LILLEY: Why Trudeau's reckless deficit spending matters
Brian Lilley
Published:
October 5, 2019
Updated:
October 5, 2019 7:31 PM EDT
Liberal Leader Justin Trudeau greets supporters after speaking at an election campaign stop in Brampton on Sept. 22, 2019. (REUTERS)
Deficits don’t matter, that’s what I’ve been told in the week since Liberal Leader Justin Trudeau unveiled a platform last Sunday with deficits as far as the eye could see.
Maybe they don’t matter to voters but they should because right now we spend more money paying the interest on our accumulated deficits than we spend on the Canada Child Benefit, equalization payments and even the military.
That should scare everyone even if the Liberal government, and much of the media, see no problem with never-ending and ever-growing deficits.
In the 2015 election Justin Trudeau was able to overcome two decades of voter aversion to deficits by promising he would run three “small” deficits of just $10 billion a year to stimulate the economy.
The deficits of course ended up much higher, almost three times higher, and lasting much longer than three years. The days of Liberals like Chretien and Martin fighting to slay deficit spending were clearly over.
Yet with Trudeau’s latest plan he’s ramping up spending once again — promising deficits of $27.4 billion in 2020-21, followed by overspending of $23.7 billion, $21.8 billion, and $21 billion in the following three years. Those are much higher deficits than his own government proposed when their spendthrift budget was tabled in March.
The bizarre thing is, the Liberals keep telling us the economy is doing well, that statistically we’ve never had it so good.
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So why do the deficit spending?
During the Great Recession when Stephen Harper’s Conservatives were running up record deficits, it was driven in part by necessity. Unemployment had spiked to unbelievable levels in many regions of the country. One finance official told me at the time that Employment Insurance was sending out more than $5 billion a month than it was taking in.
That money came from general revenues and the extra spending was backed by all parties.
Today there is no recession and the deficit spending has not only continued, it is increasing. Deficits eventually become government debt and, believe it or not, that does cost us.
According to the Canadian Taxpayers Federation, the federal debt currently sits at $695 billion and goes up by $2.2 million an hour or $54 million a day. Each one of us — every man, woman and child — is in the hock to the tune of $18,682.
Right now, just paying the interest on the debt costs us $26.2 billion a year. That’s according to the latest budget put out by the Trudeau Liberals earlier this year. That money doesn’t pay down a single penny of the debt, it just pays the interest on the debt.
It’s like paying just the interest or minimum payment on your credit card, the total that you owe keeps growing.
According to Trudeau’s own numbers, we are spending more on paying the interest on the debt than we do on the military — $4 billion more to be exact. Think about that, without the debt we could more than double military spending without raising taxes a single penny.
Or we could more than double the Canada Child Benefit. The program that sends hundreds of dollars per month to parents is expected to cost us a total of $24.3 billion this fiscal year, or about $2 billion less than we spend to service the debt.
And those pesky equalization payments that cause so much national angst as money is shuffled from one part of the country to another — mainly Quebec — costs just $19.8 billion.
Most programs and departments could be funded many times over if we were not paying more than $2 billion a month on interest on the debt.
Trudeau’s plan to spend more than $94 billion through increased deficits over the next four years will only drive up that cost to us. It’s a reckless and threatens the very social programs he claims to value and that Canadians rely on.
The Liberals say they want to avoid austerity yet their plan will certainly drive us towards that and the cuts that follow.
It’s time to stop the deficit spending.
blilley@postmedia.com
http://torontosun.com/opinion/columnists/lilley-why-trudeaus-reckless-deficit-spending-matters
