than the people being punished….it time for the real criminals to take a hit. The investment banks, and executives got off scott-free in 2008, We continue to protect those identified in the Panama Papers from income tax evasion and fraud. Politicians continue to receive their ridiculous salary , benefits and perks, corporations continue to receive corporate welfare from us and corporate executives conveniently forget to pass that on to employee and take it in the form of bonuses, stock options etc.
Perhaps we get real experts involved in solution generation and remove the politicians altogether from the discussion, as they seem to be able only to regurgitate old outdated, ineffective solutions from their playbook.
Or we just continue to print money indefinitely, until the economic system blows up on its own as every fiat based economy has since the dawn of time.
Respectfully,
Contrary to the myth being gnawed on here, you certainly can manage deficits ‘forever’. As long as people (the people with wealth) will buy the bonds. And the only limit is inflation (which is why it is so important, according to conservative orthodoxy, to keep this money out of the hands of the working class you and I, that is).
Better to worry about a degraded environment that can no longer prop up this charade.
Don’t worry so much Michael! Can’t you remember the words of our all flare and no substance leader??…”And the budget will balance itself.” So relax!
Just like the Governor in the U.S. my American relatives talked about. He told the people they didn’t need to take covid serious they had nothing to worry about God would save them. It wasn’t long before they had the worse mess in the U.S.